LG Chem, Ltd. v. Tommy Morgan

Opinion

Opinion issued December 15, 2020

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-19-00665-CV ——————————— LG CHEM AMERICA, INC. AND LG CHEM, LTD., Appellants V. TOMMY MORGAN, Appellee

On Appeal from the 239th District Court Brazoria County, Texas Trial Court Case No. 100728-CV

MEMORANDUM OPINION

This is an interlocutory appeal of the denial of two special appearances.

Appellee, Tommy Morgan, sued multiple defendants, including appellants, LG

Chem America, Inc. (LGC America), a Delaware company with its principal place of business in Atlanta, Georgia, and LG Chem, Ltd. (LGC), a South Korean

company, for injuries Morgan allegedly sustained when a battery manufactured by

LGC and marketed, distributed, and sold by LGC America, which was inside an

electronic-cigarette device, exploded and caught fire while in his pants pocket.

Morgan asserted strict products liability causes of action against both companies.1

Appellants filed separate special appearances.

After a hearing, the trial court entered orders denying appellants’ special

appearances. On appeal, appellants challenge the denial of their special appearances,

arguing that they lack minimum contacts with Texas necessary for Texas courts to

assert personal jurisdiction over them.

We affirm.

Background

Morgan sued LGC America, LGC, and other defendants in January 2019,

alleging that a lithium-ion 18650 battery used in an e-cigarette device “exploded and

caught fire” while in his pants pocket, “causing [him] to sustain severe burns and

1 Morgan also asserted causes of action for negligence and gross negligence, breach of express and implied warranties, and violations of the Texas Deceptive Trade Practices–Consumer Protection Act, see TEX. BUS. & COM. CODE ANN. §§ 17.41– .63, but all parties agree on appeal that Morgan’s lawsuit against LGC and LGC America is based on products liability.

2 other injuries.”2 Morgan asserted strict products liability claims against LGC and

LGC America, alleging that they designed, manufactured, marketed, distributed, and

sold the battery and e-cigarette device that injured him and “direct[ed] such products

to Texas.” According to Morgan, LGC designed and manufactured the battery that

injured him and distributed it through its wholly-owned distributor, LGC America,

which markets, sells, and distributes LGC’s lithium-ion batteries throughout the

United States, including in Texas. Morgan further alleged that other defendants

manufactured the e-cigarette device, which used LGC’s lithium-ion battery, and sold

the e-cigarette device—and LGC’s battery within it—to Morgan at a store in

Brazoria County. Morgan alleged that LGC’s battery was defectively manufactured

and unreasonably dangerous. He also alleged that neither the e-cigarette device nor

LGC’s battery included any warnings about foreseeable risks and that he used the e-

cigarette device and LGC’s battery in a reasonably foreseeable manner for their

intended or reasonably anticipated purpose as a battery-powered e-cigarette device.

A. LGC’s Special Appearance

LGC filed a special appearance challenging the trial court’s exercise of

personal jurisdiction over it. LGC supported its special appearance with the affidavit

2 The other defendants included two entities, WISMEC USA and Vapor Sense, and fifty John and Jane Does. These defendants are not parties to this appeal, and they are not integral to our discussion of this case except as otherwise noted.

3 of a senior manager and authorized representative of the company, averring that it is

a Korean company with its headquarters and principal offices in Seoul, South Korea,

and that it has never had an office in Texas, is not registered to do business in Texas,

has never owned or leased real property in Texas, has never had a registered agent

for service of process in Texas, and has never had a telephone number, post office

box, mailing address, or bank account in Texas. The senior manager denied that LGC

designs or manufactures batteries “for sale to individual consumers as standalone

batteries” and denied that LGC itself or through a third party distributes, advertises,

or sells the particular type of battery at issue “directly to consumers as standalone

batteries” or “as replaceable power cells in e-cigarette or vaping devices.” The

manager also denied that LGC has conducted business with any defendant other than

LGC America, including the defendant that manufactured the e-cigarette device and

the defendant that sold the device and LGC’s battery to Morgan. Further, LGC

denied that the battery that injured Morgan was designed or manufactured in Texas.

LGC’s manager did not otherwise deny that it manufactures batteries like the one

that injured Morgan and that it markets, distributes, and sells those batteries,

including through LGC America, to at least some customers in Texas.

Morgan responded that LGC, alone or through LGC America, “targets the

U.S. market by selling lithium-ion batteries to various American entities, including

4 but not limited to battery packers and power tool companies throughout the nation.”

Morgan produced more than 2,200 pages of spreadsheets that he argued showed:

(1) 168 shipments from [LGC] came through the ports of Houston, Texas[,] and Texas City, Texas;

(2) 111 of the 168 imports were consigned by an [LGC] entity with the vast majority being consigned by its subsidiary, [LGC America];

(3) a search of all imports from [LGC] to consignees with a Texas address identified 271 shipments to over 30 different companies with locations in the State, 23 of which arrived in the port of Houston and the remaining arrived in non-Texas ports with their ultimate destination being a company in Texas; [and] (4) a search of all imports from [LGC] to any Texas address listed as the notifying party showed 823 shipments to over 60 Texas entities, 30 of which arrived in the port of Houston and the remainder arrived via non-Texas ports.

Morgan also produced printouts from LGC’s website, which state that, “[i]n

1999, LG Chem succeeded in developing a lithium-ion battery for the first time in

Korea,” and “[s]ince then, it has continued to increase its sales volume in the battery

market,” and “LG Chem . . . has led the world lithium-ion battery market . . . .”

Morgan also produced printouts from the website of Stanley Black and Decker,

which is not a party to the underlying lawsuit, showing that that company has three

facilities in Texas and that it lists LGC as one of its “peers in innovation in consumer

durables . . . .” Morgan further produced an excerpt from a hearing in another lawsuit

involving LGC, in which Morgan argued that “counsel for [LGC] conceded [LGC]

ships lithium-ion 18650 batteries directly into Texas,” and he produced two orders 5 from another lawsuit in North Carolina involving both LGC and LGC America,

which Morgan argues show LGC’s attempt to serve the greater United States market

for its lithium-ion 18650 batteries. Finally, Morgan produced a document entitled

“LG Chem, Ltd. and Subsidiaries” for the time period of “September 30, 2016 and

2015,” which Morgan argued showed that LGC wholly owns LGC America, a point

that neither LGC nor LGC America dispute.3 Morgan’s trial counsel filed a sworn

declaration, stating that each exhibit was a true and correct copy, and LGC did not

object to Morgan’s evidence.

Based on his pleadings and evidence, Morgan argued that LGC is subject to

jurisdiction in Texas courts under a stream-of-commerce-plus theory because LGC

ships lithium-ion batteries directly into Texas to Texas customers and therefore has

purposefully availed itself of the privileges and benefits of conducting activities in

Texas. Morgan further argued that the operative facts of the litigation arose from or

are related to LGC’s forum contacts because Morgan is a resident of Texas and he

“purchased, used, and was injured by [LGC’s] battery in Texas.” Morgan

3 Morgan used this document to support his response to both LGC and LGC America’s special appearances, so this document appears twice in the record on appeal, but both versions appear to be corrupted because all of LGC’s “Consolidated subsidiaries” are illegible in both copies. However, neither LGC nor LGC America disputes that LGC wholly owns LGC America.

6 alternatively requested additional jurisdictional discovery “should [the trial court]

determine additional information is needed to rule on [LGC’s] Special Appearance.”

B. LGC America’s Special Appearance

LGC America also filed a special appearance, which it supported with a sworn

affidavit from its compliance manager, averring that LGC America is incorporated

in Delaware and has its principal place of business in Atlanta, Georgia, and that it

“has not had any physical presence in the State of Texas since 2013,” including

owning any real property or having a post office box, bank accounts, employees,

officers, or directors in Texas. It conceded that it generates approximately 6.37% of

its revenue in Texas. The manager further averred that LGC America sells and

distributes—but does not manufacture—various petrochemical materials and

products. It denied having ever designed, manufactured, assembled, tested,

inspected, or advertised “lithium-ion power cells” in Texas, or having ever sold or

distributed “any power cells meant for e-cigarettes or vaping devices” and, thus, that

it “could not have designed, manufactured, tested, inspected, or advertised the power

cell(s) at issue.” The manager also denied having ever conducted business with the

other named defendants except for LGC, including the manufacturer of the e-

cigarette device and the seller of the device and LGC battery to Morgan. The

manager further denied that LGC America authorized anyone else “to advertise,

distribute, or sell LG brand power cells in Texas, or anywhere else, for use by

7 individual consumers as power cells in e-cigarette or vaping devices.” LGC

America’s manager did not deny that it marketed, sold, and distributed products for

LGC, including batteries similar to the one that allegedly injured Morgan, to at least

some customers in Texas.

In response, Morgan relied on much of the same evidence he used to oppose

LGC’s special appearance, which we discussed above. He argued that LGC America

is LGC’s wholly-owned distributor for batteries to the United States market,

including Texas. He relied on printouts from LGC’s website, which state that LGC

developed “a lithium-ion battery for the first time in Korea” in 1999, and, “[s]ince

then, it has continued to increase its sales volume in the battery market,” and “LG

Chem . . . has led the world lithium-ion battery market . . . .” Morgan also relied on

the illegible printout showing that LGC America is a subsidiary of LGC, which

neither LGC nor LGC America disputes, and two orders from a separate North

Carolina lawsuit against LGC and LGC America, which Morgan contended showed

that LGC serves the greater United States market for its lithium-ion 18650 batteries.

Morgan’s trial counsel filed a sworn declaration stating that each exhibit was a true

and correct copy, and LGC America did not object to Morgan’s evidence.

Morgan argued that LGC America did not dispute that “[LGC] ships lithium-

ion batteries and other products directly into the State of Texas from Korea and

[LGC America]—in its role as shipper and distributor—likely fulfills delivery and

8 distribution of said items both in and throughout [Texas].” Morgan further argued

that, “[o]n information and belief, [LGC America] also participates in the delivery

of goods directly to the State of Texas.” Morgan’s response to LGC America’s

special appearance was similar to his response to LGC’s special appearance: he

argued that LGC America purposefully availed itself of the Texas market by

marketing, selling, distributing, and shipping LGC’s lithium-ion 18650 batteries to

customers in Texas and that a substantial connection exists between the operative

facts of the litigation and LGC America’s forum contacts because “Morgan is a

resident of Texas” and he “purchased, used, and was injured by [LGC’s] battery in

Texas.” Morgan also asked for additional jurisdictional discovery “should this Court

determine additional information is needed to rule on [LGC America’s] Special

Appearance.”

After a hearing, the trial court denied both LGC’s and LGC America’s special

appearances in separate written orders. The record does not indicate that the trial

court ruled on Morgan’s request for additional jurisdictional discovery, which

became moot when the trial court denied the special appearances. See Allstate Ins.

Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005) (“A case becomes moot if a

controversy ceases to exist or the parties lack a legally cognizable interest in the

outcome.”) (citing Bd. of Adjustment v. Wende, 92 S.W.3d 424, 427 (Tex. 2002)).

This appeal followed.

9 Special Appearance

A. Standard of Review

Whether a trial court has personal jurisdiction over a nonresident defendant is

a question of law that we review de novo. E.g., Old Republic Nat’l Title Ins. Co. v.

Bell, 549 S.W.3d 550, 558 (Tex. 2018) (citing Moncrief Oil Int’l Inc. v. OAO

Gazprom, 414 S.W.3d 142, 150 (Tex. 2013)). When, as here, a trial court does not

issue findings of fact and conclusions of law with its ruling on a special appearance,

we imply all relevant facts necessary to support the judgment that are supported by

evidence. Id. (citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795

(Tex. 2002)). When the record on appeal includes the clerk’s and reporter’s records,

the trial court’s implied findings are not conclusive and may be challenged for legal

and factual sufficiency. Marchand, 83 S.W.3d at 795 (citations omitted). A no-

evidence legal sufficiency challenge fails if the finding is supported by more than a

scintilla of evidence. Id. (citing Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80,

84 (Tex. 1992)).

B. Governing Law

Texas courts may exercise personal jurisdiction over a nonresident defendant

if: (1) the Texas long-arm statute authorizes the exercise of jurisdiction; and (2) the

exercise of jurisdiction is consistent with federal and state constitutional due-process

guarantees. Bell, 549 S.W.3d at 558 (quoting Moncrief Oil, 414 S.W.3d at 149, and

10 citing Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007)).

The Texas long-arm statute is expressly satisfied if, “[i]n addition to other acts that

may constitute doing business,” a nonresident: “contracts by mail or otherwise with

a Texas resident and either party is to perform the contract in whole or in part in this

state” or if a nonresident “commits a tort in whole or in part in this state.” TEX. CIV.

PRAC. & REM. CODE ANN. § 17.042. “However, allegations that a tort was committed

in Texas do not necessarily satisfy the United States Constitution.” Bell, 549 S.W.3d

at 559 (citing Moncrief Oil, 414 S.W.3d at 149, and Michiana Easy Livin’ Country,

Inc. v. Holten, 168 S.W.3d 777, 788 (Tex. 2005)).

“[F]ederal due process requires that the nonresident must have ‘certain

minimum contacts with [the forum state] such that the maintenance of the suit does

not offend “traditional notions of fair play and substantial justice.”’” Id. (quoting

Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). A nonresident establishes

minimum contacts with a forum when it “purposefully avails itself of the privilege

of conducting activities within the forum State, thus invoking the benefits and

protections of its laws.” Drugg, 221 S.W.3d at 575 (quoting Hanson v. Denckla, 357

U.S. 235, 253 (1958), and Holten, 168 S.W.3d at 784). “[T]he defendant’s in-state

activities ‘must justify a conclusion that the defendant could reasonably anticipate

being called into a Texas court.’” Bell, 549 S.W.3d at 559 (quoting Retamco

Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009)).

11 When determining whether a defendant has purposefully availed itself of the

privilege of conducting activities in Texas, we consider three factors:

First, only the defendant’s contacts with the forum are relevant, not the unilateral activity of another party or a third person. Second, the contacts relied upon must be purposeful rather than random, fortuitous, or attenuated. . . . Finally, the defendant must seek some benefit, advantage or profit by availing itself of the jurisdiction.

Id. (quoting Moncrief Oil, 414 S.W.3d at 151); see TV Azteca v. Ruiz, 490 S.W.3d

29, 38 (Tex. 2016) (stating that defendant’s contacts must be “purposefully directed”

towards Texas and “must result from the defendant’s own ‘efforts to avail itself of

the forum’”) (citations omitted). A nonresident may purposefully avoid a jurisdiction

“by structuring its transactions so as neither to profit from the forum’s laws nor be

subject to its jurisdiction.” Holten, 168 S.W.3d at 785 (citing Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 473 (1985)). “We assess ‘the quality and the nature of the

contacts, not the quantity.’” TV Azteca, 490 S.W.3d at 38 (quoting Moncrief Oil, 414

S.W.3d at 151).

A defendant’s contacts may give rise to general jurisdiction or specific

jurisdiction. Bell, 549 S.W.3d at 559 (citing Moncrief Oil, 414 S.W.3d at 150); M&F

Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., Inc., 512 S.W.3d 878, 885 (Tex.

2017). General jurisdiction, which is not at issue in this case,4 is established when a

4 Morgan concedes that neither LGC nor LGC America is subject to general personal jurisdiction in this case.

12 defendant’s contacts with the state “are so ‘continuous and systematic’ as to render

[it] essentially at home in the forum State.” M&F Worldwide, 512 S.W.3d at 885

(quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919

(2011)). For a Texas court to exercise specific jurisdiction over a nonresident

defendant: (1) the defendant’s contacts with Texas must be purposeful; and (2) the

cause of action must arise from or relate to those contacts. Bell, 549 S.W.3d at 559

(citation omitted); accord Brown, 564 U.S. at 919 (stating that specific jurisdiction

requires “‘affiliatio[n] between the forum and the underlying controversy,’

principally, [an] activity or an occurrence that takes place in the forum State and is

therefore subject to the State’s regulation” and that “specific jurisdiction is confined

to adjudication of ‘issues deriving from, or connected with, the very controversy that

establishes jurisdiction’”) (citation omitted).

A seller’s awareness “that the stream of commerce may or will sweep the

product into the forum State does not convert the mere act of placing the product

into the stream into an act purposefully directed toward the forum State.” Spir Star

AG v. Kimich, 310 S.W.3d 868, 873 (Tex. 2010) (quoting CSR Ltd. v. Link, 925

S.W.2d 591, 595 (Tex. 1996)). The Texas Supreme Court has held that a finding of

purposeful conduct generally requires “some ‘additional conduct’—beyond merely

placing the product in the stream of commerce—that indicates ‘an intent or purpose

to serve the market in the forum State.’” Id. (quoting Asahi Metal Indus. Co. v.

13 Superior Court of Cal., 480 U.S. 102, 112 (1987), Drugg, 221 S.W.3d at 577, and

Holten, 168 S.W.3d at 786). Examples of such additional conduct include:

(1) designing the product for the market in the forum state, (2) advertising in the

forum state, (3) establishing channels for providing regular advice to customers in

the forum state, and (4) marketing the product through a distributor who has agreed

to serve as the sales agent in the forum state. Id. (quoting Asahi, 480 U.S. at 112,

and citing Drugg, 221 S.W.3d at 577, Holten, 168 S.W.3d at 786, and Kawasaki

Steel Corp. v. Middleton, 699 S.W.2d 199, 201 (Tex. 1985) (per curiam)).

The defendant’s purposeful contacts “must be substantially connected to the

operative facts of the litigation or form the basis of the cause of action.” Bell, 549

S.W.3d at 559–60 (citing Drugg, 221 S.W.3d at 585, and Holten, 168 S.W.3d at

795); see Walden v. Fiore, 571 U.S. 277, 284 (2014) (“For a State to exercise

jurisdiction consistent with due process, the defendant’s suit-related conduct must

create a substantial connection with the forum State.”). Operative facts are the facts

that “will be the focus of the trial, will consume most if not all of the litigation’s

attention, and the overwhelming majority of the evidence will be directed to that

question.” Drugg, 221 S.W.3d at 585.

In analyzing specific jurisdiction, we focus on the relationship between the

forum, the defendant, and the litigation. Bell, 549 S.W.3d at 559 (citing Moncrief

Oil, 414 S.W.3d at 150); see Walden, 571 U.S. at 285 (“[O]ur ‘minimum contacts’

14 analysis looks to the defendant’s contacts with the forum State itself, not the

defendant’s contacts with persons who reside there.”) (citing Int’l Shoe, 326 U.S. at

319, and Hanson, 357 U.S. at 251). “[A] defendant’s contacts with the forum State

may be intertwined with his transactions or interactions with the plaintiff or other

parties,” “[b]ut a defendant’s relationship with a plaintiff or third party, standing

alone, is an insufficient basis for jurisdiction.” Walden, 571 U.S. at 286 (citing Rush

v. Savchuk, 444 U.S. 320, 332 (1980)). Specific jurisdiction must be established on

a claim-by-claim basis unless all of the asserted claims arise from the same contacts

with the forum. M&F Worldwide, 512 S.W.3d at 886 (citing Moncrief Oil, 414

S.W.3d at 150–51).

When personal jurisdiction is challenged, the plaintiff and the nonresident

defendant bear shifting burdens of proof. Bell, 549 S.W.3d at 559 (citing Kelly v.

Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010)). The plaintiff bears

the initial burden to plead sufficient allegations to bring the nonresident defendant

within the scope of Texas’s long-arm statute. Id.; see Kelly, 301 S.W.3d at 658

(“Because the plaintiff defines the scope and nature of the lawsuit, the defendant’s

corresponding burden to negate jurisdiction is tied to the allegations in the plaintiff’s

pleading.”). The trial court may consider the plaintiff’s original pleadings as well as

his response to the defendant’s special appearance in determining whether the

plaintiff satisfied his initial burden. Washington DC Party Shuttle, LLC v. IGuide

15 Tours, 406 S.W.3d 723, 738 (Tex. App.—Houston [14th Dist.] 2013, pet. denied)

(en banc) (citation omitted); Touradji v. Beach Capital P’ship, L.P., 316 S.W.3d 15,

23 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (citation omitted). “In conducting

our review, we accept as true the allegations in the petition.” Touradji, 316 S.W.3d

at 23 (citing Pulmosan Safety Equip. Corp. v. Lamb, 273 S.W.3d 829, 839 (Tex.

App.—Houston [14th Dist.] 2008, pet. denied)). If the plaintiff fails to plead facts

bringing the defendant within the reach of the long-arm statute, “the defendant need

only prove that it does not live in Texas to negate jurisdiction.” Kelly, 301 S.W.3d

at 658–59.

If the plaintiff meets his initial pleading burden, the burden shifts to the

nonresident defendant to negate all bases of personal jurisdiction alleged by the

plaintiff. Bell, 549 S.W.3d at 559 (citing Kelly, 301 S.W.3d at 658). The defendant

can negate jurisdiction on either a factual or a legal basis. Kelly, 301 S.W.3d at 659.

“Factually, the defendant can present evidence that it has no contacts with Texas,

effectively disproving the plaintiff’s allegations.” Id. The plaintiff can then respond

with his own evidence affirming his allegations, and if he does not present evidence

establishing personal jurisdiction, he risks dismissal of his suit. Id. Legally, the

defendant can show that even if the plaintiff’s alleged facts are true, the evidence is

legally insufficient to establish jurisdiction; that the defendant’s contacts with Texas

do not constitute purposeful availment; for specific jurisdiction, that the claims do

16 not arise from the contacts with Texas; or that the exercise of jurisdiction offends

traditional notions of fair play and substantial justice. Id.

“[J]urisdiction cannot turn on whether a defendant denies wrongdoing—as

virtually all will. Nor can it turn on whether a plaintiff merely alleges wrongdoing—

again as virtually all will.” Bell, 549 S.W.3d at 560 (quoting Holten, 168 S.W.3d at

791). When conducting a jurisdictional analysis, “we must not confuse ‘the roles of

judge and jury by equating the jurisdictional inquiry with the underlying merits.’”

Id. (quoting Searcy v. Parex Res., Inc., 496 S.W.3d 58, 70 (Tex. 2016)).

C. Personal Jurisdiction Over LGC

LGC argues that it only placed its batteries into the stream of commerce

without any additional conduct showing it intended to serve the Texas market. LGC

further argues that it sells its batteries only to “sophisticated manufacturers,” denying

that it sells its batteries for use in e-cigarette devices by individual consumers like

Morgan. LGC contends that without evidence that it directed the specific battery that

allegedly injured Morgan into Texas, it is not subject to jurisdiction in Texas. Thus,

LGC contends that even if it purposefully directed other, similar batteries into the

Texas market, it is not subject to jurisdiction in Texas courts for Morgan’s claims

against it. In response, Morgan points out that LGC does not dispute that it

manufactures and ships into Texas the same type of battery that allegedly harmed

17 him, and he contends that LGC construes its Texas activity too narrowly by arguing

it targets only a subset of the Texas market for its batteries.

1. Morgan’s initial burden to plead sufficient jurisdictional allegations

In his original petition, the live pleading on file when the trial court denied

LGC’s special appearance, Morgan alleged that he was injured by a battery that LGC

“manufactured, marketed, sold, distributed, or otherwise placed into the stream of

commerce,” and he clarified in his special appearance response that LGC

manufactured lithium-ion 18650 batteries like the one that injured him and that it

targeted the Texas market for such batteries by selling them to Texas customers

through its distributor, LGC America. See Washington DC Party Shuttle, 406

S.W.3d at 738 (stating that courts may consider plaintiff’s pleadings and response to

special appearance in determining whether plaintiff met initial burden to plead

sufficient jurisdictional allegations); Touradji, 316 S.W.3d at 23 (same). Morgan

alleged that he bought an e-cigarette device containing LGC’s battery from a store

in Brazoria County, that the battery did not include any warning about foreseeable

risks, and that he used the e-cigarette device and LGC’s battery in a reasonably

foreseeable manner for their intended purpose as a battery-powered e-cigarette

device. Based on these allegations, Morgan asserted products liability claims against

LGC for designing, manufacturing, assembling, marketing, distributing, and selling

18 defective and unreasonably dangerous batteries without warnings of foreseeable

risks to customers in Texas, including him.

As evidence supporting his jurisdictional allegations, Morgan produced

voluminous spreadsheets, arguing that they showed LGC frequently ships its

products, including lithium-ion 18650 batteries like the one that injured him, through

Texas ports and to Texas customers, that many of its products are consigned to LGC

America, LGC’s wholly-owned distributor, and that hundreds of shipments of

LGC’s products have been delivered to at least eighty Texas entities.5 Morgan

pointed to website printouts from one particular entity, Stanley Black and Decker,

showing the company has facilities in Texas and listing LGC as a “peer[] in

innovation in consumer durables . . . .” These allegations are sufficient to meet

Morgan’s initial burden to show that LGC was doing business in Texas under the

long-arm statute. See TEX. CIV. PRAC. & REM. CODE ANN. § 17.042; Spir Star, 310

S.W.3d at 871 (“We hold that a manufacturer is subject to specific personal

5 On appeal, LGC characterizes Morgan’s evidence as “unauthenticated,” but the record does not reflect that LGC objected to Morgan’s evidence in the trial court, and LGC does not offer any argument about it on appeal. A general prerequisite to presenting a complaint for appellate review is that the record must show that the complaint was timely made to the trial court with sufficient specificity and that the trial court ruled or refused to rule on the objection. TEX. R. APP. P. 33.1(a). Had LGC raised its objection in the trial court, Morgan would have had an opportunity to rebut LGC’s objection and, if necessary, to cure the defect by supplementing his special appearance evidence. Because LGC did not object to Morgan’s evidence in the trial court, this complaint is waived. See id.

19 jurisdiction in Texas when it intentionally targets Texas as the marketplace for its

products, and that using a distributor-intermediary for that purpose provides no

haven from the jurisdiction of a Texas court.”). The burden thus shifted to LGC to

negate all bases of alleged jurisdiction. See Bell, 549 S.W.3d at 559 (citing Kelly,

301 S.W.3d at 658).

2. Purposeful availment

LGC’s only evidence in support of its special appearance was an affidavit of

a senior manager and authorized representative who denied that LGC designs or

manufactures batteries “for sale to individual consumers as standalone batteries”;

denied that LGC distributes, advertises, or sells the type of battery that allegedly

injured Morgan directly to consumers or authorizes any third party to do so; denied

that LGC conducts business with other defendants except LGC America; and denied

that it designed or manufactured the specific battery at issue in Texas. See Kelly, 301

S.W.3d at 659 (stating defendant can negate jurisdiction on factual basis by

“present[ing] evidence that it has no contacts with Texas, effectively disproving the

plaintiff’s allegations”). Importantly, however, the affidavit did not deny that LGC

designed, manufactured, distributed, marketed, or sold the type of battery that

allegedly injured Morgan to Texas customers for at least some applications, and it

did not deny that LGC America is its distributor in the United States. See id. Nor did

LGC argue or produce evidence rebutting the voluminous Texas-imports

20 spreadsheets showing that it ships large quantities of its products, including the type

of battery that allegedly injured Morgan, to customers in Texas. See id. Therefore,

Morgan’s undisputed jurisdictional allegations and evidence show that LGC designs

and manufactures batteries of the type that injured Morgan for the Texas market, and

that it markets, sells, and distributes large quantities of such batteries to customers

in Texas.

Generally, jurisdiction does not exist over a nonresident that merely places a

product into the stream of commerce with awareness that the product could end up

in a forum state; there must be some additional conduct indicating an intent or

purpose to serve the market in the forum state. E.g., Spir Star, 310 S.W.3d at 873.

Morgan’s undisputed allegations and evidence indicate that LGC designed and

manufactured its lithium-ion 18650 batteries for the Texas market, advertised them

in Texas, and marketed them in Texas through a distributor that sold them in Texas.

See id. (stating that examples of additional conduct include: (1) designing product

for forum market, (2) advertising in forum, and (3) marketing product through

distributor that has agreed to serve as sales agent in forum). Thus, LGC’s additional

conduct indicates its intent to serve the Texas market for its lithium-ion 18650

batteries, at least to “sophisticated manufacturers.”

LGC relies on J. McIntyre Machinery, Ltd. v. Nicastro to argue that Morgan’s

evidence may show that it intended to serve the broader U.S. market but not that it

21 intended to serve the Texas market specifically. See 564 U.S. 873, 884 (2011)

(“Because the United States is a distinct sovereign, a defendant may in principle be

subject to the jurisdiction of the courts of the United States but not of any particular

State.”). Nicastro held that a nonresident defendant that does not engage in activities

revealing an intent to benefit from the market of a particular forum state is not subject

to personal jurisdiction in that state’s courts even if the activity shows an intent to

benefit from the broader United States market. Id. at 886–87. In that case, a worker

who was injured while using a metal-shearing machine brought a products liability

action in New Jersey state court against the machine’s manufacturer, J. McIntyre, an

English company that manufactured the machine in England and sold its machines

to customers in the United States generally through an independent company not

subject to J. McIntyre’s control. Id. at 878. The worker presented evidence that no

more than four of J. McIntyre’s machines—and likely “only [the] one” that injured

him—had ever “ended up in New Jersey,” but he presented no evidence that J.

McIntyre marketed or shipped its machines to New Jersey. Id. J. McIntyre’s officials

had visited the United States to attend annual conventions with its distributor, but

the conventions were never in New Jersey. Id. Because these contacts were

insufficient to show J. McIntyre intended to invoke or benefit from the protection of

New Jersey’s laws, even if sufficient to show it intended to benefit from the broader

22 U.S. market, New Jersey courts could not exercise personal jurisdiction over J.

McIntyre in Nicastro’s suit against it. Id. at 886–87.

Here, as we discussed above, there is sufficient evidence that LGC intended

to serve the Texas market. Unlike J. McIntyre, the evidence shows that LGC

marketed and shipped many lithium-ion 18650 batteries into Texas through a

wholly-owned distributor that sold LGC’s batteries in Texas. See id. at 878 (stating

that English company was not subject to jurisdiction in New Jersey because no

evidence showed it marketed or shipped its machines to New Jersey, even if it sold

its machines in United States through independent distributor not subject to its

control); accord Spir Star, 310 S.W.3d at 873 (holding that exercising jurisdiction

over nonresident requires “some ‘additional conduct’—beyond merely placing the

product in the stream of commerce—that indicates ‘an intent or purpose to serve the

market in the forum State’”). LGC designed and manufactured its batteries for the

Texas market and marketed and sold and distributed them here. These contacts are

more significant than the single (or possibly four) machines that wound up in New

Jersey even though J. McIntyre did not market or ship its machines there. See

Nicastro, 564 U.S. at 886–87. Because the evidence indicates an intent to serve the

Texas market specifically, and not just the United States more broadly, Nicastro does

not support LGC’s position. See id.

23 LGC also argues that it is not subject to jurisdiction because there is no

evidence it shipped the actual battery that injured Morgan to Texas. We disagree.

Morgan alleged that he was injured by one of LGC’s batteries and he alleged and

presented evidence that LGC manufactures and designs the same types of batteries

and markets, sells, and distributes them to Texas. The burden shifted to LGC to

negate this allegation, which it did not do. See Bell, 549 S.W.3d at 559 (citing Kelly,

301 S.W.3d at 658); Kelly, 301 S.W.3d at 659 (stating defendant can negate

jurisdiction on factual basis by “present[ing] evidence that it has no contacts with

Texas, effectively disproving the plaintiff’s allegations”). Thus, we presume for

purposes of our analysis that LGC shipped the battery that injured Morgan to Texas.

Morgan’s evidence showed that LGC, directly or indirectly through its distributor,

marketed and distributed numerous lithium-ion 18650 batteries to customers in

Texas, and it is reasonable to subject it to suit for Morgan’s alleged injury from one

of its batteries in Texas. See Spir Star, 310 S.W.3d at 874 (“[I]f the sale of a product

of a manufacturer . . . is not simply an isolated occurrence, but arises from the efforts

of the manufacturer . . . to serve directly or indirectly, the market for its products in

other States, it is not unreasonable to subject it to suit in one of those States if its

allegedly defective merchandise has there been the source of injury to its owner or

to others.”) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297

(1980)).

24 LGC also argues that it is not subject to jurisdiction in Texas because it does

not have a relationship with the defendants that manufactured the e-cigarette device

and sold the device and LGC battery to Morgan. But even so, we are concerned only

with LGC’s conduct, not with the unilateral activity of third persons. See Bell, 549

S.W.3d at 559 (stating that only defendant’s forum contacts are relevant, not

unilateral activity of third person). When a foreign manufacturer “specifically targets

Texas as a market for its products,” as LGC did, “that manufacturer is subject to a

product liability suit in Texas based on a product sold here, even if the sales are

conducted through a Texas distributor or affiliate.” See Spir Star, 310 S.W.3d at 874

(citing Asahi, 480 U.S. at 112). “In such cases, it is not the actions of the Texas

intermediary that count, but the actions of the foreign manufacturer who markets and

distributes the product to profit from the Texas economy.” Id.; accord Bell, 549

S.W.3d at 559 (“[O]nly the defendant’s contacts with the forum are relevant, not the

unilateral activity of another party or a third person.”) (quoting Moncrief Oil, 414

Morgan’s claims are not based on the manner in which LGC’s batteries were

transported into Texas or the chain of distribution, but rather on LGC’s own conduct

in manufacturing allegedly defective lithium-ion 18650 batteries and marketing,

selling, and distributing them to customers in Texas, including him, through its

distributor, LGC America. Thus, Morgan bases his claims on LGC’s own conduct.

25 See Bell, 549 S.W.3d at 559. Furthermore, manufacturing its batteries for the Texas

market and marketing, selling, and distributing them to Texas customers is

purposeful conduct—not random, fortuitous, or attenuated conduct—from which

LGC profited. See id. (“Second, the contacts relied upon must be purposeful rather

than random, fortuitous, or attenuated. . . . Finally, the defendant must seek some

benefit, advantage, or profit by availing itself of the jurisdiction.”). We conclude that

LGC purposefully availed itself of the privilege of conducting activities in Texas,

thus invoking the benefits and protections of its laws. See Drugg, 221 S.W.3d at 575

(quoting Hanson, 357 U.S. at 253, and Holten, 168 S.W.3d at 784).

3. Arise from or relate to

Due process requires that Morgan’s claims arise from or relate to LGC’s

contacts with Texas before Texas courts can exercise specific jurisdiction over LGC.

See, e.g., Bell, 549 S.W.3d at 559. This requires a substantial connection between

the operative facts of the litigation and the defendant’s purposeful forum contacts.

Id. at 559–60. Morgan asserted products liability claims against LGC, which will

require proof that LGC’s battery was in a defective or unreasonably dangerous

condition when it was sold and that the condition caused his injury. See Ranger

Conveying & Supply Co. v. Davis, 254 S.W.3d 471, 479 (Tex. App.—Houston [1st

Dist.] 2007, pet. denied) (stating elements of products liability action: (1) defendant

placed product into stream of commerce; (2) product was in defective or

26 unreasonably dangerous condition; and (3) causal connection existed between

condition and plaintiff’s injuries) (citing Houston Lighting & Power Co. v. Reynolds,

765 S.W.2d 784, 785 (Tex. 1988), and Armstrong Rubber Co. v. Urquidez, 570

S.W.2d 374, 376 (Tex. 1978)). Whether the batteries were unreasonably dangerous

is generally a fact question for a jury to decide. Am. Tobacco Co. v. Grinnell, 951

S.W.2d 420, 432 (Tex. 1997) (citing Turner v. Gen. Motors Corp., 584 S.W.2d 844,

848 (Tex. 1979)).

LGC argues that Morgan’s claims did not arise from or relate to its Texas

contacts because it manufactured its batteries for and advertised, distributed, and

sold them only to “sophisticated manufacturers,” not to individuals consumers like

Morgan for use in e-cigarette devices. As an initial matter, LGC has not disputed

Morgan’s allegation that the e-cigarette device and battery that injured him were not

sold with warnings against the use of LGC’s battery in an e-cigarette device or by

an individual consumer. Moreover, LGC’s affidavit did not define “sophisticated

manufacturer,”6 explain why the manufacturer of the e-cigarette device, in which

LGC’s battery was used when it allegedly exploded and caught fire, was not a

“sophisticated manufacturer,” or deny that “sophisticated manufacturers” who use

6 The affidavit does not mention “sophisticated manufacturers,” only “sophisticated companies,” a term not defined in the affidavit.

27 LGC’s batteries in their products would in turn sell their products using LGC’s

batteries to individual consumers.

But more importantly, the issue of whether LGC’s batteries were used in a

foreseeable manner or were misused goes to the merits of a products liability action

because “[f]oreseeability of risk of harm is a requirement for liability for a

defectively designed product . . . .”See Hernandez v. Tokai Corp., 2 S.W.3d 251,

257 (Tex. 1999) (citation omitted). Although products do not generally need to be

designed to reduce or avoid unforeseeable risks of harm, “the fact that the

foreseeable risk of harm is due to a misuse of the product, rather than an intended

use, is not an absolute bar to liability” but is instead “a factor that must be considered

in allocating responsibility for the injury.” Id. (citation omitted). “Jurisdiction cannot

turn on whether a defendant denies wrongdoing—as virtually all will. Nor can it turn

on whether a plaintiff merely alleges wrongdoing—again as virtually all will.” Bell,

549 S.W.3d at 560 (quoting Holten, 168 S.W.3d at 791).

In this interlocutory review of LGC’s special appearance, we are concerned

only with whether Morgan’s claims arise from LGC’s forum contacts, not with the

merits of Morgan’s claims. See id. (“[W]e must not confuse ‘the roles of judge and

jury by equating the jurisdictional inquiry with the underlying merits.’”) (quoting

Searcy, 496 S.W.3d at 70). Such an inquiry properly focuses on LGC’s forum

contacts, not on the identity and unilateral activity of third-party purchasers of

28 LGC’s batteries. See id. at 559 (“[O]nly the defendant’s contacts with the forum are

relevant, not the unilateral activity of another party or a third person.”). Morgan’s

undisputed allegations and evidence show that LGC designed and manufactured its

lithium-ion batteries for customers in Texas and marketed, sold, and distributed them

to Texas customers, and that Morgan’s claims arise from or relate to the

manufacture, marketing, and sale of LGC’s batteries in Texas, which injured Morgan

in Texas. See id.

LGC relies on Bristol-Myers Squibb Co. v. Superior Court of California to

argue that it could not expect to be sued in Texas by Texas consumers who acquire

its batteries and use them in a manner not intended by LGC. See 137 S. Ct. 1773

(2017). Bristol-Myers was a pharmaceutical company that was incorporated in

Delaware, headquartered in New York, and maintained substantial operations in

New York and New Jersey. Id. at 1777–78. It sold a prescription drug, Plavix, in

California and engaged in business activities there, including having research and

laboratory facilities with about 160 employees and approximately 250 sales

representatives in the state, but it did not develop Plavix in California or

manufacture, package, or work on regulatory approval in California. Id. at 1778.

Numerous California residents and nonresidents filed a class-action products

liability lawsuit against Bristol-Myers in California, alleging that Plavix damaged

their health. Id. The nonresident plaintiffs did not allege that they obtained Plavix in

29 California or through California physicians or that they were injured or treated for

their injuries in California. Id.

Bristol-Myers challenged jurisdiction in California courts over the claims by

the nonresident plaintiffs only—but not the claims by the resident plaintiffs. Id. The

California Supreme Court affirmed a finding of specific jurisdiction over the

nonresident plaintiffs’ claims against Bristol-Myers, applying a sliding-scale

approach that relaxed the connection between a defendant’s forum contacts and the

specific claims at issue if a defendant had extensive, though unrelated, contacts. Id.

at 1778–79. The United States Supreme Court disagreed, rejecting the sliding-scale

approach to jurisdiction. Id. at 1781. The Court held that California courts lacked

specific jurisdiction over the nonresident plaintiffs’ claims against Bristol-Myers,

reasoning that the nonresident plaintiffs could not rely solely on their relationship to

the resident plaintiffs, who were prescribed Plavix in California and who ingested it,

were injured by it, and were treated for it in California. Id. at 1781–82, 1783; accord

Walden, 571 U.S. at 286, 291 (stating that “defendant’s relationship with a plaintiff

or third party, standing alone, is an insufficient basis for jurisdiction” and that where

relevant conduct occurred entirely in other state, mere fact that conduct affected

plaintiffs with connection to forum state did not confer jurisdiction). Nor could the

nonresident plaintiffs rely on Bristol-Myers’s conducting research in California on

matters unrelated to Plavix, which the Court noted was irrelevant to the jurisdictional

30 inquiry. Bristol-Myers Squibb, 137 S. Ct. at 1781. The Court distinguished the

nonresidents’ claims from the residents’ claims, stating that the former “are not

California residents[,] . . . do not claim to have suffered harm in that State[,] [and,]

as in Walden, all the conduct giving rise to the nonresidents’ claims occurred

elsewhere.” Id. at 1782.

LGC misreads the import of Bristol-Myers Squibb, which was that Bristol-

Myers could not have expected to be sued in California by nonresident plaintiffs

who were not prescribed Plavix by California physicians or sold Plavix in California,

did not ingest Plavix in California, and were not treated for their alleged Plavix-

related injuries in California, even though Bristol-Myers sold Plavix to residents in

California and could expect to be sued by them there. See id. at 1781–82. Here,

Morgan does not rely on his relationship to other parties; he is a resident of Texas,

he bought and used the LGC battery that allegedly injured him in Texas, and he was

allegedly injured and treated for his injury in Texas. Thus, unlike the nonresident

plaintiffs in Bristol-Myers Squibb, Morgan does not rely on a sliding-scale approach

to jurisdiction and Bristol-Myers Squibb provides no support for LGC’s position.

In its reply brief, LGC argues that Moki Mac River Expeditions v. Drugg

supports a lack of substantial connection between its forum contacts and the

operative facts of Morgan’s claims. See 221 S.W.3d at 585 (holding that, to support

exercise of specific jurisdiction, substantial connection must exist between

31 nonresident defendant’s forum contacts and operative facts of litigation). We

disagree. Moki Mac did not involve products liability claims, as this case does, but

rather involved claims of negligence and intentional and negligent misrepresentation

against Moki Mac, a nonresident river-rafting company, arising from the plaintiffs’

son’s fatal injury while hiking on Moki Mac’s guided rafting tour in Arizona. Id. at

573. The plaintiffs argued that Moki Mac misrepresented the safety of its tours in

promotional materials it sent to the plaintiffs at their home in Texas, and that but for

those misrepresentations, they would not have sent their son on the rafting tour. Id.

at 576. The Texas Supreme Court rejected the plaintiffs’ argument that but-for

causation should be the standard in special appearances, finding that “the but-for test

[is] too broad and judicially unmoored to satisfy due-process concerns.” Id. at 581.

Instead, the court held that a substantial connection must exist between a nonresident

defendant’s Texas contacts and the operative facts of the litigation before Texas

courts may exercise jurisdiction over the nonresident. Id. at 585 (citing Guardian

Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 229–

33 (Tex. 1991), and Rush, 444 U.S. at 329). The court concluded that the operative

facts of the plaintiffs’ negligence and misrepresentation claims were not

substantially connected to the hike in Arizona because “[o]nly after thoroughly

considering the manner in which the hike was conducted will the jury be able to

assess the [plaintiffs’] misrepresentation claim.” Id. “In sum, ‘the [alleged

32 misrepresentation] is not the subject matter of the case . . . nor is it related to the

operative facts of the negligence action.’” Id. (quoting Rush, 444 U.S. at 329).

LGC argues that “the absence of a substantial connection is even more

pronounced in this case than it was in Moki Mac” because “the plaintiffs’ allegation

of reliance made the promotional materials at least a colorable but-for cause of the

accident.” However, Moki Mac rejected a but-for causation standard for special

appearances as “too broad and judicially unmoored to satisfy due-process concerns,”

so it is irrelevant whether Morgan sufficiently alleged a but-for cause of his injuries.

See id. at 581. As we discussed above, Morgan has alleged that a substantial

connection exists between LGC’s forum contacts and the operative facts, which is

the relevant inquiry. See Bell, 549 S.W.3d at 559–60 (citing Drugg, 221 S.W.3d at

585, and Holten, 168 S.W.3d at 795).

We conclude that Morgan’s products liability claims for the LGC battery that

allegedly exploded and injured him in Texas arises from or relates to LGC’s conduct

in designing and marketing its batteries for the Texas market, and marketing, selling,

and distributing them to customers here. Based on its forum activities, LGC could

reasonably anticipate being called into a Texas court when an allegedly defective

and unreasonably dangerous battery causes an injury in Texas. See id. at 559.

33 D. Personal Jurisdiction Over LGC America

LGC America’s arguments on appeal are mostly identical to LGC’s

arguments. For example, LGC America argues that: (1) it did not sell LGC’s

batteries to individual customers as replacement batteries for e-cigarette devices, but

only to sophisticated manufacturers; (2) the evidence only shows LGC America’s

intent to serve the United States market as a whole, not the Texas market specifically;

(3) Morgan bought the LGC battery from a third party with whom LGC America

has no relationship and to whom LGC America never sold any batteries; and

(4) Morgan presented no evidence that LGC America distributed the actual battery

that injured him into Texas. We reject these arguments for the same reasons we

discussed above regarding LGC’s identical arguments. See M&F Worldwide, 512

S.W.3d at 886 (stating appellate courts generally review personal jurisdiction on

claim-by-claim basis except where plaintiff’s claims arise from same jurisdictional

contacts).

Morgan’s original petition alleged that LGC or LGC America manufactured,

marketed, distributed, sold, and placed into the stream of commerce the battery that

injured him. Morgan argued in his special appearance response that LGC America

markets, distributes, and sells LGC’s batteries to Texas, that LGC America “likely

fulfills delivery and distribution” of power cells in Texas, and that, “on information

and belief, [LGC America] also participates in the delivery of goods directly to the

34 State of Texas.” He further alleged that he bought one of those batteries in Texas,

that it did not have a warning label, that he used it for its intended or reasonably

anticipated use, and that he was injured when it exploded and caught fire in his pants

pocket in Texas. Thus, Morgan met his initial burden to plead allegations bringing

LGC America within the Texas long-arm statute. See Spir Star, 310 S.W.3d at 873

(stating that marketing product in forum is additional conduct beyond merely placing

product into stream of commerce indicating intent or purpose to serve market in

forum). The burden thus shifted to LGC America to negate all bases of jurisdiction

alleged by Morgan. See Bell, 549 S.W.3d at 559 (citing Kelly, 301 S.W.3d at 658).

LGC America’s evidence consisted only of an affidavit from its compliance

manager, who denied that LGC America designed, manufactured, or advertised

“lithium-ion power cells” in Texas, that it sold or distributed “any power cells meant

for e-cigarettes or vaping devices,” including to Texas, or that it authorized any third

party to do so. The manager did not deny, however, Morgan’s allegations that LGC

America marketed, sold, and distributed LGC’s batteries to customers in Texas

beyond denying that it sold or distributed “any power cells meant for e-cigarette or

vaping devices.” The manager conceded that LGC America generated

approximately 6% of its revenue from Texas. Because LGC America did not meet

its burden to negate these jurisdictional allegations, we consider them true for

35 purposes of our review.7 See id.; Touradji, 316 S.W.3d at 23 (citing Lamb, 273

S.W.3d at 839).

These allegations are sufficient to show that LGC America purposefully

availed itself of the benefits and privileges of Texas laws and that Morgan’s claims

arise from or relate to LGC America’s forum contacts. See Bell, 549 S.W.3d at 559.

We disagree with LGC America that Morgan attempts to impute LGC’s contacts to

it. Morgan relies on LGC America’s own contacts with Texas by marketing, selling,

and distributing LGC’s batteries to customers in Texas, which is additional conduct

beyond placing a product into the stream of commerce that indicates LGC America’s

intent to serve the Texas market. See Spir Star, 310 S.W.3d at 873. Therefore, we

conclude that LGC America purposefully availed itself of the privilege of

conducting activities in Texas, thus invoking the benefits and protections of Texas

laws. See Drugg, 221 S.W.3d at 575.

7 For the first time in its reply brief, LGC America argues that “Morgan did not allege that [LGC America] so much as touched the lithium-ion power cell he purchased from a vaping retailer. And [LGC America’s] undisputed evidence negates the possibility that it ever sold the product. This ends the inquiry.” We disagree. Generally, arguments raised for the first time in reply briefs are waived and need not be considered by this Court. E.g., McAlester Fuel Co. v. Smith Int’l, Inc., 257 S.W.3d 732, 737 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (citations omitted). But even if LGC America did not waive this argument, the face of Morgan’s pleadings and LGC America’s supporting affidavit belie LGC America’s argument.

36 Morgan’s claims also arise from or relate to LGC America’s forum contacts.

Distributors and sellers of third-party manufactured products can be held strictly

liable in a products liability action for putting a defective or unreasonably dangerous

product into the stream of commerce. New Tex. Auto Auction Servs., L.P. v. Gomez

De Hernandez, 249 S.W.3d 400, 403–04 (Tex. 2008). LGC America did not present

any evidence that it did not market, distribute, and sell lithium-ion 18650 batteries

like the one that allegedly injured Morgan to customers in Texas. The operative facts

of Morgan’s claims against LGC America will focus on the LGC battery that he

bought in Texas and which exploded and caught fire in Texas, injuring Morgan in

Texas. The operative facts of Morgan’s claims thus arise out of the LGC batteries

that LGC America marketed, sold, and distributed to customers in Texas, including

Morgan. See Bell, 549 S.W.3d at 559.

We conclude that LGC America’s purposeful contacts with Texas justify a

conclusion that it could reasonably anticipate being called into a Texas court when

one of LGC’s batteries that it marketed, distributed, and sold is alleged to be

defective or unreasonably dangerous. See id.

E. Traditional Notions of Fair Play and Substantial Justice

Neither LGC nor LGC America argues that asserting jurisdiction over it

would offend traditional notions of fair play and substantial justice, much less

presents “a compelling case that the presence of some consideration would render

37 jurisdiction unreasonable” as was required to defeat jurisdiction. See Spir Star, 310

S.W.3d at 878–79 (quoting Guardian Royal, 815 S.W.2d at 231). A party waives an

issue by not briefing it. See TEX. R. APP. P. 38.1(f), (i); DiGiuseppe v. Lawler, 269

S.W.3d 588, 597 n.10 (Tex. 2008) (“Ordinarily, failure to brief an argument waives

the claimed error.”) (citation omitted). Because appellants did not brief the issue, we

conclude that it is waived. See TEX. R. APP. P. 38.1(f), (i); DiGiuseppe, 269 S.W.3d

at 597 n.10; see also Spir Star, 310 S.W.3d at 878 (“Only in rare cases . . . will the

exercise of jurisdiction not comport with fair play and substantial justice when the

nonresident defendant has purposefully established minimum contacts with the

forum state.”) (citing Guardian Royal, 815 S.W.2d at 231).

We therefore hold that the trial court did not err in denying LGC’s and LGC

America’s special appearances.

We overrule appellants’ issues.8

8 Because we overrule appellants’ issues and affirm the trial court’s orders denying their special appearances, we do not decide Morgan’s “conditional cross point,” asking the Court to remand for additional jurisdictional discovery “should this Court determine the trial court erred in denying” the special appearances.

38 Conclusion

We affirm the trial court’s orders denying LGC’s and LGC America’s special

appearances. We dismiss any pending motions as moot.

Evelyn V. Keyes Justice

Panel consists of Justices Keyes, Hightower, and Countiss.