Court Opinion

ID: 4565151
Source: CourtListenerOpinion
Date Created: 2020-09-14 07:17:07.73858+00
Date Added: 2024-06-11T08:32:39.311531
License: Public Domain

Affirmed and Memorandum Opinion filed September 10, 2020.

                                      In The

                       Fourteenth Court of Appeals

                              NO. 14-18-01107-CV

  CHANGCHUN GAOXIANG SPECIAL PIPES CO., LTD. (“GOLSUN”),
                      Appellant

                                        V.

         FLEXSTEEL PIPELINE TECHNOLOGIES, INC., Appellee

                    On Appeal from the 234th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2015-52962

                         MEMORANDUM OPINION

      Appellant Changchun Gaoxiang Special Pipes Co., Ltd. (“Golsun”), a
company organized under the laws of China, appeals the denial of its special
appearance based on specific jurisdiction. Concluding the trial court did not err in
denying the special appearance, we affirm.

                                  BACKGROUND

      Appellee FlexSteel Pipeline Technologies, Inc. was a division of Wellstream
International Limited, which is a provider of flexible pipe used in offshore oil and
gas operations. As a division of Wellstream, FlexSteel focused on developing
flexible pipes for the onshore and shallow water oil and gas markets. In 2009,
FlexSteel became a stand-alone company and Wellstream’s successor in interest.

       Bin Chen, a defendant in the trial court, but not a party to the special
appearance, worked as an employee and consultant for Wellstream for fifteen years.
Chen, a Houston resident, had access to FlexSteel’s confidential information, trade
secrets, and other intellectual property. As part of his employment with Wellstream,
Chen assigned all right, title, and interest in all original works of art and other matters
he produced to Wellstream. Chen was one of the creators of a proprietary pipe
designing software, which FlexSteel used in the design and manufacture of its
products. FlexSteel named the software its “Pipemaker” program, and treated its
patent for the flexible pipe, the machine used to manufacture the pipe, and the
indentity of its manufacturer as trade secrets. Chen was also general manager of
certain businesses in Houston, including Premiere Offshore and BW Tech.

       Chen left FlexSteel in March 2005 but continued to work as a consultant until
2008. Within weeks of leaving FlexSteel Chen designed and applied for a Chinese
patent for flexible pipe, which FlexSteel alleged mirrored its patented design, also
designed by Chen.

       Golsun began as a government-owned research institute in China. Shichun Li
is Golsun’s chairman and CEO. In 2004, Golsun wanted to expand its product base
to pipe that could withstand higher pressure. At the time Li met Chen and learned
that Chen did the kind of pipe design work Golsun was seeking. Li and Chen
discussed a joint venture with a company called FlexKing.

       In December 2005, Li traveled from China to Houston to attend a board
meeting at which Li, Chen, and other FlexKing partners discussed plans for
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manufacturing pipe that Chen designed pursuant to his China patent to be built for
the FlexKing joint venture. Those discussions included a plan to obtain the same
machine FlexSteel used to manufacture pipe from Flexsteel’s supplier. FlexSteel
treated the machine and the identity of its manufacturer as trade secrets. FlexSteel
alleged that despite its “desire to protect the identity of that vendor, and in particular
the modifications made to the vendor’s machine that allowed it to wrap steel tape
around a flexible oilfield pipe, that information was disclosed to Li and his Golsun
colleagues at these board meetings and Golsun, through Chen, initiated the process
of purchasing the very same machine from the very same company.” The minutes
of the board meeting reflected that the board resolved to allow Chen to join the joint
venture to be primarily responsible for the pipe design.

      At the time of the FlexKing joint venture Li discussed with Chen whether
Golsun could use FlexSteel’s patented pipe design. Chen explained to Li that Golsun
could not use FlexSteel’s design to manufacture pipe because the design was
patented by FlexSteel. Ultimately, the FlexKing joint venture did not succeed in
manufacturing and selling flexible pipe.

      After the failure of the joint venture Chen assigned his Chinese pipe patent to
Golsun and joined Golsun as its Technology Controller. Chen developed for Golsun
a Microsoft Excel based pipe designing programs (the “Chen Excel Tool”) that
FlexSteel alleged performed the exact same function as FlexSteel’s Pipemaker
program, which Chen designed for FlexSteel.

      According to FlexSteel’s pleadings, Golsun subsequently used Chen’s design
and a machine provided by FlexSteel’s supplier to manufacture flexible steel pipe
and sold the pipe to the Venezuelan national oil company, PDVSA. FlexSteel alleged
that Golsun was able to manufacture and sell its pipe as a result of Chen’s unlawful
disclosure of its confidential information and Golsun’s misappropriation of

                                            3
FlexSteel’s trade secrets.

      FlexSteel sued Chen and Golsun in state court for trade secret
misappropriation, breach of contract, tortious interference with a contract, breach of
fiduciary duty, and inducement or participating in the breach. Golsun specially
appeared, asserting that none of the claims in FlexSteel’s live pleading arose from
sufficient minimum and purposeful contacts with Texas to satisfy specific
jurisdiction over Golsun. After a hearing with no live testimony, the trial court
denied Golsun’s special appearance. Findings of fact and conclusions of law were
not requested or filed.

      In three issues Golsun asserts the trial court erred because (1) FlexSteel’s
allegations pertaining to Golsun’s contacts with Texas did not meet its burden of
pleading jurisdictional facts sufficient to bring Golsun within the provisions of the
Texas long-arm statute; (2) if so, Golsun did not establish minimum contacts with
Texas because (a) it is undisputed that Golsun never sold products containing the
alleged trade secrets in Texas; and (b) there is no legally or factually sufficient
evidence that any of the alleged trade secrets were disclosed to Golsun during the
only Texas meeting that predated the sale to PDVSA; and (3) even if Golsun had
minimum contacts with Texas, it would offend traditional notions of fair play and
substantial justice to require a Chinese company, which does no business in Texas,
to litigate this matter in Texas courts.

                                       ANALYSIS

I.    Standard of Review and Applicable Law

      We review de novo a trial court’s denial of a special appearance. M & F
Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., 512 S.W.3d 878, 885 (Tex.
2017). When, as here, the trial court does not issue findings of fact and conclusions

                                           4
of law, we imply all relevant facts necessary to support the judgment that are
supported by evidence. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789,
795 (Tex. 2002). Parties may challenge the legal and factual sufficiency of these
implied factual findings. Id.

      In a legal sufficiency review, we view the evidence in the light most favorable
to the finding and indulge every reasonable inference that supports the challenged
finding, crediting favorable evidence if a reasonable fact finder could and
disregarding contrary evidence unless a reasonable fact finder could not. BMC
Software, 83 S.W.3d at 795 (citing City of Keller v. Wilson, 168 S.W.3d 802, 827
(Tex. 2005)). We will set aside a finding on legal sufficiency grounds only if (a)
there is a complete absence of a vital fact, (b) we are barred by legal or evidentiary
rules from giving weight to the only evidence offered to prove a vital fact, (c) the
evidence offered to prove a vital fact is no more than a scintilla, or (d) the evidence
conclusively establishes the opposite of the vital fact. Id. In reviewing for factual
sufficiency, we consider all the evidence; we will set aside a finding only if it is so
against the great weight and preponderance of the evidence as to be clearly wrong
and unjust. Id. Finally, we review the trial court’s legal conclusions de novo. Id.

      The Texas long-arm statute authorizes Texas courts to exercise jurisdiction
over a nonresident defendant who “does business” in the state. Tex. Civ. Prac. &
Rem. Code § 17.042. The Supreme Court of Texas has interpreted the broad
language of the Texas long-arm statute to extend Texas court’s personal jurisdiction
“as far as the federal constitutional requirements of due process will permit.” M &
F Worldwide, 512 S.W.3d at 885. A plaintiff bears the initial burden of pleading
allegations sufficient to bring a nonresident defendant within the scope of the long-
arm statute. BMC Software, 83 S.W.3d at 794–95. A defendant challenging a Texas
court’s personal jurisdiction must negate all jurisdictional bases alleged. Id.

                                           5
      A trial court may constitutionally exercise personal jurisdiction over a party
when (1) the nonresident defendant has minimum contacts with the forum state and
(2) the assertion of jurisdiction complies with traditional notions of fair play and
substantial justice. Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Peters
v. Top Gun Exec. Grp., 396 S.W.3d 57, 62 (Tex. App.—Houston [14th Dist.] 2013,
no pet.). Minimum contacts are sufficient for personal jurisdiction when the
nonresident defendant purposefully avails itself of the privilege of conducting
activities within the forum state, thus invoking the benefits and protections of its
laws. M & F Worldwide, 512 S.W.3d at 886. “The defendant’s activities, whether
they consist of direct acts within Texas or conduct outside Texas, must justify a
conclusion that the defendant could reasonably anticipate being called into a Texas
court.” Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex.
2002) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297
(1980)).

      A nonresident defendant’s contacts with a forum state can give rise to either
general or specific jurisdiction. Id. General jurisdiction arises when a defendant’s
contacts with the forum state “are so ‘continuous and systematic’ as to render [it]
essentially at home in the forum State.” M & F Worldwide, 512 S.W.3d at 885
(quoting Goodyear Dunlop Tires Operations, SA v. Brown, 564 U.S. 915, 919
(2011)); see also Daimler AG v. Bauman, 571 U.S. 117, 138 (2014). General
jurisdiction concerns a court’s ability to exercise jurisdiction over a nonresident
defendant as to any claim, including claims unrelated to the defendant’s contacts
with the forum. Id. The test for general jurisdiction “requires ‘substantial activities
within the forum’ and is a ‘high bar,’ Searcy v. Parex Resources, Inc., 496 S.W.3d
58, 72 (Tex. 2016), presenting ‘a more demanding minimum contacts analysis than
for specific jurisdiction.’” TV Azteca v. Ruiz, 490 S.W.3d 29, 37 (Tex. 2016)

                                          6
(quoting BMC Software, 83 S.W.3d at 797). Even when a defendant’s contacts may
be continuous and systematic, they are insufficient to confer general jurisdiction if
they fail to rise to the level of rendering a defendant “essentially at home in the forum
[s]tate.” Old Republic Nat’l Title Ins. Co. v. Bell, 549 S.W.3d 550, 565 (Tex. 2018).

      In analyzing specific jurisdiction, on the other hand, we focus on the
relationship among the defendant, the forum, and the particular litigation at hand.
See M & F Worldwide, 512 S.W.3d at 886 (citing Spir Star AG v. Kimich, 310
S.W.3d 868, 873 (Tex. 2010) and Moki Mac River Expeditions v. Drugg, 221 S.W.3d
569, 575-76 (Tex. 2007)). Specific jurisdiction is established when the plaintiff’s
cause of action arises from or relates to the defendant’s alleged minimum contacts
within the forum. Id. For specific jurisdiction purposes, a defendant’s minimum
contacts with a forum are established when the defendant “purposefully avails itself
of the privilege of conducting activities within the forum state, thus invoking the
benefits and protections of its laws.” Id. (quoting Retamco Operating, Inc. v.
Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009)). Three principles govern
the purposeful-availment analysis: (1) “only the defendant’s contacts with the
forum” are relevant, not the unilateral activity of another party or third person; (2)
the defendant’s acts must be “purposeful” and not “random, isolated, or fortuitous”;
and (3) the defendant “must seek some benefit, advantage, or profit by ‘availing’
itself of the jurisdiction” such that it impliedly consents to suit there. Id. “The
defendant’s activities, whether they consist of direct acts within Texas or conduct
outside Texas, must justify a conclusion that the defendant could reasonably
anticipate being called into a Texas court.” Id.

      Specific jurisdiction is transaction focused. Napoli, Bern, Ripka, Shkolnik &
Associates, LLP v. Stratos Legal Services, No. 14-18-00420-CV, 2019 WL 2589885,
at *4 (Tex. App.—Houston [14th Dist.] June 25, 2019, no pet.) (mem. op.). As such,

                                           7
specific jurisdiction requires us to analyze jurisdictional contacts on a claim-by-
claim basis. See, e.g., Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 660 (Tex.
2010) (separately analyzing jurisdictional contacts for fraud and trust fund claims to
determine specific jurisdiction). When separate claims are based on the same forum
contacts, however, a separate analysis of each claim is not required. Wilmington Tr.,
Nat’l Ass’n v. Hsin-Chi-Su, 573 S.W.3d 845, 854 (Tex. App.—Houston [14th Dist.]
2018, no pet.). No party has alleged general jurisdiction in this case. Therefore, we
focus on specific jurisdiction and because FlexSteel’s claims each arise out of the
same alleged forum contacts, we analyze FlexSteel’s claims together.

II.   FlexSteel met its initial burden to plead allegations sufficient to confer
      jurisdiction.
      In its first issue Golsun asserts that FlexSteel’s allegations pertaining to
Golsun’s contacts in Texas did not meet its burden of pleading jurisdictional facts
sufficient to bring Golsun within the provisions of the Texas long-arm statute.

      FlexSteel pled that Golsun and Chen committed torts in Texas by
misappropriating FlexSteel’s alleged trade secrets in violation of Chen’s confidential
or contractual relationship with FlexSteel and its predecessor Wellstream. By
pleading misappropriation of trade secrets in Texas, FlexSteel has met its initial
burden of alleging a cause of action sufficient to confer jurisdiction under the long-
arm statute. See Moncrief Oil Intern. Inc. v. OAO Gazprom, 414 S.W.3d 142, 149
(Tex. 2013) (holding that pleading that trade secrets were misappropriated in Texas
satisfies the plaintiff’s initial pleading burden); Tex. Civ. Prac. & Rem. Code §
17.042(2). Because FlexSteel met its burden of pleading jurisdictional facts
sufficient to bring Golsun within the provisions of the Texas long-arm statute, we
overrule Golsun’s first issue.

                                          8
III.   Chen’s contacts with Texas are attributable to Golsun.

       In its second issue Golsun argues it did not establish minimum contacts with
Texas because (a) it is undisputed that Golsun has never sold products containing
alleged trade secrets in Texas; and (b) the evidence is legally and factually
insufficient to show that any alleged trade secrets were disclosed to Golsun during
meetings in Texas.

       When the initial burden is met, the burden shifts to the defendant to negate all
potential bases for personal jurisdiction the plaintiff pled. Retamco, 278 S.W.3d at
337. Golsun first argues it has not purposefully availed itself of the privilege of
conducting activities within Texas because it has not sold products in Texas. In
asserting this argument Golsun cites the Texas Supreme Court’s opinion in M & F
Worldwide Corp. v. Pepsi-Cola, in which the court found no specific jurisdiction
because, among other things, there was no allegation that a tort was committed in
Texas. 512 S.W.3d at 887. In coming to that conclusion the supreme court referenced
its decision in Moncrief, stating in that case the court “held that Texas courts had
specific jurisdiction over nonresident defendants with respect to a misappropriation-
of-trade-secrets claim where the defendants ‘attended two Texas meetings with a
Texas corporation and accepted [the plaintiff’s] alleged trade secrets created in
Texas regarding a potential joint venture in Texas with the Texas corporation.’” Id.
(quoting Moncrief, 414 S.W.3d at 154).

       We do not read the court’s opinions in M & F Worldwide Corp. and Moncrief
to require a nonresident to sell products in Texas before being subject to personal
jurisdiction in Texas. Allegations that a tort was committed in Texas satisfy the
Texas long-arm statute. Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d
777, 788 (Tex. 2005); Tex. Civ. Prac. & Rem. Code Ann. § 17.042(2). While seeking
to sell a product in Texas may bring a nonresident within the state’s jurisdiction,

                                           9
Golsun has cited to no authority that requires a sale in Texas to satisfy the
jurisdictional analysis nor have we found such authority.

         Golsun next argues the evidence was legally and factually insufficient to show
that alleged trade secrets were disclosed to Golsun during the Texas board meeting
of the FlexKing joint venture. In making this argument, Golsun does not recognize
that the Texas contacts of agents or employees are attributable to their nonresident
principals. Amec Foster Wheeler plc v. Enter. Products Operating LLC, No. 14-18-
00133-CV, 2020 WL 897376, at *6 (Tex. App.—Houston [14th Dist.] Feb. 25, 2020,
no pet.); see also Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex. 1995) (“As a
general rule, the actions of a corporate agent on behalf of the corporation are deemed
the corporation’s acts.”). In other words, even if FlexSteel was unable to establish
that trade secrets were misappropriated in Texas, Golsun is subject to Texas
jurisdiction through the acts of its agent or employee Chen, a Texas resident. See
Huynh v. Nguyen, 180 S.W.3d 608, 620 (Tex. App.—Houston [14th Dist.] 2005, no
pet.).

         Although the trial court did not expressly find Chen was Golsun’s agent or
employee we presume the trial court impliedly found all facts necessary to support
its order if supported by legally and factually sufficient evidence. See Am. Type
Culture Collection Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002); Huynh, 180
S.W.3d at 620. Therefore, we construe Golsun’s argument that it is not subject to
specific jurisdiction in Texas as an attack on the legal and factual sufficiency of the
evidence to support the trial court’s implied finding that Chen was acting as an agent
or employee of Golsun. See Huynh, 180 S.W.3d at 620; Walker Ins. Servs. v. Bottle
Rock Power Corp., 108 S.W.3d 538, 549 (Tex. App.—Houston [14th Dist.] 2003,
no pet.).

         Although Golsun did not address the issue of Chen’s employment in its

                                           10
opening brief, Golsun asserted in its reply brief that Chen was not its agent or
employee for purposes of the jurisdictional analysis. To support its allegation that
Chen was the agent or employee of Golsun FlexSteel presented the following
evidence:

            • Golsun’s website listed Chen as Golsun’s Technology
              Controller.
            • Chen used a Golsun email address when conducting business.
            • Golsun paid Chen a salary in addition to making payments to
              Chen’s companies in Houston.
      Golsun responds asserting Chen was an independent contractor, not its
employee. Golsun asserts that FlexSteel failed to prove Golsun had the right to
control Chen’s work because only an independent contractor relationship was
established. See Coleman v. Klockner & Co. AG, 180 S.W.3d 577, 584 (Tex. App.—
Houston [14th Dist.] 2005, no pet.).

      Determining employee status is a fact question unless “the material
underlying facts are not in dispute and can give rise to only one reasonable
conclusion,” in which case the question is one of law. Tex. A&M Univ. v. Bishop,
156 S.W.3d 580, 585 (Tex. 2005); Steele v. Greater Houston Transp. Co., No. 14-
18-01040-CV, 2020 WL 2832033, at *4 (Tex. App.—Houston [14th Dist.] May 28,
2020, no pet. h.) (mem. op.). The primary concern when evaluating whether one is
an independent contractor or an employee is the degree of control the general
contractor maintains. See Limestone Prod. Dist., Inc. v. McNamara, 71 S.W.3d 308,
312 (Tex. 2002) (“The test to determine whether a worker is an employee rather than
an independent contractor is whether the employer has the right to control the
progress, details, and methods of operations of the work.”).

      Courts measure the right to control by considering factors such as: (1) the

                                         11
independent nature of the worker’s business; (2) the worker’s obligation to furnish
necessary tools, supplies, and materials to perform the job; (3) the worker’s right to
control the progress of the work except as to final results; (4) the time for which the
worker is employed; and (5) the method of payment, whether by unit of time or by
the job. Limestone Prod., 71 S.W.3d at 312. All five factors need not be present to
support a finding of control. Thompson v. Travelers Indem. Co. of R.I., 789 S.W.2d
277, 278 (Tex. 1990).

      A.     Independent nature of Chen’s business and Golsun’s right to
             control Chen’s progress.

      We address the first and third factors together because they both concern who
has the right to control Chen’s work. See Steele, 2020 WL 2832033 at *4.

      The record does not contain a contract between Golsun and Chen individually,
but does contain a contract between Golsun and BW Tech, a company created and
owned by Chen. In its reply brief Golsun relies on this contract as evidence that Chen
was an independent contractor and Golsun did not control Chen’s work. The contract
is for the “Structural Design and Verification of the JLB and ZMG Series
Continuous Reinforced Plastic Composite Pipe.” Under the heading “Division of
Labor,” the contract reflects that Golsun was responsible for providing “technical
requirements and relevant background information; providing technical advice,
services and development funds.” BW Tech was responsible for project
development. Golsun maintained ownership of the property purchased with research
and development funds. The contract further gave Golsun the rights and obligations
to:

           • find out at any time [BW Tech’s] progress in research and
             development;
           • request [BW Tech] to complete the R&D tasks and deliver the
             results on schedule;

                                          12
           • request [BW Tech] to appropriately use the R&D funds as agreed
             under the contract;
           • request [BW Tech] to appropriately dispose the R&D funds
             according to development plan agreed under the contract;
           • request [BW Tech] to provide relevant technical information and
             necessary technical guidance;
           • request [BW Tech] to train relevant technical staff to become
             skilled in using the technologies under the contract; and
           • conduct scheduled stage and general inspection and acceptance
             of work, and to accept research findings.

The contract further provided that Golsun:

      shall be the owner of all results (including patented and proprietary
      technology) produced and verified during the process of executing this
      contract, along with patent application right, patent rights and
      ownership of proprietary technology (including possession, use,
      earnings and punishment power), and under no circumstances shall
      [Golsun] disclose the aforesaid to any third party by any means without
      the written consent by [Chen.]

      Golsun argues this contract is evidence that it did not have control over the
“means and details” of Chen’s work. The trial court could have reviewed this
evidence and come to the opposite conclusion. The contract provided that Golsun
controlled and owned all patent rights and proprietary technology. The contract gave
Golsun control to direct research and development funds and to request that those
funds were appropriately disposed. These factors weigh in favor of the trial court’s
implied finding that Chen was Golsun’s employee.

      B.      Chen’s obligation to furnish necessary tools, supplies, and
              materials to perform the job.
      The contract required Golsun to provide funds into research and development
projects and gave Chen the right to request Golsun to invest funds into research and
development projects. Chen was also tasked with the obligation to accomplish the

                                        13
research and development tasks and deliver the results on schedule. The contract did
not obligate Chen to provide research and development funding for the patents he
produced or to furnish necessary tools, supplies, and materials to perform his work.
This factor weighs in favor of the trial court’s finding.

      C.     Time of employment and method of payment

      The record does not reflect a designated time for Chen’s employment. As to
method of payment, the record reflects Golsun paid Chen a salary in addition to
living expenses. In Li’s affidavit attached to the special appearance he admitted
Chen assisted Golsun with “specific, discrete projects” and “with improvements to
our bonded flexible pipe,” “some other types of pipe design; and helped us secure
API 17J certification, which is required to sell pipe in markets outside of China.” Li
averred that Golsun used Chen’s company, Premiere, to market its products to
Central and South America. Li sent an email to Chen explaining that Golsun would
pay part of Chen’s salary to Chen and part to Chen’s company to permit Chen to
circumvent United States income taxes. Li admitted Golsun paid Chen a “salary and
his consulting fee.” The Golsun accounting department advised Li on the best way
to divide Chen’s compensation.

      FlexSteel attached a printout from Golsun’s website where Golsun identified
Chen as its Technology Controller. Both Li and Chen denied that Chen had been
Golsun’s Technology Controller, but they could not explain why Golsun’s website
would mistakenly list Chen as its Technology Controller and place Chen’s picture
next to the listing. There is no evidence that Chen was paid “by the job” or in any
other manner indicating independent contractor status. The trial court could have
reviewed this evidence and was within its discretion to determine Li and Chen’s
credibility when disputing evidence from Golsun’s website. The factor of Chen’s
compensation weighs in favor of the finding that Chen was Golsun’s employee.

                                          14
      Considering the above factors and viewing the evidence in the light most
favorable to the trial court’s ruling, we conclude the evidence was legally and
factually sufficient to support the trial court’s implied finding that Chen was acting
as an employee of Golsun, and Chen’s Texas contacts were attributable to Golsun.
See Huynh, 180 S.W.3d at 620.

IV.   FlexSteel’s claims arise out of the alleged actions of Chen as Golson’s
      employee.

      In conducting a personal-jurisdiction analysis, we review the claims in
question and the evidence regarding the jurisdictional facts, but we do not determine
the merits of the claims. See TV Azteca, S.A.B. De C.V. v. Ruiz, 490 S.W.3d 29, 35
n.1 (Tex. 2016); Dresser-Rand Group v. Centauro Capital, S.L.U., 448 S.W.3d 577,
584 (Tex. App.—Houston [14th Dist.] 2014, no pet.). Ultimate liability in tort is not
a jurisdictional fact, and the merits of FlexSteel’s claims are not at issue in
determining whether the trial court erred in denying Golsun’s special appearance.
See Amec Foster Wheeler, 2020 WL 897376, at *8. Thus, though we describe the
substance of FlexSteel’s claims for the purposes of our personal-jurisdiction
analysis, we do not adjudicate these claims or weigh their merit. See id.

      Without commenting on the merits of FlexSteel’s claims, we note that
FlexSteel bases its claims for misappropriation of trade secrets, breach of contract,
tortious interference with a contract, breach of fiduciary duty, and inducement or
participating in the breach on Chen’s alleged violation of his confidential or
contractual relationship with FlexSteel.

      In resolving the personal-jurisdiction issues in this appeal, we are not to
determine the validity of FlexSteel’s various allegations as to the merits. See id.
Instead, we are to focus on the relationship among Golsun and the litigation and
determine whether a substantial connection exists between Golsun’s purposeful

                                           15
contacts with Texas and the operative facts of the litigation. See Moki Mac River
Expeditions, 221 S.W.3d at 585. Regardless of the merits, FlexSteel’s claims arise
from, relate to, and have a substantial connection with the words and actions of Chen
in Texas during the relevant time. Because the evidence is legally and factually
sufficient to support the trial court’s finding that Chen was acting as an employee of
Golsun, Chen’s Texas contacts are attributable to Golsun. See Huynh, 180 S.W.3d
at 620.

       To reach this conclusion we need not and do not address whether the evidence
is legally and factually sufficient to support the trial court’s implied finding that trade
secrets were allegedly misappropriated at a board meeting in Texas. See Amec Foster
Wheeler, 2020 WL 897376, at *9. We overrule Golsun’s second issue.

V.     The exercise of personal jurisdiction over Golsun comports with
       traditional notions of fair play and substantial justice.

       In its third issue Golsun asserts the exercise of personal jurisdiction over
Golsun would not comport with traditional notions of fair play and substantial
justice. After a court finds the minimum contacts necessary to exercise personal
jurisdiction over a nonresident defendant, federal due process requires the court to
determine whether the exercise of that jurisdiction comports with traditional notions
of fair play and substantial justice. See Guardian Royal Exch. Assur., Ltd. v. English
China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex. 1991). In making this inquiry, we
consider, when appropriate, (1) the burden on the defendant; (2) the interests of the
forum state in adjudicating the dispute; (3) the plaintiff’s interest in obtaining
convenient and effective 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. at 231;
Amec Foster Wheeler, 2020 WL 897376, at *9. When the defendant is a resident of

                                            16
another nation, we also must consider (a) the unique burdens placed on the defendant
who must defend itself in a foreign legal system, (b) the procedural and substantive
policies of other nations whose interests are affected by the assertion of jurisdiction
by a state court, and (c) the federal government’s interest in its foreign-relations
policies. Guardian Royal Exch., 815 S.W.2d at 229. Only in rare cases will the
exercise of personal jurisdiction not comport with fair play and substantial justice
when the nonresident defendant purposefully has established minimum contacts
with the forum state. Id. at 231. Golsun must present a compelling case that the
presence of some other considerations would render the exercise of personal
jurisdiction unreasonable. See id.

      Golsun asserts it would be “an enormous burden” to require Golsun to litigate
in a foreign state in a foreign language. As “evidence” of such a burden Golsun cites
its special appearance in the record and notes that Li gave his deposition through an
interpreter. The record reflects, however, that Li has traveled to Texas to conduct
business multiple times. Not only has the supreme court held that distance alone
cannot ordinarily defeat jurisdiction, Moncrief, 414 S.W.3d at 155, this court has
held that modern transportation and communication have made it much less
burdensome for a party to defend itself in a country in which it engages in economic
activity. Amec Foster Wheeler, 2020 WL 897376, at *9 (citing Spir Star AG v.
Kimich, 310 S.W.3d 868, 879 (Tex. 2010)). The burden on Golsun of litigating in
Texas is not so severe as to defeat the ability of Texas courts to exercise personal
jurisdiction over Golsun in this case. See Moncrief, 414 S.W.3d at 149.

      Second, Texas has an interest in resolving this dispute because it involves the
alleged commission of torts in Texas. Texas has a substantial interest in protecting
its citizens against harm from the torts alleged in this litigation. See Silbaugh v.
Ramirez, 126 S.W.3d 88, 96 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (finding

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exercise of jurisdiction comported with fair play and substantial justice because
Texas has an interest in ensuring that its citizens are protected from breach of
contract and tortious acts committed by nonresidents conducting business in Texas).

      Golsun does not address any other factors or cite to evidence in the record in
support of its position. We hold the trial court’s exercise of jurisdiction over Golsun
does not offend traditional notions of fair play and substantial justice and overrule
Golsun’s third issue.

                                    CONCLUSION

      We affirm the trial court’s denial of Golsun’s special appearance.

                                        /s/    Jerry Zimmerer
                                               Justice

Panel consists of Justices Zimmerer, Spain, and Hassan.

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