Removal & Special Appearances in Texas
Texas Trial Lawyers Serving Counsel Nationwide in Jurisdiction Objections
Texas’ business friendly environment draws individuals and entities from across the world. While that’s beneficial for economic growth and diversity, it can create challenges when disputes involving out-of-state parties arise and require resolution through the legal system.
Before civil courts are able to intervene and adjudicate, however, their power over the parties involved must first be established. To be sued in a Texas court the Plaintiff must establish that there have been sufficient minimum contacts with Texas so as to establish jurisdiction over the defendant. If a defendant does not have those contacts, it is important to consider filing a Special Appearance. If those contacts exist, then the defendant may want to consider a Removal to Federal Court. Each of these options have very strict deadlines for removal and procedures that must be followed.
If legal action has been filed against you, your business, or your client in Texas and you wish to challenge jurisdiction, proven counsel from trial lawyers experienced in Texas venues and procedure is crucial. Hendershot Cowart, P.C. works with clients, corporate counsel, and co-counsel nationwide in matters involving special appearance, removal to federal court, and other matters of jurisdiction.
Our experienced legal team has the insight required of complex claims, and is available to discuss your matter and how we can be of assistance. Call or contact us online to speak with a lawyer.
Texas Long-Arm Statute & Jurisdictional Challenge
In Texas, a series of statutes codified under Chapter 17, Subchapter C of the Texas Civil Practice and Remedies Code – colloquially known as the Texas “Long-Arm Statute” – as well as other long-arm provisions in Texas law, govern the reach of Texas courts.
Non-Resident Jurisdiction & the Texas Long-Arm Statute
In short, the long-arm statute allows Texas courts to gain jurisdiction over out-of-state individuals or businesses (“nonresidents” or “foreign” entities) if the company’s “person in charge” is served with process for legal action.
When filing a lawsuit in Texas against an out-of-state entity, Plaintiffs must plead allegations which sufficiently trigger Texas long-arm statute. When a Defendant is not personally in Texas and does not own property in the state, Plaintiffs will typically allege a defendant engages in one of three acts that constitute doing business in Texas:
The Defendant engaged in a contract, by mail or other means, with a Texas resident, and performance of the contract takes place, in part or in whole, in Texas;
The Defendant committed a tort (civil wrong), in part or in whole, in Texas;
The Defendant recruited Texas residents for employment, either directly or through an intermediary, in or out of Texas.
In addition to these three acts, other conduct may constitute “doing business” in Texas. Generally, however, any allegations regarding the basis for jurisdiction must meet due process requirements – such as the requirement that the Defendant’s threshold for “minimum contacts” with the state (which can include correspondence with a Texas entity over the internet) was met, and jurisdiction meets “traditional notions of fair play and substantial justice” – in order to prove personal jurisdiction.
Rule 120a. Special Appearance
While it remains the Plaintiff’s burden to assert the basis (or bases) for jurisdiction, Defendants are responsible for negating every basis raised, and for adhering to procedural rules which can be complex for those unfamiliar with Texas courts.
When challenging jurisdiction, a Defendant may invoke either fact (which requires submission of evidence, often with a motion for special appearance), or law (which requires demonstrating there is no legal basis for jurisdiction, even if alleged facts are true), or both.
Beyond raising arguments that vary from case to case, out-of-state Defendants who wish to challenge jurisdiction must do so by filing a special appearance in accordance to Texas Rule of Civil Procedure 120a.
Special appearance is the only means to challenge the court’s jurisdiction over a Defendant’s person or property, and is distinctly different from a motion to quash service, which seeks a new citation, or a plea to the jurisdiction, which challenges whether the court has jurisdiction to hear the matter at issue, not whether it has the power to call a Defendant to court. An appearance that does not comply with Rule 120a is a general appearance.
There are a few key components of special appearance:
Timing: Timing of a special appearance is vital. Per Rule 120a, special appearance is heard and determined before other motions or pleadings (including a motion to transfer venue or motion to dismiss). Though a special appearance may be filed as part of the first responsive pleading, nonresident Defendants must be careful of filing other pleadings before filing a special appearance, as doing so may be interpreted as a waiver of the right to contest jurisdiction.
Waiver: A Defendant may waive or forfeit their personal jurisdiction objection by their conduct. What does or does not waive special appearance? It depends. While the most common personal jurisdiction waiver is the entering of a general appearance, the prevailing principle is that waiver occurs when a Defendant requests judicial action inconsistent with special appearance, and does not occur from proceedings which are related or ancillary to special appearance. For example:
Issuing process for witnesses, depositions, serving requests for admissions, and discovery processes are not waivers of special appearance.
A motion to set aside a default judgment, has been interpreted as a waiver of special appearance by Texas courts. Defaulted defendants must comply with due order of pleading, meaning they must obtain a ruling on the special appearance before filing a motion to set aside. In essence, it must first be determined whether a court has jurisdiction over a Defendant before any other matter in the case can be addressed.
Sworn Motion: A special appearance must be part of a sworn motion. If a motion has been filed without being sworn, some curative amendments exist. This includes a separate affidavit which verifies jurisdictional facts and is filed at least 7 days before a hearing. Though amendments can cure defects without deadline, not all defects are curable. As such, it’s important to ensure a motion for special appearance is meticulously prepared in accordance to Rule 120a, that it provides sufficient notice to challenge jurisdiction, and is filed in a timely manner.
Removal & Remand
In addition to assisting clients and counsel in matters of special appearance, our team can also provide support for other jurisdictional issues. This includes removal, or the process of transferring a case from state to federal court as provided by federal statute: 28 U.S.C. §§ 1441-1453; Fed. R. Civ. Pro. 81(c).
While the right of removing a case initially filed in state court to federal court can be a powerful tool for Defendants, it must be exercised judiciously and only after careful deliberation by experienced counsel. The particular facts and circumstances surrounding a case, subject matter, published case law, and assigned judge will largely determine whether removal is in a Defendant’s best interest.
While every case is unique, there are some general situations where it may be advantageous to exercise right to removal. Examples include:
The case concerns subject matter with which Federal judges are more likely to have experience;
Applicable case law is more developed and robust in federal court;
Greater efficiency in litigation (i.e. a particular case can be resolved faster in federal court, thereby reducing costs of litigation and business interruption);
Greater diversity of citizenship (i.e. federal juries pull from a larger jurisdiction and demographic than state courts).
Hendershot Cowart, P.C.: Proven Counsel. Proven Results
The practice of special appearance is complicated by Texas’ strict rules of procedure. For out-of-state Defendants and counsel, ensuring compliance with procedural rules, and evaluating available options with localized insight is essential to structuring the foundation for a successful outcome.
If you have a jurisdictional matter in Houston or anywhere in the state of Texas, Hendershot Cowart, P.C. is available to discuss how we can be of assistance. Contact us to speak with an attorney.