Whether a foreign manufacturer is subject to the jurisdiction of a state court in a product liability case is a question that arises with great frequency since the stream of commerce theory was introduced in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980).1 Since that time, lower courts have struggled with the meaning of “stream of commerce” and how it guides the analysis of personal jurisdiction with respect to product manufacturers.2 After a two decade hiatus,3 the United States Supreme Court recently revisited the stream of commerce theory in J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 877 (2011) in an unsuccessful attempt to clarify the theory.4 The focus of this article is recent Texas state court cases interpreting and applying the stream of commerce theory as modified by Nicastro, followed by a future prediction of their impact on an injured victim’s ability to hold a foreign manufacturer responsible in Texas state court for injury caused by an unreasonably dangerous product.

Based on recent Texas Supreme Court precedent and Texas Courts of Appeals cases, Texas will follow the “stream of commerce plus” theory when analyzing whether a trial court’s exercise of personal jurisdiction over a foreign manufacturer exceeds the permissible parameters of the due process clause. What remains unsettled are the universal standards and bright line rules regarding the types of specific contacts of a foreign manufacturer that will satisfy the minimum contacts prong in the personal jurisdictional analysis. The lack of clarification and ambiguity will continue to allow foreign manufacturers to potentially evade being subject to personal jurisdiction in Texas. Additionally, the concerns addressed by the dissent in Nicastro, are realities that Plaintiffs in product liability cases will necessarily have to confront.

My advocate tips to fellow plaintiff’s lawyers responding to a foreign manufacturer’s special appearance in a products liability case are as follows:

TIP 1: Perform an initial evaluation of the time, expense, and effort involved in pursuing a foreign defendant, and consider whether full recovery may be obtained from a U.S. defendant alone.

TIP 2 Plead specific jurisdictional facts about the foreign manufacturer in your original petition. Amend petition prior to hearing on special appearance if you did not plead adequate specific jurisdictional facts.

TIP 3: Conduct written and non-written jurisdictional discovery with a focus on: a.) the forum the product was designed for; b.) the advertisements, if any, that reached that forum; c.) the individuals (agents, employees, and/ or servants) from the entity or company who physically went to the forum for business purposes; d.) whether there is an exclusive U.S. distributor; e.) whether there are clear channels for providing regular advice to customers in the forum state; f.) whether any internet advertising or activity reaches internet users in the forum state; and, most importantly, g.) the amount of revenue obtained from sales in the forum state (upon which the El Paso Court of Appeals heavily relied).

TIP 4: In requesting documents, ask for the English translation (as the English translation will be provided to defense counsel). Be aware that the translation may favor the defense. With that being said, it is beneficial to have an independent review of critical documents.

TIP 5: Utilize the Mi Gwang factors as a guide in pleadings and discovery.

TIP 6: Check Lexis, Westlaw and other databases to determine if the foreign manufacturer has previously contested jurisdiction in the state in which your lawsuit is filed. The foreign manufacturers’ pleadings and affidavits can be helpful in your analysis and legal strategy. Also, any responses to special appearances as well as discovery conducted by the plaintiff’s lawyer in that matter can serve as a template for your case.

TIP 7: In the event the minimum contacts are insufficient, file a verified motion for continuance to conduct additional jurisdictional discovery under Texas Rule of Civil Procedure 120(a)3.

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