American Type Culture Collection v. Coleman
| Decision Date | 03 July 2002 |
| Docket Number | No. 00-0959.,00-0959. |
| Citation | 83 S.W.3d 801 |
| Parties | AMERICAN TYPE CULTURE COLLECTION, INC., Petitioner, v. Marshall COLEMAN, et al., Respondents. |
| Court | Texas Supreme Court |
Randy Edward Moore, The Moore Law Firm, Angleton, Samuel M. Sipe, Jr., Steptoe & Johnson, Washington, DC, Gordon R. Pate, Joe Michael Dodson, Pate and Dodson, Beaumont, for Petitioner.
H. Ronald Welsh, Thad T. Dameris, Vinson & Elkins, William Key Wilde, Tracie J. Renfroe, Michael Vincent Young, Bracewell & Patterson, J. Palmer Hutcheson, Gardere Wynne Sewell & Riggs, Kenneth Tekell, Tekell Book Matthews & Limmer, John T. McDowell, McDowell Collmer, Francis I. Spagnoletti, Spagnoletti & Associates, Timothy F. Lee, Ware Snow Fogel & Jackson, LLP, H. Daniel Spain, Melanie Virginia Waggoner, Spain & Hastings, Kathy D. Patrick, Gibbs & Bruns, Tom Bayko, Bayko Gibson Carnegie Hagan Schoonmaker & Meyer, Ronald E. Cook, Cook & Roach, Andrew R. Harvin, Doyle Rider Restrepo Harvin & Robbins, L.T. "Butch" Bradt, L.T. Bradt, P.C., Marc A. Sheiness, Sheiness Scott, et al., Otway B. Denny, Jr., Samuel E. Stubbs, Fullbright & Jaworski, C. Ed Harrell, Hughes, Watters & Askanase, John G. Bissell, John W. Bridger, Strong Pipkin Nelson Bissell & Ledyard, John A. Irvine, Porter & Hedges, Murray Fogler, McDade Fogler Maines, Phillip Dye, Jr., Vinson & Elkins, Peter E. Strand, James T. Liston, Jerry Von Sternberg, Gary R. Proctor, Karan Cummings Ciotti, Houston, John R. Gilbert, Gilbert & Moore, Angleton, Stephen R. Lewis, Jr., Lewis & Williams, Galveston, James E. (Buster) Brown, Law Offices of James E. "Buster" Brown, Vaughan O. Stewart, Lake Jackson, John Arthur Eaves, Jackson, MS, Carlos Garza, Texas City, Brian J. Hurst, Mark D. Taylor, Baker & McKenzie, Jerald Michael Rasansky, Dallas, Mitchell A. Toups, Steven C. Toups, Weller Green Toups & Terrell, Beaumont, Andrew Robert Spector, Miami, FL, for Respondent.
The issue in this interlocutory appeal is whether a Texas court may, consistent with due process, exercise in personam jurisdiction over American Type Culture Collection ("ATCC") in this case. The trial court found that ATCC had sufficient minimum contacts with Texas to justify the exercise of personal jurisdiction. The court of appeals agreed and affirmed the trial court's judgment. 26 S.W.3d 37. We granted ATCC's petition for review to consider whether the trial court erred in denying ATCC's special appearance. We reverse the court of appeals' judgment and render judgment dismissing the case against ATCC for lack of personal jurisdiction.
ATCC, a nonprofit research organization, serves as a long-term repository center for living microorganisms, viruses, and cell lines. ATCC also sells biological research material to research institutes and commercial manufacturers throughout the United States and in forty-five countries.
In 1994, Marshall Coleman and approximately 1,800 veterans of the Persian Gulf War sued ATCC and eighty-two other defendants alleging that the defendants sold material, equipment, and technology to Iraq that was used to create biological and chemical weapons. They brought a class action in Brazoria County for products liability and negligence, contending they were harmed by exposure to those pathogens.
The defendants removed the case to federal court, which dismissed for lack of subject-matter jurisdiction. Coleman v. Alcolac, 888 F.Supp. 1388, 1404 (S.D.Tex. 1995) (). Upon remand, ATCC filed a special appearance under Texas Rule of Civil Procedure 120a, challenging personal jurisdiction. The trial court heard arguments relating to the motion in 1995 and denied ATCC's special appearance three years later.
The court of appeals affirmed, holding that jurisdiction was proper because ATCC's Texas sales were "numerous and repetitive." 26 S.W.3d at 49. The court noted that while ATCC's Texas sales represented "only about 3.5 percent of its worldwide business," ATCC had not directed the court to evidence comparing its Texas sales volume to its sales volume in the forty-five other countries in which it sold products. Id. at 46. The court stated:
Such a comparison ... would have gone to whether ATCC could reasonably have anticipated being sued in Texas. Moreover, if Texas was ATCC's sixth biggest U.S. sales market despite generating only five percent of all ATCC's U.S. business, the trial judge could have reasonably inferred most jurisdictions, foreign or otherwise, generated a very low percentage of ATCC's overall business. Therefore, the trial judge could also have reasonably inferred the 3.5-percent figure was not insignificant.
Id. The court also observed that ATCC did not present comparative-sales evidence regarding its Maryland site which served as a patent-repository for Texas residents. Id. at 47. The court found it significant that "ATCC [did] not state ... whether 2.7 percent [of its repository business over a twenty-year period] was a high or low figure compared to its repository business in other states or countries." Id.
ATCC petitioned for rehearing en banc, which the court of appeals denied. Id. at 53. Although the judgment of the court of appeals is normally conclusive for interlocutory appeals, we may exercise jurisdiction if the justices of the court of appeals disagree on a question of law material to the decision. TEX. GOV'T CODE § 22.225(b)(4), (c). Justice O'Connor, who did not sit on the original panel deciding the case, dissented from the denial of the petition for en banc rehearing. 26 S.W.3d at 53. We granted ATCC's petition for review to consider whether the trial court erred in denying ATCC's special appearance.
We must first determine whether we have subject-matter jurisdiction over this interlocutory appeal. ATCC alleges that we have jurisdiction under Texas Government Code sections 22.001(a)(1) and 22.225(c). Specifically, ATCC contends this Court has jurisdiction because Justice O'Connor dissented from the denial of en banc review. The question is whether, in this case, "the justices of the court[] of appeals disagree[d] on a question of law material to the decision." TEX. GOV'T CODE 22.001(a)(1), 22.225(c).
In dissenting to the court of appeals' denial of en banc review, Justice O'Connor challenged concepts fundamental to the court of appeals' holding. She criticized the panel for creating the concept of "comparative personal jurisdiction." 26 S.W.3d at 53. Disagreeing with the court's jurisdictional analysis pertaining to sales in other states, Justice O'Connor wrote that "[e]vidence showing sales were low in other states, as compared to sales in Texas, should not be a factor to be considered in special appearance cases." Id. at 53-54. In her view, the facts upon which the panel found personal jurisdiction were "extremely weak." Id. at 53.
Because Justice O'Connor's dissent addressed the merits of the panel's decision and disagreed expressly with a question of law material to the decision, we have jurisdiction to decide this case. Our jurisdiction is based not on the bare fact that a justice dissented from en banc review, but on the direct clash between the justice and the court on the appropriate analysis for the case. Having determined that we have jurisdiction to decide this case, we now turn to the issue before us — whether a Texas court may exercise personal jurisdiction over ATCC consistent with due process requirements in this case.
Whether a court has personal jurisdiction over a defendant is a question of law. BMC Software v. Marchand, 83 S.W.3d 789 (Tex.2002). But in resolving this question of law, a trial court must frequently resolve questions of fact. Id. at
On appeal, the trial court's determination to grant or deny a special appearance is subject to de novo review, but appellate courts may be called upon to review the trial court's resolution of a factual dispute. Id. at 794. When the trial court does not issue findings of fact, reviewing courts should presume that the trial court resolved all factual disputes in favor of its judgment. Id. at 795. Here, the relevant facts are generally not disputed. Texas courts may assert personal jurisdiction over a nonresident defendant only if the Texas long-arm statute authorizes jurisdiction and the exercise of jurisdiction is consistent with federal and state due process standards. Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991), The Texas long-arm statute reaches "as far as the federal constitutional requirements of due process will allow." Id. Thus, the Texas long-arm statute requirements are satisfied if exercising jurisdiction comports with federal due process limitations. Id. We rely on precedent from the United States Supreme Court as well as our own state's decisions in determining whether a nonresident defendant has met its burden to negate all bases of jurisdiction. BMC Software, 83 S.W.3d at
Under the Due Process Clause of the Fourteenth Amendment, jurisdiction is proper if a nonresident defendant established "minimum contacts" with Texas and maintenance of the suit does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1940). The purpose of the minimum-contacts analysis is to protect the defendant from being haled into court when its relationship with Texas is too attenuated to support jurisdiction. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990). Accordingly, we focus upon the defendant's activities and expectations in deciding whether it is proper to call it before a Texas court. Id.
The minimum-contacts analysis requires that a defendant "purposefully avail" itself of the privilege of conducting...
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