Duracarbon Latinamerica, LLC v. SIMEC USA Corporation, et al.

CourtDistrict Court, S.D. Texas
DecidedDecember 5, 2025
Docket7:24-cv-00331
StatusUnknown

This text of Duracarbon Latinamerica, LLC v. SIMEC USA Corporation, et al. (Duracarbon Latinamerica, LLC v. SIMEC USA Corporation, et al.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Duracarbon Latinamerica, LLC v. SIMEC USA Corporation, et al., (S.D. Tex. 2025).

Opinion

UNITED STATES DISTRICT COURT December 05, 2025 SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk MCALLEN DIVISION

DURACARBON LATINAMERICA, LLC, § § Plaintiff, § § VS. § CIVIL ACTION NO. 7:24-CV-331 § SIMEC USA CORPORATION, et al., § § Defendants. §

ORDER & OPINION

Duracarbon Latinamerica, LLC (“Duracarbon USA”) sold graphite electrodes to SIMEC International, S.A. de C.V. (“SIMEC Mexico”) and Companhia Siderúrgica do Espírito Santo S.A. (“SIMEC Brazil”). The electrodes were shipped from China to Mexico and Brazil. SIMEC Mexico and SIMEC Brazil accidentally sent a portion of their payments to Duracarbon Latinoamerica S.A. de C.V. (“Duracarbon Mexico”), a different and unrelated company. Duracarbon sued SIMEC Mexico, SIMEC Brazil, and their parent company, Grupo SIMEC, S.A.B. de C.V. (“Grupo SIMEC”) for breach of contract and unjust enrichment. (Second Am. Compl., Doc. 34) Grupo SIMEC, SIMEC Mexico, and SIMEC Brazil challenge the Court’s personal jurisdiction over them as well as whether Duracarbon properly perfected service on them.1 (Motion to Dismiss, Doc. 49) After reviewing the record and the applicable law, the Court concludes that SIMEC Mexico, SIMEC Brazil, and Grupo SIMEC are not subject to personal jurisdiction in Texas in this lawsuit.

1 Duracarbon also sued SIMEC USA Corporation. SIMEC USA filed an Answer (Doc. 47) and does not join in the Motion to Dismiss. 1 / 13 I. Jurisdictional Facts2 A. Corporate Entities 1. Duracarbon USA Duracarbon USA sells graphite products for use in steel manufacturing. The company bases its business in Mission, Texas. For the transactions at issue in this case, it sourced the graphite products from China. (See August Invoice, Doc. 52–9) Lei Zhang co-founded Duracarbon USA in February 2021. He previously worked as an attorney for Duracarbon Mexico, a Mexican company that also sells graphite for steel manufacturing. His employment and involvement with the Mexican company ended in January 2021, and the following month he co-founded Duracarbon USA in Texas. Duracarbon USA and Duracarbon Mexico are unrelated companies with no ongoing ties between them. 2. SIMEC Grupo SIMEC is a Mexican corporation. As a company publicly traded on the New York Stock Exchange, Grupo SIMEC complies with reporting requirements with the Securities and Exchange Commission, presenting “consolidated financial statements” that include the financials of the subsidiaries that it controls. (SEC Statement, Doc. 52–22, 87 (explaining that “[c]ontrol is obtained when the company possesses the power to govern the financial and operative policies of an entity in order to obtain benefits from its activities”)) Grupo SIMEC owns 100% of SIMEC Mexico, a Mexican corporation with operations in Mexico. Grupo SIMEC also wholly owns SIMEC Brazil, a Brazilian company with operations in Brazil.

2 In resolving a Motion to Dismiss for lack of personal jurisdiction, the Court “can consider the assertions in the plaintiff's complaint, as well as the contents of the record at the time of the motion.” Ethridge v. Samsung SDI Co., Ltd., 137 F.4th 309, 313 (5th Cir. 2025). 2 / 13 Grupo SIMEC, SIMEC Mexico, and SIMEC Brazil have no offices or personnel in Texas. The record does not reflect that any of these companies own assets in Texas or have bank accounts in the state. Grupo SIMEC owns 100% of SIMEC USA, which is incorporated and headquartered in California. Sigosa Steel Company is a corporation registered in Texas and with a mailing address in Brownsville, Texas. The company shares names with a Mexican subsidiary of Industrias CH, Aceros y Laminados Sigosa, S.A. de C.V., but is not that company’s direct subsidiary or otherwise directly related to it. (Siegrist Decl., Doc. 55–1, ¶ 4) Sigosa maintains a website identifying an address in Brownsville and displaying the “Grupo SIMEC” logo. The president of Sigosa Steel, Raul Virgil Gonzalez, has previously served on the Grupo SIMEC board of directors. In an unrelated matter before the United States Court of International Trade, Grupo SIMEC requested additional time to respond to a questionnaire, and in that request indicated that Sigosa was its “USA distributor.” (CIT Filing, Doc. 52–23, 254) In that filing, Grupo SIMEC noted that it “believes that Sigosa should not be collapsed with SIMEC because Sigosa’s operations are completely separate from those of SIMEC.” (Id. at 382) Grupo SIMEC described itself as “really two companies (SIMEC and Sigosa)[.]” (Id. at 258) In the current matter, Grupo SIMEC’s General Counsel declares that Grupo SIMEC owns no stock in Sigosa, does not control Sigosa’s operations, and that the two companies “maintain separate corporate headquarters.” (Siegrist Decl., Doc. 55– 1, ¶ 5) B. 2021 Transaction In March 2021, SIMEC Mexico ordered 120,000 kilograms of graphite electrodes from Duracarbon USA.3 (Purchase Order, Doc. 52–7) SIMEC Mexico appears to have requested three shipments–for April, May, and June of 2021–for arrival at one of its plants in Mexico.

3 The document references “KGS” as the unit, which the Court construes as a reference to kilograms. 3 / 13 Duracarbon USA timely fulfilled the order by shipping the electrodes in four batches, sourcing them from China. Duracarbon USA directed those shipments to SIMEC Mexico. No party presents evidence that the shipped product passed through Texas en route to Grupo SIMEC subsidiaries. In November 2021, SIMEC Mexico made a payment of $77,321.55 to Duracarbon USA, in payment for the first and last shipments of electrodes. (Nov. 2021 Payment, Doc. 52–8; Zhang Decl., Doc. 52–28, ¶ 17) The following month, SIMEC Mexico made another payment of almost $155,000, but paid Duracarbon Mexico instead of Duracarbon USA. (Dec. Payment, Doc. 52–13) After discovering that SIMEC Mexico sent the payment to the wrong payee, Zhang “reviewed all the pending purchase orders and payments from Grupo SIMEC-owned entities” to ensure that similar payment mistakes did not re-occur. (Zhang Decl., Doc. 52–28, ¶¶ 24–25) He noticed that SIMEC Brazil was scheduled to make a payment to Duracarbon USA on a prior order. Thus, in January 2022, Zhang contacted SIMEC Brazil to ensure payment would be made to Duracarbon USA. (Id. at ¶¶ 25–26) Despite this warning, SIMEC Brazil made the payment to Duracarbon Mexico. (Email, Doc. 52–12) SIMEC USA had no involvement in these transactions. The California company “did not order the graphite electrodes, did not receive the[] shipments from [Duracarbon USA], did not make or authorize any payments, and was not involved in any negotiations or communications concerning” the invoices at issue. (Padilla Decl., Doc. 49–1, 2) In addition, Grupo SIMEC “has always treated SIMEC USA as an independent affiliate for U.S.-based operations only, with no authority over matters involving” Grupo SIMEC, SIMEC Mexico, or SIMEC Brazil. (Id. at 3) C. Procedural History Duracarbon USA sued Grupo SIMEC, SIMEC Mexico, SIMEC Brazil, and SIMEC USA for breach of contract and unjust enrichment, seeking damages totaling $302,995.10. (Second Am.

4 / 13 Compl., Doc. 34 ¶¶ 1, 3) Duracarbon USA alleges that Grupo SIMEC bears vicarious liability for its subsidiaries’ actions. (Id. at ¶¶ 26–27) Duracarbon USA served SIMEC USA and SIMEC Mexico through SIMEC USA’s registered agent in California, contending that “service of process on SIMEC USA was appropriate to effectuate service on SIMEC Mexico, given the significant operational and financial connections between SIMEC USA and SIMEC Mexico.” (Memorandum, Doc. 13, ¶ 4; see also Return of Service, Doc. 7) Duracarbon USA requested the Court’s authorization to serve SIMEC Brazil and Grupo SIMEC via service on SIMEC USA, arguing that “the substantial financial and operational relationships” between the entities justified such service. (Motion, Doc.

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Duracarbon Latinamerica, LLC v. SIMEC USA Corporation, et al., Counsel Stack Legal Research, https://law.counselstack.com/opinion/duracarbon-latinamerica-llc-v-simec-usa-corporation-et-al-txsd-2025.