Opinion
1:23-cv-00452-JRN
02-27-2024
ALAN PICKETT, Plaintiff v. ACT FULFILLMENT SERVICES, Defendant
HONORABLE JAMES R. NOWLIN, SENIOR UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
DUSTIN M. HOWELL, UNITED STATES MAGISTRATE JUDGE
Before the Court is Defendant ACT's Motion to Dismiss, Dkt. 3, and all related briefing. After reviewing these filings and the relevant case law, the undersigned recommends that the District Court deny the motion.
I. BACKGROUND
This is a products liability case. Plaintiff Alan Pickett, a Texas resident, alleges that he was injured when his brand new Fiido electric bicycle “suddenly and without warning” broke in half causing him to be thrown from the bike. Dkt. 1-1, at 3. As a result of the fall, Pickett was injured and required surgery. Id. Pickett claims that the bike at issue in this case was “designed, tested, manufactured, constructed, marketed, distributed, sold and/or placed into the stream of commerce” by ACT, a California corporation. Id. Pickett specifically alleges that ACT is a manufacturer or nonmanufacturing seller under the Texas Civil Practice and Remedies Code and may therefore be held liable for his injuries. Id. at 4.
Under § 82 of the Texas Civil Practice and Remedies Code both sellers and manufacturers can be held liable. A "manufacturer" means “a person who is a designer, formulator, constructor, rebuilder, fabricator, producer, compounder, processor, or assembler of any product or any component part thereof and who places the product or any component part thereof in the stream of commerce.” Tex. Civ. Prac. & Rem. Code § 82.001. “‘Seller' means a person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof.” Id. Generally, a seller that did not manufacture (a nonmanufacturing seller) the product is not liable for harm unless the nonmanufacturing seller participated in the design of the product, altered or modified the product, installed the product, or if the manufacturer of the product is insolvent or not subject to the jurisdiction of the court. Id. § 82.003.
Pickett filed suit in the 201st District Court in Travis County, and ACT removed the case to this Court on subject matter jurisdiction grounds. Dkt. 1, at 2-3. ACT now moves to dismiss Pickett's complaint arguing that he has failed to establish that this Court has personal jurisdiction over ACT. Dkt. 3, at 1. As to general personal jurisdiction, ACT states that it does not have continuous and systematic contacts sufficient to render it at home in Texas. Id. As to specific personal jurisdiction, ACT argues that Pickett has failed to allege that ACT has sufficient minimum contacts demonstrating that ACT has purposefully availed itself of the privilege of conducting activities in Texas. Id. ACT also states that Pickett failed to establish that ACT conducted activities in Texas or that it placed any products in the stream of commerce with the expectation that they would be purchased or used in Texas. Id.
When Pickett responded to ACT's motion to dismiss, he also moved for jurisdictional discovery. He did not contest ACT's general personal jurisdiction analysis and instead focused his response and motion for jurisdictional discovery on whether this Court has specific personal jurisdiction. Dkt. 6, at 5. Based on FedEx shipping documents showing that the Fiido bike at issue in this case was “distributed and shipped” from ACT's Jurupa Valley, California address to Pickett's home in Austin, Texas, Pickett argues that ACT distributed and delivered the product into the stream of commerce with the expectation that it would be used in Texas, thus establishing specific personal jurisdiction. Dkt. 6, at 7. When Pickett requested jurisdictional discovery, he claimed that further evidence of ACT's contacts with Texas and involvement with the product at issue in this case were likely within ACT's possession and control and could lead to a finding of sufficient contacts with Texas, thus supporting this Court's exercise of personal jurisdiction over ACT. Dkts. 6, at 7; 9, at 4.
After a hearing on Pickett's motion for jurisdictional discovery, the undersigned granted the motion in part and denied the motion in part. Dkt. 22, at 1. Specifically, the undersigned ordered ACT to produce documents: (1) relating to shipment of Fiido bikes to the State of Texas from the 2 years preceding the incident; (2) all documents related to the subject bike; (3) documents regarding assembly, packaging, testing, and importation/exportation of Fiido bikes from the 2 years preceding the incident; and (5) documents regarding marketing and/or advertising in the State of Texas from the 2 years preceding the incident. Id. at 3. The undersigned also allowed the parties to file supplemental responses, if necessary, based on the discovery produced. Id.
Pickett filed a supplemental response stating that jurisdictional discovery produced evidence of “nearly five (5) dozen ... contacts with Texas,” specifically records showing that ACT shipped at least 55 Fiido bikes to Texas. Dkt. 25, at 2. Pickett argues that this evidence demonstrates that “ACT is regularly engaged in the business of supplying or placing products like the electric bike in question in the stream of commerce for use by the consuming public.” Id. at 4. ACT replies that the evidence “shows only purported shipments by [ACT] to nonparties which have nothing to do with Plaintiff or this case.” Dkt. 26, at 1. ACT argues that there are “no communications, financial transactions, or business dealings between” Pickett and ACT because ACT did not manufacture or sell the bike, and ACT never held title to the bike. Id. ACT argues that, therefore, it did not purposefully avail itself of Texas for the purposes of establishing minimum contacts. Id.
II. LEGAL STANDARD
A. 12(b)(2)
The Federal Rules of Civil Procedure allow a defendant to assert lack of personal jurisdiction as a defense to suit. Fed.R.Civ.P. 12(b)(2). On such a motion, “the plaintiff bears the burden of establishing the district court's jurisdiction over the nonresident.” Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). The Court may determine the jurisdictional issue “by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.” Id. But when, as here, the Court rules on the motion without an evidentiary hearing, the plaintiff need only present a prima facie case that personal jurisdiction is proper; proof by a preponderance of the evidence is not required. Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008). Uncontroverted allegations in a plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor. Id. Nevertheless, a court need not credit conclusory allegations, even if uncontroverted. Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001) (per curiam).
In federal court, personal jurisdiction may be exercised over a nonresident defendant when: (1) that party is amenable to service of process under the forum state's long-arm statute, and (2) the exercise of personal jurisdiction over the defendant is consistent with due process. Jones v. Petty-Ray Geophysical Geosource Inc., 954 F.2d 1061, 1067 (5th Cir. 1992).
The Texas long-arm statute authorizes service of process on a nonresident defendant if that party is “doing business” in Texas. Tex. Civ. Prac. & Rem. Code § 17.042. The Texas Supreme Court has interpreted the “doing business” language of its long-arm statute as reaching as far as the federal constitutional requirements of due process will allow. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990). Thus, the Court examines the due process requirements directly.
“‘A party's liberty interest under the fourteenth amendment protects it from being subjected to binding judgments of a forum with which it has established no meaningful contacts, ties, or relations.'” Guidry v. U.S. Tobacco Co., Inc., 188 F.3d 619, 623 (5th Cir. 1999) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985); Int'l Shoe v. Washington, 326 U.S. 310, 319 (1945)). The due process clause requires first that a foreign defendant have “minimum contacts” with the forum state so that the maintenance of a suit does not offend “traditional notions of fair play and substantial justice.” Id. (citing Int'l Shoe, 326 U.S. at 316). For minimum contacts, a nonresident defendant must have purposefully availed himself of the privilege of conducting activities within the forum state, thereby invoking the benefits and protections of its laws. Gardemal v. Westin Hotel Co., 186 F.3d 588, 595 (5th Cir. 1999).
Where a nonresident defendant has sufficient “continuous and systematic” contacts with the state in which the suit is pending, the court may exercise “general” personal jurisdiction over that party in a cause of action that does not arise out of or relate to that defendant's contacts with the forum state. Guidry, 188 F.3d at 623 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)) “[Continuous and systematic contacts” are required by the due process clause because the forum state does not have a direct interest in the cause of action. Gardemal, 186 F.3d at 595. Thus, the minimum contacts review is more demanding and broader for general personal jurisdiction than for specific personal jurisdiction and requires the plaintiff to demonstrate substantial activities in the forum state. Id.
Where the controversy “is related to or ‘arises out of [the defendants'] contacts with the forum,” the district court may exercise “specific” personal jurisdiction if the nonresident defendant has “purposefully directed” his activities at the residents of the forum state. Guidry, 188 F.3d at 623 (citing Shaffer v. Heitner, 433 U.S. 186, 204 (1977); Burger King, 471 U.S. at 474). The Court must examine the relationship among the defendant, the forum state, and the litigation to determine whether the defendant purposefully established “minimum contacts” with the forum state that made it foreseeable that the nonresident defendant should “reasonably anticipate being haled into court there.” Guidry, 188 F.3d at 623 (citing Burger King, 471 U.S. at 474.
To decide if there is specific jurisdiction, the district court must apply a three-prong test: (1) whether the defendant has minimum contacts with the forum state, i.e., did it purposely direct its activities toward the forum state or purposely avail itself of the privilege of conducting activities there; (2) did the plaintiffs cause of action arise out of or result from the defendant's forum-related contacts; and (3) would the exercise of personal jurisdiction be fair and reasonable? Id. “If the plaintiff successfully satisfies the first two prongs, the burden shifts to the defendant to defeat jurisdiction by showing that its exercise would be unfair or unreasonable.” Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). Here, the parties dispute only whether this Court has specific personal jurisdiction over ACT.
See Dkt. 6, at 5 (Pickett's response stating, “[a]s a preliminary matter, Plaintiff does not contest ACT's general jurisdiction analysis in this case. Thus, the focus of this response will address ACT's specific personal jurisdiction challenge.”).
III. DISCUSSION
A. Minimum Contacts
In cases involving products sold or manufactured by foreign defendants, the Fifth Circuit applies the stream-of-commerce approach to personal jurisdiction. Ainsworth v. Moffett Engg, Ltd., 716 F.3d 174, 177 (5th Cir. 2013). The stream-of-commerce principle refers to “the regular and anticipated flow of products from manufacturer to distribution to retail sale.” Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 112, 116 (1987). In Ainsworth, the Fifth Circuit explained that, under the stream-of-commerce approach to personal jurisdiction, the minimum contacts requirement is met so long as the court “finds that the defendant delivered the product into the stream of commerce with the expectation that it would be purchased by or used by consumers in the forum state.” 716 F.3d at 177. Under that test, “mere foreseeability or awareness [is] a constitutionally sufficient basis for personal jurisdiction if the defendant's product made its way into the forum state while still in the stream of commerce,” but “[t]he defendant's contacts must be more than ‘random, fortuitous, or attenuated, or of the unilateral activity of another party or third person.'” Id. According to the Supreme Court, “although physical presence in the forum is not a prerequisite to jurisdiction, ... physical entry into the State-either by the defendant in person or through an agent, goods, mail, or some other means- is certainly a relevant contact.” Walden v. Fiore, 571 U.S. 277 (2014); see Luv N Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 470 (5th Cir. 2006).
1. Whether the stream-of-commerce approach applies
As a preliminary matter, ACT disputes that it can be held to the stream-of-commerce standard in this case because personal jurisdiction over a nonresident corporation is proper “only when that corporation ‘delivered its products into the stream of commerce'” and ACT was “never the owner of the subject bicycle,” nor the seller or manufacturer, “and there is no evidence indicating Defendant had anything to do with the ownership, sale, or manufacturing of the subject [product].” Dkt. 26, at 2 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98 (1980) (emphasis added)). For its argument regarding title specifically, ACT relies on Amazon.com, Inc. v. McMillan, 625 S.W.3d 101,111 (Tex. 2021), for the proposition that only a person or entity that has held or relinquished title can be a “seller” in the products liability context. Dkt. 26, at 2. ACT claims that it “never held or relinquished title to the bicycle at any point in the chain and the stream-of-commerce standard therefore does not apply.” Id. The analysis of whether ACT has minimum contacts with Texas collapses into a discussion of what ACT's role in relation to the bike at issue is and whether it is a seller or manufacturer for the purposes of liability under Chapter 82 of the Texas Civil Practice and Remedies Code.
a. ACT's role in relation to the bike under Chapter 82 of the Texas Civil Practice and Remedies Code
First things, first. Texas's products liability statute, codified in Chapter 82 of the Texas Civil Practice and Remedies Code allows actions:
against a manufacturer or seller for recovery of damages arising out of personal injury, death, or property damage allegedly caused by a defective product whether the action is based in strict tort liability, strict products liability, negligence, misrepresentation, breach of express or implied warranty, or any other theory or combination of theories.Tex. Civ. Prac. & Rem. Code § 82.001(2). Pickett pleads that ACT is a manufacturer or alternatively, a nonmanufacturing seller. Dkt. 1-1, at 3.
i. Is ACT a manufacturer?
A “manufacturer” means “a person who is a designer, formulator, constructor, rebuilder, fabricator, producer, compounder, processor, or assembler of any product or any component part thereof and who places the product or any component part thereof in the stream of commerce.” Tex. Civ. Prac. & Rem. Code § 82.001.
The parties' briefing and the jurisdictional discovery in the record do not conclusively address whether ACT is a manufacturer. On one hand, Pickett pleads ACT “is a manufacturer” and the “bike in question ...was originally manufactured ... by ACT.” Dkt. 1-1, at 3-4. While ACT maintains throughout its pleadings that it is not the manufacturer of the bike, it failed to submit evidence to controvert Pickett's allegations. The declaration of Kimberley Inglish, Secretary and CFO of ACT, submitted as part of ACT's motion to dismiss, does not affirmatively deny that ACT is the manufacturer of the bicycle in question. See Dkt. 3-1, at 1 (stating that Inglish understands that Pickett alleges the bike was designed, tested, manufactured, constructed, marketed, distributed, sold, and/or placed into the stream of commerce by ACT and stating only that “ACT did not place the electric bicycle in the stream of commerce” and “is not regularly engaged in the business of supplying or placing products like the electric bicycle in question in the stream of commerce”).
On the other hand, ACT was ordered to produce documents related to the assembly, packaging, testing, importation/exportation, marketing/advertising of the bike at issue in this case. Dkt. 22, at 1. Neither party has provided or cited documents responsive to those requests, if any were produced by ACT. The undersigned finds that at this time, for the purpose of ACT's motion to dismiss, Pickett has pleaded that ACT is manufacturer and this contention has not been controverted with evidence in the record.
ii. Is ACT a seller?
Pickett alternatively pleads that ACT is a “nonmanufacturing seller who may be held strictly liable under Texas Civil Practice and Remedies Code § 82.003.” Dkt. 1-1, at 4. Generally, a nonmanufacturing seller, i.e., a seller that did not manufacture the product, is not liable for harm unless the nonmanufacturing seller participated in the design of the product, altered or modified the product, installed the product, or if the manufacturer of the product is insolvent or not subject to the jurisdiction of the court. Tex. Civ. Prac. & Rem. Code § 82.003. To be liable as a nonmanufacturing seller of defective products under § 82.003, an entity must first qualify as a seller under § 82.001. Amazon.com, Inc., 625 S.W.3d at 112.
Seller “means a person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof.” Tex. Civ. Prac. & Rem. Code § 82.001. Whether an entity is considered a “seller” by this definition depends on the specific facts at issue. Centerpoint Builders GP, LLC v. Trussway, Ltd., 496 S.W.3d 33, 41 (Tex. 2016).
First, to be “engaged in the business,” a seller does not need to actually sell the product; introducing the product in the stream of commerce is enough. See Firestone Steel Prods. v. Barajas, 927 S.W.2d 608, 613 (Tex. 1996); Restatement (Second) of Torts § 402A (cmt. f). Additionally, a service provider can also be “engaged in the business” of placing a product in the stream of commerce as a seller. See Fresh Coat, Inc. v. K-2, Inc., 318 S.W.3d 893, 899 (Tex. 2010) (“Chapter 82's definition of ‘seller' does not exclude a seller who is also a service provider, nor does it require the seller to only sell the product.”) (internal citations omitted); Thomas v. St. Joseph Hosp., 618 S.W.2d 791, 796 (Tex. Civ. App.-Houston [1st. dist.] 1981, writ refd n.r.e.) (acknowledging the existence of a “sales/service hybrid situation”). But a service provider is not “engaged in the business” of selling a product if providing that product is incidental to selling services. Centerpoint Builders GP, 496 S.W.3d at 40 (holding that general contractor was not engaged in the business of selling trusses necessary to provide its services of constructing a building because it did not intend to gain a profit from the sale and was reimbursed for the cost of materials); cf. Fresh Coat, 318 S.W.3d at 899 (holding that Fresh Coat was in the business of selling a specific product that it was hired to install). Essentially, the entity that introduces the product in the channels of commerce must be in the “same position as one who sells the product.” New Tex. Auto Auction v. Gomez de Hernandez, 249 S.W.3d 400, 403 (Tex. 2008) (noting that an advertising agency that provides copy, a newspaper that distributes circulars, and an internet provider that lists store locations are insufficiently “engaged” in a product's sales).
Second, “distributing or otherwise placing” a product in the stream of commerce may include one's taking physical possession of, exerting control over, or delivering the product. See Moses v. Zimmer Holdings, Inc., No. H-06-1350, 2007 WL 3036096, at *5 (S.D. Tex. June 29, 2007). A service provider that enables a transaction between two parties, without exercising control over the product, however, does not “place” a product in the stream of commerce. Ames v. Ford Motor Co., 299 F.Supp.2d 678, 679 (S.D. Tex. 2003). Further, “placing a product” in the stream of commerce must be more than merely presenting or introducing the product to consumers. New Tex. Auto Auction, 249 S.W.3d at 405 (noting that an emcee at a trade show introducing a product is not “placing” the product in the stream of commerce).
Lastly, to place a product in the “stream of commerce,” a product “must be released in some manner to the consuming public.” Armstrong Rubber Co. v. Urquidez, 570 S.W.2d 374, 376 (Tex. 1978). It does not need to be sold to enter the stream of commerce but must either be available for purchase or to facilitate the purchase of products by the public. See PS Invs., L.P. v. S. Instrument & Valve Co., 438 S.W.3d 638, 642-43 (Tex. App.-Houston [14th Dist.] 2014, pet. denied).
There are ordinary sellers, those who are “engaged in the business of distributing,” who part with title for a price. Amazon.com, Inc., 625 S.W.3d at 108. There are also non-selling entities that, for a commercial purpose, “plac[e] products in the stream of commerce through non-sale commercial transactions [and] gratuitously transfer[] title to promotional goods with the expectation of making future sales.” Id. at 107, 112; see also, e.g., McKisson, 416 S.W.2d at 792 (“One who delivers an advertising sample to another with the expectation of profiting therefrom through future sales is in the same position as one who sells the product.”). Whether a seller is an ordinary seller or a non-selling commercial entity, the seller must have held or relinquished title. Amazon.com, Inc., 625 S.W.3d at 112.
Against this backdrop, ACT claims it “never held or relinquished title,” and therefore, cannot be a seller for the purposes of Pickett's claim under Chapter 82 of the Texas Civil Practice and Remedies Code. Dkt. 26, at 2. Yet evidence in the record suggests that the bike in question perhaps left ACT's possession and control when it was sent from ACT's Jurupa Valley, California address to Pickett in Austin, Texas via FedEx. Dkt 9-1, at 3. Additionally, ACT has not brought forth evidence of what entity did hold title to the bike in question as it moved from the manufacturer (if not ACT), to ACT, then to Pickett, via FedEx. The only evidence in the record is: (1) ACT's corporate representative's declaration that “ACT did not place the electric bicycle in the stream of commerce” and “is not regularly engaged in the business of supplying or placing products like the electric bicycle in question in the stream of commerce”; and (2) counter-evidence presented by Pickett and produced by ACT in discovery showing that “ACT shipped at least 55 Fiido bikes to Texas.” Dkts. 25, at 2; 3-1, at 1; 25, at 8-55.
While it is true that Texas courts have refused to extend seller liability to those that merely assist or facilitate sales-such as auctioneers, advertising agencies, newspapers, internet providers, and shipment companies-neither party has addressed the question of whether ACT is the shipper or if ACT was merely storing the bicycles prior to shipment. See New Tex. Auto Auction, 249 S.W.3d at 404 (citing Restatement (Third) of Torts: Prod. Liab. § 20 cmt. g (1998), which provides that “[p]ersons assisting or providing services to product distributors, while indirectly facilitating the commercial distribution of products, are not subject to liability”); see also Stuart, 772 F.2d at 1190 (“[T]he shipment of articles to the forum state is insufficient to justify an exercise of in personam jurisdiction over the nonresident shipper.”). Here, the evidence shows that the bikes were shipped via FedEx from ACT's facility, leaving open the question of whether ACT qualifies as a shipper, and thus, not a seller. Dkts. 9-1, at 3; 25, at 8-55.
In sum, the fact issues that were the basis of the undersigned's grant of limited jurisdictional discovery, specifically concerning what role ACT played in distributing the subject bikes, persist. The Court exercised its discretion as to the type and amount of discovery and ordered ACT to produce documents: (1) relating to shipment of Fiido bikes to the state of Texas from the 2 years preceding the incident; (2) all documents related to the subject bike; (3) documents regarding assembly, packaging, testing, and importation/exportation of Fiido bikes from the 2 years preceding the incident; and (4) documents regarding marketing and/or advertising in the State of Texas from the 2 years preceding the incident. Dkt. 22, at 1. While documents responsive to these requests could have turned up documents dispositive as to whether ACT is a manufacturer or seller and who held title as the bike moved through the distribution chain, none have been produced to the Court.
In this posture, on a 12(b)(2) motion, where some discovery has taken place, but a full and fair hearing has not occurred, the Court cannot act as a fact finder and must construe all disputed facts in favor of the plaintiff and take uncontroverted allegations in plaintiff's complaint as true for purposes of the prima facie case of personal jurisdiction. Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008); Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008); Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002); Kelly Law Firm P.C. v. An Attorney for You, 679 F.Supp.2d 755, 762 (S.D. Tex. 2009).Here, ACT has not controverted with its sole affidavit in the record, that it is a manufacturer, or nonmanufacturing seller (with requisite title status). Accordingly, the undersigned finds that by pleading that ACT is a manufacturer, or alternatively a nonmanufacturing seller and presenting evidence that the subject bike was shipped from ACT's address to Pickett, Pickett has sufficiently alleged that ACT is a manufacturer or nonmanufacturing seller for the purposes of the minimum contacts analysis.
Cf. Amazon.com, Inc., 625 S.W.3d at 112 (where the court decided at the motion for summary judgment stage that because “the product ... was sold on Amazon's website by a third party and Amazon did not hold or relinquish title, Amazon is not a seller even though it controlled the process of the transaction and the delivery of the product”).
Pickett has provided evidence that ACT, in its alleged role as manufacturer or nonmanufacturing seller, has sent several dozen Fiido bikes from its facility in Jurupa Valley, California to destinations in Texas. Dkt. 25, at 8-55. The undersigned finds that Pickett has met his burden of making a prima facie showing that ACT has minimum contacts with Texas. See Dillard v. Fed. Corp., 321 F.Supp.3d 752, 759 (W.D. Tex. 2018) (finding that where tire manufacturer shipped thousands of tires to Texas, some directly, some through intermediaries, there was evidence that the manufacturer intended to benefit economically from Texas markets and, therefore, had minimum contacts with the State).
B. Whether the Cause of Action Arises Out of Forum-Related Contacts
Next, to establish specific personal jurisdiction, the Court must find that Pickett's claims stem from ACT's contacts with Texas. Guidry, 188 F.3d at 623 (citing Burger King, 471 U.S. at 474). Pickett's contacts have been determined to be the shipment of Fiido bicycles, including the one at issue in this case, to addresses in the State of Texas. Pickett alleges he was injured when he was “riding his brand new Fiido T1 Utility Electric Bicycle” when “[s]uddenly and without warning, the Bike's frame broke in half causing [him] to be thrown from the bike onto the concrete road below” causing Pickett to “suffer[] injuries, including a massive complete rotator cuff tear, which required surgery; as well as significant abrasions and contusions.” Dkt. 1-1, at 4. Pickett brings claims for negligence and strict liability against ACT for his injuries which allegedly were the direct result of the defective and unreasonably dangerous conditions of the bike. Id. Because Pickett has pleaded that his injuries were the direct result of the alleged defective and unreasonably manufactured product directed to him by ACT, the undersigned finds that Pickett's claims do stem from ACT's contacts with Texas. See Oehring v. Spike Brewing, LLC, No. 6:19-CV-00444-ADA, 2020 WL 3001052, at *4 (W.D. Tex. June 4, 2020) (finding that where Defendant's contacts with the forum state consisted of sales of a beer brewing kit containing a fermenter, and Plaintiff's claim was that he was injured when the fermenter's clamp malfunctioned and the fermenter lid struck him in the face causing lacerations and permanent damage, the pleadings were sufficient to establish that his claim arose from forum-related contacts).
C. Whether the Exercise of Personal Jurisdiction Is Fair and Reasonable
Even if the undersigned determines that minimum contacts exist and the claims stem from those contacts, the exercise of specific personal jurisdiction must not offend the traditional notions of fair play and substantial justice. Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 421 (5th Cir. 1993) In determining this fundamental fairness issue, the Court must examine (1) the defendant's burden; (2) the forum state's interests; (3) the plaintiff's interest in convenient and effective relief; (4) the judicial system's interest in efficient resolution of controversies; and (5) the State's shared interest in furthering fundamental social policies. Id. Since Pickett has satisfactorily demonstrated that this Court may exercise specific personal jurisdiction, the burden now shifts to ACT to show “that exercising jurisdiction would be unfair or unreasonable.” Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 433 (5th Cir. 2014).
ACT summarily addresses whether this Court's exercise of personal jurisdiction over it would be fair and reasonable. ACT states only that “[p]er the perfunctory and conclusory allegations in the Complaint, the exercise of personal jurisdiction over ACT would not be fair and reasonable” given that no contractual relationship exists between the parties and given that the parties did not directly communicate. Dkt. 3, at 2, 8. ACT does not address the burden, forum state interest, plaintiff's interest, the judicial system's interest, or the state's interest. Therefore, the Court finds that there is nothing unconstitutional about exercising specific personal jurisdiction over ACT. The undersigned determines that ACT has failed to meet its burden of showing that exercising jurisdiction would be unfair or unreasonable. Therefore, the undersigned finds that the Court may exercise specific personal jurisdiction over ACT. See Oehring, 2020 WL 3001052, at *4 (finding that where Defendant failed to argue four of the five factors of fundamental fairness in its briefing, Defendant failed to meet its burden, and the court may exercise specific personal jurisdiction); see also Schlobohm, 784 S.W.2d at 357-58 (citing Asahi, 480 U.S. at 113; Burger King, 471 U.S. at 476-77) (establishing that because the minimum contacts analysis encompasses so many considerations of fairness, it has become less likely that the exercise of jurisdiction will fail a fair play analysis).
IV.RECOMMENDATION
In accordance with the foregoing discussion, the undersigned RECOMMENDS that the District Court DENY ACT's Motion to Dismiss, Dkt. 3. The referral of this case to the undersigned should be CANCELED.
V. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The district court need not consider frivolous, conclusive, or general objections. See Battle v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987). A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen days after the party is served with a copy of the Report shall bar that party from de novo review by the district court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the district court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Assn, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).