Segovia Analyzes Texas Court’s Rejection of Yelp Defense

Texas Lawyer published Adams & Reese Associate Gabriel Segovia’s article analyzing a recent decision from the Texas Fifteenth Court of Appeals in State of Texas v. Yelp. The article, “Texas Fifteenth Court of Appeals Rejects Yelp’s Internet ‘Invisibility Cloak’ Defense,” examines how Texas courts are addressing personal jurisdiction in cases involving internet-based business activity.

Segovia outlines several key takeaways from the court’s opinion:

• Jurisdiction must be pleaded in the petition. The court held that the State failed to plead general jurisdiction in its petition sufficiently and declined to consider new jurisdictional theories raised for the first time in response to Yelp’s special appearance. The decision highlights an appellate split in Texas and underscores the importance of pleading to all jurisdictional bases early.
  
  
• Specific jurisdiction can arise from Texas-targeted online conduct. Although Yelp argued its actions were nationwide in scope, the court found that intentionally directing online content at Texas users can establish purposeful availment and relatedness.
  
  
• The internet is not a jurisdictional shield. The court rejected the argument that internet-based activity alone insulates a company from suit, explaining that Texas-targeted website features and content may support personal jurisdiction.
  
  
• Registration to do business carries unresolved risk. While the court did not rule on consent by registration, it acknowledged ongoing legal uncertainty following the U.S. Supreme Court’s decision in Mallory v. Norfolk Southern Railway, signaling that businesses should carefully evaluate jurisdictional exposure when registering to do business.