Spir Star AG v. Kimich

310 S.W.3d 868, 53 Tex. Sup. Ct. J. 423, 2010 Tex. LEXIS 210, 2010 WL 850151
CourtTexas Supreme Court
DecidedMarch 12, 2010
Docket07-0340
StatusPublished
Cited by289 cases

This text of 310 S.W.3d 868 (Spir Star AG v. Kimich) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spir Star AG v. Kimich, 310 S.W.3d 868, 53 Tex. Sup. Ct. J. 423, 2010 Tex. LEXIS 210, 2010 WL 850151 (Tex. 2010).

Opinion

*871 Chief Justice JEFFERSON

delivered the opinion of the Court.

A foreign manufacturer sold its products in Texas through a Texas distributor. We must decide whether the use of that distributorship insulates the manufacturer from the reach of a Texas court when one of the products injures a Texas citizen. We hold that a manufacturer is subject to specific personal 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. Because, in this case, personal jurisdiction comports with traditional notions of fair play and substantial justice, we affirm the court of appeals’ judgment.

I. Factual and Procedural Background

Spir Star AG (“AG”), a German corporation headquartered in Rimbach, Germany, manufactures high-pressure hoses and fittings for sale throughout the world. AG is owned by three German citizens: Werner Buchner, Gerhard Strobach, and Walter de Graaf. In 1995, AG decided that Houston would be the optimal location for a distributorship because the Texas coastal region’s numerous refineries were well suited for AG’s energy-related products. AG’s executives traveled to Houston, leased office space, and established a Texas distributorship, Spir Star Inc., now Spir Star Limited (“Limited”). AG’s directors gave Limited permission to use the trademarked “Spir Star” name free of charge. Although it sells products other than AG’s, Limited is AG’s exclusive distributor in Texas and North America.

AG manufactures hoses that are used primarily in the energy industry. Each month, Limited purchases a maritime eon-tainer full of AG’s products, which are then shipped to the port of Houston. Limited assembles the hoses using AG-provided training and tools and sells them to customers in Texas and elsewhere. Title to the hoses passes to Limited in Europe. The Texas distributorship accounts for thirty-five percent of AG’s annual sales, although Limited and AG do not share profits or finances with each other.

De Graaf, AG’s president, is also the president of Limited. He splits his time between Houston and Germany, and regularly conducts AG’s business in Texas. De Graaf and AG’s other two officers own seventy-five percent of Limited; twenty-five percent is owned by Limited employees.

In 2003, an AG high-pressure hose ruptured and seriously injured Louis Kimich. AG had sold the hose to Limited, which in turn sold it to Kimich’s employer. Kimich sued his employer and the premises owner, and later added claims against AG and Limited. 1

AG filed a special appearance, which the trial court and the court of appeals denied. 311 S.W.3d 1. We granted AG’s petition for review, 51 Tex. Sup.Ct. J. 1403, 1416 (Sept. 26, 2008), and now affirm.

II. Applicable Law

To render a binding judgment, a court must have both subject matter jurisdiction over the controversy and personal jurisdiction over the parties. CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex.1996). Whether a court has personal jurisdiction over a defendant is determined as a matter of law, which appellate courts review de novo. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). When, as here, a trial court does not issue findings of fact or conclusions of law to *872 support its special-appearance determination, we presume that all factual disputes were resolved in favor of the trial court’s ruling. Id.

Texas courts have personal jurisdiction over a nonresident defendant when (1) the Texas long-arm statute provides for it, and (2) the exercise of jurisdiction is consistent with federal and state due process guarantees. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex.2002). Our long-arm statute reaches “ ‘as far as the federal constitutional requirements for due process will allow.’ ” Id. (quoting Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991)). Consequently, the statute’s requirements ai’e satisfied if exei’cising jurisdiction comports with federal due process limitations. Id.

If a defendant has never invoked the protections that a forum offers its residents, or has no purposeful contact with it, the forum court’s jurisdiction is confined. Personal jurisdiction over nonresident defendants is constitutional only when: (1) the defendant has established minimum contacts with the forum state, and (2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 167 (Tex.2007). The catchphrase “traditional notions of fair play and substantial justice,” first used in Milliken v. Meyer, 311 U.S. 457, 463-64, 61 S.Ct. 339, 85 L.Ed. 278 (1940), has its origins in a 1917 decision that referred to both “fair- play” and “substantial justice” when the Supreme Court considered whether service by publication comported with the due process clause. See McDonald v. Mabee, 243 U.S. 90, 91-92, 37 S.Ct. 343, 61 L.Ed. 608 (1917) (reversing a judgment of the Supreme Court of Texas). Since that time, we have incorporated the phrase into our own jurisprudence, beginning with O’Brien v. Lanpar Co., 399 S.W.2d 340, 342 (Tex.1966) (quoting Int’l Shoe, 326 U.S. at 316, 66 S.Ct. 154). The phrase remains a hallmark of personal jurisdiction today. See, e.g., Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex.2009); PHC-Minden, 235 S.W.3d at 166; Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.2007).

Although this “fair play” and “substantial justice” test is well known to appellate courts, the expression is imprecise. It gains meaning, however, when viewed in light of the “minimum contacts” a defendant has with the forum. Int’l Shoe, 326 U.S. at 316, 66 S.Ct. 154. 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. When a nonresident defendant has purposefully availed itself of the privilege of conducting business in a foreign jurisdiction, it is both fair and just to subject that defendant to the authority of that forum’s courts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1984).

A defendant’s contacts with a forum can give rise to either specific or general jurisdiction.

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Bluebook (online)
310 S.W.3d 868, 53 Tex. Sup. Ct. J. 423, 2010 Tex. LEXIS 210, 2010 WL 850151, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spir-star-ag-v-kimich-tex-2010.