Fifth Circuit Affirms That District Court in Texas Lacks Jurisdiction to Vacate Arbitration Award in Florida

Defendants-appellees picked up work orders from the plaintiff-appellant in its Florida offices, performed field work in Florida, and sent invoices to the plaintiff-appellant in Texas, who eventually stopped paying the invoices. The defendants-appellees commenced a AAA arbitration, and a Florida arbitrator eventually found in their favor. The plaintiff-appellant filed suit in Texas seeking to vacate the arbitration award under state law, which defendants-appellees opposed under FRCP 12(b)(2), (b)(3), (b)(5) and under the Colorado River abstention doctrine. The Western District of Texas dismissed the suit for lack of personal jurisdiction.

The circuit court focused on whether the defendants-appellees had "minimum contacts" in Texas, such that a Texas court could exercise specific personal jurisdiction over them. Looking at the parties' contract, the place of performance was Florida. The circuit court dismissed the remainder of the plaintiff-appellant's arguments in favor of jurisdiction, notably the argument that the parties' agreement contained a Texas choice-of-law clause. "While such clauses can be probative of purposeful availment, they're never dispositive." Here, despite the Texas choice-of-law clause, the parties' agreement does not suggest that they expected to resolve their disputes in Texas. In fact, the agreement required arbitration take place in accordance with the AAA's venue-selection rules, i.e., as close as possible to the project in Florida. Finding no jurisdiction, the circuit court concluded that, "[i]n short, this is Florida's problem. Not Texas's."

Sayers Const., LLC v. Timberline Const., Inc., et al., No. 19-51099 (5th Cir. Oct. 2, 2020)