IP Law Daily, TRADEMARK—5th Cir.: Rize created sufficient minimum contacts with Texas for purposes of specific personal jurisdiction, (Mar 12, 2026)

By Carolin Dennis, B.Sc., LL.B., LL.M.

El Paso-based Raiz made a sufficient showing that California-based Rize had minimum contacts with Texas to support personal jurisdiction.

The U.S. Court of Appeals for the Fifth Circuit vacated and remanded the district court’s dismissal of a suit for trademark infringement and unfair competition against Rize for want of personal jurisdiction. The Fifth Circuit found that although Rize has no physical branches in Texas, its actions, of serving and having continuing obligations to its Texas members supported the conclusion that it has minimum contacts in Texas (Raiz Federal Credit Union v. Rize Federal Credit Union, No. 25-50406 (5th Cir. Mar. 9, 2026)).

Background. Raiz Federal Credit Union (Raiz) is a federal credit union based in El Paso, Texas and has operated under its current name for approximately three years, since July 2022. Raiz is the owner of United States Trademark Registration Nos. 7,140,784 and 7,141,044 (collectively, Raiz Marks) and uses them in connection with its financial services that it provides to its customers. Rize Federal Credit Union (Rize) is a federal credit union headquartered and incorporated in California with physical branches in California and Nevada. However, Rize also serves customers located in Texas. Rize previously operated under the name, SCE Federal Credit Union, until it rebranded and changed its name in June 2024. Raiz sent a cease-and-desist letter to Rize due to the similarity of their names and logos. Rize continued to use the allegedly infringing mark. Raiz sued for trademark infringement and unfair competition in a Texas federal court. The district court granted Rize’s motion to dismiss for lack of personal jurisdiction. Raiz timely appealed.

Personal jurisdiction. The appellate court noted that personal jurisdiction exists if the forum state’s long-arm statute applies, and due process is satisfied. Here, since Texas’s long-arm statute is coextensive with the Due Process Clause of the Fourteenth Amendment, these two inquiries merge. Additionally, though personal jurisdiction can be either general or specific, this case only implicates the latter. When evaluating whether due process permits specific jurisdiction, the appellate court considers: (1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable. If the plaintiff satisfies the first two prongs, the burden shifts to the defendant to show that exercising jurisdiction would be unfair or unreasonable.

Raiz identified many contacts, consolidated into the following: (1) Rize provides financial services to its members in Texas, (2) Texas members can join Rize via its website, (3) Rize sends solicitations and emails to its Texas members, (4) Rize sponsored and attended a credit union industry conference in Texas. Raiz argued that these contacts establish sufficient minimum contacts for specific personal jurisdiction. The district court purported to evaluate these contacts under the first prong only. However, it appeared to incorporate aspects of the second prong, holding that Rize’s “suit-related contacts” with Texas, taken together, are insufficient to establish minimum contacts and therefore, the district court lacked personal jurisdiction over Rize. The appellate court disagreed based only on the first prong of the specific jurisdiction inquiry.

Raiz noted that Rize has over 500 members in Texas. However, the majority were from California, Nevada, or another state when they became members. Less than one percent of Rize’s total membership is from Texas. However, the appellate court noted that a court could find minimum contacts despite this fact. Moreover, Rize has members who originated from Texas, at least 17 of whom joined after Rize rebranded.

Raiz also emphasized on Rize’s solicitations to its existing Texas members, but these communications targeted members based on their usage of Rize services, not their geographical location. Considering prospective members, Rize did not target Texas in its advertising or marketing but focused on California and Nevada. However, the appellate court noted that a defendant’s advertising activity is useful but not dispositive.

Rize acquires members through a membership agreement, a contract. Rize pointed to a California choice of law provision in its membership agreement. The appellate court determined that Rize’s choice of California law both supports the conclusion that it has minimum contacts in California and does not mean that Rize cannot establish minimum contacts elsewhere, as in Texas.

Considering all the contacts, the appellate court found that Raiz has made a sufficient showing that Rize has minimum contacts with Texas. The appellate court noted that Rize may not have any branches, property, or employees in Texas, but “physical presence in the forum is not a prerequisite to jurisdiction.” Rize has continuing obligations to its Texas members. Further, Rize may not have purposely directed its activities toward Texas, but it has purposefully availed itself of the privilege of conducting business in Texas.

The appellate court also found that the district court mentioned, but ultimately did not reach, the second and third prongs of the specific jurisdiction analysis. Accordingly, the appellate court vacated the district court’s dismissal and remanded the case for the district court to decide whether Raiz’s claims arise out of or result from Rize’s Texas-related contacts and whether exercising personal jurisdiction is fair and reasonable.

The Case is No. 25-50406.

Judge: Per Curiam.

Attorneys: Mark Aaron Shoffner (Bell, Nunnally & Martin, L.L.P.) for Raiz Federal Credit Union. Jennafer Groswith (Wilson, Elser, Moskowitz, Edelman & Dicker, L.L.P.) for Rize Federal Credit Union, f/k/a SCE Federal Credit Union.

Companies: Raiz Federal Credit Union; Rize Federal Credit Union, f/k/a SCE Federal Credit Union

Cases: Trademark LouisianaNews MississippiNews TexasNews