DISSENT; Opinion Filed January 11, 2022 

# S

In The 

### Court of Appeals Fifth District of Texas at Dallas

No. 05-20-00558-CV

FOREVER LIVING PRODUCTS IN TERNATIONAL, LLC, A NEVADA LIMITED LIABILITY COMPANY, AND ALOE VERA OF AMERICA, INC., A TEXAS CORPO RATION, Appellants V. AV EUROPE GMBH, A GERMAN LI MITED LIABILITY COMPANY, Appellee On Appeal from the 191st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-19-00270

DISSENT FROM DENIAL OF EN BANC REHEARING Before the Court sitting En Banc. Opinion by Justice Schenck I dissent from this Court’s denial of appellee’s motion for rehearing en banc because the panel opinion conflicts with an en banc decision of this Court and further because I have concerns with applying the “nerve center” test developed for use in determining federal diversity to the separate and dis tinct legal (constitutional) question of personal jurisdiction. The pa nel opinion deprives the defendant-appellee of both substantive and procedural protec tions contrary to the rights guaranteed by–2– the federal and state constitutions as read by our supreme court and this Court sitting

en banc. As a matter of substance, our suprem e court has read the Texas long-arm

statute to be co-extensive with the ma ximal limits of the federal constitutional requirements of due process. See Kawasaki Steel Corp. v. Middleton , 699 S.W.2d 199, 200 (Tex. 1985) (per curiam). The Un ited States Supreme Court has recognized two due process warrants for application of a state’s l ong-arm statute: (1) specific jurisdiction, which focuses on the strength of the nexus between the defendant, the forum, and the litigation; and (2) general ju risdiction, which requires no relationship to the litigation but obtains where the defe ndant’s contacts with the forum are so continuous and systematic that a defenda nt should reasonably anticipate being sued there for any matter regardless of its connection with the forum. See Moki Mac River Expeditions v. Drugg , 221 S.W.3d 569, 575 (Tex. 2007). Our panel opinion finds general juri sdiction here, making the defendant subject to suit in Texas for all litigation regard less of its relation to this state. Thus, if a citizen in Germany should slip and fall on the steps of a property owned by the defendant-appellee this winter, our opini on would render Texa s a constitutionally appropriate forum for the resulting suit. 1 This conclusion stems not from the volume

1 Oddly, we arrive at this result as to a corpora tion that is dormant and not “doing business” anywhere within the literal text of our long-arm statute. See Forever Living Prods. Int’l v. AV Europe GMBH , No. 05-20-00558-CV, 2021 WL 3276876, at *4 (Tex. App.—Dallas July 30, 2021, no pet.) (“In approximately June 2018, AV Europe stopped conducti ng business.”). As I understand it, we arrive at the conclusion that it is more engaged in the business of “not doing” bu siness in Texas more than anywhere else because it–3– or quality of its forum contacts viz the forese eability of litigation there so as to make all forms of litigation consiste nt with “fair play and substantial justice,” but from the application of the “nerve center” test used in the federal diversity statute to deem the domicile of a corporation for purposes of federal subject matter jurisdiction. E.g. , Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 927 (2011) (“A corporation’s ‘continuous activity of some sorts within a state,’ . . . ‘is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.’” (quoting Int’l Shoe Co. v. Washington , 326 U.S. 310, 318 (1945))). As I understand the due process “fair play and substantial ju stice” standard adopted by the United States Supreme Court in International Shoe and borrowed in our long-arm statute, it poses a constituti onal question of amenability to the demand of a government, state or federal, to a ppear and answer suit in its courts. See Int’l

Shoe , 326 U.S. at 316. The federal diversity st atute poses a totally distinct question

of whether subject matter jurisdiction might obtain and thus whether suit might be brought in a federal, as opposed to state, court but in all events against parties who, obviously, are also subject to personal juri sdiction as both forms of jurisdiction are

necessary. CSR Ltd. v. Link , 925 S.W.2d 591, 594 (Tex. 1996) (citing Ins. Corp. of Ireland, Ltd. v. Compagni e des Bauxites de Guinee , 456 U.S. 694 (1982)). Because federal and state courts alike may exercise personal jurisdiction over defendants

employs an agent who chose to make his home in Texas. See id. Presumably, if that same employee chose to live and remotely work from hi s lake house in Little Rock, Arkansas, his employer should anticipate being subject to a judgment in Arkansas as well as in Germany.–4– only in compliance with the due process limits, Congress (or c ourts) recognizing diversity jurisdiction based on deemed citizenship and, perhaps, even minimal diversity poses only a conflict between the federal and state systems, not a threat to the constitutional rights of the defe ndant to avoid an alien forum. While the United States Congress can cr eate diversity jurisdiction and deemed residences for purposes of recognizing federal subject matter jurisdiction, 2 it does not have the ability to reimagine the Due Process Clause to create personal jurisdiction over a foreign corporation. So far as I understand it, neither the Texas Legislature nor the United States Congr ess has purported in any legislative enactment to alter the reading of th e Due Process Clause, nor could they. See Marbury v. Madison , 5 U.S. 137, 180 (1803); see also Howlett v. Rose , 490 U.S. 356, 357 (1990); Cooper v. Aaron , 358 U.S. 1, 16–17 (1958)

. Because personal jurisdiction is solely a federal constitutional due process issue, the answer to that question is to be found in the U.S. report s, not the U.S. Code. Looking to those pages, the answer here is clear. See Int’l Shoe , 326 U.S. at 316. 3

2 Ironically, the broad federal control over diversit y jurisdiction extends most liberally to aliens precisely because of the fear of offending foreign sove reigns by subjecting their citizens to suit in local tribunals. Kevin R. Johnson, Why Alienage Jurisdiction? Historical Foundations and Modern Justifications for Federal Jurisdiction over Disputes Involving Noncitizens , 21 Y ALE J. I NT ’ L L. 1, 10–16 (1996). Deeming such defendants to be amenable to suit in state court because federal subject matter jurisdiction would recognize a federal forum to protec t them from suit in state court seems to put matters backwards.

3 It seems to be a trend among lower courts to appl y the nerve center test to the question of general jurisdiction. See D.E. Wagner, Hertz So Good: Amazon, General Jurisdiction’s Principal Place of Business, and Contacts Plus As the Future of the Exceptional Case , 104 C ORNELL L. R EV . 1085, 1106 (2019). Nevertheless, answering one question by askin g a different question does not advance the analysis.–5– Separate and apart from the substantive question, the effort to subject this

defendant to suit in Texas raises procedural concerns that have been long settled by our supreme court and were recently addre ssed by this Court sitting en banc that foreclose the notion that a defendant is to be subjected to jurisdiction on grounds neither alleged in the petition nor suppor ted by proof on disposition of the special appearance challenge. Nowhere in the pe tition is general jurisdiction asserted, nor is there any reference to “continuous and systematic contacts” with Texas. 4 Instead, because the appellant-defendant went to th e effort of addressi ng and offering proof

that it was not subject to general jurisdiction in challenging jurisdic tion, the panel held the defendant to the burden to dispr ove all potential bases (pleaded or not) for that exercise, rather than simply asking whether the appellant-defendant successfully negated or disproved the jurisdictional facts alleged in the petition. This burden assumption is contrary to what I understood to be our en banc holding that “the plaintiff must meet its initial burden on special appearance by pleading, in its petition , sufficient allegations to invoke jurisdiction under the Texas long-arm statute.” See Steward Health Care Sys. LLC v. Saidara , 633 S.W.3d 120, 129 (Tex. App.—Dallas 2021, no pet.) (e n banc) (emphasis in original); see also Forever Living Prods. Int’l , 2021 WL 3276876, at *2. In other words, if the plaintiff has not alleged jurisdictional facts, a de fendant is not obliged to anticipate and

4 See Forever Living Prods. Int’l , 2021 WL 3276876, at *4 (con struing petition’s allegation that appellant is “operating in Dallas C ounty” to be “broad enough to encomp ass the premise th at AV Europe’s nerve center is in Texas”).–6– disprove them, or render itself subject to an exercise of personal jurisdiction for having sought to disprove a basis for jurisd iction that is not a lleged by introducing some evidence to negate it at the peril of the court identifying others. Under Moki

Mac , the burden of establishing jurisdiction always remains on the plaintiff, and the burden of producing evidence may switch to the defendant where the plaintiff has made an allegation giving ri se to a presumption. See Saidara , 633 S.W.3d at 140 (Schenck, J., c oncurring) (citing Moki Mac , 221 S.W.3d at 574).

CONCLUSION Because the Court’s opinion expands congressional power over federal subject matter jurisdiction beyond its cons titutional scope and c onflicts with prior en banc precedent, I dissent from the Cour t’s denial of the request for en banc

reconsideration.

200558DF.P05 /David J. Schenck / DAVID J. SCHENCK JUSTICE