Luciano v. SprayFoamPolymers.com, LLC

• Decision Date: 25 June 2021
• Docket Number: No. 18-0350,18-0350
• Citation: 625 S.W.3d 1
• Court: Texas Supreme Court
• Parties: Frank LUCIANO and Helene Luciano, Petitioners, v. SPRAYFOAMPOLYMERS.COM, LLC, Respondent

625 S.W.3d 1

Frank LUCIANO and Helene Luciano, Petitioners,

v.SPRAYFOAMPOLYMERS.COM, LLC, Respondent

No. 18-0350

Supreme Court of Texas.

Argued January 8, 2020

OPINION DELIVERED: June 25, 2021

Tara Kern, Jay R. Downs, Dallas, Tab H. Keener, for Respondent.

Bill Davis, Austin, Lisa A. Bennett, Kyle D. Hawkins, Houston, Jeffrey C. Mateer, Warren Kenneth Paxton, Austin, for Amicus Curiae The State of Texas.

Lisa A. Bender, Kathryn Cherry, Bradley G. Hubbard, Dallas, Daryl Joseffer, Allyson Newton Ho, Dallas, Jonathan D. Urick, Allison K. Turbiville, for Amicus Curiae The Chamber of Commerce of the United States of America.

Dawn M. Smith, Paul J. Downey, Dallas, Jacob N. Runyon, for Petitioners.

Justice Devine delivered the opinion of the Court.

SprayFoamPolymers.com, LLC is an out-of-state entity that manufactures and sells insulation products to residential and commercial customers. Frank and Helene Luciano, a Texas couple, built a home in Texas, purchased spray foam insulation services from a Texas-based installation company, suffered injuries in Texas allegedly arising from the insulation, and now seek to hold parties in the chain of distribution liable for these alleged injuries. The issue presented is whether Texas courts may exercise personal jurisdiction over SprayFoam.

The Lucianos sued SprayFoam—the manufacturer of the insulation—and Old World Cast Stone—the installation company—in Travis County. SprayFoam filed a special appearance contesting personal jurisdiction. The trial court denied SprayFoam's special appearance without issuing findings of fact or conclusions of law. The court of appeals reversed, holding that the Lucianos failed to establish either general or specific personal jurisdiction over SprayFoam. 584 S.W.3d 44, 50–53 (Tex. App.—Austin 2018). The Lucianos petitioned this Court for review.

We reverse and hold that when a manufacturer like SprayFoam "serves a market for a product in a State and that product causes injury in the State to one of its residents, the State's courts may entertain the resulting suit." Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct. , ––– U.S. ––––, 141 S. Ct. 1017, 1022, 209 L.Ed.2d 225 (2021).

I. Background

SprayFoam is a Connecticut corporation with its principal place of business and sole office in Connecticut. Since 2006, SprayFoam has been in the business of manufacturing and selling spray foam insulation to residential and commercial customers. The insulation is a polyurethane foam designed to make homes "more energy efficient, quieter, healthier and more comfortable" by sealing the cracks, crevices, and voids where air loss and infiltration occur. SprayFoam receives and approves all orders at its Connecticut office. Once payment is received, SprayFoam distributes its product to the customer.

In July 2013, the Lucianos hired Old World to install spray foam insulation into the wall cavities and roof deck of their new home in Leander, Texas. The Lucianos maintain that they were never informed of any health risks associated with the insulation. After moving into their new home in December, the Lucianos noticed a strong odor. They allege that they soon began suffering from coughing spells, itchy and burning eyes, allergies, and headaches. For months the Lucianos were told by both Old World and SprayFoam that the odor would lessen over time, but the problem persisted.

In September 2014, at SprayFoam's behest, the Lucianos acquired the project specifications sheet from Old World which showed that "Thermoseal 500," a product manufactured by SprayFoam, had been installed in their home. SprayFoam then sent Preston Nix, whom SprayFoam describes as its "independent contractor sales representative," to inspect the Luciano home. The Lucianos never received the results of Nix's inspection.

The Lucianos thereafter sued Old World and SprayFoam in Travis County, Texas, pleading claims of negligence, products liability, breach of warranties, nuisance, breach of contract, and violations of the Texas Deceptive Trade Practices Act. The Lucianos allege their claims arise from the sale and installation of SprayFoam's Thermoseal 500 in their home, and the failure to remediate the harm caused by the insulation.

In response, SprayFoam specially appeared to contest the trial court's ability to exercise personal jurisdiction over it. SprayFoam supported its special appearance with the affidavit of its general manager, Richard Ettinger. Ettinger's affidavit provided a laundry list of geographical facts, including assertions that SprayFoam had never sold or advertised any of its products in Texas, had no control over or involvement with Nix or Nix's business, and had contracted with a "Colorado third-party logistics company" for "outsourced logistics services in Texas." The Lucianos replied with an affidavit from their attorney Dawn M. Smith. Smith's affidavit attached screenshots from multiple websites, including (1) Nix's LinkedIn page on which he held himself out to be SprayFoam's "Southwest Sales Manager"; (2) Old World's webpage reflecting that it sold Thermoseal 500; and (3) screenshots from SprayFoam's own webpage, retrieved from an archival source called WaybackMachine, where SprayFoam claimed it used a "Grand Prairie TX Distribution Center." SprayFoam raised authentication and hearsay objections to the evidence.

The trial court overruled SprayFoam's authentication and hearsay objections to these three pieces of evidence and denied SprayFoam's special appearance, signing an order without any findings of fact or conclusions of law. The court of appeals reversed the trial court's denial of SprayFoam's special appearance. 584 S.W.3d at 47. After assuming the trial court properly admitted some of the Lucianos’ proffered evidence, id. at 50, the court of appeals concluded that the Lucianos had not shown that SprayFoam established sufficient minimum contacts with Texas to justify exercising either general or specific personal jurisdiction over SprayFoam, id. at 51–53. The court thus dismissed SprayFoam from the Lucianos’ suit for lack of jurisdiction. Id. at 53. We granted the Lucianos’ petition for review.¹

II. Special Appearance

A. Applicable Law

A court must have both subject matter jurisdiction over a case and personal jurisdiction over the parties to issue a binding judgment. Spir Star AG v. Kimich , 310 S.W.3d 868, 871 (Tex. 2010) (citing CSR Ltd. v. Link , 925 S.W.2d 591, 594 (Tex. 1996) ). Personal jurisdiction involves a court's ability to bind a particular party to that judgment. CSR , 925 S.W.2d at 594 (citation omitted). Whether a court may exercise power over a party is a question of law, which we review de novo. Spir Star , 310 S.W.3d at 871 (citing BMC Software Belg., N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002) ). Resolving this question of law, though, may require a court to decide questions of fact. Am. Type Culture Collection, Inc. v. Coleman , 83 S.W.3d 801, 806 (Tex. 2002). When, as here, the trial court does not issue findings of fact and conclusions of law with its judgment, we presume all factual disputes were resolved in favor of the trial court's decision unless they are challenged on appeal. Id. ; see Worford v. Stamper , 801 S.W.2d 108, 109 (Tex. 1990) (per curiam).

Texas courts may assert personal jurisdiction over a nonresident if (1) the Texas long-arm statute authorizes the exercise of jurisdiction and (2) the exercise of jurisdiction is consistent with federal due-process guarantees. TV Azteca v. Ruiz , 490 S.W.3d 29, 36 (Tex. 2016) (citing Moncrief Oil Int'l Inc. v. OAO Gazprom , 414 S.W.3d 142, 149 (Tex. 2013) ). The Texas long-arm statute broadly permits jurisdiction over a nonresident doing "business in this state" if the nonresident "commits a tort in whole or in part in this state." TEX. CIV. PRAC. & REM. CODE § 17.042(2). Allegations that a tort was committed in Texas satisfy our long-arm statute, Moncrief Oil , 414 S.W.3d at 149, but such allegations must also satisfy due-process requirements, Spir Star , 310 S.W.3d at 872 ; see U.S. CONST. amend. XIV, § 1. Here, the Lucianos allege that SprayFoam committed a tort in Texas. Consequently, the requirements for personal jurisdiction are satisfied if exercising jurisdiction comports with federal due-process limitations.

Consistent with federal due-process protections, a state may assert personal jurisdiction over a nonresident defendant only if the defendant has established "minimum contacts" with the forum state such that maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ; Spir Star , 310 S.W.3d at 872 ; Moki Mac River Expeditions v. Drugg , 221 S.W.3d 569, 575 (Tex. 2007) ; Siskind v. Villa Found. for Educ., Inc. , 642 S.W.2d 434, 436 (Tex. 1982). The plaintiff bears the initial burden of pleading allegations sufficient to confer jurisdiction. Moki Mac , 221 S.W.3d at 574 (citing Coleman , 83 S.W.3d at 807 ). The burden then shifts to the defendant to negate all bases of jurisdiction in the allegations. Id. (citing BMC , 83 S.W.3d at 793 ); Moncrief Oil , 414 S.W.3d at 149.

A defendant's contacts with the forum can give rise to either general or specific jurisdiction. Spir Star , 310 S.W.3d at 872. A court has general jurisdiction over a nonresident defendant whose "affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State." TV Azteca , 490 S.W.3d at 37 (alteration in original) (quoting Daimler AG v. Bauman , 571 U.S. 117, 127, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) ). By contrast, specific jurisdiction "covers defendants less intimately connected with a State, but only as to a narrower class of claims." Ford Motor Co. , 141 S. Ct. at 1024. The minimum contacts necessary for specific jurisdiction are established if the defendant purposefully avails itself of the privilege of conducting activities in the forum state, ...