On Appeal from the 191st Judicial District Court
Dallas County, Texas
Trial Court Cause No. 04-02665-J
Before Justices FitzGerald, Richter, and Francis
Opinion By Justice Francis
Appellants Elk River, Inc. and 529900 Ontario Limited a/k/a Niagara Safety
Products (Niagara) appeal the trial court's order resolving two special appearances. In three
issues, Elk River, Inc. contends the trial court erred in granting appellee Garrison Tool & Die,
Ltd.'s special appearance because the trial court had personal jurisdiction and exercising it
comports with traditional notions of fair play and substantial justice. In a single issue, Niagara
contends the trial court erred in denying Niagara's own special appearance. We affirm.
Garrison and Niagara are Canadian limited companies with principal places of
business a few miles apart in Fort Erie, Ontario, Canada. Garrison manufactures components for
fall safety equipment. Niagara operates as a commissioned sales force distributing the products
of fall safety equipment manufacturers. Garrison sells a small portion of its products directly to
Miller Equipment in Pennsylvania. Otherwise, Garrison consigns its entire production to Niagara
for sale under an oral agreement. The two companies have no corporate relationship, and
Niagara sells its own products and the products of other companies as well. Neither Garrison
nor Niagara has ever had an office, employees, a registered agent, or a bank account in Texas.
The underlying negligence and products liability suit arises from the June 16,
2003 death of Carlos Juaquin Munoz in Goehner, Nebraska. Munoz died after falling 1,200 feet
from a broadcast tower owned by Spectrasite Communications, Inc., a Texas corporation. At
the time of his death, Munoz was working on the tower for his employer, Doty-Moore Tower
Services, Inc., a Texas corporation with principal place of business in Dallas County, Texas.
The plaintiff below, appellee Hortencia Wardlow, is Munoz's mother. In her
suit, Wardlow alleges Munoz died because a safety harness securing him to the tower failed.
Munoz's safety harness included a Garrison model GL 3100 hook described as a “pelican
hook” or “ladder hook.” Wardlow alleges Niagara sold the hook to Elk River, an
Alabama-based component distributor, which then sold the hook to Trinity Sling Authority, Inc.,
a Texas corporation. Trinity Sling allegedly assembled the hook and other components into a
safety harness or “positioning lanyard” which it allegedly sold to Doty-Moore.
Wardlow sued Doty-Moore, Spectrasite, Trinity Sling, and Elk River. After
Elk River filed a third-party complaint against Garrison and Niagara for contribution and
indemnity, Wardlow amended her pleadings to add the Canadian defendants.
Garrison and Niagara filed special appearances to contest the trial court's
personal jurisdiction over them. After conducting a hearing, the trial court found (1) Niagara sells
Garrison's products all over the United States, including Texas; (2) Garrison did not exercise any
control over Niagara's selection of customers or geographic markets to serve; and (3) Niagara
advertises in Texas through a catalog, talks to Texas customers, and intends to serve the Texas
market. In contrast, the trial court found Garrison does not advertise or market its products in
The trial court concluded it did not have personal jurisdiction over Garrison.
The trial court concluded Niagara's sale of the hook to Elk River in Alabama did not create a
sufficient nexus between the litigation and the State of Texas for specific jurisdiction over
Garrison even if it was foreseeable that Elk River might sell a completed positioning lanyard to a
Texas corporation. The trial court further concluded Garrison had not attempted to service the
Texas market, and Niagara was not Garrison's agent. Ultimately, the trial court concluded,
“Garrison's contacts with the State of Texas do not rise to the level of continuous and systematic
and are too shadowy and thin to support the exercise of general jurisdiction.”
trial court concluded it did not have specific jurisdiction over
Niagara but it did have general jurisdiction because Niagara was doing business in Texas and had established
continuous and systematic minimum contacts with Texas. As evidence of continuous and
systematic contacts, the trial court cited Niagara's business activity and sales in Texas, its
advertising and marketing of products in Texas, its communications and solicitations aimed at
Texas customers, and its “sufficiently interactive” website.
trial court concluded the exercise of general jurisdiction over Niagara
does not offend traditional notions of fair play and substantial justice because of the minimum contacts
it found. Further, the trial court concluded Niagara's attendance at industry conferences and its
in-person sales calls showed the burden of defending the lawsuit would be minimal. The trial
court concluded the State of Texas has a strong interest in protecting its citizens and
compensating them for injuries resulting from defective products, in regulating the quality of
products in the State's stream of commerce, and in adjudicating this dispute.
Whether a court has personal jurisdiction over a nonresident defendant is a
question of law. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 805-06
(Tex. 2002). To resolve this question of law, the trial court frequently must resolve preliminary
questions of fact. BMC Software Belgium, N. V. v. Marchand, 83 S.W.3d 789, 794 (Tex.
2002). The trial court's fact findings may be reviewed for legal and factual sufficiency. Id. The
trial court's conclusions of law are subject to de novo review. See id.
In this case, Elk River challenges the factual sufficiency of the evidence
supporting some of the trial court's findings while Niagara challenges the findings on both legal
and factual sufficiency grounds. Both appellants request de novo review of the trial court's
conclusions of law.
reviewing findings for legal sufficiency, we credit evidence favorable
to the challenged finding and disregard contrary evidence unless a reasonable fact finder could not
reject the evidence. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We uphold
the findings against a legal sufficiency challenge if more than a scintilla of evidence supports them.
Hoffmann v. Dandurand, 180 S.W.3d 340, 345 (Tex. App.-Dallas 2005, no pet.). In
assessing the factual sufficiency of the evidence, we consider all of the evidence presented and
reverse only if the findings are so against the great weight and preponderance of the evidence so
as to be clearly wrong or unjust. Id. Unchallenged findings of fact are binding on appeal. Hotel
Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 632 (Tex. App.-Dallas 1993, writ
denied). If we determine the trial court reached an erroneous conclusion of law, the error does
not require reversal if the trial court reached the proper judgment. Welborn Mortgage Corp. v.
Knowles, 851 S.W.2d 328, 332 (Tex. App.-Dallas 1993, writ denied).
The long-arm statute authorizes Texas courts to exercise jurisdiction over
nonresident defendants doing business within the State. See Tex. Civ. Prac. & Rem. Code Ann.
§ 17.042 (Vernon 1997). The long-arm statute reaches as far as possible consistent with federal
constitutional guarantees of due process of law. See Guardian Royal Exch. Assurance, Ltd. v.
English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991). An exercise of personal
jurisdiction over a nonresident defendant is consistent with federal due process requirements if
(1) the defendant has established minimum contacts with Texas, and (2) the exercise of
jurisdiction comports with traditional notions of fair play and substantial justice. BMC Software,
83 S.W.3d at 795.
In evaluating the extent of the defendant's contacts with Texas, the touchstone
of our jurisdictional analysis is “purposeful availment.” Michiana Easy Livin' Country, Inc.
v. Holten, 168 S.W.3d 777, 784 (Tex. 2005). In determining whether the defendant has
purposefully availed itself of the privilege of conducting activities within Texas, we look only to
the defendant's contacts and not unilateral contacts of third parties. See id. at 784-85. We
examine only purposeful contacts of the defendant itself that are not random, isolated, or
fortuitous. Id. at 785. We search for evidence showing the defendant availed itself of the forum
by seeking some benefit, advantage, or profit. Id. When a foreign defendant is involved, the
minimum contacts analysis is particularly important because of the unique and onerous burdens
placed on a party called to defend itself in a foreign legal system. See BMC Software, 83
S.W.3d at 795.
A nonresident defendant's minimum contacts may result in either general or
specific personal jurisdiction. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S.
408, 413-14 (1984); BMC Software, 83 S.W.3d at 795-96. General jurisdiction exists if the
defendant has established continuous and systematic contacts with Texas. BMC Software, 83
S.W.3d at 796. Specific jurisdiction arises when the nonresident defendant has established
minimum contacts by purposefully availing itself of the privilege of conducting activities in Texas
and its liability arises from or is related to those contacts. Moki Mac River Expeditions v.
Drugg, No. 04-0432, 2007 WL 623805, at *4 (Tex. Mar. 2, 2007).
In considering whether the exercise of jurisdiction over a foreign defendant in
an international dispute comports with traditional notions of fair play and substantial justice, we
consider (1) the burden on the nonresident defendant, (2) the forum state's interest in
adjudicating the dispute, and (3) the plaintiff's interest in obtaining the most efficient resolution of
controversies. Guardian Royal, 815 S.W.2d at 232 & n. 17. We must also consider the
procedural and substantive policies of other nations whose interests are affected by the assertion
of the court's jurisdiction. Id. at 228. Those interests, as well as the Federal Government's
interest in its foreign relations policies, are best served by careful inquiry into the reasonableness
of the court asserting jurisdiction in the case and an unwillingness to impose the serious burden of
international litigation on an alien defendant where the forum State's interest is minimal. Id. at
The plaintiff bears the initial burden of pleading sufficient allegations to bring
the nonresident defendant within the provisions of the long-arm statute. BMC Software, 83
S.W.3d at 793. Once the plaintiff meets its burden, a nonresident defendant challenging
personal jurisdiction through a special appearance bears the burden to negate all bases of
personal jurisdiction. Id.
its first issue, Elk River contends the trial court erred in granting
Garrison's special appearance because Garrison's continuous and systematic contacts with the State of
Texas subject it to general jurisdiction. Elk River asserts Garrison placed the hook into the
“stream of commerce” with the reasonable expectation some hooks would reach the Texas
market, advertised and marketed its products to Texas customers, and employed Niagara as its
agent in the State. Elk River challenges for factual sufficiency the trial court's findings that
Garrison does not exercise any control over Niagara's selection of customers or geographic
markets, that Garrison is not sure what percentage of its products are sold to entities in Texas,
and that Garrison does not advertise or market its products in the State of Texas. Elk River
seeks review of the trial court's conclusions of law that (1) Garrison has not made an attempt to
service the Texas market, (2) there is no agency relationship between Garrison and Niagara, (3)
Niagara's Texas contacts should not be imputed to Garrison, and (4) Garrison's contacts with
Texas “do not rise to the level of continuous and systematic and are too shadowy and thin to
support the exercise of general jurisdiction.” We conclude the great weight and preponderance
of the evidence supports the trial court's findings, and its legal conclusions are not erroneous.
Phillip Watts, Garrison's corporate representative, admitted when deposed that
Garrison manufactured the GL 3100 hooks, delivered them on consignment to Niagara, and
reasonably expected Niagara would sell some of the hooks to Texas customers. Because
Garrison delivered the hooks into the “stream of commerce” with the reasonable expectation
they would enter Texas, Elk River asserts Garrison did attempt to service the Texas market and
its contacts exceed the threshold to invoke the trial court's general jurisdiction.
The “stream of commerce” doctrine provides a basis for personal jurisdiction
in products liability suits when a manufacturer or distributor, seeking to serve the markets of
other States, has “delivered its products into the stream of commerce with the expectation that
they will be purchased by consumers in the forum State.” World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 298 (1980). The doctrine permits suit within a particular forum when
“allegedly defective merchandise has there been the source of injury to its owner or to others.”
Id. at 297-98 (emphasis added).
The “stream of commerce” doctrine does not establish general jurisdiction in
the forum State. See Alpine View Co., Ltd. v. Atlas Copco AB, 205 F.3d 208, 216 (5th Cir.
2000); Bearry v. Beech Aircraft Corp., 818 F.2d 370, 375 (5th Cir. 1987). See also Moki
Mac, 2007 WL 623805, at *11 (disapproving of efforts to blur the distinction between general
and specific jurisdiction). Because the accident in question occurred in Nebraska, we cannot
agree with appellant that merely placing the hook into the stream of commerce in Canada
subjects Garrison to general jurisdiction in Texas. See Bearry, 818 F.2d at 375.
Elk River contends that in addition to placing the hooks into the stream of
commerce, Garrison established continuous and systematic contacts with Texas in other ways.
Elk River asserts Garrison's effort to advertise its products in Texas independently satisfies the
due process requirements to establish general jurisdiction. Elk River further asserts Garrison
designed the hook for the market in Texas, marketed the product through Niagara, and sent
employees to safety industry conferences in Dallas to assess the Texas market.
Niagara does not advertise in Texas media, but it does send catalogs to its
Texas customers. Niagara regards the catalogs as a form of advertising. Additionally, Niagara
maintains a website that functions essentially as an electronic copy of its paper catalog with a link
whereby a potential customer can e-mail it to obtain a sales call, order form, or catalog. The
website does not have the capability to allow customers to place online orders. Garrison has
never advertised in Texas, but it did design and approve the pages of Niagara's website and
catalog that advertise its products.
For purposes of establishing personal jurisdiction, websites fall into three
categories: (1) fully interactive websites clearly used for transacting business over the internet,
(2) interactive websites allowing the exchange of information between a potential customer and
a host computer, and (3) passive websites used only for advertising over the internet. Reiff v.
Roy, 115 S.W.3d 700, 705-06 (Tex.App.-Dallas 2003, pet. denied). In cases involving
interactive websites, the degree of interactivity determines whether there is personal jurisdiction.
Id. at 706.
Although Garrison contributes content to Niagara's website and catalogs, it
does not control Niagara's advertising, it does not distribute the catalogs, and it does not interact
with website and catalog users. Even if the trial court was correct in finding that the website is
somewhat interactive, the limited interactivity is between Niagara and its customers. See id.
(finding no continuous and systematic contacts in Texas even though Colorado hotel franchisee
participated in hotel company's website accessible to Texas customers). Thus, Niagara's website
and catalog constitute the type of unilateral, third-party contacts we cannot attribute to Garrison
in our jurisdictional review. See Michiana, 168 S.W.3d at 785. Cf. CMMC v. Salinas, 929
S.W.2d 435, 436 (Tex. 1996) (concluding no jurisdiction over foreign manufacturer even though
it provided advertising promotional materials to product distributor).
Nothing in the record shows Garrison designed its hooks with any particular
market in mind other than ensuring the hook met national product standards. Watts testified
Garrison has only two customers: Niagara and Miller. Although Garrison expected its products
to reach Texas, Niagara alone chose the customers and geographic markets to serve, thus
supporting the trial court's finding that Garrison had no control over Niagara's distribution.
Niagara distributed Garrison's products in North America, South America, Europe, and
Australia. Watts testified Garrison had no involvement with Niagara's Texas customers and
would not necessarily know if Niagara discontinued its Texas sales. Watts testified he would not
be surprised if the hook ended up in Texas-or in Chile. In his affidavit supporting Garrison's
special appearance, Watts averred he did not know what percentage of Garrison's product sales
occur in Texas. Thus, the record does not support Elk River's assertion that Garrison designed
its hook with the Texas market in mind.
Likewise, the record does not show that Garrison attended the trade shows in
Dallas to assess the Texas market in particular. Watts admitted he and another employee did
attend trade shows two years in a row in the mid-1990's in Orlando, Florida and Dallas, Texas.
Watts described the purpose behind the visits as “just for observation . . . . just to view the
market, we had no booth or anything there. We just went down to look at product line of
various competitors to see what styles, configurations were out on the market.” Watts'
deposition testimony, especially when viewed in context with his other testimony regarding
Garrison's total deference to Niagara in marketing the products, shows Garrison attended the
trade shows to scout its competitors rather than the Texas market. Furthermore, there is no
evidence in the record showing Garrison exercised any control over the selection of Dallas,
Texas as a site for the safety industry trade show. Sporadic attendance at trade shows in Texas,
the locations of which are not within Garrison's control, does not demonstrate availment of the
Texas market. See Am. Type Culture, 83 S.W.3d at 809.
Elk River next contends Niagara's contacts should be imputed to Garrison
because Niagara availed itself of the Texas market while acting as Garrison's agent. Elk River
asserts Niagara exists solely to sell Garrison products on commission.
The essential feature of agency is the right of control. See Schott Glas v.
Adame, 178 S.W.3d 307, 315 (Tex. App.-Houston [14th Dist.] 2005, pet. denied). The right
of control includes the right to dictate the means and details of the agent's performance. Id.
Agency is generally a question of fact. Id.
Garrison does not control Niagara as an agent. Although Watts agreed Niagara
was Garrison's “captured distributor,” he expressly denied Niagara served as Garrison's agent.
Watts testified Garrison had no control over Niagara's distribution. The two companies do not
share ownership or management. When questioned about the relationship between Garrison and
Niagara, Watts initially affirmed that Niagara's only reason to exist is to distribute Garrison's
products; however, he immediately clarified Niagara has “other products which they sell.
They're not existent dependently upon us.” Scott Doan, Niagara's general manager, described
Niagara in his deposition as Garrison's “commissioned salespeople,” but Doan also testified
Niagara sells other companies' products. Both Watts and Doan described a relationship in which
Garrison delegates to Niagara all of the sales functions for Garrison's products. Elk River
presented no contrary evidence showing Garrison had any right to control Niagara. We agree
with the trial court that there is no evidence of an agency relationship. See id. at 314-17
(concluding no agency relationship where sales representative sold products of defendant
manufacturer and others on commission but manufacturer did not control details of sales
Finally, we note evidence in the record suggesting Garrison's efforts to avoid
personal jurisdiction. The notion of consent underlies general jurisdiction. Am. Type Culture, 83
S.W.3d at 808. By availing itself of the benefits and protections of the forum's laws, a
nonresident defendant consents to be sued in the forum. Id. When, however, a nonresident
defendant purposefully structures its transactions so as to avoid the benefits and protections of a
forum state's laws, it has not consented to suit within the forum. Moki Mac, 2007 WL 623805,
at *3; Am. Type Culture, 83 S.W.3d at 808; Bearry, 818 F.2d at 375-76.
Garrison manufactures its products in Canada and then consigns them to a
Canadian distributor to perform all marketing and sales functions within the United States.
Although Watts did not know if the goods were shipped F.O.B. and nothing on the packing slips
or invoices so indicates, Doan testified title to the components passes from Garrison to the
consignee at the time the product is shipped. Evidence in the record suggesting Garrison has
purposefully structured its transactions to avoid the benefits and protections of Texas law further
supports the trial court's conclusion that it could not assert general jurisdiction over Garrison.
See Am. Type Culture, 83 S.W.3d at 808.
We conclude the evidence is factually sufficient to support the trial court's
findings that Garrison does not exercise control over Niagara's sales and marketing activities,
does not monitor what percentage of sales occur in Texas, and does not advertise or market its
products in Texas. See Hoffmann, 180 S.W.3d at 345. Our de novo review supports the trial
court's conclusions of law regarding Garrison not attempting to service the Texas market,
Niagara's agency status, and Garrison's “shadowy and thin” contacts with Texas. See Am.
Type Culture, 83 S.W.3d at 809-810; CSR, Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996)
(concluding no general jurisdiction over foreign company that had no offices, employees, or
bank accounts in Texas, and had never solicited business, mailed correspondence, paid taxes,
and entered contracts in Texas). We overrule Elk River's first issue.
In its second issue, Elk River contends the trial court erred in concluding it
lacked specific jurisdiction over Garrison. Elk River challenges the trial court's findings that
Niagara sold the hook at issue to it, that foreseeability is insufficient to create jurisdiction, and
that Garrison made no attempt to service the Texas market. Elk River also attacks the trial
court's conclusion of law that there is no specific jurisdiction over Garrison. Elk River contends
the evidence shows Garrison manufactured the hook, placed it into the stream of commerce with
the expectation it would be purchased or used in Texas, sold it to Texas residents, and made
“surrounding representations regarding the ladder hook” to Texas residents. Elk River contends
the sale of the hook in Texas and the representations to Texas residents show Garrison's
activities were purposefully directed toward Texas, thus rendering irrelevant the issue of whether
the hook ever passed through Texas. We disagree.
River concedes that whether it is included within the chain of
distribution is irrelevant to this jurisdictional appeal. Nevertheless, although the record does not show
indisputably that Niagara sold the specific hook at issue to Elk River, invoices show Elk River
bought hooks from the batch containing the hook at issue. David Lawyer, safety manager for
Doty-Moore, testified during his deposition that Doty-Moore obtains its safety equipment mostly
from Trinity Sling and has it “drop shipped” directly to jobsites. Lawyer further testified that
Elk River is a supplier to Trinity Sling. For our purposes, we conclude the evidence is factually
sufficient to support the trial court's finding that Niagara sold the hook to Elk River.
Turning to the merits of the issue, Elk River must show (1) Garrison
purposefully availed itself of the Texas market and (2) the underlying litigation arises from or
relates to Garrison's Texas contacts. See Moki Mac, 2007 WL 623805, at *4. Elk River
cannot meet either prong of the standard.
have already discussed at length in our review of Elk River's first
issue the evidence showing Garrison did not purposefully avail itself of the Texas market. Although the
hook was sold eventually to a Texas corporation, Garrison did not sell it into the Texas market,
did not advertise here, did not contact any customers here, and structured its business so as to
avoid doing business in Texas. Thus, Garrison did not purposefully avail itself of the Texas
market. See Michiana, 168 S.W.3d at 785-86; see also Moki Mac, 2007 WL 623805, at
*5-7 (discussing various factors that may constitute purposeful availment).
Moreover, even if we assume Garrison purposefully availed itself of the Texas
market, the underlying litigation does not arise from or relate to its contacts with Texas. “[F]or a
nonresident defendant's forum contacts to support an exercise of specific jurisdiction, there must
be a substantial connection between those contacts and the operative facts of the litigation.”
Moki Mac, 2007 WL 623805, at *12. The operative facts in the underlying litigation concern
whether a hook was defectively designed or manufactured in Canada and whether there was
negligence at a jobsite in Nebraska. Elk River points to no representations Garrison made to
Texas residents. According to Watts, Garrison had no relationship with Elk River, Trinity Sling,
Spectrasite, or Doty-Moore. Moreover, any representations that were made are not, by
themselves sufficiently substantial to confer specific jurisdiction in this case. See id. at *13
(concluding alleged misrepresentations of safety made to Texas residents were not operative
jurisdictional facts in suit for wrongful death of Texas resident occurring during rafting trip in
The evidence before the trial court shows the hook traveled from Canada to
Alabama and ended up in Nebraska. The record does not reveal whether the hook even passed
through Texas on its way to Nebraska. Trinity Sling's corporate representative, identified in the
record as either Bruce Hardin or Dale Fincher, testified at his deposition that Elk River
sometimes drop shipped products directly to Trinity Sling's customers' job sites. Elk River was
unable to determine whether the hook was delivered to Trinity Sling in Texas or whether it was
drop shipped directly to Doty-Moore.
There being no evidence Garrison purposefully availed itself of the Texas
market or that Wardlow's injuries arose from or relate to any activity of Garrison within Texas
or any activity conducted outside Texas and purposely directed to Texas, we conclude factually
sufficient evidence supports the trial court's findings. See Hoffmann, 180 S.W.3d at 345.
Because Garrison negated all bases of specific personal jurisdiction, we conclude the trial court
did not err in concluding it had no specific jurisdiction over Garrison. See BMC Software, 83
S.W.3d at 793. We overrule Elk River's second issue. Our disposition of Elk
River's first two issues makes it unnecessary to address Elk River's third issue regarding whether
exercising personal jurisdiction over Garrison would offend traditional notions of fair play and
substantial justice. See Hoffman, 180 S.W.3d at 350.
In its sole issue, Niagara contends the trial court erred in finding general
jurisdiction over it because its Texas contacts are insufficient to constitute minimum contacts for
jurisdictional purposes. Niagara characterizes its contacts as consisting of sales to a handful of
Texas companies, mailing a few catalogs, and maintaining a passive website. Niagara suggests
the trial court was swayed to find general jurisdiction by appellees' “stream of commerce”
argument, which is only applicable to establishing specific jurisdiction.
Niagara posits that exercising general jurisdiction over it in Texas does not
comport with traditional notions of fair play and substantial justice because its sole place of
business is in Fort Erie, Ontario, Canada; it has only seven employees, all of whom work in
Canada; and no Niagara employee has ever traveled to Texas on business. It concedes making
a few in-person sales calls in Pennsylvania, but it denies ever making in-person sales calls in
Texas. Niagara contends the evidence is legally and factually insufficient to support portions of
nine of the trial court's findings of fact. Niagara also seeks review of the trial court's conclusions
Wardlow responds Niagara has not met its burden to refute the trial court's
findings. Wardlow contends the evidence supports both general and specific jurisdiction over
Niagara. Using many of the same contentions it argued with regard to Garrison, Elk River also
contends the trial court has general and specific jurisdiction over Niagara and exercising personal
jurisdiction comports with traditional notions of fair play and substantial justice.
Like Garrison, Niagara has no office, employees, registered agent, or bank
account in Texas. Unlike Garrison, Niagara does have active Texas customers, it has had
contacts with others, and it ships additional products to Rodia, Inc., a “hands-off
intermediary” in Texas that transships its products to Mexico. During the fiscal year when
Munoz died, Niagara shipped $176,244.77 worth of products to eight Texas-based customers,
although it does not know if the products are used in Texas or assembled and shipped
out-of-state. A compilation of several years of sales figures shows Niagara received between
2.22-8.34% of its total sales from sales to Texas customers.
first challenges the portions of the trial court's finding no. 2 in
which the trial court found Niagara sells Garrison's products “throughout the United States” and derives
sixty-to-sixty- five percent of its sales within the United States. The sales percentage figure
came from Doan's deposition testimony. Niagara contends the evidence does not support the
finding because Doan characterized the sixty-to-sixty-five percent figure as a “guess.”
without deciding, that this finding regarding national sales figures is
relevant in some manner to determining whether jurisdiction is proper in Texas, the finding is
supported by the evidence. Although Doan denied having a customer in each of the fifty States,
his personal recollection of the “big ones” included customers in Minnesota, Washington, New
Jersey, North Carolina, Louisiana, Texas, California, Arizona, and Colorado. Niagara's
customer list shows customers in most States, including Texas, and many other countries. Doan
testified he personally had made sales calls in Alabama, Colorado, Indiana, Minnesota, North
Carolina, and Pennsylvania. Doan's “guess” regarding the U.S. sales figure was corroborated
by Watts, who estimated Garrison received seventy percent of its product sales in the United
contests the portion of the trial court's finding no. 3 that Niagara
sends representatives and its catalog to the National Safety Congress Trade Show which is held at a
different location in the United States each year. Niagara contends the record does not show its
catalog is generally available at the trade show and it has never attended a trade show in Texas.
Doan, however, testifying about customer relationships in the year prior to
Munoz's accident, admitted the catalog was available at Niagara's booth at that year's trade
show and customers could have picked up catalogs “at the show.” Although we agree with
Niagara that the record does not show it attended any trade shows in Texas, the trial court did
not find Niagara attended in Texas, and the record does support its actual finding that the trade
show is held annually in different locations across the country.
Regarding the trial court's finding no. 4, Niagara contends the evidence is
legally and factually insufficient to support the trial court's finding that it has eight active
customers in Texas and at least some contact with sixteen Texas customers. Niagara contends
the active customer count should not include Rodia. Niagara also complains the contact list
includes personal friends of Doan's relatives with whom there is no business relationship.
In fact, the record shows Doan testified Niagara had eight Texas customers in
mid-2003 and he included Rodia within the list. Moreover, the trial court's finding was not
intended to establish Niagara was doing business in Texas solely because of its relationship with
Rodia. Rather, the relationship with Rodia is one of a number of business relationships
establishing Niagara's contacts with the State. Niagara's list of business contacts did include one
company contacted because Doan's father was a friend of the owner. Thus, the evidence
supports the trial court's finding for fifteen contacts.
finding no. 5, the trial court made a number of findings regarding the
extent of Niagara's sales in Texas between May 3, 2001 and November 30, 2005. During that period,
the trial court found, Niagara sold 19,612 model GL 3100 hooks in Texas, grossed
$1,357,569.34 from its Texas sales, including nearly a quarter million dollars from selling GL
3100 hooks, and there was never an interval during that period when it was not selling products
in Texas. The trial court further concluded Texas sales accounted for 8.34% of Niagara's sales
during the fiscal year beginning in May 2001, and that Niagara sold $297,125.81 and
$176,244.77 in Texas during its 2002 and 2003 fiscal years. Niagara contends the trial court's
finding should exclude sales to Rodia. Niagara also contends the trial court's sales figure for fiscal
year 2002 is incorrect, even if Rodia is included, because Niagara sold only $251,606.10 in
Texas that year. Although Niagara admits there were “a number of sales,” it further contends
sales figures do not support the trial court's finding of continual sales throughout the 2001-2005
Doan testified Niagara sold products to Rodia in Texas. Doan also prepared a
sales summary chart, used as an exhibit in his deposition, showing robust sales to multiple Texas
companies during all fiscal years between 2001 and 2005. Additionally, the record contains
about one thousand pages of packing slips and invoices documenting Niagara's ongoing sales
activity in Texas. Based on Doan's sales chart, we agree with Niagara that the evidence shows
the correct sales figure for the 2002 fiscal year is only $251,606.10. The actual sales figure,
however, is not material for our resolution of this jurisdictional issue. The quality of Niagara's
contacts, rather than the quantity, determines whether there is personal jurisdiction. See Am.
Type Culture, 83 S.W.3d at 809-10. Thus, we conclude the evidence is legally and factually
sufficient to support the material portion of the trial court's finding.
In finding nos. 7 and 9, the trial court found Niagara sells products to
distributors like Elk River rather than end users. The trial court further found Niagara was aware
its products would be resold throughout the United States and it employed a distribution system
to do so. The trial court found Niagara expected the Garrison hooks it sells would be used in
Texas and it intended to serve both national and Texas markets. Niagara contends the evidence
is legally and factually insufficient to support finding nos. 7 and 9 because the evidence shows it
does not know how its customers will use the hooks or whether assemblies will be sold
throughout the United States. Niagara further contends it does not employ a distribution system
to resell products in Texas.
we question the relevance to a general jurisdictional analysis of
Niagara's knowledge of what ultimately happens to the products after they leave its customers' possession,
we further note that its contentions are at odds with Doan's testimony. Doan testified he believed
a majority of the Garrison hooks Niagara sold to Texas-based distributors would end up with
end users in Texas. Doan admitted the hooks Niagara sells could end up anywhere, including
Texas. If we accept Niagara's own interpretation of its relationship with Rodia, then Rodia is
Niagara's Texas-based distributor for transshipping products into the Mexican market.
Furthermore, the evidence in the record shows Elk River distributes the products Niagara sells it,
including distributing products to Texas customers, such as Trinity Sling.
In finding no. 8, the trial court found Niagara advertises and markets products
in Texas by sending catalogs to Texas customers. The trial court further found Niagara contacts
Texas customers to clarify and track purchase orders, to track sales, and to report the status of
orders to customers. Niagara points out it sent only eight 2006 catalogs to Texas and it
contends there is no evidence it sent catalogs to Texas “during the relevant time period prior to
the accident. . . .”
Doan testified he considered Niagara's catalogs to be a form of advertising.
Although Doan did testify Niagara does not issue catalogs every year, he also testified, regarding
companies that bought Niagara products during the period between May 2002 and April 2003,
“the majority of [companies ordering product] would get [a catalog], but I can't definitively say
that everyone got one.” In his affidavit, Doan averred customers get a new catalog every two or
three years. Thus, it appears Niagara intended the catalogs as a continuing form of advertising
until such time as another catalog was sent. Even if no catalogs were mailed during the year in
question, the trial court could reasonably infer the existing catalogs were used to order product.
The record shows eight Texas-based companies (including Rodia) bought Niagara products
during the fiscal year from May 2002 and April 2003.
Niagara does not challenge finding nos. 11 and 12 so much as interpret and
clarify them. In finding no. 11, the trial court found in part that Niagara's website allowed
customers to contact Niagara by email. If Niagara received an email from a potential customer in
Texas, it would then call the customer. Niagara points out its website is not particularly
interactive and there is no evidence any Texas-based customer ever used the website.
The trial court did not find that any Texas customers contacted Niagara through
its website. Doan did testify, however, that if a customer, including presumably a customer in
Texas, did email Niagara, that customer would receive a follow-up sales call. Thus, the evidence
does support the trial court's actual finding.
In finding no. 12, the trial court found Munoz maintained a post office address
in Texas. The trial court's finding is supported by Munoz's W-2 tax form which shows a Texas
postal box address. Niagara contends, citing documents attached as exhibits to its brief, that
while Munoz may have maintained a Texas post office box address, he was a resident of
Louisiana. The attachments to Niagara's brief are not evidence before the court. See Perry v.
Kroger Stores, Store 119, 741 S.W.2d 533, 534 (Tex. Civ. App.-Dallas 1987, no writ).
Nevertheless, the trial court did not find Munoz was a resident of Texas. The trial court's finding
recites only that Munoz maintained the postal box address. Thus, Niagara's contention is not
adverse to the trial court's finding.
Having reviewed the record evidence and Niagara's contentions regarding legal
and factual sufficiency, with the immaterial exceptions of reducing the number of Texas contacts
to fifteen and slightly reducing the fiscal year 2002 sales figure to $251,606.10, we conclude
more than a mere scintilla of evidence supports each challenged finding of fact, and the findings
are not so contrary to the overwhelming weight of the evidence as to be clearly wrong or unjust.
See BMC Software, 83 S.W.3d at 794; Hoffmann, 180 S.W.3d at 345.
Having concluded the evidence supports the trial court's findings, we now
review de novo the trial court's conclusions of law. The trial court concluded Niagara was
subject to general jurisdiction in Texas because it was doing business in Texas and it had
purposefully established minimum contacts with Texas. The trial court concluded Niagara's
contacts with Texas are continuous and systematic because it does business in Texas, and it
continuously and systematically sells and markets products in Texas, advertises in Texas,
communicates with customers and solicits business in Texas and, thus, has purposefully availed
itself of the Texas market. The trial court concluded Niagara's website was “sufficiently
interactive” to be considered a point of contact with Texas. The trial court concluded the
exercise of jurisdiction over Niagara comports with traditional notions of fair play and substantial
justice because of the contacts previously mentioned. The trial court concluded the burden on
Niagara would be minimal because it attended national conferences and it sent employees on
nationwide in-person sales calls. Finally, the trial court concluded Texas had an interest in
protecting citizens from defective products and providing a forum for compensation, regulating
the quality of products in its stream of commerce, and in adjudicating this particular dispute.
Although the parties dispute how interactive Niagara's website is and when it
was implemented, the evidence shows customers may view Niagara's catalog on the website
and contact the company for more information and to place orders. Thus, it appears the website
is passive advertising rather than a purposeful activity directed toward Texas residents. See
Exito Electronics, Co., Ltd. v. Trejo, 166 S.W.3d 839, 858 (Tex. App.-Corpus Christi 2005,
no pet.) (concluding website catalog with contact information for issuer was passive website for
jurisdictional purposes); Gessman v. Stephens, 51 S.W.3d 329, 339 (Tex. App.-Tyler 2001,
no pet.) (concluding website posting company's name, logo, and email link, while “interactive,”
is too passive to serve as basis for personal jurisdiction).
Nevertheless, assuming, without deciding, that Niagara's website is not
“sufficiently interactive” as the trial court concluded, an incorrect conclusion of law does not
require reversal if the controlling findings of fact support the trial court's order under a correct
legal theory. Barnett v. County of Dallas, 175 S.W.3d 919, 923 (Tex. App.-Dallas 2005, no
pet.); City of Houston v. Cotton, 171 S.W.3d 541, 546 (Tex. App.-Houston [14th Dist.]
2005, pet. denied). In this case, the conclusion regarding the website is immaterial to resolving
Niagara's special appearance.
trial court did not view the website as determinative of jurisdiction,
rather it concluded the website was sufficiently interactive to be “considered as part of [Niagara's]
contacts with Texas.” It is Niagara's other contacts with the State of Texas that are dispositive
of the appeal.
The parties dispute the relevant time period for analyzing Niagara's contacts
with Niagara arguing for the 2002-03 period from sale of the hook to Munoz's death and
appellees contending contacts are relevant up to the date suit was filed. Resolution of this conflict
would be material only if Niagara had continuous and systematic contacts during one time interval
and not during the other. In fact, the timing dispute is immaterial because Niagara had continuous
and systematic contacts throughout the period from 2001-05. Niagara's own sales records show
robust sales to Texas companies for the past five years, including the years when the hook was
manufactured and when Munoz died. Moreover, Garrison and Niagara have deliberately
structured their relationship in such a manner that Niagara does business in states like Texas
while Garrison does not. See Am. Type Culture, 83 S.W.3d at 808. The deposition testimony,
sales chart, and packing slips show Niagara availed itself of the Texas market by systematically
and continuously shipping products to and interacting with Texas customers, thus establishing a
pattern of continuing and systematic activity. See id. at 809. We conclude the trial court did not
err in concluding Niagara has sufficient minimum contacts to justify the exercise of general
jurisdiction in Texas. Cf. Design Info. Sys. v. Feith Sys. & Software, Inc., 801 S.W.2d 569,
571 (Tex. App.-Fort Worth 1990), aff'd in part, rev'd in part 813 S.W.2d 481 (Tex. 1991)
(per curiam op.) (repeated sales transactions with Texas residents justified conclusion
nonresident software company's contacts with Texas were continuing and systematic).
Likewise, we agree the trial court may exercise general jurisdiction over
Niagara without violating traditional notions of fair play and substantial justice. Even though
Niagara is a small company, it conducts a far-flung global business. We agree with the trial court
that Niagara's numerous sales calls and trade show attendance throughout the United States
shows the burden on Niagara to defend itself in Texas is minimal. The State of Texas does have
at least some small interest in adjudicating this dispute because several of the defendants are
Texas corporations and the decedent maintained at least an address within the State. Moreover,
because so many of the defendants do business in Texas, resolving the dispute here would be
most efficient for the plaintiff. Neither side has presented any evidence regarding how the
litigation would affect Canada's procedural and substantive policies. We therefore conclude that
a careful inquiry into the reasonableness of the trial court's assertion of general jurisdiction over
Niagara, mindful of our unwillingness to impose the burden of international litigation upon foreign
defendants, supports the trial court's determination to exercise personal jurisdiction. See
Guardian Royal, 815 S.W.2d at 228-32.
Because the trial court may exercise general jurisdiction over Niagara,
appellees' arguments in favor of exercising specific jurisdiction are moot. Moreover, for the
reasons we have already stated in connection with Elk River's appeal, we conclude Wardlow's
cause of action did not arise in Texas or relate to Niagara's activities in Texas and, therefore,
specific jurisdiction does not exist. See Moki Mac, 2007 WL 623805, at *4; BMC Software,
83 S.W.3d at 796. Thus, the trial court did not err in failing to make a positive finding on the
exercise of specific jurisdiction. We overrule Niagara's sole issue.
We affirm the trial court's order.