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Golden Peanut Company, LLC v. Give and Go Prepared Foods Corp.

Court of Appeals of Texas, Fifth District, Dallas

May 14, 2019

GOLDEN PEANUT COMPANY, LLC D/B/A GOLDEN PEANUT AND TREE NUTS, Appellant
v.
GIVE AND GO PREPARED FOODS CORP., Appellee

          On Appeal from the 101st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-17-13535

          Before Justices Bridges, Partida-Kipness, and Carlyle

          MEMORANDUM OPINION

          CORY L. CARLYLE JUSTICE

         This case reads like a law school exam: a Canadian confectioner sued a Georgia-based[1] nut supplier and a Texas-based nut supplier in Dallas County. Texas pecans are at the center of the controversy unless they aren't. Weevils found their way into some pecans somewhere, which was a problem.

         Appellee, Canadian corporation Give and Go, sued appellant, Georgia LLC Golden Peanut, in Dallas County claiming that Golden Peanut delivered, from its Georgia plant to Give and Go's Canadian plant, weevil-infested pecan pieces, some or all of which may have come from Texas.[2] The trial court denied Golden Peanut's special appearance but didn't provide its reasoning. See Tex. R. Civ. P. 296. We reverse and render judgment, dismissing Give and Go's claims against Golden Peanut because Texas courts lack jurisdiction over Golden Peanut in this particular case. Because all issues are settled in law, we issue this memorandum opinion. See Tex. R. App. P. 47.4.

         I. Background

         Give and Go alleged (1) beginning in late 2016, Golden Peanut "supplied Plaintiff with small pecan pieces containing whole and partial pecan weevil larvae visible to the human eye"; (2) Give and Go "had no choice but to engage in a . . . recall of the Pecans," which caused Give and Go to "suffer significant property damage and associated economic damages"; and (3) the trial court "has personal jurisdiction over the Defendants because Defendants do business in Dallas County, Texas."

         Golden Peanut filed a special appearance, contending (1) it "is not a Texas resident"; (2)"general personal jurisdiction is lacking as Golden Peanut is not 'at home' in Texas because it is a Georgia limited liability company with its principal place of business in Georgia"; and (3)specific personal jurisdiction is lacking because "Plaintiff's lawsuit does not arise from any Golden Peanut conduct in Texas" and "there is no nexus between Plaintiff's allegations against Golden Peanut and Golden Peanut's connections to Texas." In an affidavit attached to the special appearance, Kevin J. Kramer, Golden Peanut's Vice President of Tree Nuts, stated, "All of the pecans associated with [Give and Go's] Orders were shipped from Golden Peanut's shelling plant in Camilla, Georgia to Give and Go in Canada." The record indicates that once pecans arrive at the Camilla shelling plant, they are mixed together such that tracing shelled pecans' origins becomes near impossible.

         In its response to the special appearance, Give and Go contended (1) Golden Peanut is subject to personal jurisdiction in Texas and (2) Golden Peanut submitted to personal jurisdiction by "compelling merits-based discovery and participating in other non-jurisdictional matters and hearings." Following the special appearance hearing, both parties filed supplemental briefs. Golden Peanut asserted it is not subject to general jurisdiction in Texas because (1) Georgia is its state of incorporation and principal place of business; (2) "[f]or a company with locations in five states and three countries, Golden Peanut's limited Texas facilities are insufficient"; and (3) "Texas employees making up 13% of a company's worldwide workforce is insufficient." Golden Peanut attached and cited another Kramer affidavit, which included an exhibit describing Golden Peanut's "global footprint" as consisting of its corporate headquarters and regional office in Georgia; eight "peanut facilities," one of which is a shelling and storage facility in Texas; four "pecan facilities," one of which is a shelling and packaging facility in Texas; and two "tree nut facilities" in California.

         Give and Go's supplemental brief stated (1) "Golden Peanut concedes that potentially all of Golden Peanut's pecans at issue in this case could have come from its Texas pecans suppliers" and (2) "Give and Go has satisfied the 'substantial connection' requirement because its claims arise from pecans contaminated with weevils that Golden Peanut sourced from Texas and sold to Give and Go."

         II. The special appearance

         Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law that we review de novo. Old Republic Nat'l Title Ins. Co. v. Bell, 549 S.W.3d 550, 558 (Tex. 2018); Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007); Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 790-91 (Tex. 2005). If, as in this case, the trial court does not issue findings of fact and conclusions of law with its special appearance ruling, we imply all findings of fact necessary to support its ruling that are supported by the evidence. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002). When jurisdictional facts are undisputed, whether those facts establish jurisdiction is a question of law. Old Republic, 549 S.W.3d at 558.

         Texas courts may exercise personal jurisdiction over a nonresident defendant if (1) the Texas long-arm statute permits exercising jurisdiction and (2) asserting jurisdiction satisfies constitutional due process guarantees. Cornerstone Healthcare Grp. Holding, Inc. v. Nautic Mgmt. VI, L.P., 493 S.W.3d 65, 70 (Tex. 2016); Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 657 (Tex. 2010); see also Tex. Civ. Prac. & Rem. Code §§ 17.041-.045 ("Long-Arm Jurisdiction in Suit on Business Transaction or Tort"). The Texas long-arm statute reaches "as far as the federal constitutional requirements for due process will allow." Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002). Personal jurisdiction over a nonresident defendant satisfies constitutional due process guarantees when (1) the nonresident defendant has established minimum contacts with the forum state and (2) exercising jurisdiction comports with traditional notions of fair play and substantial justice. See M & F Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., Inc., 512 S.W.3d 878, 885 (Tex. 2017) (citing Walden v. Fiore, 571 U.S. 277, 283 (2014)).

         Minimum contacts are established when the nonresident defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking its laws' benefits and protections. Kelly, 301 S.W.3d at 657-58. There are three parts to the purposeful-availment inquiry: (1) only the defendant's contacts are relevant; (2) the contact must be purposeful, not random, fortuitous, or attenuated; and (3) the defendant must seek some advantage, benefit, or profit by availing itself of the forum. Moki Mac, 221 S.W.3d at 575.

         A nonresident defendant's forum-state contacts may give rise to two types of personal jurisdiction. Id. Specific jurisdiction, also called case-linked jurisdiction, is established if the defendant's alleged liability arises out of or relates to the defendant's contacts with the forum state. Id. at 576. A claim arises from or relates to the forum contacts if there is a "substantial connection between [the] contacts and the operative facts of the litigation." Id. at 585. The specific jurisdiction analysis focuses on the relationship among the defendant, the forum, and the litigation. Id. at 575- 76. Specific jurisdiction requires us to analyze ...


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