y thank you are so may please the court for over forty years since the supreme court's opinion in worldwide volkswagen this circuit has consistently and repeatedly applied a stream of commerce test for jurisdiction in products  consistently and repeatedly as recently as last december in the dipping orthopedics case has found that in this circuit you apply the justice brennan stream of commerce test that is more broadly interpreted if you apply that test to this case the trial court found that the seat involved in or the stream of commerce or an egg state of texas that ruling was not objected to or appealed by the happily there's no question that it caused injury in the state of texas that's where the incident occurred again no objection to that finding the issue here is whether or not we were required in the trial court to present evidence that the defendant deliberately targeted the state of texas if you read the district court's opinion he notes that we failed to produce evidence that they engage in activity directed at texas that is not what is required what is required is that we needed to produce evidence that was forseeable to them that the subject driver seat would be used by consumers in the time we presented ample evidence of that if you look at this court's ruling in the aynesworth case the most recent case  directly in lies in a similar issue the court found in that case that a forklift in the state of mississippi that it was forseeable given the volume of sales of those forklifts in the state and the heavy influence of the poultry industry here texas is the nd largest state in terms of registered drivers in vehicles on the road and we know through the documents that were obtained in discovery in or in the record that the defendants targeted to bid to supply seats specifically for the united states the seeds involved were coded on a label so that at the assembly process in europe the u s spam seats would be installed in u s bound vehicles is it matter how whether the defendant knows how many quit because that i think that problem in the brief is that we're talking about seats that are destined you just said destined for the united states and so they could go anywhere let's say within the contiguous forty eight dollars states and maybe even the other two as well since they're built to comply with u s law does it matter that the defendant know how many or at least it tests a paid how many are going to go to texas in particular i think it does matter your honor because if you look at the supreme court's opinion in mcintyre there the court found that one sale in the state of new jersey was not enough but the court observed  if it was a large manufacturing and reflected back on worldwide volkswagen if it was out here folks walking that had challenged jurisdiction in that case that the quantity matters justices stevens noted that as well that mcintyre here the record shows that twenty eight thousand of these seats were sold in the united states in two thousand and eight ilona and that the contract that the defendants bid in got the opportunity to supply seats involved over one hundred and thirty nine sales so when they are told in the agreement and it's in the record at page six thousand seven hundred and sixty eight that these vehicles are intended to be marketed for short and long distance driving in the united states they might be available for rental car use they know that they're supplying one hundred and thirty nine thousand seats that will be driven in just that fashion and i don't think this court is required to ignore the prominence of texas in the automotive marketplace if you look at the comments made by the court in mcintyre the relevant commercial circumstances of the product or a valid consideration for the court is that there's a product leave the stream of commerce if it in this case it's part of its purchased by an individual for private ownership presumably the person drove around in the vehicle for years and then ultimately sold it again does that does it become out of sight out of the stream of car of commerce once it's purchased privately i a coded label indicating they should be installed in vehicles bailed for the united states because they were equipped with the side impact their baggage they just think they put the code a label on there in germany yes your yes your honor with the necessary equipment needed for the united states market and it would go into a u s bound vehicle and that if the apple he was well aware of that built them for that purpose labeled them for that purpose and shipped them knowing that when that barcode was sca they would be going to the united states so are you arguing that that by that action alone the defendant should be amenable to to a lawsuit in any of the states in the united states well your honor there's a governor on that in this case there were only thirty five dollars states that sold this vehicle so if one of the requirements which it has always been in this circuit is that it exits the stream of commerce that acts as a governor here that would only occur where they were sold to retail consumer  but otherwise yes because you have to look at what benefit did they derive from the markets that they targeted and is it fair then to ask them to bear the burden of facing a lawsuit there in this particular case because of the automotive context this defendant in the supplier agreement made took on the obligation of assuring that the vehicle would perform appropriate me the seats would perform appropriately in a crash that they would comply with the u s regulations and i think it's very important that the court consider again as the supreme court has instructed the economic realities of the market here by this apple e taking on the burden of assuring compliance with us safety regulations the federal motor vehicle safety act makes this apple e as a supplier of motor vehicle equipment liable to face a judicial action in any federal district court if they fail to notify the our government of a defect in the seat for example or if they have some other recall action so if you if you back off to the fundamental question any th when the due process case does it comport with substantial justice and fair play you had the commercial commerce it seems to me when it was sold to i think so my from louisiana and held for six years of i remember the facts and then traded in and sold again back in texas it didn't have to be sold back in texas it could've been sold again in mississippi or new york state or something else you sees me that it was sold again back in texas as a fortuity is something unrelated to anything the manufacture did and that's part of what the case law talks about as well no connection it seems to me in just seconds and the reentry if that's what it was into the stream commerce and what the manufacturers initial knowledge and reasonable expectations may have been if that's even the way to look at it to extent that made some sense can you respond to that i understand the court's question and it is true i wouldn't argue otherwise that it was fortuitous that the gentleman loaded louisiana traded in plano texas let me ask about a premise for that  basically that since texas is such a large market that that makes it fit with aynesworth but that applies to the initial sale of this car in texas that is part of our hero because the question is ok so at least for that in someplace out well that may very well be but that's not the issue for the analysis it's is it fair and comport with the process to have the apple e face just a tail end of it i'm still talking about stream of commerce doctrine not after it was shipped here the question is once there is a legal action pending is the forum in that case louisiana is it fair and comport with due process to hold the happily or the the party in that case to face jurisdiction there and it's the same question here they knowingly targeted the distribution channel that they knew would go to the united states and certainly knew that texas was a very large market for the automotive context but i would say and what i said a moment ago response to justice in your hearts and questions that in this context because they were taking on the burden of complying with us safety regulations and chose to supply a piece of motor vehicle equipment with all the accompanying regulatory requirements that magna itself knew where the sales were to occur what it what it two or three dealerships in the state of texas they didn't need to know what sort of dollar volume does matter the volume of seats which they supplied that they knew were going to the united states that speaks to what they had the markets that they were targeting because if you look at the case all refers to both direct and indirect targeting and if they only supplied twenty seats in the united states that would be quantified way different than one hundred and forty thousand dollars so i'm not taking the position that u s regulatory compliance alone should be the linchpin in this case but it is a major factor because of the economic realities of the to the texas supreme court's interpretation of the due process clause has been resale only rejected by the district courts in the circuit and i think appropriately so the texts from court noted in spurs star did not change their law that the the long arm statute continues to reach the balance of the due process clause and when it comes to that where is the outer limit of the due process cause this court need not defer to any state supreme court and should only look to the u s supreme court it please the court there's really about three issues that need to be addressed in the st one is the most important and that's to the lower court did they correctly conclude that based upon the extremely thin facts in this record they could not properly exercise when the exercise of personal jurisdiction over magna germany be fair and reasonable under these facts consistently since about two thousand and eleven if we look at personal jurisdiction so two thousand and eleven is kind of the water moment we get the decision in dot diamond versus baumann we learn about general jurisdiction and how that's different and then we also start learning more about specific jurisdiction and that means case link jurisdiction and so the terminology that used in specific jurisdiction which is what's at issue in this case is is very consistent it's the inquiry is the relationship between the defendant the form d of the litigation it's a forum for analysis it's highly fac specific it does not travel with the product and the court will look at the suit related conduct and see whether creates a substantial connection with the form state this is from the walden opinion on it look at the relationship among the defendant the foreman the litigation the relationship must arise out of the contacts the defendant he himself creates with the former state and not someone else so that's the test and here are the facts so the knowledge of the texas market would satisfy this circuit's stream of commerce test so what was that proof well the proof for magno was as follows from magna germany magni germany is a company in germany they're located in germany they have no contacts with texas they don't design things in texas market things in texas advertise in texas the registered age in texas not licensed to do the business in texas and one travels to texas magna germany is a seat manufacture in germany and this particular c it ended up in a smart for two dialer car was manufactured in germany now the way this one came together was as follows because none of this is simple so in germany smart specified there are going to be three subcomponent suppliers there is supply parts for this seat the st one is hammerstein and so hammerstein was the person responsible or company responsible for the design of the seat and the seats mechanism components in the seats structure now there was a sister company call l r a o m ormont tech which is a sister company that supplied the metal structure to the seat so you get these two companies this one and this one they've been told they've been hired they're going to supply these pieces of metal parts to the sea remember the metal parts what allegedly failed they're going to supply  to magna dreaming in germany and magna germany will now a symbol the seat and put on the plastic pieces the foam and the trim and what we've done in the left is a full sea which we put on a truck or a train and it goes off to the smart plant in france and that's all magna germany knows about that see they know that that seed has been put out to the plant in germany and at that point seatbelt bracket that was on the seat and that was a requirement by smart for the us market now whether or not that would actually be used in the seat that was in a smart for two and a sold in the us market no one knows that was up there now those seats were sold in south america north america australia europe asia south africa diamond made those decisions they directed where those seats went some could have that bracket on it some could not from magna germany's perspective they didn't know they didn't control that they were the sense i think that your friend on the other side may may that's not what he saying is that by the server cation of the bracket alone seach that we had this certification on it where the only ones that would be used in vehicles sold in our state and then be used in vehicles sold elsewhere to you have do you what part of that if any do you agree with seat belt bracket on the seat to be sold in north america now whether or not gee we could sell that seat in south america you could sell it in europe you could sell in asia again and that's that is up to dime or compliance with u s regulations there is some expectation that it could be sold in the next day that's that's correct that is a broad expectation because that's all of the united states that's not texas in particular and that's part of part of what the problem was that the lower court noted this is a forum by form analysis so even in aynesworth you when we're looking at mississippi and we're looking at the poultry industry in mississippi and we've got  forklift it's made for moving poultry around it's very form specific so compliance with federal motor vehicle safety standards is not a form specific conduct contact it applies to any state so that means putting it into the stream of commerce and just wherever he ends up because of the blast any state you can't make you can't be sued in any state under these specific jurisdictional analysis and given the contacts in this case that's true now it's a very fact specific analysis of the seat manufacture was the lear seats and let's say that lear had a plant in arkansas that would be a completely different set of facts and circumstances so having the highly fact specific analysis that it we have to apply being informed by form contact then we look at the contacts and the you can envision a set of facts under which given your premise your client could be subject to suit in a particular state not in a not under these facts in this record not as to magna germany a company that was in germany had no contact with texas didn't control the distribution of the seat to texas that was all facts on the which your client could be magnet to be sued in the united states and i was indicating there was a set of facts that a subcomponent supplier who is located in the united states could be sued under specific jurisdiction not magna germany under these facts and he didn't again this is a german company the supplying a c ter german automobile automobile manufacturer who was subsequently made decisions that they are going to export that sea to several markets including north and south america so again it's a part of your argument factual it is very much fact based an angel worth which is very much focused on real numbers that we may not have in this case but it seems to me you're relying a fair amount on the fact that there's no way for you kind to know this a paid what market even american on my stage to market to these cars would go to the seats were placed in are there any numbers in the record as to the relative size of texas or united states to the seller of these view through the marketing with arms of sales to the marketing of these vehicles vs south america or any other market you said the cars  anticipated openings in dealerships in texas but as far as hard numbers that's one of the distinguishing facts in this case you just don't have that what they have in the market was only the united states there was no other place these similes in collapse and it seems to me what you focusing on right now is that the plaintiff's case collapses because there's no way if you can even to known that these seeds were going to be put in vehicles for united states much less one of the largest states in the united states it may not have gone there at all so if the only market was the united states how does that affect your analysis if the only market is the united states the argument still holds because it's a four by four men else's and if we go back to vo and i think this is the key it says it's for see ability this critical due process is not the mere likelihood the product will find its way to form but rather it's the defendant's conduct in connection with the forum and the court goes on to talk about the expectation that it will be purchased by consumers in the form not the united states in the form that form here is texas and the key here is the expectation and judge southwick i think that's exactly the is you're expecting it to be sold in texas and there's nothing in the record whatsoever that would support that conclusion based on these facts and circumstances because again magna had dropped  yes it was taking advantage of what would we remains if anything would be something that would be as between magna germany and don were which was a transaction that incur took place entirely in europe so if we look at that rd prong that's how that should come out under that there are you arguing also that we should give deference to the texas supreme court's interpretation of federal due process are you relying primarily on said in those other cases in the been dreading the loving care case they were all situations where the defendant under those facts could expect that that product would be sold or used in the form state louisiana or mississippi or one of those states the the argument on the reach of the texas long arm statute is a problematic one so consider this this case was filed in gra for determining whether or not a company is doing business in texas so the long arm statutes it's in section seventeen of the civil practice and remedies code it defines the reach of the long arm statute in texas and that includes a corporation doing business in texas so what does it mean to be doing business in texas and the texas supreme court has defined that in terms of the stream of commerce plus test some mere perceived realty their product was going to arrive in the market in texas is not enough there has to be additional conduct which would be designing advertising marketing sending your agents again making this a really clear case and the problem here is because it comes it if you apply the rules differently then you get a problem with your doctrine because we get completely different outcomes in state court and in federal court under the situation here there is no doubt whatsoever if this case stayed in grayson county we are not here having this argument now because that additional conduct does not exist at all so this actually flows into the rd point how would it ever be fair and reasonable to exercise jurisdiction in this particular case when you would have a difference in outcome if you had applied those to do protests would be completely different in state court in texas it would be in the th circuit how would that ever be fair and reasonable now the criteria under that rd set of factors is there's we look at the burden on the defendant and the only evidence in this record of course is from magna on that particular point and we also look at whether or not the former state has an interest in adjudicating the dispute applying the texas test they don't have any interest in adjudicating this test whatsoever if we look these plaintiffs interest and the interstate judicial systems interest in resolving these issues we've got a good mix already because we've had eight defendants two we've had settlements with five of them two of them one been dismissed and magn germany is the only one that remains and under this situation resolving that where the transaction took place in europe makes the most sense so is it would be fair and reasonable manner germany would say the  answer here is no it would not be fair and reasonable under these facts and circumstances to exercise jurisdiction over a seeding company in germany that has no connection with texas and that's what makes this case really unique are the facts so many of the personal jurisdiction cases the manufacturer controls the distribution they're part of it because they control that they expect the product end up in the form and we just don't have that here because the distribution is dime glitters distribution chain don look controlled how the product ended up in texas so we don't have that fact that's just not present here and the other thing that's not present is this numbers how many of the seats are in texas on this record we only really know two and that was the ones that were in stocks car as far as the regular anticipated flow we just don't have that in this record so that makes this also unique we have anticipated flows the united states but that gets us back to this whole problem of you can there's jurisdiction in any one of the fifty states so long as it goes into the stream of commerce and that's what the new jersey supreme court had in the jamie mcintyre case and that's a test that even justice briar rejected as being two prong because it gets us away from the form by form analysis and it gets us back into this ever you find your product you can be sued so that product becomes your agent for service of process just like it was someone working for you and were ever they are found you can be sued and that was rejected invokes lagan and it was rejected by justice breyer and his concurrence in j supposed to be a metaphor it was supposed to be helpful to explaining specific jurisdiction and when it can be exercised and it's turned out to be anything but that and so your example explains that deep but if we even back it up further so the seat was what it was with hammerstein hammerstein soon as the battle since the metal with the sister ship down to manager i mean they put it in the seat the seat goes off to the plant in france gets put in a car in france or sensually that means one stream another stream of the final product begins in france and that one goes through jacksonville florida some crossed the southern united states ends in houston it gets purchased by a louisiana resident in houston he drives it over to louisiana registers and keeps it there and eventually he resells it on the used car market it gets sold to a toilet dealership and then purchased by mr zaki right it's the be sold in our stage as opposed to someplace else that we accept those same standard out of the record cites that i just gave the court if you go look at them it was clear this seat was labeled for a us bail vehicle not brazil or south america or asia but for the united states of america but would you disagree with the characterization i may be misstating it but when i heard that it wasn't stamped or otherwise coded for selling  for if accepted by this court would absolutely send a thunder bolt through the automotive industry if you bid to supply a safety component for vehicle mean on a state's it is part and parcel with doing so that you face judicial action united states whether it be through regulatory action or through consumer claims if your product as a defect if this court adopts the reasoning advocated by the apple e to caught airbags cannot be sued in the united states nor could the apple or any other similar components supplier because the economic reality that's evident in the record by the agreements in place in this case is that no one is ever going to say we're supplying airbags for louisiana or we're supplying seeds for michigan that is not this market the united states regulatory scheme is a nationwide scheme and so is the marketplace so if this court reverses forty years of rulings and finds that you have to show targeting of texas that will never happen in the automotive component context and defective components can be targeted for sale for profit in the united states at high volumes as we had here and yet legal responsibility in ok also seems to me that this guy is following right that much as i understand your argument is that we don't have the evidence in this record that would be consistent with aynesworth another case that show reasonable expectation knowledge on the part of you of the manufacturer of a component part of how much would be sold in texas versus other locations you want to you have more evidence in this record than the court know what we have here we supplied in the record is that the texas is the nd largest market that had the nd most dealerships and that it has the nd most registered drivers in the entire united states so when you're targeting for sale one hundred and forty thousand of these seats it's certainly in the record and i would remind the court the standard here is to accept any ambiguity in the facts in the record in the light most favorable to jurisdiction and if you consider those facts in a light most favorable to the jurisdiction there's no question that they could reasonably for see that their product would be relied upon to perform safely in texas and should it not that they could face legal action there you have evidence in the record that magna was aware that the information you're providing is the dime where information right that time where is distributing vehicles magna has to be aware of that is that your honor in the record you're saying they could just bootstrap that knowledge to go to the united states in high volumes that the one hundred and thirty nine thousand number i'm talking about specifically the connections to texas dealerships there all a one hundred percent we can to your honor if this court requires that i have proof that the apple e targeted texas directly i will not have that evidence nor will anyone else in any automotive component case but that's not what the case law requires s