Dillard et al v. Federal Corporation
Filing
46
MEMORANDUM OPINION AND ORDER Vacating Prior Order Dismissing Case Docket Entry No. 41 and Denying the Defendant's Motion to Dismiss Docket Entry No. 11. Signed by Judge Royce C. Lamberth. (rg)
FILED
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
AUG 0 1 201g
C1ER,,
U.S.
OISTRC t.LERK
I
TEXAS
WSTERN DST
GEORGE DILLARD, el al.,
BY
§
§
PLAINTIFFS,
DEPtrry
§
§
v
I
Civil No.
SA-16-CV-00854-RCL
§
§
FEDERAL CORPORATION,
§
§
DEFENDANT.
§
Memorandum Opinion:
Vacating Prior Order Dismissing Case [ECF No. 41J
Denying the Defendant's Motion to Dismiss [ECF No. 11J
This case arises from a car accident that occurred in Piedras Negras, Mexico, on May
3, 2013. The accident allegedly occurred when on the tires on the plaintiffs' vehicle failed, causing
the vehicle to veer to the side of the road and roll over, injuring the occupants. The plaintiffs sued
Federal Corporation ("Federal"), a Taiwanese company that designed and manufactured the failed
tire, for negligence and strict products liability. Federal moved to dismiss the case for lack of
personal jurisdiction. The Court authorized jurisdictional discovery. At the end of discovery, the
parties filed their respective briefs. The Court granted the ripe motion to dismiss, with an opinion
to follow. ECFNo. 41.
In the course
of writing and revising this opinion, however, the Court realized that it
erred in granting the motion to dismiss. Therefore, pursuant to Rule 60(b)( 1 ),(6), the Court will
vacate its prior order granting the motion to dismiss and dismissing this case and will instead deny
the motion and allow this case to move forward. The following opinion explains the Court's
reasoning.
The issue before the Court is whether the Court has personal jurisdiction over the
defendant. "A federal district court sitting in diversity may exercise personal jurisdiction over a
nonresident defendant if (1) the long-arm statute of the forum state confers personal jurisdiction
over that defendant; and (2) exercise of such jurisdiction by the forum state is consistent with due
process under the United States Constitution." Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir.
1999). Texas's long-arm statute extends to the limits of federal due process. Moncrief Oil Int'l v.
OAO Gazprom, 481 F.3d 309, 311 n.1 (5th Cir. 2007); Spir Star AG v. Kimich, 310 S.W.3d 868,
872 (Tex. 2010) ("Our long-arm statute reaches as far as the federal constitutional requirement for
due process will allow.") (internal citations and quotation marks omitted); TEx. Civ. PRAC. & REM.
CoDE § 17.041-045. TherefOre, these two requirements merge into one and the Court need only
concern itself with the constitutional inquiry in this case.
The primary focus of a constitutional "personal jurisdiction inquiry is the defendant's
relationship to the forum state." Bristol Meyers Squibb Co.
v.
Superior Court of California, 137
S. Ct. 1773, 1779 (2017). The Fourteenth Amendment's Due Process Clause permits a state court
(or a federal court sitting in diversity) to exercise personal jurisdiction only when a defendant has
"certain minimum contacts with [the State] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice." International Shoe Co.
U.S. 310, 316 (1945) (quoted 1nBNSFRy. Co.
v.
v.
Washington, 326
Tyrrell, 137 S. Ct. 1549, 1558 (2017)) (internal
citations and quotation marks omitted). Using this analysis, the Supreme Court has "recognized
two types of personal jurisdiction: 'general' (sometimes call 'all-purpose') jurisdiction and
'specific' (sometimes called 'case-linked') jurisdiction." Bristol Meyers Squibb Co., 137 S. Ct. at
1779-80. The Court will look at each type ofjurisdiction in turn.
2
I.
The Court Lacks General Jurisdiction Over the Defendant.
"A court with general jurisdiction" over a defendant "may hear any claim against that
defendant, even if all the incidents underlying the claim occurred in a different State." Id. at 1780
(emphasis in original). A court only has general jurisdiction over a defendant when the defendant's
"affiliations with the State are so 'continuous and systematic' as to render [it] essentially at home
in the forum State." Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (quoting Goodyear Dunlop
Tires Ops., S.A.
v.
Brown, 564 U.S. 915, 919 (2011)). A corporate defendant is necessarily "at
home" in its place of incorporation and in its principal place of business. BNSF Ry. Co., 137 S.
Ct. at 1558. So general jurisdiction is always available in those forums. It is also possible for
general jurisdiction to be available in other forums when a corporate defendant's operations in
those forums are "so substantial and of such a nature as to render the corporation at home in that
State." Daimler, 571 U.S. at 139 n. 19. But the Supreme Court has emphasized that such would
be an "exceptional case." Id. And Justice Sotomayor has opined that such cases will almost never
exist. BNSFRy. Co., 137 S. Ct. at 1560 ("[I]t is virtually inconceivable that such corporations will
ever be subject to general jurisdiction in any location other than their principal places of business
or of incorporation.") (Sotomayor, J., dissenting). The Court agrees with that assessment.
It is clear that Federal is not subject to general jurisdiction in Texas.
It is not
incorporated in Texas, but in Taiwan. Its principal place of business is not in Texas, but in Taiwan.
And there is no plausible argument that Federal's contacts with Texas are "so substantial and of
such a nature as to render the corporation at home in that State." Daimler, 571 U.S. at 139 n.19.
A quick comparison with the Supreme Court's recent decision in BNSF Ry Co.
Tyrrell will help illustrate this last point. 137 S. Ct. 1549 (2017). The defendant in that
v.
case
BNSF Railway Companyhad 2061 miles of railroad track in Montana, nearly 2,100 employees
3
in Montana, and an automotive facility in Montana. Id at 1554. But even these contacts were not
enough to make BNSF "at home" in Montana and to subject BNSF to general jurisdiction in
Montana. Id. at 1559. Federal has fewer and less substantial contacts with Texas than BNSF did
with Montana. Federal has no employees in Texas. Federal owns no property in Texas. That
being so, Federal is not "at home" in Texas and not subject to general jurisdiction of courts in
Texas.
The Court Has Specific Jurisdiction Over the Defendant.
II.
While general jurisdiction allows a court to hear any claim against a defendant, specific
jurisdiction allows a court to hear only those claims that "aris[e] out of or relat[e] to the
defendant's contacts with the forum." Bristol-Myers Squibb Co., 137 S. Ct. at 1780 (quoting
Daimler, 571 U.S. at 127) (emphasis in original): Determining whether a court may exercise
specific jurisdiction over a defendant requires the Court to examine three things:
(1) Whether the defendant has minimum contacts with the forum
state, i.e., whether it purposely directed its activities toward the
forum state or purposeflully availed itself of the privileges of
conducting activities there; (2) whether the plaintiffs cause of
action arises out of or results from the defendant's forum-related
contacts; and (3) whether the exercise of personal jurisdiction is fair
and reasonable.
Bustos
v.
Lennon, 538 F. App'x. 565, 567 (5th Cir. 2013). The Court will address each of these
three prongs in turn.
A. Minimum
1.
ContactsFederal Has Purposeful, Minimum Contacts with Texas.
The Court Will Not Apply the "Stream-of-Commerce-Plus" Test.
As an initial matter, the parties disagree as to the applicability of certain Supreme Court
precedents to this case.
Specifically, the parties disagree whether the Court should apply the
reasoning from Justice O'Connor's plurality opinion in Asahi Metal Indus. Co.
4
v.
Superior Court
of CaL, 480 U.S.
102 (1987). That opinion held that the "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 purposeftilly directed toward the forum State" that can meet the
minimum contacts requirement. Asahi, 480 U.S. at 112. Rather, the defendant must engage in
"[a]dditional conduct" that "indicate[s] an intent or purpose to servethe market in the forum State."
Id. This has been referred to as the "stream-of-commerce-plus" test. In re Chinese Manufactured
Drywall Prods. Liab. Litig., 742 F.3d 576, 585 (5th Cir. 2014). Federal encourages the Court to
apply this test.
But Justice O'Connor's opinion did not achieve majority status. And for that reason
the Fifth Circuit has refused to follow it. Instead, the Fifth Circuit continues to apply a looser test
for minimum contacts in stream of càmmerce cases derived from Justice Brennan's opinion in
Asahi:
[T]he minimum contacts requirement is met so long as the court
finds that the defendant delivered the product into the stream of
commerce with the expectation that it would be purchased by or
used by consumers in the forum state. Under that test, mere
foreseeability or awareness [is] a constitutionally sufficient basis for
personal jurisdiction if the defendant's product made its way into
the forum state while still in the stream of commerce.
Ainsworth
v.
Moffett Eng'g, Ltd., 716 F.3d 174, 177 (5th Cir. 2013) (internal citations and
quotation marks omitted). The plaintiffs urge this Court to apply this looser test for minimum
contacts.
Under Rule 4, this Court's personal jurisdiction is generally coextensive with that of a
"court of general jurisdiction in the state where [this Court] is located."
FED. R. CIV. P. 4(k)(1)(A).
This Court is located in the great state of Texas. A Texas state court of general jurisdiction,
pursuant to the holdings of the Supreme Court of Texas, would follow Justice O'Connor's opinion
5
in Asahi as the correct interpretation of the Fourteenth Amendment's minimum contacts
requirement in stream of commerce cases. Spir Star AG, 310 S.W.3d at 873 ("[O]ur precedent
generally follows Justice O'Connor's plurality opinion in Asahi, which requires some additional
conductbeyond merely placing the product in the stream of commercethat indicates an intent
or purpose to serve the market in the forum State.") (internal citations and quotation marks
omitted). It seems, then, that this Court should follow the lead of Texas state courts and apply the
more restrictive minimum contacts analysis set forth by Justice O'Connor' s opinion in Asahi.
But despite the soundness of this Rule 4 analysis, the Fifth Circuit uses its own
interpretations of the Due Process Clause when conducting jurisdictional analyses, not Texas (or
other underlying States') interpretations. The Fifth Circuit has not (to this Court's knowledge)
explicitly stated that district courts should not take state interpretations Of the Due Process Clause
into account pursuant to Rule 4(k)(1)(A); but the Fifth Circuit's persistent practice of applying its
own, broader views ofjurisdiction under the Due Process Clause seem to endorse, implicitly, such
a view. At the very least, Federal has not cited any case in which the Fifth Circuit applied state
interpretations of the Due Process Clause in a jurisdictional setting rather than its own.
At least one other court in this District has come to a similar conclusion. In Denman
Tire Corp.
v.
Compania Hulera Tornel, S.A. de C.V, No. DR-12-cv-027, 2014 WL 12564118
(W.D. Tex. Mar. 31, 2014), that court stated that though "it was counterintuitive for the Fifth
Circuit to disregard the Texas Supreme Court's explicit definition of the reaches of its long-arm
statute"including the Texas Supreme Court's interpretations of the Due Process Clause"the
Fifth Circuit has nonetheless made clear that the issue is one of federal interpretation, not state
interpretation." Id at *9 This Court disagrees that the Fifth Circuit has made this issue "clear."
None of the cases cited by the court in Denman include an explicit statement that, when a state
6
long-arm statue extends to the limits of the Due Process Clause, the interpretations of the Due
Process Clause that matter are those of the Fifth Circuit rather than those of the state supreme court
that actually has power to authoritatively interpret the statute. But the cases cited by the court in
Denman do, at the very least, illustrate the Fifth Circuit's practice
of using its own interpretations
as opposed to a state court's interpretations. This Court agrees with its sister court that the Fifth
Circuit's disregard of Texas Supreme Court interpretations of the Due Process Clause is
"counterintuitive." Nevertheless, like its sister court, this Court feels bound, as an inferior federal
court, to follow the Fifth Circuit's practice.
For these reasons, the Court will not apply the stream-of-commerce-plus test from
Justice O'Connor's opinion in Asahi, as would the Texas Supreme Court. Rather, it will apply the
looser, stream-of-commerce/awareness test from Justice Brennan's opinion in
Asahi
and Fifth
Circuit precedent.
2. Federal Was Aware
that its Tires Reached Texas through the Stream of
Commerce.
Federal was aware that its tires were arriving in Texas through the stream of commerce
and being sold there. First, Federal's corporate representative, Mr. Dawu Chen, admitted that
Federal ships tires directly to customers at several locations in Texas,
No. 39-5 at23:12-25; Houston, id. at 38:18-39:1; San Antonio,
53:22-54:13; and McAllen,
id.
Id.
including
Lubbock, ECF
at 39:7-11; Carroliton,
Id.
at
at 39:2-6. Federal was aware that its tires were arriving in Texas
through other states as well. Id. at 32:11-34:5 (discussing an e-mail thread between a Texas
customer and a Federal employee concerning tires being shipped to McAllen, TX, from Ohio or
California). Second, Mr. Chen also admitted that Federal was aware that it had end users of its
tires located in Texas.
See
id.
at 29:8-18 (discussing an end user in located in El Paso,
TX);
Id.
at
46:6-12 ("Q. And we've looked at some past e-mails from end users, which you've already said
7
are the people that actually use the tires, and those end[] users are in Texas. And you have directed
those people to these various persons or companies that sell [your] tires in Texas, correct? A. That
is correct."); id. at 51:21-24 ("Q..
.
.
Federal Corporation knows that there are consumers who are
looking for Federal tires in Texas and helps them buy tires in Texas, correct? A. Yes."); id at
134:24-135:2 ("Q.
. . .
-
Federal Corporation knows that it is that its tires are being sold in Texas,
correct? A. Yes."). So it is clear that Federal's tires arrived in Texas either through direct shipment
or through the stream of commerce and that Federal was aware of this fact.
Despite these admissions, Federal sets forth several arguments that it does not maintain
purposeful, minimum contacts with Texas.
First, Federal asserts that it neither knows nor cares whether the tires that it ships
directly to Texas or that reach Texas through a chain of distributibn will actually be sold
tO
and
used by end users in Texas. Id. at 40:19-23 ("It is logical to believe that the tires are sold within
Texas. But we have no exact knowledge, and we don't really care about that. Our job is done
when the tires arrive at the warehouse of these locations.").
Thus, it had no awareness or
"expectation that [its tires] would be purchased by or used by consumers in [Texas]."
Ainsworth,
716 F.3d at 177.
The Court does not doubt that Federal does not care whether its tires are eventually
sold and used in Texas or elsewhere; but the Court does not believe Federal when it says that it
has no knowledge or expectation that its products will be sold and used there. First, we have
already seen that Federal was aware that it had end users in Texas. ECF No. 39-5 at 29:8-18;
id.
at 46:6-12; id. at 109:7-8 ("A. We believe he's selling the tires in Texas, but maybe not limited to
Texas."). Second, as Mr. Chen put it, "[i]t is logical to believe that the tires are sold within Texas."
Id. at 40:19-20. Mr. Chen is right. When a company ships thousands
8
of tires to various Texas
cities, it is logical to assume that those tires are being sold and used there. Another way to say this
would be to say that Federal could expect its tires to be sold and used in Texas. At the least, then,
Federal had an "expectation that [its tires] would be purchased by or used by consumers in
[Texas]." Ainsworth, 716 F.3d at 177.
Second, Federal argues that "every fact Plaintiffs rely on in support of their argument
is the result of either unilateral action
of some third-party or Plaintiffs themselves; or is otherwise
so attenuated that Federal cannot be deemed to have purposefully availed itself of the benefits and
protections of the State of Texas." ECF No. 40 at 6. The Court disagrees. When Federal ships
thousands of tires directly to Texés, it is not the result of a third-party's unilateral action. That is
a first-party's direct interaction with Texas. Federal cannot say that it has no control of where it
ships its own products. If it wanted, it could refuse to ship tires to Texas. It cannot avoid the
creation of purposeful, minimum contacts by saying "my customer asked me to." Simply put,
shipping directly to Texas because a customer asks you to creates a purposeful contact with Texas.
Beyond that, the entire point of the stream-of-commerce theory is to find cases where
jurisdiction is appropriate even when a product was directed to a forum by a third-party. Consider
Asahi. There, "Asahi did not design or control the system of distribution that carried its valve
assemblies into California." Asahi, 480 U.s. at 121 (Brennan, J. concurring). In other words,
Asahi's valve assemblies only ended up in California due to the unilateral actions of a third party.
And yet, according to Justice Brennan (whose opinion the Fifth Circuit follows), because "Asahi
was aware of the distribution system's operation, and [because] it knew that it would benefit
economically from the sale in California of products incorporating its components
. . .
Asahi's
regular and extensive sales of component parts to a manufacturer it knew was making regular sales
of the final product in California" was sufficient "to establish minimum contacts with California."
9
Id. Federal has similar contacts with Texas. Federal ships some tires directly to Texas. Other
tires it places into the stream of commerce with the awareness they could end up in Texas (as
shown by Federal's efforts to connect Texas consumers with third-party dealers of Federal Tires,
ECF No. 39-5 at 32:11-34:5). In no sense are these contacts "random, fortuitous, or attenuated."
Ainsworth, 716 F.3d at 177. As such, Federal's arguments that its contacts with Texas should not
count toward establishing jurisdiction because they involve third parties making decisions or are
too attenuated fail.
3. Minimum
ContactsConclusion
Federal ships thousands of tires to Texas. It ships some of those tires directly to Texas
from Taiwan. Other tires arrive in Texas through intermediaries in other states. And many of
those tires are sold in Texas to residents of Texas. The information revealed during jurisdictional
discovery proves these facts. Therefore, Federal has "regular and extensive sales" in Texas that
benefit it economically and of which it was fully aware. Asahi, 480 U.s. at 121 (Brennan, J.
concurring). Therefore, under Justice Brennan's opinion in Asahi and the Fifth Circuit precedent
following that case, Federal has established purposeful, minimum contacts with Texas.
But these contacts are sufficient to justify this Court's exercising jurisdiction over
Federal only if the other two prongs of the specific jurisdiction testrelatedness and
reasonablenessare also met. The Court now turns to the relatedness prong.
B.
RelatednessThe Plaintiffs' Cause of Action Arises Out of or Results from
Federal's Contacts with Texas.
The second prong of the specific jurisdiction test is the relatedness prong. It asks
"whether the plaintiff's cause of action arises out of or results from the defendant's forum-related
contacts." Bustos, 538 F. App'x. at 567. The Court finds that the plaintiffs' cause of action in this
case does arise from Federal's forum-related contacts.
10
Federal's forum-related contacts in this case are those discussed in the previous section:
purposefully putting thousands of tires into the stream of commerce with the awareness and
expectation that at least some of those tires would be purchased and used in Texas. Here, the
Federal tires were installed on a 2007 F-150 pickup truck. One of the plaintiffs, Mr. Jimenez,
bought that truck in Texas.' Therefore, "the defendant's product made its way into the forum state
while still in the stream of commerce." Ainsworth, 716 F.3d at 177. Now, the plaintiffs allege
that one of the tires on that truck failed, causing a car crash and injuries to the plaintiffs. Because
the allegation is that the offending tire was purposefully put into the stream of commerce by
Federal with the awareness that a Texas consumer may purchase and use the product, the plaintiffs'
cause of action arises out of or results from Federal's contacts with Texas.
Federal argues that, because the accident in question occurred not in Texas, but in
Mexico, the plaintiffs' cause of action does not arise out of Federal's Texas contacts. Not so. It
is well established that the unilateral act of a consumer/plaintiff bringing a good into a state "cannot
satisfy the requirement of contact with the forum State." World-Wide Volkswagen Corp.
v.
Woodson, 444 U.S. 286, 298 (1980) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). But
that same act of taking a good to another state does not nullify the purposeful contacts a defendant
has with a previous state. The plaintiffs in World-Wide Vol/cwagen could not sue the defendants
in Oklahoma just because the plaintiffs travelled there and got injured there. But they could have
sued the defendants in New York, where the defendants clearly had purposeful, minimum contacts,
despite having been injured outside New York. The relevant contact was not the accident or the
l
The plaintiffs failed to allege that the truck was bought in Texas in their complaint. But they did allege it in their
response to the motion to dismiss. Normally, the Court would not consider facts raised for the first time in a response
to a motion to dismiss. But because the Court authorized jurisdictional discovery in this case, ECF No. 25, it is only
natural that the plaintiffs would cite new facts in their response that were not mentioned in their complaint. This fact
should have been included in the complaint. But because the Court is already considering new facts as part of the
response, it will not strain at a gnat to exclude this one.
injury. The relevant contact was the purposeful placing of the vehicle into the stream of commerce
with the awareness that a consumer in the forum state could purchase and use the vehicle.
Here, Federal purposefully placed its products into the stream of commerce, knowing
full well that some of those products would end up in the possession of Texas consumers. And
that is what allegedly happened
herea Federal tire entered the stream of commerce
and was
purchased and used in Texas by Texans. That the injury occurred elsewhere does not change those
contacts. But for Federal's act of placing tires destined for Texas in the stream of commerce, the
accident allegedly would not have happened. Therefore, the accident and the plaintiffs' cause of
action arises out of Federal's purposeful contacts with Texas, regardless of the place of injury.
For these reasons, the relatedness prong of personal jurisdiction is satisfied. The Court
now proceeds to the third and final prongreasonableness.
C. ReasonablenessExercising Jurisdiction Over Federal
in this Court
Comports with Fair Play and Substantial Justice.
The third prong of the personal jurisdiction test asks whether the exercise ofjurisdiction
in a particular case would be "reasonable and just according to our traditional conception of fair
play and substantial justice." Int'l Shoe Co.
v.
Washington, 326 U.S. 310, 320 (1945); see also
Bustos, 538 F. App'x. at 567. "The relationship between the defendant and the forum must be
such that it is 'reasonable
. . .
to require the corporation to defend the particular suit which is
brought there." World-Wide Volkswagen, 444 U.S. at 292 (quoting Int'l Shoe Co., 326 U.S. at
317). To make this determination, courts look at five factors: (1) the burden on the defendant, (2)
the forum state's interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining
convenient relief, (4) the interstate judicial system's interest in obtaining the most efficient
resolution of controversies, and (5) the shared interest of the several states in furthering
fundamental substantive social policies. Id.
12
First, the burden imposed on Federal by litigating this dispute here would be
substantial.
Federal would need "not only to traverse the distance between [Federal's]
headquarters in [Taiwan] and the [federal court in Texas], but also to submit its dispute.
. .
to a
foreign nation's judicial system. The unique burdens placed upon one who must defend oneself
in a foreign legal system should have significant weight in assessing the reasonableness
of
stretching the long arm of personal jurisdiction over national borders." Asahi, 480 U.S. at 114.
But these concerns cannot overwhelm other factors. Otherwise, it would be impossible
to resolve cross-border disputes in American courts at all. The Court also notes that the burden
placed on international corporations by the requirement to litigate in an American court is not what
it once was. Advances in travel and communications technology have lightened that burden
greatly.
This case provides the perfectS example.
Mr. Chen's deposition was conducted
electronically, with no need for international travel. In addition, the practice of litigating in a
foreign judicial system has become more and more commonplace as the world's economy has
become ever more interconnected. So while the Court does not ignore that litigating this case in
Texas will burden Federal, that burden alone does not make the exercise ofjurisdiction in this case
offensive to traditional notions of fair play and substantial justice.
Second, Texas's interest in adjudicating this dispute is great. Federal argues this is not
so because the accident in question occurred in Mexico, not Texas. It is true that Texas's interest
would be greater if the accident occurred in Texas. But it was mere happenstance that this accident
occurred in Piedras Negras,
Mexicoa border townrather than in Texas.
So Texas's interest is
still great despite not being the place of injury. The plaintiffs are Texans. Texas has an interest in
seeing its citizens justly compensated for their injuries. The offending tire entered Texas while
13
still in the stream of commerce and was purchased by Texans. Texas has an interest in ensuring
that products entering its borders and purchased by its residents are safe.
Third, the plaintiffs are greatly interested in obtaining convenient relief. It would be
even more burdensome to require the plaintiffs to litigate in Taiwan than it is to require Federal to
litigate in the U.S. Federal has the resources to frequently travel internationally and to identify
and hire excellent defense attorneys who are familiar with American law. It is far from clear that
the plaintiffs have the resources required to go after Federal in Taiwan. If the plaintiffs are to
obtain any relief from Federal at all, it will likely have to come from courts in Texas.
Federal argues that the plaintiffs' interest in obtaining relief is diminished because they
have already settled one lawsuit related to this accident that was brought against Ford and against
Jacinto Enterprises. There is some merit to this argument. The plaintiffs have already recovered
something for their injuries. And should litigation go forward and should Federal lose, it would
surely be entitled to an offset due to the earlier settlements. But these circumstances do not mean
that the plaintiffs have no interest in further relief. The Court therefore finds that the plaintiffs'
earlier settlements merit little weight in this analysis.
The Supreme Court has said that "[w]hen minimum contacts have been established,
often the interests of the plaintiff and the forum in the exercise of jurisdiction will justify even
serious burdens placed on [an] alien defendant."
Asahi, 480
U.S. at 114. So far, that is what the
Court sees. Minimum contacts have been established and both the plaintiff and the forum have
strong interests in the exercise of jurisdiction. But the Court must still consider the remaining
factors. In
Asahi,
the Court addressed the last two factors together. Id. at 115. This Court will
follow suit.
14
Fourth and fifth, the Court "consider[s] the interests of the several States, in addition
to the forum State, in the efficient judicial resolution of the dispute and the advancement of
substantive policies." Id. (internal quotation marks removed). Like Asahi, this case requires the
Court "to consider the procedural and substantive policies of other
nations
whose interests are
affected by the assertion of jurisdiction by" a Texas court. Id. These policies and interests are
"best served by a careful inquiry into the reasonableness of the assertion of jurisdiction in the
particular case, and an unwillingness to find the serious burdens on an alien defendant outweighed
by minimal interests on the part of the plaintiff or the forum State."
id
Federal notes that evidence pertaining to the manufacture, design, testing, inspection,
and sale of the subject federal tire is in Taiwan, not Texas. That may be so, but the burden involved
in discovering this information in Taiwan and sending it electronically to Texas is no greater than
the burden faced by any non-international defendant. Further, the truck, tire, and plaintiffs in
question are not in Taiwan, but are in either Texas or Mexico, which is much closer to Texas than
it is to Taiwan. Given the physical evidence's proximity to Texas and the nature of modern
discovery, the Court cannot agree that Taiwan is a more convenient or efficient location for
litigation than Texas.
Overall, the interests of the plaintiff and of Texas in litigating this suit in Texas are
substantial. The burdens on Federal as an alien defendant, while substantial, are not so substantial
as to outweigh those interests. This is especially so in light of the substantial contacts that Federal
has in Texas. In light of these contacts, the strong interests of the plaintiffs and Texas in seeing
this dispute litigated in Texas, the realities of modern international business and litigation, and the
particular facts of this case, the Court concludes that this Court's exercise of personal jurisdiction
over Federal in this instance does not offend traditional notions of fair play and substantial justice.
15
Conclusion
Federal has purposeful, minimum contacts with Texas. Specifically, Federal put its
tires into the stream of commerce with the expectation that some of those tires would be purchased
in Texas and used by Texans. Federal's contacts with Texas gave rise to the plaintiffs' cause of
action in this case. The plaintiffs allege that it was one of Federal's tires, carried into Texas in the
stream of commerce and purchased in Texas by the plaintiffs, that caused the accident and their
injuries. And this Court's exercise of jurisdiction over Federal does not offend traditional notions
of fair play and substantial justice. Both the plaintiffs and Texas have substantial interests in this
Court's exercise ofjurisdibtion. In light of Federal's contacts with Texas, those interests outweigh
the burden of requiring Federal to litigate this case in this Court.
For tbes reasons, the Court will 'Vacate its prior order under Rule 60(b)( 1 ),(6), and
deny Federal's motion to dismiss.
A separate order shall issue.
Signed: August ___________,2018
HON
BLE ROYCE LAMBERTH
UNITED STATES DISTRICT JUDGE
16
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