Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
GRUPO MEXICO S.A.B. DE C.V., Appellant,
MT. MCKINLEY INSURANCE COMPANY AND EVEREST REINSURANCE COMPANY, Appellees.
appeal from the 319th District Court of Nueces County, Texas.
Justices Benavides, Longoria, and Perkes
GREGORY T. PERKES Justice.
Mt. McKinley Insurance Company and Everest Reinsurance
Company (collectively Mt. McKinley) filed suit in Texas
against appellant Grupo Mexico S.A.B. de C.V. (Grupo), a
foreign corporation, and two of its subsidiaries, Americas
Mining Corporation (AMC) and Asarco, Inc. (Asarco), also
foreign corporations. In this interlocutory appeal, Grupo
contends the trial court erred in denying its special
appearance because: (1) the trial court lacks general
jurisdiction over Grupo; (2) the trial court lacks specific
jurisdiction over Grupo based on Grupo's contacts; (3)
Asarco's contacts cannot be imputed to Grupo under an
alter ego theory; and (4) Mt. McKinley's motion to strike
Grupo's special appearance was not an otherwise
legitimate basis to deny Grupo's special appearance. We
1999, Grupo, an international mining concern based in Mexico
City, acquired Asarco in a leveraged buyout and subsequently
formed AMC as a wholly-owned subsidiary to hold its shares of
Asarco. Asarco, incorporated in New Jersey and headquartered
in Arizona, had been involved in the mining industry, both
domestically and internationally, for over a century.
However, due to a confluence of factors, including increased
debt load after the leveraged buyout, falling copper prices,
and mounting environmental and asbestos liabilities,
Asarco found itself unable to pay its debts after Grupo's
acquisition, including invoices from vendors critical to
Asarco's daily operations.
exception to Asarco's debt crisis was its controlling
interest in the publicly traded Southern Peru Copper Company
(SPCC), which remained profitable in the face of low copper
prices and contributed significantly to Asarco's
operating cash flow.  Recognizing SPCC's value and its
vulnerability to Asarco's creditors, Grupo sought to
transfer Asarco's shares in SPCC to AMC (the "SPCC
Transfer"). Grupo was concerned that the SPCC Transfer
might be challenged in court as a fraudulent transfer by
Asarco's creditors, so it hired outside accounting and
law firms to shepherd the deal.
a banking company in Mexico, agreed to loan AMC $310 million
to fund a portion of the transaction; however, as a condition
of the financing, Asarco was required to use a portion of the
proceeds from the SPCC Transfer to pay $100 million in
unsecured Yankee Bonds owned by Inbursa. But Asarco needed to
raise an additional $50 million to pay off the Yankee Bonds,
and thus began monetizing assets. This included filing a
lawsuit against Mt. McKinley and other insurers in Nueces
County, Texas, seeking payment under insurance policies for
asbestos claims made against Asarco ("Coverage
Lawsuit"). Grupo was not a party to that litigation. On
March 20, 2003, Asarco and Mt. McKinley entered into a
"Settlement Agreement, Release and Policy Buy-Back"
whereby Mt. McKinley agreed to pay $12 million in exchange
for Asarco's release of all claims against it and the
voiding of the insurance policy ("Settlement
Agreement"). Under the Settlement Agreement, Asarco
agreed to defend and indemnify Mt. McKinley from any claims
arising from the settlement. "Asarco" was defined
under the Settlement Agreement to include Grupo.
SPCC Transfer was completed eleven days later. The structure
of the deal allowed Asarco to retire a significant amount of
debt, including a $450 million line of revolving credit
secured by Grupo, but left Asarco with less cash on hand than
before the transfer, and without its most valuable
2005, Asarco and several of its wholly owned subsidiaries
filed for bankruptcy. Two years later, Asarco initiated an
adversary proceeding against Mt. McKinley, seeking to avoid
the Settlement Agreement as a constructive fraudulent
transfer. See 11 U.S.C. § 548 (stating that the
bankruptcy trustee "may avoid any transfer . . . of an
interest of the debtor in property . . . if the debtor . . .
received less than a reasonably equivalent value in exchange
for such transfer . . . and . . . was insolvent on the date
that such transfer was made . . . or became insolvent as a
result of such transfer"). Mt. McKinley demanded that
Grupo defend and indemnify it in the adversary proceeding
under the terms of the Settlement Agreement. When Grupo
refused, Mt. McKinley filed the underlying suit in Nueces
County, Texas against Grupo, Asarco, and AMC, seeking a
declaratory judgment of Grupo's obligations under the
Settlement Agreement and damages for the amount it incurred
in connection with the adversary proceeding.
Asarco made general appearances, but Grupo filed a special
appearance, challenging Mt. McKinley's allegations of
general and specific jurisdiction. See Tex. R. Civ.
P. 120a. Mt. McKinley alleged that Asarco's Texas
contacts could be imputed to Grupo under an alter ego theory
for purposes of establishing both general and specific
jurisdiction. Mt. McKinley additionally alleged that
Grupo's own contacts with Texas were sufficient to
establish specific jurisdiction.
trial court initially granted Grupo's special appearance
and Mt. McKinley filed an interlocutory appeal. See
Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7);
Mt. McKinley Ins. Co. v. Grupo Mexico, S.A.B. de
C.V. (Grupo I), No. 13-12-00347-CV, 2013 WL
1683641 (Tex. App.-Corpus Christi-Edinburg Apr. 18, 2013, no
pet.) (mem. op.). Based on the record before us, we
determined that the trial court did not err in granting the
special appearance. Grupo I, 2013 WL 1683641, at *7.
We reversed and remanded, however, to allow for additional
jurisdictional discovery. Id. at *11. We concluded
that the trial court abused its discretion by denying Mt.
McKinley's motion for a continuance because Grupo had
repeatedly obstructed Mt. McKinley's efforts to obtain
even the most basic jurisdictional discovery. Id. at
remand, despite protracted discovery disputes, a voluminous
jurisdictional record was ultimately produced. Upon reurging,
the trial court denied Grupo's special appearance and now
Grupo seeks interlocutory review of that decision.
See Tex. Civ. Prac. & Rem. Code Ann. §
Standard of Review & Applicable Law
Standard of Review
a trial court may exercise personal jurisdiction over a
nonresident defendant is a question of law we review de novo.
Searcy v. Parex Res., Inc., 496 S.W.3d 58, 66 (Tex.
2016) (citing Am. Type Culture Collection, Inc. v.
Coleman, 83 S.W.3d 801, 805-06 (Tex. 2002)). The
plaintiff bears the initial burden of alleging facts that
establish the trial court's jurisdiction. Id.
(citing Retamco Operating, Inc. v. Republic Drilling
Co., 278 S.W.3d 333, 337 (Tex. 2009)). The burden then
shifts to the defendant to negate all bases for personal
jurisdiction that exist in the plaintiff's pleading.
Id. (citing Republic Drilling, 278 S.W.3d
at 337). "When, as here, the trial court did not issue
findings of fact and conclusions of law, all relevant facts
that are necessary to support the judgment and supported by
evidence are implied." Old Republic Nat'l Title
Ins. Co. v. Bell, 549 S.W.3d 550, 558 (Tex. 2018)
(citing BMC Software Belgium, N.V. v. Marchand, 83
S.W.3d 789, 795 (Tex. 2002)).
Texas's long-arm statute, Texas courts may exercise
personal jurisdiction over a nonresident defendant that
"does business" in Texas. See Tex. Civ.
Prac. & Rem. Code Ann. §§ 17.041, .042;
PHC-Minden, L.P., v. Kimberly-Clark Corp., 235
S.W.3d 163, 166 (Tex. 2007). Because the exercise of personal
jurisdiction over a nonresident implicates due process
concerns, the Texas long-arm statute reaches only "as
far as the federal constitutional requirements of due process
will permit." PHC-Minden, 235 S.W.3d at 166
(quoting U-Anchor Adver., Inc. v. Burt, 553 S.W.2d
760, 762 (Tex. 1977)); see Goodyear Dunlop Tires
Operations, S.A., v. Brown, 564 U.S. 915, 918 (2011)
("A state court's assertion of jurisdiction exposes
defendants to the State's coercive power, and is
therefore subject to review for compatibility with the
Fourteenth Amendment's Due Process Clause." (citing
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945))). Accordingly, in addition to its own decisions, the
Supreme Court of Texas relies on precedent from the United
States Supreme Court and other federal courts.
PHC-Minden, 235 S.W.3d at 166.
exercise of personal jurisdiction satisfies due process if
(1) the nonresident defendant established minimum contacts
with the forum state and (2) the exercise of jurisdiction
comports with traditional notions of fair play and
substantial justice. Id. (citing Int'l
Shoe, 326 U.S. at 316). When a corporate, nonresident
defendant purposefully avails itself of the privileges and
benefits of conducting business in a foreign jurisdiction,
its contacts are sufficient to confer the forum with personal
jurisdiction. Moncrief Oil Int'l, Inc. v. OAO
Gazprom, 414 S.W.3d 142, 150 (Tex. 2013) (citing
Republic Drilling, 278 S.W.3d at 338)). Only the
defendant's purposeful contacts are relevant to the
inquiry, unilateral activity of another party or third
person, as well as random, isolated, or fortuitous contacts
by the defendant, are insufficient to prove the defendant
purposefully availed itself. Cornerstone Healthcare Grp.
Holding, Inc. v. Nautic Mgmt. VI, LP, 493 S.W.3d 65, 70
(Tex. 2016) (citing Michiana Easy Livin' Country,
Inc. v. Holten, 168 S.W.3d 777, 785 (Tex. 2005)).
minimum contacts have been established, the exercise of
jurisdiction will typically comport with traditional notions
of fair play and substantial justice. Spir Star AG v.
Kimich, 310 S.W.3d 868, 878 (Tex. 2010) (citing
Guardian Royal Exch. Assurance, Ltd. v. English China
Clays, PLC, 815 S.W.2d 223, 231 (Tex. 1991)). The
defendant must present "a compelling case that the
presence of some consideration would render jurisdiction
unreasonable." Id. at 879 (quoting Guardian
Royal, 815 S.W.2d at 231). Those considerations 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 relief; (4)
the international judicial system's interest in obtaining
the most efficient resolution of controversies; and (5) the
shared interest of the several nations in furthering
fundamental substantive social policies. Id. at 878
(quoting Guardian Royal, 815 S.W.2d at 231).
are two types of personal jurisdiction, specific and general.
Id. at 71; see generally Helicopteros Nacionales
de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)
(adopting the terms "general" and
"specific" to describe the two types of personal
jurisdiction). Specific jurisdiction is appropriate when the
plaintiff's claim arises from or relates to the
defendant's contacts with the forum state.
Cornerstone Healthcare, 493 S.W.3d at 71 (citing
Spir Star, 310 S.W.3d at 873). Thus, the central
inquiry under specific jurisdiction is the relationship
between the defendant, the forum state, and the
plaintiff's claim. Id. at 71 (citing Moki
Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575-76
jurisdiction, on the other hand, does not require a nexus
between the defendant's in-state contacts and the
plaintiff's claim; instead, the focus is solely on the
defendant's contacts with the forum.
Helicopteros, 466 U.S. at 414 (citing Perkins v.
Benguet Consol. Mining Co., 342 U.S. 437 (1952));
PHC-Minden, 235 S.W.3d at 168. Without that
connection, however, traditional notions of fair play and
substantial justice become tenuous; therefore, to
counterbalance that tension, our supreme court has long
recognized that general jurisdiction requires "a more
demanding minimum contacts analysis than for specific
jurisdiction," describing the necessary contacts with
Texas as "continuous and systematic" or
"substantial activities." CSR, Ltd. v.
Link, 925 S.W.2d 591, 595 (Tex. 1996) (citations
recently, the United States Supreme Court had "given
little guidance on the appropriate inquiry for general
jurisdiction." PHC-Minden, 235 S.W.3d at 167.
Then, in Goodyear Dunlop Tires Operations, S.A., v.
Brown, the Court confirmed that general jurisdiction
imposes a substantially higher standard than specific
jurisdiction, requiring the defendant's contacts with the
forum to be so pervasive and constant "as to render [the
defendant] essentially at home in the forum state." 564
U.S. 915, 919 (2011). In other words, to establish general
jurisdiction over an out-of-state corporate defendant, the
defendant's in-state activities must be equivalent to the
defendant incorporating or establishing a principal place of
business in the forum. Id. at 924.
years later, in Daimler AG v. Bauman, the Supreme
Court expounded on what it means to be "essentially at
home" by specifically rejecting the idea that
maintaining a "substantial, continuous, and systematic
course of business" in the forum is sufficient to confer
general jurisdiction. 571 U.S. 117, 138 (2014); Old
Republic, 549 S.W.3d at 565 (recognizing
"essentially at home" as the new standard for
general jurisdiction). Although it declined to foreclose the
possibility that a forum could exercise general jurisdiction
over an out-of-state ...