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From Products Liability Law Daily, February 7, 2014

Chinese manufacturer lacked minimum contact with Texas in toilet supply line suit

By Kathleen Bianco, J.D.

A federal district court in Texas dismissed a products liability claim against a Chinese manufacturer of plumbing equipment after it was determined that the manufacturer was not subject to personal jurisdiction in Texas (Allstate Insurance Company v. Interline Brands, Inc.February 5, 2014, Boyle, J.).

Background. Allstate Insurance Company and Fire Insurance Exchange, acting as subrogee for 13 insured homeowners in eight different states, including Texas, filed suit against Watts Plumbing, the alleged manufacturer of defective toilet supply lines that caused water-related damages in the insured individuals’ homes. Watts, which conducts business out of it sole facility in China, filed a motion to dismiss the claims against it for lack of personal jurisdiction.

Specific personal jurisdiction. The Fifth Circuit applies a three-step analysis to determine whether specific personal jurisdiction over a defendant exists: (1) whether the defendant purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable. The plaintiffs argued that the defendant was subject to personal jurisdiction because it had placed its goods into the stream of commerce and had engaged in commercial efforts to sell its goods to businesses and consumers in Texas. The court disagreed, finding that there was insufficient evidence to conclude that the defendant had delivered its toilet supply line into the stream of commerce with the expectation that it would be purchased by or used by consumers in Texas. Consequently, the court held that the plaintiff had failed to make a prima facie case for specific personal jurisdiction.

General personal jurisdiction. Fifty-four shipments to companies in Texas over an eight-year period did not constitute continuous and systematic business contacts with the state. A court may assert general jurisdiction over a foreign corporation when the foreign company’s affiliations with the state are so “continuous and systemic” as to renter them essentially at home in the forum state. The plaintiffs contended that the 54 shipments of products from defendant to the State of Texas qualified as “continuous and systematic” forum contacts for purposes of general personal jurisdiction. The court disagreed, finding that the 54 shipments over the course of eight years equated to less than seven annual shipments. The court opined that this was not enough to warrant personal jurisdiction, especially when cause of action was not related to those product shipments. Accordingly, the claims against the defendant were dismissed for lack of personal jurisdiction.

The case number is 3:13-CV-946-B.

Attorneys: Paul Vigushin (Law Offices of Paul Vigushin PC) for Allstate Insurance Co. Christopher J. Pruitt (Brown Pruitt Wambsganss Ferrill & Dean, P.C.) for Linx Ltd.  C. Vernon Hartline, Jr. (Hartline Dacus Barger Dreyer LLP) for Watts Plumbing Technologies Co., Ltd.

Companies: Allstate Insurance Co.; Watts Plumbing Technologies Co., Ltd.

MainStory: TopStory JurisdictionNews HouseholdProductsNews TexasNews

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