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declining to impute contacts under an agency theory where a "distribution agreement reflect[ed] the parties’ express agreement that Blue Endo would preserve its independent status"
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NO. 01-17-00485-CV
05-31-2018
TROKAMED GMBH, Appellant v. RICHARD VIEIRA AND CHRISTY VIEIRA, INDIVIDUALLY, AND RICHARD VIEIRA, AS REPRESENTATIVE OF THE ESTATE OF JANICE C. VIEIRA, Appellees
On Appeal from the 234th District Court Harris County, Texas
Trial Court Case No. 2016-60164
MEMORANDUM OPINION
In this interlocutory appeal, Trokamed GmbH ("Trokamed") appeals the trial court's order denying its special appearance in the lawsuit brought by Richard Vieira and Christy Vieira, individually, and Richard Vieira, as representative of the estate of Janice C. Vieira ("the Vieiras"). Trokamed contends that the trial court erred in denying its special appearance because it is not subject to personal jurisdiction in Texas. Because the evidence does not support the trial court's exercise of jurisdiction over the nonresident, we reverse.
Background
On September 7, 2016, the Vieiras, who are Texas residents, filed suit against Lassiter Medical Systems, Inc. ("Lassiter"), a Texas corporation, Market-Tiers, Inc. d/b/a Blue Endo ("Blue Endo"), a Kansas corporation, and Trokamed, a German corporation, asserting causes of action for negligence and gross negligence, strict products liability, breach of express and implied warranty, and fraudulent misrepresentation and omission. Following the appointment of a special process server, Trokamed was served with the Vieiras' complaint in Germany on December 17, 2017, in accordance with the Hague Convention.
The Vieiras allege that, on July 19, 2012, Dr. Charles A. Safely performed a total laparoscopic hysterectomy and bilateral salpingo-oophorectomy on Janice Vieira, using a laparoscopic power morcellator ("LPM") to morcellate uterine tissue for extraction. The Vieiras allege that Trokamed designed and manufactured the LPM used in Janice Vieira's surgery, Blue Endo marketed and distributed the device in Texas and throughout the United States, and Lassiter distributed the device in Texas. The Vieiras further allege that Janice Vieira developed metastasis of endometrial adenocarcinoma throughout her body as a result of the use of the LPM, which resulted in her death.
Trokamed filed a special appearance contesting personal jurisdiction. To its pleading, Trokamed attached the declaration of Karlheinz Tröndle, General Manager of Trokamed, in which he averred, in pertinent part:
Blue Endo and Lassiter filed answers. Blue Endo also filed a cross-claim against Trokamed alleging breach of contract and seeking indemnity and contribution from Trokamed.
• Trokamed is organized under the laws of the Federal Republic of Germany and is headquartered in Geisingen, Germany. Trokamed's products, including the LPM at issue, are designed, manufactured, and distributed in Geisingen, Germany, and not in the State of Texas. Blue Endo is the exclusive distributor of the LPM in the United States. The LPM is shipped to Blue Endo EXW (ex works) from Trokamed's premises in Germany;
• Trokamed employees involved in the design, manufacture, and distribution of the LPM live in Germany, none of the employees are residents of Texas or regularly visit Texas for business purposes, and English is not their native language;
• Trokamed has never employed any directors, officers, employees, agents, or representatives involved in the sale or marketing of Trokamed's products and/or services in Texas. No director, officer, employee, or agent of Trokamed has ever been assigned to duty in Texas. Neither Trokamed nor any of its directors, officers, employees, or agents have conducted, transacted,
or participated in the purchase, sale, distribution, or resale of any goods or services in Texas. Trokamed has never been a member, investor, or partner in any entity that is a resident of Texas or does business in Texas;
• Trokamed has never (i) maintained offices, bank accounts, telephone listings or other assets in Texas; (ii) owned any real or personal property in Texas; paid any taxes in Texas; (iii) had a parent or subsidiary that maintains an office or does business in Texas; or (iv) monitored or controlled the manner in which its products are distributed by third-party distributors;
• Trokamed has never (i) solicited business in Texas; (ii) advertised in Texas; (iii) distributed any literature or materials about its products in Texas; (iv) been licensed to sell any products and/or services of any kind in Texas; (v) sought a qualification to do business in Texas; (vi) entered into any contracts, service agreements, purchase orders, or other agreements for the purpose of directly selling, promoting, advertising, or providing products or services in Texas; (vii) established any channels for providing regular advice to purchasers or users of its products in Texas; (viii) run a website for exclusive use by residents of Texas; or (ix) offered a Texas valid warranty with any product.
• Trokamed has never before been sued in Texas, it does not maintain a registered agent for service of process in Texas, and it has never previously agreed to personal jurisdiction of any court in the United States.
"'Ex Works' means that the seller delivers when it places the goods at the disposal of the buyer at the seller's premises or at another named place (i.e., works, factory, warehouse, etc.)." Under this arrangement, the seller is not required to load the goods or clear them for export. Int'l Chamber of Commerce, "IncotermsRules® 2010," https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-rules-2010/.
The Vieiras filed a response to Trokamed's special appearance in which they argued that the facts supported jurisdiction over Trokamed, namely, that Trokamed (1) sought and obtained FDA approval for the LPM; (2) provided an express warranty to Texas customers as set forth in the Instructions for Use ("IFU") accompanying the LPM; and (3) controlled the content and delivery of the warnings in the IFUs. Additionally, the Vieiras asserted that Blue Endo's contacts in Texas were attributable to Trokamed because Blue Endo was Trokamed's agent for purposes of disseminating the IFUs. Blue Endo and Lassiter joined the Vieiras' response. Trokamed filed a reply to the Vieiras' response disputing their allegations.
On June 12, 2017, following a hearing, the trial court denied Trokamed's special appearance. This interlocutory appeal followed.
Discussion
In its sole issue, Trokamed contends that the trial court erred in denying its special appearance because there is no evidence that Trokamed purposefully availed itself of conducting business in Texas sufficient to confer personal jurisdiction.
A. Special Appearance
We review de novo a trial court's decision to grant or deny a special appearance. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002). A plaintiff must plead allegations that bring a nonresident defendant within the provisions of the Texas long-arm statute. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002). "Once the plaintiff has pleaded sufficient jurisdictional allegations, the defendant filing a special appearance bears the burden to negate all bases of personal jurisdiction alleged by the plaintiff." Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010). "The defendant can negate jurisdiction on either a factual or legal basis." Id. at 659. "Factually, the defendant can present evidence that it has no contacts with Texas, effectively disproving the plaintiff's allegations." Id. "Legally, the defendant can show that even if the plaintiff's alleged facts are true, the evidence is legally insufficient to establish jurisdiction." Id.
When, as here, a trial court does not issue findings of fact and conclusions of law in support of a special appearance ruling, then "all facts necessary to support the judgment and supported by the evidence are implied." BMC Software, 83 S.W.3d at 795. However, these findings are not conclusive when the appellate record includes both the clerk's and reporter's records, as it does here, and a party may challenge these findings for legal and factual sufficiency on appeal. Waterman S.S. Corp. v. Ruiz, 355 S.W.3d 387, 402 (Tex. App.—Houston [1st Dist.] 2011, pet. denied).
B. Personal Jurisdiction
Texas courts may assert personal jurisdiction over a nonresident defendant if (1) the Texas long-arm statute authorizes the exercise of jurisdiction; and (2) the exercise of jurisdiction is consistent with federal and state due process standards. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). The Texas long-arm statute provides that a nonresident who "does business" in the state is subject to personal jurisdiction. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042 (West 2015). The Texas long-arm statute allows Texas courts to exercise personal jurisdiction "as far as the federal constitutional requirements of due process will permit." BMC Software, 83 S.W.3d at 795 (citing U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977)). Federal due process requires that the nonresident defendant have purposefully established minimum contacts with the forum state, such that the defendant reasonably could anticipate being sued there. Curocom Energy LLC v. Young-Sub Shim, 416 S.W.3d 893, 896 (Tex. App.—Houston [1st Dist.] 2013, no pet.). The exercise of personal jurisdiction must also comport with traditional notions of fair play and substantial justice. Id.
Specific jurisdiction arises when the defendant purposefully avails itself of conducting activities in the forum state, and the cause of action arises from or is related to those contacts or activities. Kelly, 301 S.W.3d at 658 (citing Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009)). In a specific jurisdiction analysis, "we focus . . . on the 'relationship among the defendant, the forum [,] and the litigation.'" Moki Mac, 221 S.W.3d at 575-76 (citing Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex. 1991)). The plaintiff must show a substantial connection between the defendant's contacts with the forum state and the operative facts of the litigation. Moki Mac, 221 S.W.3d at 585. The "purposeful availment" inquiry has three parts. See Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005). First, only the defendant's contacts with the forum are relevant, not the unilateral activity of another party or a third person. Id. at 785. Second, the contacts relied upon must be purposeful rather than random, fortuitous, or attenuated. Id.; see also Burger King, 471 U.S. at 475 n.18, 105 S. Ct. at 2184. Third, the "defendant must seek some benefit, advantage, or profit by 'availing' itself of the jurisdiction." Michiana, 168 S.W.3d at 785.
A nonresident's contacts can give rise to either general or specific personal jurisdiction. Moncrief Oil Int'l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013). Because the Vieiras concede that general jurisdiction does not exist in this case, we focus our examination on specific jurisdiction.
C. "Stream of Commerce" Theory
The Vieiras argue that the trial court had sufficient evidence before it to find that Trokamed is subject to specific jurisdiction in a Texas court. To support their argument, they rely on the "stream of commerce" jurisprudence addressing specific jurisdiction in the context of products liability claims.
Texas courts generally follow the stream-of-commerce analysis in Justice O'Connor's plurality opinion in Asahi Metal Industrial Co. v. Superior Court of California, 480 U.S. 102, 107 S. Ct. 1026 (1987). See Spir Star AG v. Kimich, 310 S.W.3d 868, 875 (Tex. 2010). In Asahi, Justice O'Connor wrote:
The "substantial connection" between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State. The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State. Additional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who
has agreed to serve as the sales agent in the forum State. But a defendant's awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State.Asahi, 480 U.S. at 112, 107 S. Ct. at 1032 (emphasis and citations omitted). Thus, for personal jurisdiction to extend to a nonresident manufacturer, "the manufacturer must have intended to serve the Texas market." Spir Star, 310 S.W.3d at 875.
The Supreme Court last addressed stream of commerce in J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 131 S. Ct. 2780 (2011). In McIntyre, an English manufacturing company retained an independent U.S. distributor to sell its scrap metal machinery in the United States. See id. At least one, but no more than four of the machines found their way to New Jersey, where a worker was injured while using the machine. Id. at 878, 886, 131 S. Ct. at 2186, 2790. The manufacturer neither marketed, nor shipped, any of the machines to New Jersey. Id. at 878, 131 S. Ct. at 2786. The foreign manufacturer wanted its independent distributor to sell its machines "to anyone in America willing to buy them," and engaged in active marketing activities in the U.S. to achieve this goal, including visiting trade shows. See id. at 888, 131 S. Ct. at 2791 (Breyer, J., concurring). A lower court found that the manufacturer, which contracted with the independent distributor, could have reasonably anticipated its product would make it to New Jersey which justified personal jurisdiction over the company in a products liability suit. See id.
A plurality of the United States Supreme Court, led by Justice Kennedy, disagreed and held that the defendant's product had not targeted the forum state. See id. at 881, 131 S. Ct. at 2787-88. The concurring justices, whose rationale controls, also held that there was no personal jurisdiction. See id, at 887-88, 131 S. Ct. at 2791 (Breyer, J., concurring). In his concurring opinion, Justice Breyer concluded that the plaintiffs had not shown that the defendant "'purposefully avail[ed] itself of the privilege of conducting activities' within New Jersey, or that it delivered its goods in the stream of commerce 'with the expectation that they will be purchased' by New Jersey users." Id. at 889, 131 S. Ct. at 2792. (Breyer, J., concurring). Justice Breyer emphasized that "'something more,' such as special state-related design, advertising, advice, marketing, or anything else" would be necessary to constitutionally exercise personal jurisdiction over the defendant. Id.
When the reasoning of a Supreme Court opinion does not command a majority vote, "the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds." Gregg v. Georgia, 428 U.S. 153, 169 n.15, 96 S. Ct. 2923 (1976) (opinion of Stewart, Powell, and Stevens, JJ); see also Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 178 (5th Cir. 2013) (noting Justice Breyer's concurring opinion in McIntyre "controls here").
1. Advertising in Texas
The Vieiras allege that Trokamed manifested its intent to serve the Texas market when it "sought to actively advertise and market to United States [including Texas] physicians." In support of their argument, they point to an email from a Trokamed employee in Germany to Blue Endo's president in Kansas requesting a recommendation for a U.S. magazine in which Trokamed might seek to publish an article about morcellation.
The email states, in pertinent part, "We are planning to publish an article for morcellation in a magazine for [g]yn[]ecologist[s] in the US. Do you have a suggestion which magazine would be the best to reach as much [sic] gyn[]ecologists as possible?"
The Vieiras' assertion is unavailing for several reasons. First, the email does not constitute an effort by Trokamed to place a sales advertisement in Texas; instead, Trokamed sought a place to publish a medical article. Second, the email reflects that Trokamed was only considering publishing an article about morcellation, and we find nothing in the record showing that such an article was, in fact, published. Third, Trokamed sought a national publication, not a Texas one. See Curry v. Williams, 880 F. Supp. 487, 489 (S.D. Tex. 1994) (concluding no personal jurisdiction over Missouri dealership that advertised in nationally circulated magazine without any particular effort to sell to Texas buyers), aff'd, 49 F.3d 728 (5th Cir. 1995); C.W. Brown Mach. Shop, Inc. v. Stanley Mach. Corp., 670 S.W.2d 791, 793-94 (Tex. App.—Fort Worth 1984, no pet.) (holding no jurisdiction over Massachusetts company that advertised in national publication but had no other contacts with Texas). This evidence does not support the Vieiras' allegation that Trokamed actively advertised and marketed in Texas. See McIntyre, 564 U.S. at 886, 131 S. Ct. at 2790 (noting that it "it is petitioner's purposeful contacts with New Jersey, not with the United States, that alone are relevant"); Searcy v. Parex Res., Inc., 496 S.W.3d 58, 87 (Tex. 2016) (stating that "[a] defendant must choose to create contacts with Texas for Texas courts to have specific jurisdiction over claims stemming from those contacts"); In re Fed. Corp., No. 13-16-00219-CV, 2016 WL 6519110, at *4 (Tex. App.—Corpus Christi Nov. 1, 2016, no pet.) (mem. op.) (stating that court must "evaluat[e] the defendant's contacts with the forum without considering the defendant's contacts directed at other locations").
2. Distributor Agreement
The Vieiras allege that Trokamed entered into a distribution agreement with Blue Endo for the specific purpose of selling Trokamed products in the Unites States, including Texas. Thus, they argue, Trokamed's intent to serve the Texas market could not be clearer. In support of their argument, the Vieiras rely principally on three cases: Semperit Technische Produkte Gesellschaft M.B.H. v. Hennessy, 508 S.W.3d 569 (Tex. App.—El Paso 2016, no pet.), LeBlanc v. Kyle, 28 S.W.3d 99 (Tex. App.—Texarkana 2000, pet. denied), and Tobin v. Astra Pharmaceutical Products, Inc., 993 F.2d 528 (6th Cir.1993).
In Hennessey, a drilling rig worker was killed after the high pressure hydraulic hose that he was using failed, causing a pressure release that threw him into the oil derrick. 508 S.W.3d at 572. The plaintiffs sued STP, the Austrian hose manufacturer, and SIP, its New Jersey subsidiary that distributed the hose, among others. See id. STP filed a special appearance which was denied by the trial court. Id.
The court of appeals affirmed the trial court's denial of STP's special appearance. See id at 587. Although it noted that STP had not designed a product for Texas or advertised in Texas, and there was no evidence of regular channels of communication with customers in Texas, the court stated that those examples were not the only kind of factors that could be considered. See id. The court concluded that "[t]he 'plus' factor in this case is a distribution network that in fact has resulted in STP selling millions of dollars of goods to Texas customers." Id. at 579. The court noted that STP had established SIP as its sales subsidiary in New Jersey, and that although SIP marketed its product in all fifty states, it had targeted Texas both through its president visiting customers and potential customers, as well as participated in the delivery of several million dollars of goods to Texas. See id. The court also found that the branding of the hose for a sub-tier distributor which targeted Texas, and who was prohibited from selling any other company's products but the manufacturer's, demonstrated purposeful availment of the Texas marketplace. See id. at 580.
Here, in contrast, there is no corporate relationship between the parties. The distribution agreement between Trokamed and Blue Endo, which is not specific to Texas but covers the U.S., Canada, and Mexico, does not specifically prohibit Blue Endo from selling other companies' products, unless they are substantially similar, equivalent, or directly competive, without Trokamed's consent. Further, in contrast to STP, Trokamed has not participated in the delivery of its products to Texas; instead, under the distribution agreement, Trokamed passed title of the LPMs to Blue Endo in Germany, and the LPMs become the property of Blue Endo at the moment they leave Trokamed's premises in Germany. Moreover, under the express terms of the agreement, it was Lassiter that sold the specific LPM used in the decedent's operation.
The Vieiras also rely on LeBlanc in support of their argument. There, the court of appeals upheld personal jurisdiction over a French hot water heater manufacturer who sold its products to a Vermont distributor, who in turn sold an allegedly defective heater to a Texas company. See 28 S.W.3d at 100. Under the distribution agreement, the Vermont company was to sell product in its territory, which included all fifty states. Id. at 101. Through this arrangement, some 452 units were sold in Texas over a five-year period. Id. The court rejected the notion that by intending to serve all fifty states, the manufacturer was not targeting any specific state for jurisdictional purposes. Id. at 104. Rather, an agreement to serve the fifty states "demonstrates a purposeful effort to serve the United States market, which includes Texas." Id.
The LeBlanc opinion predates McIntyre. More importantly, the LeBlanc court's reliance on the existence of the distribution agreement and evidence of the foreign manufacturer's intent to serve "the fifty states" conflicts with McIntyre, which rejected the notion that permitting or desiring a distributor to sell to all fifty states, without more, is sufficient to confer jurisdiction. See McIntyre, 564 U.S. at 888 (disagreeing that producer is subject to jurisdiction for products liability action so long as it "knows or reasonably should know that its products are distributed through a nationwide distribution system that might lead to those products being sold in any of the fifty states") (Breyer, J., concurring) (citation omitted).
The Vieiras also cite Tobin as support for their argument. There, the Sixth Circuit Court of Appeals found that Tobin, a Dutch pharmaceutical company which sold its drug through a U.S. distributor, could be sued in Kentucky where the drug was sold and used. See 993 F.2d at 531. The agreement between the Dutch manufacturer and the American distributor required the distributor to market the drug in a defined territory, which included all fifty states. Id. at 543. The court rejected the contention that the marketing effort was to the United States as a whole, and not Kentucky in particular, noting that if it accepted that view, "a foreign manufacturer could insulate itself from liability in each of the fifty states simply by using an independent national distributor to market its products." Id. at 544.
Tobin, like LeBlanc, predates McIntyre and conflicts with McIntyre's recognition of the principle that "personal jurisdiction requires a forum-by-forum, or sovereign-by-sovereign, analysis." McIntyre, 564 U.S. at 884. We further note that although the defendant in Tobin, like Trokamed, marketed its product in the U.S. through a distributor, the defendant in Tobin entered the U.S. and conducted clinical studies here. See Tobin, 993 F.2d at 544. Notably, at least two district courts have concluded that McIntyre abrogates Tobin. See Crowell v. Analytic Biosurgical Sol., No. 2:12-CV-06072, 2013 WL 3894999, at *5-6 (S.D. W. Va. July 26, 2013) (citing LaBarre v. Bristol-Myers Squibb Co., No. 06-6050 (FLW), 2013 WL 144054, at *7 (D.N.J. Jan. 11, 2013), aff'd, 544 F. App'x. 120 (3rd Cir. 2013)).
The Vieiras also contend that the evidence shows that Trokamed retained substantial control over Blue Endo under the terms of the distribution agreement. Specifically, they argue that Trokamed developed the IFUs that were required to be packaged with the LPMs they sold to Blue Endo and they controlled how the warnings were communicated to customers. Thus, they assert, Trokamed's control over the content and dissemination of the IFUs demonstrates Trokamed's intent to serve the Texas market.
Trokamed does not dispute that it was involved in authoring material which was included in the IFUs. However, the IFUs expressly state that they are the intellectual property of Blue Endo, not Trokamed. ("All product imagery, descriptions and texts are the intellectual property of BLUE ENDO.") Further, the IFUs bear Blue Endo's logo and contact information.
The Vieiras also allege that, under the distribution agreement, Trokamed warranted that it would "take over legal liability of defects for the exclusive products" including the morcellator involved in decedent's surgery. However, the record reflects that the only warranties that Trokamed issued with respect to the LPMs are those limited warranties that ran solely to Blue Endo—not Texas customers—as referenced in section 8.1 of the parties' distribution agreement.
3. Establishing Channels of Communication
The Vieiras allege that Trokamed established and maintained a channel of communication with Texas customers that evidences purposeful contacts with the forum state.
The Vieiras assert that, as the manufacturer and the entity that obtained FDA approval for its morcellators, Trokamed was required under federal law to regularly maintain and monitor the IFUs, report any adverse events pursuant to the federal Medical Device Reporting ("MDR") regulations, and maintain quality systems pursuant to the federal Current Good Manufacturing Practices ("CGMPs"). See 21 U.S.C. 360i; 21 C.F.R. § 803.50, 21 C.F.R. § 820.20. Thus, they argue, by seeking and obtaining approval from the FDA for its product, Trokamed established a channel of communication with its Texas customers through which it could provide advice to purchases and users of its product. However, approval by a federal regulatory agency does not do away with the requisite state-specific contacts analysis and automatically confer jurisdiction. See e.g., Landry v. Watson Pharms., Inc., CV. No. 11-00097DAE-KSC, 2011 WL 3477089, at *5 (D. Haw. Aug. 9, 2011) (finding no specific jurisdiction over Nevada corporation in Hawaii based upon claims relating to an FDA-approved and regulated product where corporation had no other ties to Hawaii); Tansey v. Cochlear Ltd., No. 13-CV-4628 (SJF), 2014 WL 4829453, at *6 (E.D.N.Y. Sept. 26, 2014) (holding no specific jurisdiction in New York against Australian manufacturer for claims related to cochlear devices that were "heavily regulated and must pass premarket approval" by the FDA where manufacturer had no contacts with New York); Fisher v. Alfa Chems. Italiana, 258 F. App'x 150, 151 (9th Cir. 2007) (finding no specific jurisdiction over Italian manufacturer of felfluramine in Nevada for lack of contacts, despite FDA filings).
4. Agency Relationship
The Vieiras allege that Blue Endo's contacts with Texas are attributable to Trokamed under an agency relationship.
Under Texas law "[t]he critical element of an agency relationship is the right to control, and the principal must have control of both the means and details of the process by which the agent is to accomplish his task in order for an agency relationship to exist." Coleman v. Klockner & Co. AG, 180 S.W.3d 577, 588, 593 (Tex. App.—Houston [14th Dist.] 2005, no pet.) (dismissing claims against German defendants for lack of personal jurisdiction, holding that contacts of independent subsidiary "cannot be imputed to the [German] defendants"). Without such control, the purported agent is merely an independent contractor. See id. at 588. The Coleman court noted that "[t]he distinction between an independent contractor and an agent is important to the jurisdictional inquiry because the actions of an independent contractor by themselves are not sufficient to subject a non-resident corporation to the jurisdiction of the forum state." Id.; see also PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 175-76 (Tex. 2007) (concluding no basis for imputing subsidiaries contacts to its parent given lack of basis for general jurisdiction).
In support of their argument that Blue Endo was Trokamed's agent, the Vieiras assert that the terms of the distribution agreement required Trokamed to keep Blue Endo "generally informed, in written form, from time to time of its activities with respect to the Exclusive Product(s) and Product(s), as well as of market conditions within the territory, and upon reasonable request of Trokamed, Germany." They also point to language in the agreement requiring Blue Endo to inform Trokamed if any approvals, permits, or consents of federal regulatory agencies, including the FDA, were missing or inadequate.
The requirement that Blue Endo keep Trokamed informed of its activities and the market conditions of the territory, and that Blue Endo advise Trokamed if approval, permits, or consents are lacking, is not evidence that Trokamed had an actual right of control over Blue Endo sufficient to attribute Blue Endo's contacts with Texas to Trokamed. See Greenfield Energy, Inc. v. Duprey, 252 S.W.3d 721, 733 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (concluding that in assessing whether one party's contacts can be imputed upon another, critical test focuses on right and/or exercise of control). To the contrary, the distribution agreement reflects the parties' express agreement that Blue Endo would preserve its independent status: "It is the express intent of the Parties that Blue Endo be an independent contractor throughout the duration and performance of this Agreement. Each party shall retain exclusive control of its employees, agents, contractors, and business partners."
Because we conclude that Trokamed met its burden of negating specific jurisdiction, we hold that the trial court erred in denying its special appearance. Accordingly, we sustain Trokamed's issue.
In light of our conclusion that Trokamed has insufficient minimum contacts with Texas to justify a finding of specific jurisdiction, we need not consider whether the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. See Foley v. Trinity Indus. Leasing Co., 314 S.W.3d 593, 602 (Tex. App.—Dallas 2010, no pet.) (noting that only if minimum contacts are established does court consider second prong of constitutional due process analysis).
Conclusion
We reverse the trial court's order denying Trokamed's special appearance and render judgment dismissing the Vieiras' claims against Trokamed for lack of personal jurisdiction.
Russell Lloyd
Justice Panel consists of Justices Bland, Lloyd, and Caughey.