When it comes to a company’s claims that a distributor sold it a faulty steel pipe, an appeals court ruled the company didn’t sufficiently prove its case.
Fourteenth Court of Appeals judges Kem Thompson Frost, Frances Bourliot and Margaret “Meg” Poissant affirmed dismissal in the case against distributor CIEC USA Incorporation and the Chinese manufacturer that made the product, Yangzhou Chengde Steel Pipe Co. Continental Alloys & Services (Delaware) LLC and Continental Alloys & Services, Inc. filed the lawsuit in the 189th District Court in Harris County. That court dismissed the case. The appeals court affirmed.
“Concluding the plaintiffs have not shown that the trial court erred in sustaining the special appearance and that the plaintiffs waived any error in the trial court’s granting of the distributor’s motion to dismiss, we affirm the trial court’s judgment,” wrote Chief Justice Frost.
Texas Fourteenth Court of Appeals Chief Justice Kem Thompson Frost
| txcourts.gov
After ruling that the appeals court does have jurisdiction in the case, the judges then determined if the lower court made a mistake when it sustained Chengde’s special appearance. They noted that the plaintiffs didn’t display that there was a sufficient link between Chengde’s contacts in Texas and the details of the case. Chengde doesn’t have any employees, offices, property, bank account, or advertisements in the Lone Star state. It also doesn’t have a contract to advertise or market its products in the state.
Still, the plaintiffs argue that Chengde has more than 100 connections to Texas companies that it can sell its products to, so the lower court has general jurisdiction. But Chief Justice Frost wrote, “General jurisdiction is present only when a defendant not only has continuous and systematic contacts with the forum state, but also has these kinds of contacts to such an extent that they make the defendant essentially at home in the state. “
Ultimately, Chengde is a Chinese company that operates mostly out of China.
The judges also pointed out that in their amended complaint, the plaintiffs left out the claims against CIEC. In doing so, the plaintiffs forfeited their complaints against CIEC along with any potential claim that the lower court erred in dismissing the complaints against CIEC.
Because of this, the appeals court affirmed the dismissal for both the manufacturer and the distributor.