USA Today A/K/A Gannett Co., Inc., Gannett Publishing Services, LLC, and Gannett Satellite Information Network, LLC v. Ryan, LLC

                                      In The

                               Court of Appeals

                    Ninth District of Texas at Beaumont

                              __________________

                              NO. 09-22-00322-CV
                              __________________

         USA TODAY A/K/A GANNETT CO., INC., GANNETT
      PUBLISHING SERVICES, LLC, AND GANNETT SATELLITE
            INFORMATION NETWORK, LLC, Appellants

                                        V.

                             RYAN, LLC, Appellee

__________________________________________________________________

                On Appeal from the 284th District Court
                     Montgomery County, Texas
                   Trial Cause No. 22-06-07554-CV
__________________________________________________________________

                          MEMORANDUM OPINION

      This interlocutory appeal pertains to a special appearance wherein the

Defendants, Appellants USA Today a/k/a Gannett Co., Inc., Gannett Publishing

Services, LLC, and Gannett Satellite Information Network, LLC (hereinafter

collectively “Defendants” or “Appellants”), alleged that the trial court lacked

personal jurisdiction over the breach of contract claim filed by Plaintiff, Appellee

Ryan, LLC (“Ryan”), against them. Ryan filed a petition in Montgomery County,

                                         1
Texas, district court, asserting claims for breach of contract and defamation against

the Defendants. The Defendants filed a special appearance challenging both general

and specific personal jurisdiction as to the contract claim, and they did not challenge

personal jurisdiction on the defamation claim. After a hearing on the special

appearance, the trial court denied the special appearance without issuing findings of

fact or conclusions of law. The Defendants timely filed an interlocutory appeal.

Because we conclude that trial court lacks personal jurisdiction over Appellants as

to Ryan’s breach of contract claim, we reverse the trial court’s order denying

Appellants’ special appearance.1

                                     Background

The Parties

      According to the record, Ryan, LLC is a tax services provider. Ryan

characterizes itself as a “Texas-based” Delaware limited liability company with its

principal place of business in Dallas, Texas. In November 2019, Ryan merged with



      1
         Defendants also objected to venue and filed a motion to transfer venue which
the trial court denied. After Defendants filed this interlocutory appeal and another
interlocutory appeal on the denial of their TCPA motion, the Defendants also filed a
petition for mandamus in this Court. We issued a mandamus opinion holding that
the trial court erred in denying the motion to transfer venue and finding that venue
for the underlying lawsuit should be transferred to Dallas County. See In re USA
Today a/k/a Gannett Co., Inc., No. 09-23-00140-CV, 

(Tex. App.—Beaumont Oct. 19, 2023, orig. proceeding) (mem. op.). Under the due
order of pleadings, we retain jurisdiction over this appeal. See Tex. R. Civ. P.
120a(2).
                                           2
S.A.L.T. Payroll Consultants, Inc. (“SALT”), and Ryan is SALT’s successor-in-

interest. USA Today a/k/a Gannett Co., Inc., Gannett Publishing Services, LLC, and

Gannett Satellite Information Network, LLC are companies engaged in the news

media business. The Gannett entities are organized in Delaware and have their

principal place of business in McLean, Virginia.

Ryan’s Original Petition

      In June 2022, Ryan filed its Original Petition against Defendants in

Montgomery County. The petition asserted several claims including but not limited

to a breach of contract claim and a claim for defamation. 2 Ryan’s defamation claim

was based on its allegation that Defendants had published articles, podcasts, tweets,

and other false communications about Ryan across the United States and globally.

Ryan further alleged that the publications at issue “contain[] demonstrably false

assertions of fact or create[] a defamatory impression by misrepresenting material

facts, omitting material facts, and juxtaposing facts in a misleading way.” Ryan’s



      2
          One category of claims asserted in Ryan’s petition against Defendants was
for defamation or slander relating to a series of articles, statements, and podcasts by
USA Today that discussed tax consulting work performed by Ryan on behalf of
others. The second category of claims asserted by Ryan included claims for breach
of contract, a suit on a sworn account, quantum meruit, unjust enrichment, and fraud
all relating to the alleged tax consulting work that Ryan provided to Defendants. The
parties grouped the second category of claims pertaining to the tax consulting work
Ryan provided to USA Today together and referenced such claims as “contract
claims”—as do we—noting these claims appear to relate to the parties’ alleged
agreement in which Ryan provided tax consulting work to Defendants.
                                            3
contract claims were based on allegations that Defendants breached the parties’

contract by failing to pay fees 3 relating to tax refund opportunities Ryan identified

for Defendants in Kentucky and Indiana, totaling about $192,000.

      Ryan attached to the petition a copy of the contract between SALT and

Gannett Co., Inc., executed in July 2019. That contract stated that New York law

governed, and it gave addresses for SALT in St. Petersburg, Florida and for Gannett

Co., Inc. in McLean, Virginia. Neither the “Scope of Services” section—nor any

other provision—of the contract defined the geographic areas for which SALT was

to perform tax review services and it did not define where the work was to be done.

Ryan also attached a December 2021 demand letter and invoices from SALT to

Gannett Co., Inc. for unpaid professional fees owed to SALT for tax savings it

identified for Gannett in Kentucky and Indiana. In addition, Ryan attached copies of

news stories allegedly published by Defendants that Ryan alleged depict Ryan in a

false or unfavorable light, along with copies of letters dated November 2021 and

January 2022, from Ryan’s counsel to Defendants’ executives, outlining the news

stories Ryan considered false and defamatory.

Special Appearance




      3
       Under the parties’ tax consulting agreement, Defendants agreed to pay a fee
of 35% of any tax refund or savings Defendants realized because of opportunities
Ryan identified.
                                         4
      Defendants filed an Original Answer Subject to Special Appearance and

Motion to Transfer Venue in July 2022. Therein, Defendants asserted a general

denial and asserted that the alleged statements at issue were true, were privileged

under the First Amendment and under Article I, section 8 of the Texas Constitution,

or were privileged under common law. At the same time, the Defendants filed their

answer, Defendants also filed a Special Appearance. In the Special Appearance the

Defendants argue that Ryan’s petition

             . . . improperly attempts to join two unrelated sets of claims
      against Defendants: (1) breach of contract and related claims based on
      an agreement that allegedly covered tax consulting work performed by
      Ryan for Gannett Co. in Kentucky and Indiana (“Contract Claims”),
      and (2) defamation claims based on news reports published in USA
      Today and other media about Ryan’s work on behalf of other clients in
      Arizona and North Dakota (“Defamation Claims”).[] Ryan cannot
      maintain both sets of claims in Texas because Defendants are not
      subject to personal jurisdiction in this state as to the Contract Claims.
      Thus, the Court should dismiss the Contract Claims for lack of personal
      jurisdiction.[]
             To be clear, Defendants do not challenge personal jurisdiction as
      to the Defamation Claims. . . .

Defendants alleged that specific jurisdiction must be analyzed on a claim-by-claim

basis and that

      [a]ll of Ryan’s specific jurisdictional allegations relate only to its
      Defamation Claims [and] Ryan’s Contract Claims are based entirely on
      out-of-state activities—a contract between a Florida company and a
      Virginia company allegedly performed in Kentucky and Indiana, and
      governed by New York law. The only Texas connection is the fortuity
      that, after the agreement was signed, Ryan merged with the Florida
      company.

                                         5
In the Special Appearance, the Defendants argue they are not subject to general

jurisdiction because they are not incorporated in Texas, and they do not maintain

their principal places of business in Texas. Defendants also argue that the fact that

they are registered to conduct business in Texas does not render them sufficiently

“at home” in Texas to establish general jurisdiction.

      As to specific jurisdiction, Defendants argue that, even if accepted as true,

“none of Ryan’s jurisdictional allegations identify any forum contacts by Defendants

that give rise to, or are related to, Ryan’s Contract Claims[.]” According to

Defendants, Ryan’s contract claims are based on Defendants’ failure to pay for

services that its predecessor SALT provided to Defendants in Kentucky and Indiana

and the defamation claims are based on news reports published in USA Today and

other media Defendants own. In addition, Defendants assert that Gannett Publishing

Services and Gannett Satellite are not parties to the SALT Contract and that Ryan

has not alleged any basis for asserting its contract claims against these two entities.

Defendants also argue that the fact that SALT was eventually purchased by Ryan—

a Texas LLC—cannot be a basis for specific jurisdiction over Defendants because

the minimum-contacts inquiry focuses on the defendants’ contacts with the forum

state and not the plaintiff’s contacts. 4 Defendants later filed an Affidavit of Brian



      4
       The record includes a letter dated August 10, 2022, confirming the parties’
Rule 11 Agreement that included an agreement “not to conduct any jurisdictional
                                        6
Krueger in Support of Defendants’ Special Appearance. 5 The affidavit states that

Krueger was Director of Payroll for Gannett. According to the Defendants, the

parties’ contract does not mention Texas, it was not negotiated in Texas, Defendants

filled out a form provided by SALT to pursue a Texas refund and returned the

completed form to SALT, no personnel from SALT or Ryan had to be in Texas to

pursue the refund, and Defendants paid SALT’s invoice in full for the Texas refund

opportunity. The Defendants argue that the alleged breach of contract claim concerns

only out of State activity and tax savings from other states.

Ryan’s First Amended Petition

      In August 2022, Ryan filed its First Amended Petition. Therein, Ryan restated

its claims against Defendants for defamation and breach of contract. Ryan’s

defamation claim was based on its allegation that Defendants had published articles

that “falsely accused Ryan [] of unlawful and unethical business practices in its




discovery in connection with the Original Petition and Special Appearance of
Defendants[.]”
       5
         In its response to Defendants’ Special Appearance, Ryan argues that the
Krueger Affidavit was filed “to cure Defendants[’] defective Special Appearance
that was not sworn or verified in accordance with Rule 120a.” Ryan does not
continue that argument on appeal. We note that the Texas Supreme Court has held
that a defective special appearance can be cured by amendment and that an unsworn
special appearance does not constitute a general appearance provided it does not
acknowledge the trial court’s jurisdiction nor does it seek court action other than a
dismissal for lack of jurisdiction. See Dawson-Austin v. Austin, 

, 322-
23 (Tex. 1998).
                                           7
efforts to secure legitimate tax savings for its clients.” 6 Ryan’s contract claims were

based on its allegation that Defendants had contracted with Ryan to obtain tax

savings but, after Ryan’s work resulted in more than $2 million in tax savings to

Defendants, Defendants failed to pay fees it owed to Ryan for the tax savings.

According to Ryan’s First Amended Petition, Defendants falsely claimed to Ryan

that Defendants did not wish to pursue certain tax savings opportunities that Ryan

had identified, but then the Defendants pursued the tax savings and failed to pay fees

owed to Ryan. Ryan alleged that Defendants breached their contract with Ryan and

“wrongfully pocketed Ryan’s fees,” and then also published articles that “falsely

condemned the very tax recovery services that USA Today itself sought and

participated in” and hid this detail from their readers. The fees Ryan alleged that

Defendants failed to pay related to tax savings in Kentucky and Indiana. Ryan’s

defamation allegations pertain to work it performed for Defendants related to a dyed

diesel refund request in Arizona and an oil well production equipment refund request

in North Dakota. Ryan alleged that Defendants published false accusations “to a

global internet audience” as well as in print and that the stories were republished by

other media outlets.



      6
        Ryan’s defamation claims are the subject of a separate interlocutory appeal
(No. 09-22-00432-CV) pertaining to the denial of a TCPA motion and that is
currently pending before this Court. We include only a limited discussion about the
defamation claims herein.
                                         8
      Ryan’s Amended Petition alleged that Ryan is organized in Delaware and has

its principal place of business in Dallas, Texas. The Amended Petition also included

the following statement alleging personal jurisdiction over the Defendants:

      . . . This Court has personal jurisdiction over Defendants under Texas’
      long-arm statute, TEX. CIV. PRAC. & REM. CODE § 17.042, and
      consistent with the Due Process Clause of the Fourteenth Amendment
      because Defendants transacted business in Texas, because Defendants
      (i) contracted with a Texas resident and the contract was performed, in
      whole or in part, in Texas, (ii) committed torts in the state of Texas; and
      (iii) recruits Texas residents, directly or through an intermediary
      located in this state, for employment inside or outside this state. In
      addition, Defendants have sufficient minimum contacts with Texas,
      including because:

      a) The contract at issue identifies Texas as a state where Ryan’s
      predecessor in interest, SALT, would seek tax savings on Defendants’
      behalf;

      b) The sales person that secured the engagement with Gannett for SALT
      was a Texas resident working from Texas at the time he solicited the
      business and Gannett hired SALT;

      c) The tax savings that Gannett hired SALT and then Ryan to obtain for
      it included merger acquisition work. The merger acquisition work
      involved capturing tax savings for Gannett following its acquisition of
      Texas businesses, mostly small local papers, that were then rolled into
      Gannett by identifying taxes paid by Gannett’s predecessor and using
      those taxes to reduce Gannett’s tax liability to the State of Texas;

      d) SALT identified to Gannett substantial tax savings available to it
      from the State of Texas;

      e) Gannett authorized SALT to seek those tax savings from the State of
      Texas by executing forms to submit to the State of Texas Workforce
      Commission which specifically: (i) authorized SALT and Ryan to act
      on Gannett’s behalf with the State of Texas; and (ii) requested a refund
      of all credits in Gannett’s unemployment tax account;
                                          9
f) The contract at issue was performed, in part, in the State of Texas in
connection with SALT’s and Ryan’[s] attempts to obtain tax savings
for Gannett on its unemployment taxes incurred due to Gannett’s Texas
based employees;

g) Substantially all of the work performed under the contract at issue
was done after SALT was acquired by Ryan, a Texas company;

h) Gannett obtained substantial tax savings from the State of Texas as
a result of Ryan’s work and knowingly accepted tax savings from the
State of Texas;

i) An invoice for work performed on Texas unemployment tax savings
for Gannett under the contract at issue was generated in Texas;[]

j) Shortly after the merger, SALT made Defendants aware that Ryan,
which it knew was a Texas-based company, acquired SALT and SALT
employees specifically identified Ryan as their new employer in written
communications to Defendants following the merger;

k) Defendants committed the tort of defamation in Texas by targeting
Ryan (a Texas company) and publishing defamatory statements about
Ryan to a substantial number of Texas residents, including in a
substantial number of print editions that were published in Texas, and
in online editions, podcasts, and tweets that were published to Texas
residents;

l) Defendants transact business in the state of Texas as they market and
sell their cornerstone newspaper, USA Today, which has over one
million daily subscribers, to a substantial number of Texas residents;

m) Defendants’ USA Today newspaper has a substantial number of
subscribers who are residents of Texas;

n) Defendants distribute a substantial number of print editions of USA
Today to hotels and other locations in Texas, where they are read by
Texas residents;

o) Defendants own and operate printing and distribution facilities and
operations in Texas;
                                   10
p) Defendants’ printing and distribution facilities in Texas print and
distribute copies of USA Today to their subscribers who reside in Texas
and to hotels and other locations in Texas;

q) Defendants printed copies of the USA Today articles at issue in this
case at their Texas print facilities and distributed those articles to their
subscribers who reside in Texas and to hotels and other locations in
Texas;

r) At the time Ryan worked for Defendants under the contracts at issue,
Defendants had offices and employed over 400 people in the state of
Texas, including, on information and belief, people involved in the
publication of the defamatory print editions at issue;

s) Defendants solicit people in Texas to work for them in Texas;

t) Until at least 2015, Defendants owned and operated an advertising
office in Texas, for their flagship paper, USA Today;

u) In the State of Texas, Defendants currently own and operate nine
daily publications (including, but not limited to, new[s]paper brands
The Abeline Reporter-News, Corpus Christi Caller-Times, The El Paso
Times, GoSanAngelo | Standard-Times, Times Record News (Wichita
Falls), Amarillo Globe-News, Austin American-Statesman,[] and
Lubbock Avalanche-Journal), eighteen weekly publications, and three
production facilities;

v) Gannett owns real and/or business personal property and has offices
and/or production facilities throughout the State of Texas;[]

w) Defendant Gannett Satellite is registered to do business in Texas and
has been since 1982;

x) Defendant Gannett Co. is registered to do business in Texas and has
been since 2016; and

y) Defendants’ employee, Craig Harris, submitted a FOIA request in
Texas concerning Ryan’s business activities in the State of Texas.



                                    11
Ryan also alleged that three members of Ryan resided in Montgomery County,

Texas, at the time the causes of action against Defendants accrued.

Ryan’s Response to the Special Appearance

      In September 2022, Ryan filed its Response in Opposition to Defendants’

Special Appearance. Therein, Ryan argued that Defendants are subject to personal

jurisdiction in Texas on the contract claims because: the contract was solicited from

Texas; the contract was performed in part by both Defendants and Ryan in Texas;

the parties’ relationship began when a SALT sales representative in Texas called

Defendants; Defendants hired SALT specifically to seek tax refunds in Texas;

Defendants actually received a tax refund from the State of Texas; and Ryan

continued to pursue tax refunds at Defendants’ request after SALT merged with

Ryan, a Texas-based company. Ryan also argued that Defendants are subject to

general jurisdiction in Texas because they are “essentially ‘at home’ in Texas”

because: Defendants are registered to do business in Texas, their newspapers are

widely circulated in Texas, Defendants employ hundreds of Texas residents,

Defendants own real property in Texas, Defendants own multiple Texas community

newspapers, and Defendants have “extensive business operations, facilities and

offices in Texas.”

      As to Ryan’s contract claim, Ryan alleged that Defendants have “had contacts

with the State of Texas specifically in connection with the [contract] at issue in

                                         12
Ryan’s Contract Claims.” According to Ryan, the SALT sales representative who

initially contacted Defendants worked and lived in Texas at the time. Defendants

hired SALT to perform tax savings work in connection with Defendants acquisition

of Texas businesses (local newspapers), and SALT identified tax overpayments in

Texas that could be refunded. In addition, Ryan argues that Defendants’ Special

Appearance was filed before Ryan filed its First Amended Petition, and that “every

jurisdictional fact contained in the First Amended Petition that is not explicitly

denied in Krueger’s affidavit or the Special Appearance the Affidavit verifies is

conceded.” Therefore, Defendants failed to meet their burden to negate every ground

Ryan asserted as a basis for personal jurisdiction.

      Ryan argues that, as a result, only three of the twenty-five jurisdictional

allegations in its First Amended Petition (see (a) through (y) supra) are deemed

conceded. According to Ryan, Defendants have purposefully availed themselves of

the privilege of conducting business in Texas through their contract with SALT and

the work performed under the contract, and the tax savings opportunities in Texas

identified through the contract constitute purposeful availment because they are a

benefit, advantage, or profit Defendants sought from the forum state. Ryan also

argues that its contract claims “arise out of or relates to the defendant[s’] contacts

with the forum.” Ryan explains that Defendants approached Ryan about seeking tax

savings in Indiana after Ryan merged with SALT, and that by accepting performance

                                         13
of Ryan—a Texas limited liability company—under the parties’ contract, the Texas

long-arm statute is satisfied. Ryan also argues that Defendants are subject to general

jurisdiction in Texas by virtue of their extensive business operations, facilities,

offices, and employees in Texas. Finally, Ryan argues that exercising jurisdiction

over Defendants would not offend notions of fair play and substantial justice because

Defendants are a nationwide corporation that is engaged in litigation across the

country and because Texas has an interest in adjudicating a contract dispute

involving a company headquartered in Texas. Ryan also argues that trying its claims

against Defendants in one action would be convenient and efficient.

      Attached to its Response was the affidavit of Kevin Cappock, a Principal for

Ryan, in which Cappock attested, in relevant part, that the SALT sales representative

who solicited Defendants’ business worked and lived in Texas and that the parties’

contract was performed in part in Texas. Also attached was an invoice from SALT

to Defendants for fees due for having identified an overfunding of Defendants’

Texas unemployment tax account and for a reduction in Indiana unemployment

taxes. In addition, Ryan attached the Declaration of Richard Frissell, in which he

stated that he previously worked for SALT as a Senior Manager and for Ryan as a

Director of Employment Tax. Frissell also stated that he informed Defendants when

Ryan acquired and merged with SALT and that Ryan was a Texas-based company.




                                         14
      Ryan also filed under seal a copy of a confidential report dated August 16,

2019, that SALT issued to Gannett Co., Inc. which identified tax savings

opportunities for Defendants. The report identified tax savings in Texas, Kentucky,

and Indiana, as well as several other states.

Reply in Support of Special Appearance

      In their Reply in Support of Special Appearance, Defendants argued that they

are not subject to general jurisdiction in Texas because they are incorporated in

Delaware and maintain their principal places of business in Virginia, so that they are

not “at home” in Texas. Defendants also argues that they are not subject to specific

jurisdiction in Texas because the contract claims do not have a substantial

connection to Defendants’ alleged activities in Texas. According to Defendants,

      Ryan’s claims are based on a contract between Gannett, based in
      Virginia, and a Florida-based payroll-tax consulting company. The
      contract was negotiated and executed outside Texas prior to Ryan’s
      purchase of the Florida company. The parties selected New York law
      to govern their agreement. “Texas” appears nowhere in the [contract]
      document. The Contract Claims arise solely from disputed non-
      payments for alleged contract performance in Kentucky and Indiana.

Defendants argue that the alleged solicitation of them by a SALT sales representative

in Texas is not purposeful availment by Defendants. Defendants further argue that

Texas was not the focus of the parties’ contract, and tax savings in Texas comprised

only about 5% of the total proposed savings that were identified. Ryan’s merger with

SALT cannot be a basis for personal jurisdiction over Defendants because the

                                          15
merger was unilateral activity by the plaintiff (Ryan) and a third party (SALT).

Defendants argue that any direct contract they had with Ryan is not sufficient to

establish purposeful availment because “[i]t is well established that ‘merely

contracting with a Texas company does not necessarily constitute “purposeful

availment” for jurisdictional purposes.’”7 In this case, Defendants assert that the

lawsuit does not arise from nor relate to their contacts with Texas and so there is no

substantial connection between Defendants’ Texas contacts and Ryan’s contract

claims that would be needed for specific jurisdiction. According to Defendants,

      [a] trial of the Contract Claims in this case would not focus on SALT’s
      alleged actions in Texas or Ryan’s collection of a fee for Texas-related
      work. Rather, the operative facts of the Contract Claims concern
      whether Ryan was entitled to payments from Gannett for tax refund
      opportunities located in Kentucky and Indiana.

In its Reply, Defendants also surmise that Ryan decided to file its contract claims in

the same lawsuit as its defamation claims as “part of its retaliation against

[Defendants].”

Hearing on Special Appearance

      The trial court heard the Special Appearance on September 16, 2022. Counsel

for Ryan asked the court to focus on specific, rather than general, jurisdiction.



      7
        See Majors Mgmt., LLC v. Price & Co., No. 09-17-00063-CV, 

, at **16-18 (Tex. App.—Beaumont Feb. 8, 2018, no pet.) (mem.
op.); Rushmore Inv. Advisors, Inc. v. Frey, 

 (Tex. App.—Dallas
2007, no pet.)
                                         16
Counsel for the Defendants argued that Defendants did not contest jurisdiction as to

the defamation claims, but the Defendants emphasized that the jurisdictional

analysis for the contract claims was “entirely separate” from the defamation claim.

In particular, the Defendants argued that “the gist of [] [Ryan’s] breach of contract

claim [] ha[d] nothing to do with Texas[]” so that Ryan cannot satisfy the

“relatedness” requirement for specific jurisdiction—that there is no substantial

connection between the Defendants’ contacts with Texas and the operative facts of

the litigation. The Defendants argued that the “effects test” for specific jurisdiction

requires that a defendant’s alleged wrongful conduct must connect the defendant to

the forum state and not just to a plaintiff that resides in the forum state.8 The

Defendants argued that the defamation claims have nothing to do with the contract

at issue, and the challenge to personal jurisdiction pertains only to the breach of

contract claims.

      Counsel for Ryan explained to the court that perhaps the reason Defendants

were contesting personal jurisdiction over the contract claims was because

Defendants had not disclosed in the news articles on which Ryan based its

defamation claims that Defendants were a client for Ryan, and it would be

embarrassing for that detail to come out. Ryan also argued that Texas was a subject



      8
          See Old Republic Nat’l Title Ins. Co. v. Bell, 

 (Tex.
2018).
                                          17
of the parties’ contract because Defendants “had been on somewhat of a buying spree

and had bought up a lot of local Texas newspapers[]” and that tax savings in Texas

comprised about a third of the opportunities that Ryan identified. Ryan further

argued that Defendants

      . . . actually petitioned the state of Texas for a tax refund. They signed
      paperwork created by the Texas Workforce Commission to get a tax
      refund in this state under the agreement that forms the basis of our
      breach of contract claim. They got a check from the state of Texas, not
      just someone in Texas, the state of Texas for that tax refund, and they
      cashed it. That is purposeful availment.

Ryan argued that the “relatedness” requirement for specific jurisdiction was satisfied

and no strict causal link between the Texas work and the breach of contract claim

was required. According to Ryan, the breach of contract claim arises out of the same

agreement between the parties that resulted in tax savings for Defendants in Texas.

Ryan also argued that the tax savings in Indiana were identified after SALT merged

with Ryan, that Ryan strongly urged Defendants to pursue it, Ryan actually paid

Defendants’ Indiana taxes on Defendants’ behalf, but Defendants refused to pay for

the tax savings achieved.

Order Denying Defendants’ Special Appearance

      On September 20, 2022, after the hearing, the trial court signed an Order

Denying Defendants’ Special Appearance. The order did not include findings of fact

and conclusions of law, and our record does not reflect that any party requested them.

Defendants timely filed their notice of an interlocutory appeal.
                                         18
                                        Issue

      Appellants argue that the trial court erred by denying Defendants’ Special

Appearance. According to Appellants, they are not subject to general jurisdiction in

Texas because they are not “at home” in the State. Appellants also argues that they

are not subject to specific jurisdiction as to Appellee’s contract claims because those

claims are not substantially connected to Appellants’ Texas contacts.

                                 Standard of Review

      A nonresident defendant may challenge a Texas court’s personal jurisdiction

over it by filing a special appearance. Tex. R. Civ. P. 120a. Whether a trial court has

personal jurisdiction over a nonresident defendant is ultimately a question of law

that we review de novo. LG Chem Am., Inc. v. Morgan, 

, 346 (Tex.

2023); Moncrief Oil Int’l, Inc. v. OAO Gazprom, 

 (Tex. 2013);

BMC Software Belgium, N.V. v. Marchand, 

 (Tex. 2002). The

plaintiff has the initial burden of pleading sufficient allegations to bring a

nonresident defendant within the jurisdiction of a Texas court. LG Chem Am., Inc.,

670 S.W.3d at 346; Moncrief Oil Int’l, Inc., 

; Kelly v. Gen. Interior

Constr., Inc., 

 (Tex. 2010); Retamco Operating, Inc. v. Republic

Drilling Co., 

 (Tex. 2009); Booth v. Kontomitras, 

 (Tex. App.—Beaumont 2016, no pet.). If the plaintiff meets this initial

burden, the defendant then bears the burden to negate all bases of personal

                                          19
jurisdiction alleged by the plaintiff. See LG Chem Am., Inc., 670 S.W.3d at 346

(citing Kelly, 

). The defendant may negate the jurisdictional

allegations on either a factual or legal basis. Kelly, 

.

       Where, as here, there are no timely filed findings of fact and conclusions of

law, “all facts necessary to support the judgment and supported by the evidence are

implied.” BMC Software, 

. However, in this case, Appellants do

not dispute Appellee’s jurisdictional facts or allegations. So, we need not consider

any implied findings of fact, and we consider only the legal question whether the

undisputed facts establish Texas jurisdiction. Old Republic Nat’l Title Ins. Co. v.

Bell, 

 (Tex. 2018) (citing Tex. Dep’t of Parks & Wildlife v.

Miranda, 

 (Tex. 2004); Moncrief Oil Int’l, Inc., 

 n.4). When reviewing Appellee’s jurisdictional allegations, we ask only whether

the allegations are sufficient to invoke the exercise of personal jurisdiction over

Appellants without regard to the merits of their claims. See Booth, 

.

                           Personal Jurisdiction Generally

       “A court must have personal jurisdiction over a defendant to issue a binding

judgment.” LG Chem Am., Inc., 670 S.W.3d at 346 (citing Luciano v.

SprayFoamPolymers.com, LLC, 

, 7-8 (Tex. 2021)). Texas courts may

exercise personal jurisdiction over a nonresident defendant as authorized by the

                                          20
Texas long-arm statute and when consistent with federal due-process guarantees.

See 

-.045 (the Texas long-arm statute);

LG Chem Am., Inc., 670 S.W.3d at 346; Luciano, 625 S.W.3d at 8. The Texas long-

arm statute provides that a nonresident does business in the state if the nonresident

commits certain acts in Texas, including, but not limited to, the following:

      (1) contracts by mail or otherwise with a Texas resident and either party
      is to perform the contract in whole or in part in this state;
      (2) commits a tort in whole or in part in this state; or
      (3) recruits Texas residents, directly or through an intermediary located
      in this state, for employment inside or outside this state.

. An allegation of jurisdiction may

satisfy the Texas long-arm statute, but the allegation may not satisfy the United

States Constitution. Moncrief Oil Int’l, Inc., 

. Therefore, even if a

court determines the facts satisfy the Texas long-arm statute, the court must also

examine the facts to determine whether the exercise of personal jurisdiction over the

defendant comports with due process. See CSR Ltd. v. Link, 

(Tex. 1996).

                                General Jurisdiction

      A defendant’s contacts may support either general personal jurisdiction or

specific personal jurisdiction. See Moncrief Oil Int’l, Inc., 

; Zinc

Nacional, S.A. v. Bouche Trucking, Inc., 

 (Tex. 2010). General

jurisdiction arises when a defendant’s contacts with the forum state are so

                                         21
“continuous and systematic” that the defendant is “essentially at home[]” in the

forum state. State v. Volkswagen Aktiengesellschaft, 

, 412 (Tex.

2023) (citations omitted). This kind of personal jurisdiction allows courts to render

a binding judgment against a defendant even if the plaintiff’s claims neither arise

from activities conducted in the forum state nor “‘relate to the forum [s]tate or the

defendant’s activity there.’” 

 (quoting Ford Motor Co. v. Mont. Eighth Jud. Dist.

Ct., 

 (2021)).

      General jurisdiction may only be exercised over a nonresident defendant

whose contacts in the forum state are so continuous and systematic “‘as to render [it]

essentially at home in the forum State.’” Daimler AG v. Bauman, 

(2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 

 (2011)). General jurisdiction requires a more demanding minimum contacts

analysis than specific jurisdiction does, and the nonresident defendant must have

conducted substantial activities within the forum. BMC Software, 

.

For a Texas court to exercise general jurisdiction over a nonresident, the

nonresident’s contacts with Texas must be continuous, systematic, and substantial.

See Goodyear, 

; Moki Mac River Expeditions v. Drugg, 

 (Tex. 2007) (“If the defendant has made continuous and systematic

contacts with the forum, general jurisdiction is established whether or not the

defendant’s alleged liability arises from those contacts.”). “General jurisdiction is

                                         22
premised on the notion of consent. That is, by invoking the benefits and protections

of a forum’s laws, a nonresident defendant consents to being sued there.” Am. Type

Culture Collection, Inc. v. Coleman, 

 (Tex. 2002). The plaintiff

must establish more than isolated or sporadic visits with the forum before such

contacts will constitute the type of continuous, systematic, and substantial contacts

necessary for general jurisdiction. See Helicopteros Nacionales de Colombia v. Hall,

 (1984).

      The Supreme Court has explained,

      . . . only a limited set of affiliations with a forum will render a defendant
      amenable to all-purpose jurisdiction there. “For an individual the
      paradigm forum for the exercise of general jurisdiction is the
      individual’s domicile; for a corporation, it is an equivalent place, one
      in which the corporation is fairly regarded as at home.” With respect to
      a corporation, the place of incorporation and principal place of business
      are “paradig[m]. . .bases for general jurisdiction.” Those affiliations
      have the virtue of being unique—that is, each ordinarily indicates only
      one place—as well as easily ascertainable. These bases afford plaintiffs
      recourse to at least one clear and certain forum in which a corporate
      defendant may be sued on any and all claims.
      ...
      . . . Accordingly, the inquiry under Goodyear is not whether a foreign
      corporation’s in-forum contacts can be said to be in some sense
      “continuous and systematic,” it is whether that corporation’s
      “affiliations with the State are so ‘continuous and systematic’ as to
      render [it] essentially at home in the forum State.”

Daimler AG, 

-39 (quoting Goodyear, 

).




                                           23
      Ryan alleged that Defendants had “significant contacts with the State of Texas

for an extended period of time[]” sufficient to support general jurisdiction.

Specifically, Ryan alleged that:

      • Defendants Gannett Satellite and Gannett Co. are registered to do
        business in Texas;
      • Gannett markets and sells its cornerstone newspaper (USA Today) in
        Texas;
      • Gannett’s business is supported by a large number of employees,
        property and facilities in Texas;
      • Gannett owns and operates printing and distribution facilities and
        operations in Texas; and
      • Gannett owns and operates nine daily and eighteen weekly
        publications in Texas.

Defendants did not deny these jurisdictional allegations; however, while these kinds

of contacts with the state of Texas may be “continuous and systematic,” see, e.g.,

Am. Type Culture Collection, 83 S.W.3d at 810, courts do not generally find them

sufficient to show that the entity is “essentially at home” in the state nor will such

be sufficient to support general jurisdiction. See, e.g., Daimler AG, 

;

Old Republic Nat’l Title Ins. Co., 

. The parties do not dispute that

Appellants are organized under the laws of Delaware and have their principal places

of business in Virginia, and these facts are generally regarded as the hallmark of

general jurisdiction. See Daimler AG, 

 (quoting Goodyear, 

); see also Ford Motor Co., 

; Ford Motor Co. v. Cejas, No.

09-16-00280-CV, 

, at **26-27 (Tex. App.—Beaumont


                                         24
Feb. 22, 2018, no pet.) (mem. op.). Therefore, based on the record before us, we

cannot say that the Appellants’ “‘affiliations with the State are so ‘continuous and

systematic’ as to render [them] essentially at home in the forum State.’” See Daimler

AG, 

 (quoting Goodyear, 

). We conclude that there is

no general jurisdiction over the Appellants. See 

            Consent to Personal Jurisdiction for the Defamation Claims

      Before we examine specific jurisdiction, we note that Appellants did not

challenge personal jurisdiction as to Ryan’s defamation claims. That said, a

defendant may challenge personal jurisdiction by filing a special appearance, and

“[a] special appearance may be made as to an entire proceeding or as to any severable

claim involved therein.” See Tex. R. Civ. P. 120a.

      Severance is proper when (1) the controversy involves more than one
      cause of action, (2) the severed claim is one that would be the proper
      subject of an independently asserted lawsuit, and (3) the severed claim
      is not so interwoven with the remaining action that the actions involve
      the same facts and issues.

State v. Morello, 

 (Tex. 2018) (citing F.F.P. Operating

Partners, L.P. v. Duenez, 

 (Tex. 2007)). Trial courts have broad

discretion to sever claims. See 

      Courts examine specific personal jurisdiction on a “claim-by-claim” basis

unless all claims arise from the same forum contacts. See Volkswagen

Aktiengesellschaft, 669 S.W.3d at 413 (Specific jurisdiction “involves a ‘claim-by-

                                         25
claim’ analysis that focuses on the relationship between the defendant, the forum

state, and the operative facts of the litigation.”); Moncrief Oil Int’l, Inc., 

 (stating “specific jurisdiction exists when the cause of action arises from

or is related to purposeful activities in the state[]” and concluding that defendants’

contacts with Texas supported personal jurisdiction for trade secrets claim but not

for tortious interference claim); Kelly, 

 (separately analyzing

jurisdictional contacts for fraud and trust fund claims to determine specific

jurisdiction); Schrader v. Roach, No. 01-20-00183-CV, 

, at *11 (Tex. App.—Houston [1st Dist.] June 21, 2022, pet. denied) (mem. op.)

(“A plaintiff bringing multiple claims that arise out of different forum contacts of

the defendant must establish specific jurisdiction for each claim.”); see generally

Booth, 

 (analyzing personal jurisdiction for each claim).

      Here, the controversy involves claims for defamation and claims related to the

alleged breach of contract. The causes of action, while related, do not arise from the

same forum contacts. The defamation or slander claims pertain to news stories

Appellants published in a variety of media formats, and they largely concern events

in Arizona and North Dakota. By contrast, the contract claims pertain to Appellants’

alleged failure to pay on a contract with Ryan (as successor-in-interest to SALT) and

to tax consulting services Ryan and SALT performed for Appellants. At the hearing

on the special appearance, counsel for Appellants told the court that a jury would see

                                           26
a report generated by Ryan and provided to Appellants that identified tax savings in

multiple states, including Kentucky, Indiana, and Texas. The parties agree that

Appellants paid Ryan for the tax consulting work it performed for Appellants

regarding potential tax savings in Texas. We conclude that Appellants’ consent to

personal jurisdiction as to Ryan’s defamation claims does not constitute a consent to

personal jurisdiction as to Ryan’s contract claims. See Tex. R. Civ. P. 120a;

Volkswagen Aktiengesellschaft, 669 S.W.3d at 413.

                                 Specific Jurisdiction

      Specific personal jurisdiction applies more narrowly than general jurisdiction.

See Volkswagen Aktiengesellschaft, 669 S.W.3d at 412-13 (citing Ford Motor Co.,

). Courts can exert specific jurisdiction over a nonresident

defendant when two conditions are met: (1) the defendant engages in some act by

which it purposefully avails itself of the privilege of conducting activities within the

forum state, and (2) the plaintiff’s claims arise out of or relate to those forum

contacts. 

 (citing Ford Motor Co., 

-25; Luciano, 625 S.W.3d at 8-

9); LG Chem Am., Inc., 670 S.W.3d at 346 (“Th[e] specific-jurisdiction analysis

involves ‘two co-equal components’: purposeful availment and relatedness.”)

(quoting Moki Mac River Expeditions, 

). This kind of personal

jurisdiction involves a “claim-by-claim” analysis that focuses on the relationship

between the defendant, the forum state, and the operative facts of the litigation. 

                                          27
at 413 (quoting Moncrief Oil Int’l, Inc., 

); see also Bristol-Myers

Squibb Co. v. Superior Ct., 

 (2017).

Purposeful Availment

      The purposeful availment analysis asks whether “‘a nonresident’s conduct and

connection to a forum are such that it could reasonably anticipate being haled into

court there.’” See Volkswagen Aktiengesellschaft, 669 S.W.3d at 413 (quoting

Moncrief Oil Int’l, Inc., 

). “To show purposeful availment, a

plaintiff must prove that a nonresident defendant seeks a benefit, advantage, or profit

from the forum market.” In re Christianson Air Conditioning & Plumbing, LLC, 

, 679 (Tex. 2022) (citing Michiana Easy Livin’ Country, Inc. v. Holten,

 (Tex. 2005)). We apply three considerations to determine

purposeful availment:

      • “[O]nly the defendant’s contacts with the forum are relevant, not the
        unilateral activity of another party or a third person”;
      • “The contacts relied upon must be purposeful,” not “random,
        fortuitous, or attenuated”; and
      • The defendant “must seek some benefit, advantage[,] or profit by
        availing itself of [Texas’s] jurisdiction.”

See Volkswagen Aktiengesellschaft, 669 S.W.3d at 413-14 (quoting Moncrief Oil

Int’l, Inc., 

). “Where the defendant has ‘deliberately’ engaged in

significant activities within a state, he ‘manifestly has availed himself of the

privilege of conducting business there.’” Luciano, 625 S.W.3d at 9 (quoting Burger

King Corp. v. Rudzewicz, 

 (1985)).
                                       28
      With these considerations in mind, we find the following jurisdictional

allegations in Ryan’s First Amended Petition satisfy the purposeful availment

requirement:

      e) Gannett authorized SALT to seek [] tax savings from the State of
      Texas by executing forms to submit to the State of Texas Workforce
      Commission which specifically: (i) authorized SALT and Ryan to act
      on Gannett’s behalf with the State of Texas; and (ii) requested a refund
      of all credits in Gannett’s unemployment tax account;
      ...
      h) Gannett obtained substantial tax savings from the State of Texas as
      a result of Ryan’s work and knowingly accepted tax savings from the
      State of Texas;
      ...
      l) Defendants transact business in the state of Texas as they market and
      sell their cornerstone newspaper, USA Today, which has over one
      million daily subscribers, to a substantial number of Texas residents;
      ...
      n) Defendants distribute a substantial number of print editions of USA
      Today to hotels and other locations in Texas, where they are read by
      Texas residents;

      o) Defendants own and operate printing and distribution facilities and
      operations in Texas;

      p) Defendants’ printing and distribution facilities in Texas print and
      distribute copies of USA Today to their subscribers who reside in Texas
      and to hotels and other locations in Texas;

      q) Defendants printed copies of the USA Today articles at issue in this
      case at their Texas print facilities and distributed those articles to their
      subscribers who reside in Texas and to hotels and other locations in
      Texas;

      r) At the time Ryan worked for Defendants under the contracts at issue,
      Defendants had offices and employed over 400 people in the state of
      Texas, including, on information and belief, people involved in the
      publication of the defamatory print editions at issue;
                                          29
      s) Defendants solicit people in Texas to work for them in Texas;

      t) Until at least 2015, Defendants owned and operated an advertising
      office in Texas, for their flagship paper, USA Today;

      u) In the State of Texas, Defendants currently own and operate nine
      daily publications (including, but not limited to, new[s]paper brands
      The Abeline Reporter-News, Corpus Christi Caller-Times, The El Paso
      Times, GoSanAngelo | Standard-Times, Times Record News (Wichita
      Falls), Amarillo Globe-News, Austin American-Statesman,[] and
      Lubbock Avalanche-Journal), eighteen weekly publications, and three
      production facilities;

      v) Gannett owns real and/or business personal property and has offices
      and/or production facilities throughout the State of Texas;[]

      w) Defendant Gannett Satellite is registered to do business in Texas and
      has been since 1982;

      x) Defendant Gannett Co. is registered to do business in Texas and has
      been since 2016; and

      y) Defendants’ employee, Craig Harris, submitted a FOIA request in
      Texas concerning Ryan’s business activities in the State of Texas.

Taken together, these activities, which Appellants do not deny, reflect an intent to

conduct business and “serve the market” within Texas as well as intent to seek

certain tax benefits or refunds in Texas. See id. at 9-10.

Relatedness

      That said, our analysis does not end with purposeful availment because “the

exercise of specific jurisdiction is prohibited if ‘the suit’ does not ‘aris[e] out of or

relat[e] to the defendant’s contacts with the forum.’” See id. at 14 (quoting Bristol-

Myers, 

). The Texas Supreme Court has explained,
                                           30
      . . . This so-called relatedness inquiry defines the appropriate “nexus
      between the nonresident defendant, the litigation, and the forum.” Moki
      Mac, 

; see also Walden [v. Fiore], 571 U.S. [277,]
      284 [(2014)]; Shaffer v. Heitner, 

 [] (1977).

      In Moki Mac, we held that the relatedness requirement is satisfied by a
      “substantial connection” between the nonresident defendant’s contacts
      and the “operative facts of the litigation.” 

. After
      Moki Mac, the Supreme Court in Bristol-Myers explained that the “arise
      out of or relate to” standard suggests there must be “an affiliation
      between the forum and the underlying controversy, principally, [an]
      activity or an occurrence that takes place in the forum State and is
      therefore subject to the State’s regulation.” 

      (alteration in original) (citing Goodyear Dunlop Tires Operations, S.A.
      v. Brown, 

 [] (2011)). In other words, “specific
      jurisdiction is confined to adjudication of issues deriving from, or
      connected with, the very controversy that establishes jurisdiction.” 

      (emphasis added).

 To be sure, the relatedness requirement does not require a strict causal link

between the defendant’s in-state activity and the litigation. See Ford Motor Co., 

. But “there must be ‘an affiliation between the forum and the

underlying controversy, principally, [an] activity or an occurrence that takes place

in the forum State and is therefore subject to the State’s regulation.’” Bristol-Myers,

 (quoting Goodyear, 

).

      Ryan argues that the relatedness requirement is satisfied because “work under

the [parties’ contract] was performed at Gannett’s direction in Texas, by a Texas

company, and Gannett directly petitioned the Texas government itself for tax

refunds.” While these facts may be true, here the Texas part due under the contract

was paid by the Defendants. The unpaid amount due under the contract at issue in
                                          31
this lawsuit pertains to Appellants’ alleged failure to pay for tax refunds or savings

that Ryan (or SALT) identified in Kentucky and Indiana. The appellate record

includes copies of invoices from SALT to Gannett for tax savings opportunities

identified in Kentucky and Indiana, and the invoices show a St. Petersburg, Florida

address for SALT and a Milwaukee, Wisconsin address for Gannett. Here, the

parties do not dispute that Appellants’ paid Ryan (or SALT) for tax savings

opportunities identified in Texas, and the dispute does not arise from Appellants’

pursuit of tax savings in Texas. “What is needed—and what is missing here—is a

connection between the forum and the specific claims at issue.” Bristol-Myers, 

. We conclude there is no “substantial connection” between Appellants’

activities in Texas and the operative facts of the contract claims in this lawsuit. See

Luciano, 625 S.W.3d at 14, 15 (quoting Bristol-Myers, 

).

      Having found no basis for either general or specific personal jurisdiction over

the Appellants/Defendants, we need not examine whether due process is satisfied.

See Tex. R. App. P. 47.1. We conclude that the trial court erred by denying

Appellants’ Special Appearance, and we reverse and remand for proceedings

consistent with this opinion.




                                          32
      REVERSED AND REMANDED.



                                                LEANNE JOHNSON
                                                     Justice

Submitted on October 23, 2023
Opinion Delivered December 14, 2023

Before Golemon, C.J., Johnson and Wright, JJ.




                                      33