Court Holds That Fiduciary Shield Doctrine Does Not Protect A Representative From Tortious Conduct

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In Ren v. ANU Res., LLC, a plaintiff sued an entity and its representatives for breach of contract, breach of fiduciary duty, and other tort claims arising from investments in oil and gas properties. No. 14-16-00035-CV, 2016 Tex. App. LEXIS 10401 (Tex. App.—Houston [14th Dist.] September 22, 2016, no pet. history). One of the defendant representatives filed a special appearance, challenging the trial court’s personal jurisdiction over him. The trial court denied the special appearance, and the defendant appealed.

On appeal, the defendant argued that he was not subject to specific jurisdiction in Texas under the fiduciary shield doctrine because he did not conduct business in Texas in his individual capacity. Rather, he claimed that his actions were solely on behalf of Chinese corporate entities. The court of appeals described the fiduciary shield doctrine as follows:

Under the fiduciary shield doctrine, a nonresident officer or employee may not be subject to personal jurisdiction when all of his contacts with the forum state were made on behalf of his corporation or employer. However, this court has repeatedly held that the doctrine does not protect a corporate representative from the exercise of specific jurisdiction as to intentional torts or fraudulent acts for which he may be held individually liable.

The court then held that because the plaintiff alleged intentional torts against the defendant for which he could be held individually liable, primarily for tortiously interfering with an agreement and defrauding the plaintiff, it rejected the defendant’s argument that he was entitled to protection from jurisdiction simply because his acts were allegedly done in a corporate capacity. After reviewing other evidentiary matters, the court affirmed the trial court’s denial of the special appearance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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