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Fiduciary Shield Doctrine As A Jurisdictional Defense

In a case recently we had non-resident defendants assert the fiduciary shield doctrine as a defense to jurisdiction. Although these out of state defendants visited Texas on several occasions and conducted business in the State of Texas, they claimed protection from jurisdiction on the grounds that all their contacts with Texas were in their capacities as corporate officers.

The fiduciary-shield doctrine protects a corporate officer or employee from the trial court’s exercise of general personal jurisdiction when the individual’s contacts with Texas were on behalf of the employer.

However, the fiduciary-shield doctrine has not been expressly adopted by the Texas Supreme Court. The fiduciary-shield doctrine has been applied only to the exercise of general personal jurisdiction over a non-resident defendant. Moreover, the fiduciary-shield doctrine does not protect an employee from specific personal jurisdiction as to intentional torts or fraudulent acts for which the employee may be held individually liable. At this the firm’s case has not been ruled upon by the trial court.

Due do lawsuits being filed in Texas related to the collapse of investment firms I am certain we will be seeing use of the Fiduciary Shield Doctrine by defendants as a means to avoid appearing in Texas courts.

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