Salinas v. CMMC
| Decision Date | 19 July 1995 |
| Docket Number | No. 03-94-00685-CV,03-94-00685-CV |
| Citation | 903 S.W.2d 138 |
| Parties | Prod.Liab.Rep. (CCH) P 14,283 Ambrocio SALINAS, Appellant, v. CMMC, Appellee. |
| Court | Texas Court of Appeals |
William W. McNeal, McNeal, Garner & Lippe, Lockhart, for appellant.
Michael W. Eady, Brown McCarroll & Oaks Hartline, Austin, for appellee.
Before POWERS, KIDD, and B.A. SMITH, JJ.
This case asks us to determine whether Texas can assert personal jurisdiction over a foreign corporation that shipped its allegedly defective product to Texas but had no other significant contacts with the state. Appellee CMMC made a special appearance to contest Texas's in personam jurisdiction; after a hearing on the issue, the trial court dismissed the suit for lack of jurisdiction. Appellant Ambrocio Salinas argues in four points of error that Texas may assert personal jurisdiction over CMMC. Because we agree that assumption of jurisdiction over this foreign defendant does not offend the constitutional guarantees of due process, we will reverse.
An understanding of the parties' connections with each other, with the forum state, and with the litigation is essential to answer questions of jurisdiction.
In the spring of 1989, Penny Adams, a consultant for Hill Country Cellars, contacted KLR Machines, Inc. about purchasing a wine press. KLR is an independent distributor of machinery used in the wine and juice industries. KLR contacted CMMC, a French corporation that manufactures equipment used for wine production, including the Vaslin CEP 700 wine press that is the subject of this litigation. In the United States, CMMC sells to customers directly and through KLR. KLR sells CMMC's products as well as products made by other manufacturers. It is unclear from the record whether any other distributors sell CMMC products in the United States.
A significant amount of correspondence and negotiations ensued between Adams and KLR and between KLR and CMMC; in June 1990 Hill Country agreed to purchase the press for approximately $44,000. There is no evidence that Adams, or anyone else from Hill Country, had any direct contact with CMMC. After KLR and Hill Country entered into a contract for the sale of the press, CMMC sent it FOB from France to the port of Houston. It was then transported by truck directly to Hill Country in Cedar Park, Texas.
CMMC does not advertise in the United States, but KLR advertises CMMC's products in two magazines that have national circulation and are widely read in the wine industry. CMMC is aware of KLR's advertising. Neither KLR nor CMMC has a place of business in Texas. Other than a few isolated sales of equipment in the state, CMMC has no contacts with Texas.
Although the sale and the shipping arrangements were made through KLR, the press was shipped directly to Hill Country from CMMC. The evidence clearly demonstrates that CMMC knew that the press was being sent to Hill Country for use in Texas. In addition, CMMC modified the product in accordance with Hill Country's specifications: the electrical system was rewired to comport with United States electrical standards. CMMC also processed and paid a warranty claim that Hill Country made through KLR in 1991 when the press had mechanical problems.
Salinas, a Hill Country employee, injured his arm on August 7, 1991 while cleaning the press. On July 29, 1993, Salinas filed this action seeking damages from CMMC and Vaslin Italia SRL. Both defendants made special appearances to contest jurisdiction. Subsequently, Salinas dropped his claims against Vaslin Italia SRL. 1 After hearing evidence at the special appearance hearing, the trial court dismissed the case for want of jurisdiction over CMMC.
A nonresident defendant making a special appearance to contest jurisdiction bears the burden of proof to negate all bases of personal jurisdiction alleged by the plaintiff. Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex.1985). When the facts are undisputed, a trial court's determination that personal jurisdiction cannot be exercised over a defendant is a question of law which this Court considers de novo.
Texas's long-arm statute has consistently been interpreted to allow jurisdiction to the full extent permitted by the United States Constitution. Tex.Civ.Prac. & Rem.Code Ann. § 17.042 (Vernon 1986); see, e.g., Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990). Therefore, the only limitations on the assertion of jurisdiction by Texas over a nonresident defendant are those imposed by the Due Process Clause of the Fourteenth Amendment. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). It is well established that personal jurisdiction may be asserted over a nonresident corporate defendant that has "minimum contacts with [the state] such that the 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, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940)). The Texas Supreme Court has recently confirmed its adherence to the federal test. Guardian Royal Exch. Assurance v. English China Clays, P.L.C., 815 S.W.2d 223, 230 (Tex.1991).
Jurisdictional analysis can be separated into two types: general jurisdiction and specific jurisdiction. See generally Helicopteros, 466 U.S. at 408, 104 S.Ct. at 1868. A court may exercise specific jurisdiction over a foreign defendant when the cause of action "arises out of" the defendant's contacts with the forum. Id. at 414, 104 S.Ct. at 1872 (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579-80, 53 L.Ed.2d 683 (1977)). A finding that the court has specific jurisdiction over a foreign defendant gives the forum state the power to adjudicate the particular controversy before the court. General jurisdiction, on the other hand, allows a state to adjudicate all matters before the court, even if the cause of action is unrelated to the defendant's contacts with the forum state. Consequently, general jurisdiction In this case, Salinas's cause of action clearly arises out of CMMC's contacts with Texas, so our analysis addresses only the issue of specific jurisdiction. To assume specific jurisdiction, we must determine whether (1) the defendant has "minimum contacts" with Texas, and (2) the exercise of jurisdiction by Texas courts offends "traditional notions of fair play and substantial justice." Milliken, 311 U.S. at 463, 61 S.Ct. at 343.
unlike specific jurisdiction, requires that the defendant have "continuous and systematic" contacts with the forum state. See Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 438, 72 S.Ct. 413, 415, 96 L.Ed. 485 (1952); see also National Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 772-73 (1995); Guardian Royal, 815 S.W.2d at 227-28.
Despite the Supreme Court's numerous attempts to identify the minimum contacts required to establish personal jurisdiction, a definitive standard remains elusive. In part, this void is caused by the fact-bound nature of jurisdictional inquiry and the unsuitability of talismanic formulas. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 470-71, 105 S.Ct. 2174, 2181, 85 L.Ed.2d 528 (1985); Guardian Royal, 815 S.W.2d at 231. In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Court found that a principal purpose of the minimum contacts requirement was to protect the defendant from unfair surprise. Although the Court rejected the idea that mere foreseeability that a chattel manufactured or sold by the defendant might find its way into a state was enough to confer jurisdiction, the Court held that a state "does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state." Id. at 500-02, 105 S.Ct. at 2197-99 (emphasis added).
World-Wide Volkswagen is not, however, the Supreme Court's last word on minimum contacts. In Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 106-07, 107 S.Ct. 1026, 1029-30, 94 L.Ed.2d 92 (1987), a Taiwanese manufacturer of motorcycle inner tubes sued its Japanese supplier of valve stems for indemnification of its settlement of a personal injury claim. The Court unanimously found that California's exercise of personal jurisdiction over Asahi was unconstitutional because forcing the Japanese company to defend itself in California was too great a burden when neither the state nor the plaintiff had a strong interest in having the case tried in California. Id. at 114-15, 107 S.Ct. at 1033-34. Despite their unanimity in finding a lack of fair play and substantial justice, the Court was evenly split on whether the defendant had adequate minimum contacts with California. Four justices thought that merely placing the valve stems into the stream of commerce with the knowledge that some of them would end up on tires in California was not enough to satisfy the minimum contacts analysis without some "additional conduct" directed at the forum state. Justice O'Connor wrote:
The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State. Additional contact of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, or marketing through a distributor who has agreed to serve as the sales agent in the forum State. But a defendant's awareness that the stream of commerce may or will sweep the product into...
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