Gregory D. Jordan, a business litigation attorney, offers insights regarding the Supreme Court of Texas ruling dated July 2, 2010, in the case of Quixtar, Inc. v. Signature Management Team LLC.
“The Quixtar case is important because it clarifies Texas law pertaining to whether a lawsuit can be dismissed for a lack of convenience,” asserts Austin, Texas-based business litigation attorney Gregory D. Jordan. “The Court made it very clear that if you are sued by an out of state plaintiff, the trial court should afford substantially less deference to the plaintiff’s forum choice when the trial court is deciding whether to dismiss a suit on convenience grounds.” Mr. Jordan continues, “In my opinion, this case should make it much easier to convince a trial court to dismiss a lawsuit if the plaintiff is from out of state.”
In Quixtar, Inc. v. Signature Management Team LLC, the Texas Supreme Court addressed a situation where the trial court had dismissed a lawsuit filed in Collin County, Texas, between two Michigan businesses based on common law forum non conveniens. The Court of Appeals had reversed the dismissal, holding that the trial court abused its discretion. The appellate court noted that suit could have been filed in Michigan, but held that the defendant did not meet its burden to show that the private and public interest factors of the forum non conveniens analysis strongly weighed in favor of dismissing the suit filed in Texas. The defendant appealed to the Supreme Court of Texas. The Supreme Court of Texas reversed the Court of Appeals’ judgment, holding that the trial court did not abuse its discretion when it dismissed the suit.
Quixtar is a Virginia Corporation with a principal place of business in Michigan. Signature Management Team is a limited liability company organized in Nevada with a principal place of business in Michigan. Quixtar, a successor to Amway, is a MLM (multi-level marketing) corporation that sells products through a network of individual business owners (IBOs), including some in Texas. Signature Management is a tools company that sells marketing tools, self-help books, seminars, and motivational speaker appearances to IBOs. Quixtar also owns a training system and sells similar tools to IBOs, making it a direct competitor to Signature Management. Quixtar alleged that Signature taught IBOs improper and potentially illegal business-building techniques that put Quixtar’s entire operation at risk.