Court of Appeals of Texas, Eighth District, El Paso
MICHELIN NORTH AMERICA, INC. Appellant,
BRENDA ISELA LOPEZ DE SANTIAGO, Individually and as Representative of the ESTATE OF EILEEN ARAMBULA LOPEZ, Deceased, and PEDRO ARAMBULA MERAZ Appellees.
from the County Court at Law No. 6 of El Paso County, Texas
McClure, C.J., Rodriguez, and Palafox, JJ.
T. RODRIGUEZ, Justice
fact pattern in this case involves a variation on a familiar
theme in civil procedure textbooks. An out-of-state tire
manufacturer targets Texas as a marketplace and sells its
products extensively throughout Texas. The Texas resident
driver of an automobile purchased in Texas is injured and his
Texas resident passengers are hurt or killed after one of the
manufacturer's tires allegedly fails in Mexico. Can the
tire manufacturer be haled to a Texas court to answer the
driver and passengers' product liability charges?
North America says no. Conceding that it actively markets its
products in Texas, that it intends for its products to end up
in Texas, that many of the tires it places into the stream of
commerce do in fact end up in the hands of Texas consumers,
and that the company makes a substantial amount of money from
Texas sales, Michelin nevertheless insists the trial court
cannot assert jurisdiction over it based on a simple
jurisdictional twist. Michelin only markets new
tires in Texas. This case involves a used Michelin
tire, placed on the vehicle by a third party following
Michelin's initial sale of the tire through distributors
to an unknown party.
largely frames its argument in terms of the stream of
commerce metaphor: because an intervening retail customer
removed the tire from the stream of commerce and then sold
the tire again on a secondary market before it ended up on
the vehicle in question, Michelin asserts that jurisdictional
chain is broken for all purposes, and that no specific
personal jurisdiction exists over the company in Texas.
unconvinced by Michelin's stream-of-commerce argument and
will not today adopt a per se rule holding that
intervening retail sales necessarily cut off downstream
personal jurisdiction in products liability cases. We agree
with Michelin that the plaintiffs' status as Texas
residents, standing alone, is not enough to confer personal
jurisdiction on Texas courts; there must be a substantial
connection between defendant Michelin's allegedly
tortious conduct, the injury plaintiffs suffered, and the
State of Texas. Walden v. Fiore, 571 U.S. 277, 134
S.Ct. 1115, 1123, 188 L.Ed.2d 12 (2014). Thus, the real
question in this case is not whether an intervening retail
sale serves as a jurisdictional chokepoint under the
stream-of-commerce-plus test. The real question is whether
the plaintiff's indirect purchase of a defective product
on a secondary market in Texas can sustain specific
jurisdiction in a Texas court when most of the tortious
conduct and the brunt of the injury related to that product
happened outside of Texas.
conclude that due process will permit the exercise of
specific jurisdiction in this case. Michelin failed to refute
the plaintiff's claim that the original tire sale took
place in Texas, and the secondary sale here arose from and
related to that Texas-based initial sale. The trial
court's order is affirmed.
the parties largely talk past each other in their pleadings,
the facts alleged by each side never directly clash. As such,
the jurisdictional facts here are undisputed. We will take
them as true for the purposes of deciding this appeal.
North America (Michelin) is a tire manufacturer incorporated
in New York with its principal base of business in South
Carolina. Michelin designs and manufactures tires, but it
does not sell tires directly to consumers, nor are there
facts in this record to support the inference that Michelin
maintains any physical presence in the state of Texas.
Instead, Michelin uses distributors to penetrate markets
across the United States.
uses three distributor companies-Discount Tire Company of
Texas, Wal-Mart Stores, and Tire Dealer's Warehouse-to
sell new tires directly to consumers in Texas. At least
forty-six authorized dealers sell Michelin tires in
brick-and-mortar stores in the El Paso area alone. Michelin
also runs a web site (www.michelinman.com)
accessible to Texas consumers that allows users to directly
purchase officially licensed Michelin merchandise, join a
mailing list to receive Michelin promotional emails, use a
configuration tool to determine which Michelin tires fit a
particular vehicle, communicate live with a "Tire
Concierge" that assists in finding the right tire, and
search for Michelin dealerships. Michelin gathers data in
Texas to monitor tire performance; allows Texas individuals
to register their tires for product updates; and distributes
recall information online, through its distributors, and
directly to registered tire users.
is also no stranger to this State's courts. From 2001 to
2016, Michelin has filed lawsuits seeking affirmative relief
in Texas courts and has answered lawsuits as a defendant in
other Texas cases without contesting jurisdiction, including
in other cases involving alleged tire failures.
particular tire involved in this accident is known as a
Uniroyal Tiger Paw Freedom tire. It was designed and
developed in 2005 in both Ohio and South Carolina by a
Michelin subsidiary company. The Uniroyal Tiger Paw Freedom
tire was designed to be used until it reaches a tread depth
of 2/32 of an inch and has an expected service life of ten
years. Following the design phase, the tire was manufactured
during the 11th week of 2005 at a plant in Kitchener,
Ontario, Canada. According to the first amended petition in
this case, "Defendant MNA [Michelin North America]
shipped the subject tire to the State of Texas and delivered
the same to its distributor in Texas with the intent of
delivering the tire to a retailer for sale in the State of
Texas because MNA had directed its business to Texas."
We take this to mean that the subject tire was initially
transferred to a Texas distributor for sale in the Texas
marketplace. Michelin never directly disputed this allegation
in its special appearance.
2014, Brenda Isela Lopez de Santiago (Lopez) purchased a used
2002 Honda CR-V SUV from a car dealership in El Paso, Texas.
The car came with Uniroyal tires already installed, and they
had already been used at the time of purchase. Lopez alleged
both in her pleadings and in an affidavit that the subject
tire was previously purchased in Texas and that no one at the
car dealership ever replaced the tires. Again, Michelin never
directly disputed this allegation. Instead, Michelin averred
in a special appearance filing that "[u]pon information
and belief, the subject tire was purchased used from a third
party wholly unrelated to MNA." In construing these
pleadings for purposes of appeal, we take this to mean that
the parties agree that prior to Lopez's purchase of the
SUV, the subject tire was previously sold in Texas and
purchased separately from a third party unconnected to
24, 2015, Lopez allowed Pedro Arambula Meraz to drive her
CR-V. Lopez, her daughter, and others were passengers. As
Arambula Meraz drove on a road in Ciudad Juarez, Chihuahua,
Mexico, across the international border from El Paso, the
right back tire on the Honda CR-V failed, causing a rollover
accident. Lopez was injured in the crash, and her daughter
died. Arambula Meraz was also injured.
sued both Arambula Meraz and Michelin in a Texas state
district court in El Paso. With respect to Michelin, Lopez
brought negligence and product liability claims. Arambula
Meraz also filed cross-claims against Michelin for negligence
and products liability.
trial court overruled Michelin's special appearance
request. This interlocutory appeal followed.
advances a two-pronged attack on the trial court's
jurisdiction before this Court. In Issue One, Michelin
contends that it is not "at home" in Texas for
purposes of claim-blind general jurisdiction, meaning that
any legitimate assertion of personal jurisdiction must tie
Texas as a forum to the specific claim at bar. In Issue Two,
Michelin argues that specific jurisdiction fails because the
suspect tire in this case was neither designed nor
manufactured in Texas, nor did Michelin directly sell the
tire to Lopez. Because Michelin designs, manufacturers, and
markets only new tires, and this case involved a used tire
purchased by an unidentified intervening retail customer,
specific jurisdiction does not exist.
agree that no general jurisdiction exists over Michelin. A
company can only be considered "at home" either in
the state of its incorporation or the state where it is
headquartered. Michelin is neither incorporated or
headquartered in Texas. However, we disagree that specific
jurisdiction is unavailable. We hold that the intervening
retail sale of a Michelin tire in Texas does not per
se insulate Michelin from personal jurisdiction in
Texas, and there is a sufficient nexus between the claim, the
defendant, and the State of Texas as a forum to permit the
exercise of specific jurisdiction.
plaintiff and the defendant "bear shifting burdens of
proof in a challenge to personal jurisdiction."
Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d
653, 658 (Tex. 2010). "[T]he plaintiff bears the initial
burden to plead sufficient allegations to bring the
nonresident defendant within the reach of Texas's
long-arm statute." Id. Once the plaintiff
satisfies this initial burden, the defendant challenging
jurisdiction "bears the burden to negate all bases of
personal jurisdiction" and must tie its jurisdictional
arguments "to the allegations in the plaintiff's
pleading." Id. The defendant can challenge
personal jurisdiction "on either a factual or legal
basis." Id. at 659. "Factually, the
defendant can present evidence that it has no contacts with
Texas, effectively disproving the plaintiff's
allegations." Id. "Legally, the defendant
can show that even if the plaintiff's alleged facts are
true, the evidence is legally insufficient to establish
jurisdiction; the defendant's contacts with Texas fall
short of purposeful availment; for specific jurisdiction,
that the claims do not arise from the contacts; or that
traditional notions of fair play and substantial justice are
offended by the exercise of jurisdiction." Id.
concedes that it has contacts with Texas, and it did not
challenge any of Lopez's allegations regarding the nature
of initial or intervening retail sales at all, either through
conflicting allegations made in its special appearance
filings or by way of contravening affirmative evidence
offered at the trial court level. That converts this case
from a mixed question of fact and law to a purely legal
question. We apply those uncontested jurisdictional facts to
the law de novo. Kelly, 301 S.W.3d at 658.
as here, the trial court does not file findings of fact in a
special appearance, all questions of fact are presumed to
support the judgment. Worford v. Stamper, 801 S.W.2d
108, 109 (Tex. 1990). A reviewing court must affirm if the
judgment can be upheld on any legal theory supported by the
evidence. Happy Indus. Corp. v. American Specialties,
Inc., 983 S.W.2d 844, 847 (Tex.App.--Corpus
Christi-Edinburg 1998, writ dism'd w.o.j.).
areas of the law are defined by clear, settled rules and
crisp, linear analytical approaches that spring from a common
source of judicial understanding-one that is often grounded
less in high-minded philosophical debate and more in
practical applications and the need of litigants and courts
for certainty and consistency. Personal jurisdiction is not
one of those areas of law. As we have previously noted,
"[s]tating the maxims for personal jurisdiction is often
easier than applying them." Semperit Technische
Produkte Gesellschaft MBH v. Hennessy, 508 S.W.3d 569,
578 (Tex.App.--El Paso 2016, no pet.). We endeavor to state
and apply these maxims as best we can.
court must have both subject matter jurisdiction over the
controversy and personal jurisdiction over the parties"
before it may exercise its power over a legal dispute.
Spir Star AG v. Kimich, 310 S.W.3d 868, 871 (Tex.
2010). "Subject matter jurisdiction involves a
court's 'power to hear a particular type of
suit,' while personal jurisdiction 'concerns the
court's power to bind a particular person or
party.'" TV Azteca v. Ruiz, 490 S.W.3d 29,
36 (Tex. 2016). This case deals with the trial court's
ability to exercise personal jurisdiction.
court may exercise personal jurisdiction over a non-resident
defendant so long as that state's long-arm statute
permits it, and so long as the jurisdictional exercise is
consistent with the due process limitations imposed on state
courts by the federal constitution. TV Azteca, 490
S.W.3d at 36. Because the Texas long-arm statute allows state
courts to exercise personal jurisdiction over nonresident
tortfeasors to the fullest extent permitted by the federal
constitution, our jurisdictional analysis rises and falls
entirely in tandem with federal due process case law.
Id.; see also Tex.Civ.Prac.&Rem.Code
Ann. § 17.042 (West 2015)(Texas long-arm statute).
Threshold: Minimum Contacts and Notions of Fair Play
federal due process level, personal jurisdiction was
initially conceptualized as a function of a defendant's
physical presence; a state could not hale a defendant to
court unless and until the defendant was present within the
forum state's physical borders. Burnham v. Superior
Court of Cal., Cty. of Marin, 495 U.S. 604, 611-12, 110
S.Ct. 2105, 2110-11, 109 L.Ed.2d 631 (1990)(Scalia, J.,
plurality op.); Int'l Shoe Co. v. State of
Washington, Off. of Unemployment Compensation &
Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90
L.Ed. 95 (1945). This physical presence approach to
jurisdiction later evolved under the Burger and Warren Courts
in response to the rise of interstate commerce and the
proliferation of corporations-legally fictitious entities
that had no physical bodies that could be subjected to
jurisdiction. See Burnham, 495 U.S. at 617, 110
S.Ct. at 2114.
International Shoe Co., the United States Supreme
Court dealt with the issue of corporate "presence"
in discussing a state's exercise of extraterritorial
jurisdiction over a non-resident corporate defendant. 326
U.S. at 315, 66 S.Ct. at 158. The Court held that due process
allowed states to exercise personal jurisdiction over
non-resident defendants if a defendant had "certain
minimum contacts" with the forum "such that the
maintainence of the suit does not offend 'traditional
notions of fair play and substantial justice.'"
Id. at 316, 66 S.Ct. at 158. Subsequent
interpretations of International Shoe have treated
this language as creating a test with two prongs: (1) a
minimum contacts prong and (2) a fair play/substantial
justice prong. See Burger King Corp. v. Rudzewicz,
471 U.S. 462, 476, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528
defendant establishes minimum contacts with a state when it
purposefully avails itself of the privilege of conducting
activities within the forum state, thus invoking the benefits
and protections of its laws." [Internal quotation marks
and citation omitted]. Retamco Operating, Inc. v.
Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009).
"Significant contacts suggest that the defendant has
taken advantage of forum-related benefits, while minor ones
imply that the forum itself was beside the point."
Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex.
2010). "Once it has been decided that a defendant
purposefully established minimum contacts within the forum
State, these contacts may be considered in light of other
factors to determine whether the assertion of personal
jurisdiction would comport with fair play and substantial
justice." [Internal quotation marks and citation
omitted]. Burger King, 471 U.S. at 476, 105 S.Ct. at
2184. Fair play/substantial justice factors include (1) the
burden on the defendant, (2) the forum state's interest
in adjudicating the dispute, (3) the plaintiff's interest
in obtaining convenient and effective ...