In re Fed. Corp.
| Decision Date | 01 November 2016 |
| Docket Number | NUMBER 13-16-00219-CV |
| Parties | IN RE FEDERAL CORPORATION |
| Court | Texas Court of Appeals |
On Petition for Writ of Mandamus
MEMORANDUM OPINION ON REHEARING1Before Justices Benavides, Perkes and Longoria
In this original proceeding, relator Federal Corporation ("Federal") petitions for a writ of mandamus to compel the trial court to withdraw its order requiring Federal to fully respond to numerous discovery requests.2 We conditionally grant mandamus relief in part and deny relief in part.
Real party in interest Jose Eduardo Gonzalez ("Gonzalez") became quadriplegic as a result of a vehicle rollover accident caused by a tire failure that allegedly resulted from a tread separation. Following the accident, Gonzalez brought suit against multiple defendants for negligence and strict product liability. Relevant to this proceeding, Gonzalez alleged that Federal designed, manufactured, and shipped the tire which caused the accident.
Federal, a corporation based in Taiwan, responded with a special appearance asserting that the trial court lacked personal jurisdiction. See TEX. R. CIV. P. 120a. Gonzalez then propounded over 100 separate discovery requests pursuant to Federal's special appearance. For purposes of this proceeding, we follow Federal in dividing the requests into three groups: requests which seek information regarding Federal's activities in Texas; requests which seek information regarding the same activities in the states of the United States other than Texas; and requests which seek information related to the merits of the case. Federal answered the first set of requests but objected to the second and third sets on the ground they were calculated to produce information irrelevant to the special appearance.3
Gonzalez filed a motion seeking to compel Federal to fully respond to discovery. Following a hearing at which both parties were represented by counsel, the trial courtgranted the motion in an order which also limited the geographic scope of the second set of requests to Texas and Mississippi.
This original proceeding ensued.4 This Court stayed the trial court's order compelling discovery and requested a response. This Court received a response from Gonzalez and a reply to the response from Federal.
To be entitled to the extraordinary relief of the writ of mandamus, the relator must show both that (1) the trial court abused its discretion and (2) there is no adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding). The relator has the burden of establishing both prerequisites to mandamus relief, and this burden is a heavy one. In re CSX Corp., 124 S.W.3d 149, 151 (Tex. 2003) (orig. proceeding). A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable that it amounts to a clear and prejudicial error of law or if it clearly fails to correctly analyze or apply the law. In re Olshan Found. Repair Co., 328 S.W.3d 883, 888 (Tex. 2010) (orig. proceeding).
The Texas Rules of Civil Procedure provide a right to discovery "of any matter that is not privileged and is relevant to the subject matter of the pending action." TEX. R. CIV. P. 192.3(a). We broadly construe the phrase "relevant to the subject matter" to afford litigants "the fullest knowledge of the facts and issues prior to trial." Ford Motor Co. v.Castillo, 279 S.W.3d 656, 664 (Tex. 2009). The Texas Rules of Evidence define "relevant" evidence as that which makes a fact of consequence to the action more or less likely than it would be without the evidence. TEX. R. EVID. 401.
The scope of discovery is generally within the trial court's discretion, but the trial court must attempt to impose reasonable discovery limits. In re Graco Children's Products, Inc., 210 S.W.3d 598, 600 (Tex. 2006) (orig. proceeding) (per curiam). While the scope of discovery is broad, permissible discovery requests "must show a reasonable expectation of obtaining information that will aid the dispute's resolution." In re CSX Corp., 124 S.W.3d at 152 (citing In re Am. Optical Corp., 988 S.W.2d 711, 713 (Tex. 1998) (orig. proceeding)). However, a request is not overbroad merely because it may call for some information of doubtful relevance. In re Nat'l Lloyds Ins. Co., 449 S.W.3d 486, 488 (Tex. 2014) (orig. proceeding) (per curiam). A "central consideration" in determining overbreadth is whether the request could have been more narrowly tailored to avoid including irrelevant information but still obtain necessary, pertinent information. In re Allstate County Mut. Ins. Co., 227 S.W.3d 667, 669 (Tex. 2007) (orig. proceeding).
Federal argues in its first issue that the second grouping of requests are overbroad because they are calculated to disclose information regarding its contacts with states other than Texas. According to Federal, such information is irrelevant because it does not make any fact germane to the special appearance more or less likely. Resolving this issue requires us to first discuss relevancy in the context of discovery and how it applies to a special appearance.
Texas Rule of Civil Procedure 120a provides that any party may file a special appearance "for the purpose of objecting to the jurisdiction of the court over the person or property of the defendant on the ground that such party or property is not amenable to process issued by the courts of this State." TEX. R. CIV. P. 120a(1). The party bringing the special appearance is entitled to have it heard and decided before any other pleading. See id. R. 120a(2). A court should not reach the merits of the case when deciding a special appearance. Phillips Dev. & Realty, LLC v. LJA Eng'g, Inc., No. 14-14-00858-CV, ___S.W.3d ___, ___, 2016 WL 3610457, at *3 (Tex. App.—Houston [14th Dist.] June 30, 2016, pet. filed). Rule 120a specifically provides for jurisdictional discovery, see id. R. 120a(3), but discovery "is limited to matters directly relevant to the issue" of jurisdiction. In re Doe, 444 S.W.3d 603, 608 (Tex. 2014) (orig. proceeding).
Two issues are relevant to whether Texas courts may exercise personal jurisdiction over a defendant: (1) the Texas long arm statute must authorize jurisdiction; and (2) the exercise of jurisdiction must comply with federal and state constitutional guarantees of due process. Searcy v. Parex Res., Inc., No. 14-0293, ___ S.W.3d ___, ___, 2016 WL 3418248, at *5 (Tex. June 17, 2016). Because the long arm statute "provides for personal jurisdiction that extends to the limits of the United States Constitution," Texas courts address only whether federal due process requirements permit the exercise of jurisdiction. See id.
Whether jurisdiction complies with due process depends on two factors: (1) the defendant must have established minimum contacts with the forum state; and (2) the assertion of jurisdiction must not offend "traditional notions of fair play and substantial justice." TV Azteca v. Ruiz, 490 S.W.3d 29, 36 (Tex. 2016) (citing Int'l Shoe Co. v. Wash.,326 U.S. 310, 316 (1945)). As relevant to our analysis in this case, sufficient minimum contacts exist when the defendant "purposefully avails itself of the privilege of conducting activities within the forum [s]tate, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). The purposeful-availment analysis looks to "contacts that the defendant 'purposefully directed' into the forum state" rather than "random, fortuitous, isolated, or attenuated" connections with the forum. Searcy, ___ S.W.3d at ___, 2016 WL 3418248, at *5.
Minimum contacts can create two forms of jurisdiction: specific and general. Specific jurisdiction exists when the plaintiff's cause of action "arises from or relates to the defendant's contacts" with the forum state. Cornerstone Healthcare Group Holding, Inc. v. Nautic Mgmt. VI, L.P., No. 14-0538, ___ S.W.3d ___, ___, 2016 WL 3382159, at *4 (Tex. June 17, 2016). The specific-jurisdiction analysis focuses "on the relationship among the defendant, the forum[,] and the litigation." Id. (internal quotation marks omitted, brackets in the original). General jurisdiction, by contrast, exists when the defendant's "affiliations with the [forum] State are so 'continuous and systematic' as to render [it] essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). A court with general jurisdiction over a defendant may decide a case even if the plaintiff's cause of action did not arise from the defendant's contacts with the forum. TV Azteca, 490 S.W.3d at 37. The effect of the minimum contacts analysis is that a state may exercise jurisdiction over a nonresident defendant only when its "conduct and connection to a forum are such that it could reasonably anticipate being haled into court there." Moncrief Oil Intern. Inc. v. OAO Gazprom, 414 S.W.3d 142, 152 (Tex. 2013).
Even when a defendant has established minimum contacts with a state, due process permits state courts to assert jurisdiction only if it is consistent with "traditional notions of fair play and substantial justice." TV Azteca, 490 S.W.3d at 55. If a defendant has purposefully availed itself of the privilege of conducting business in the forum state, subjecting that defendant to the forum state's courts will typically not offend due process. Id. Nevertheless, courts consider several factors to evaluate whether the assertion of jurisdiction by a forum is fair and just: (1) the burden on the defendant litigating the dispute in the forum; (2) the forum state's interest in litigating the dispute; (3) the plaintiff's interest "in obtaining convenient and effective relief"; (4) the interest of the interstate or...
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