Opinion ID: 895205
Heading Depth: 2
Heading Rank: 2

Heading: AG intended to serve the Texas market, and Kimich's claim arose from AG's purposeful direction of acts towards Texas.

Text: Not only did AG market its products through a distributor in the forum state, AG directly targeted the Texas market. In CSR, we held that there was no specific jurisdiction over CSR, a foreign asbestos supplier whose product wound up in Texas: CSR's knowledge that its buyer, a pipe manufacturer, had a plant in Texas was not determinative because that manufacturer also had plants in at least four other states, and CSR's awareness that the stream of commerce may sweep the product into Texas `[did] not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State.' CSR, 925 S.W.2d at 595 (quoting Asahi, 480 U.S. at 112, 107 S.Ct. 1026). Instead, we held that there must be some indication that CSR intended to serve the Texas market. Id. at 595. This is consistent with federal authority holding that no specific jurisdiction exists over a manufacturer whose product just happens to end up in the forum state. For example, the Seventh Circuit Court of Appeals recently held that a Danish jack manufacturer was not subject to specific jurisdiction in Indiana, because there was no evidence that the manufacturer had an awareness or expectation that some of its products would be purchased in Indiana: In World-Wide Volkswagen, the Supreme Court held that personal jurisdiction was lacking because, in part, there was no evidence in the record that any products that the defendants distributed (in that case, automobiles) were ever sold to retail customers in the forum state. Similarly in this case, Jennings produced no evidence that any of AC Hydraulic's products (including the jack at issue in this suit) were ever sold in Indiana. Jennings claims that an Indiana company purchased the jack, but even if we were to accept this unsubstantiated allegation as evidence, Jennings does not tell us in what state or from whom this company purchased the jack. Additionally, Jennings established that AC Hydraulic sells some of its products to two distributors in Florida, but she did not present any volume information for these sales or provide us with information about where the distributors resell the products, so the scope of any alleged distribution in the rest of the United States, and whether any AC Hydraulic products have been distributed in Indiana, cannot be determined. The bottom line is that, relying on the sparse evidence that Jennings presented, we do not know how the jack in question got to Indiana, or if any other AC Hydraulic products have ever been sold there. It is possible that the unilateral activity of a third party, rather than the defendant's distribution scheme, landed the jack in Indiana, which is the very scenario that doomed the plaintiffs' case in World-Wide Volkswagen. Jennings v. AC Hydraulic A/S, 383 F.3d 546, 550-51 (7th Cir.2004) (internal citations omitted)(emphasis added); [2] see also Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 683 (1st Cir.1992) (finding no specific jurisdiction over foreign corporation because there was no evidence that [corporation] intended to serve the market in Maine). Contrast those cases with the situation here. AG's board of directors created Limited because AG wanted to take advantage of the biggest economy in the world. Strobach testified that the whole board . . . decided that [Houston would be the best place for a distributor] because we knew thatwe thought that would be the greatest need, because of the immediate vicinity of all the refineries. Strobach traveled to Houston because we wanted to establish an office in Houston. The Board's selection of a Houston office preceded by a few days the arrival of Walter De Graaf, president of both AG and Limited and an employee of each, who signed the documents that created Limited. De Graaf spends half the year working in Houston and is paid by both AG and Limited while there; his contract with AG authorizes him to act on its behalf no matter where he is. After deciding to establish Limited, AG authorized Limited to use the Spir Star name, and Limited became AG's exclusive distributor in Texas and throughout North America. According to one of AG's directors, Limited has been very successful indeed, and it is AG's largest customer by far. AG has sold millions of dollars worth of hoses to Limited; each month, AG sells Limited a maritime container full of reels of hose, which are shipped to the port of Houston. AG supplies Limited with crimping and assembly tools and written assembly standards, and AG personnel train Limited's employees in hose assembly. AG's website, authored by one of its employees, states that: In order to cover the world-wide market and provide quick service to our customers, office [sic] were opened in the following countries: SPIR STAR France, S.A.R.L. 1991 in Haguenau/France, SPIR STAR Inc. [Limited] 1995 in Housten [sic]/Texas (U.S.A.) and SPIR STAR Asia Pty. Ltd. 1999 in Singapore. Limited's website, which is written from AG's perspective, states that the decision was made that the company should expand its activities outside of Europe and that we ventured across the Atlantic and founded SPIR STAR, Ltd. in Houston, Texas. The same website touts Limited as the main link for our growing market share in North and South America. Under the heading Spir Star Companies, four entities are listed: AG, Limited, Spir Star France, and Spir Star Asia, PTE Ltd. De Graaf, AG's president, testified that he reviewed the content of both websites prior to their publication. The trial court could have believed, as Kimich argues, that AG, acting through its directors and officers, created Limited or that the website statements were admissions by AG. Or the trial court simply could have determined that AG marketed [its] product through a distributor who has agreed to serve as the sales agent in the forum State. Asahi, 480 U.S. at 112, 107 S.Ct. 1026. If the foregoing evidence does not indicate an intent or purpose to serve the market in [Texas], it is difficult to imagine what would. Cf. id. (finding no specific jurisdiction in California because respondents have not demonstrated any action by Asahi to purposefully avail itself of the California market). Finally, Kimich's claim arose from AG's Texas contacts. See World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559 ([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 product 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.); Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir.1987) (When the contact stems from a product, sold or manufactured by the foreign defendant, which has caused harm in the forum state, the court has [specific] jurisdiction provided defendant purposefully availed itself of the privilege of conducting activities within the forum); cf. Hicks v. Kawasaki Heavy Indus., 452 F.Supp. 130, 134 (M.D.Pa.1978)(noting that there exists a direct relationship between the cause of action and [Kawasaki's] contacts with the state, as motorcycle sold by foreign manufacturer to distributor is alleged to have caused injury in the state to a resident of the state), cited in Asahi, 480 U.S. at 112-13, 107 S.Ct. 1026.