Anchia v. DAIMLERCHRYSLER AGAnchia v. DAIMLERCHRYSLER AG
OPINION
Opinion by
Aрpellants challenge the trial court’s order granting appellee’s special appearance. In three issues, appellants contend the trial judge erred in making certain findings of fact and conclusions of law and granting appellee’s special appearance because ap-pellee has “purposefully and voluntarily directed its activities toward the State of Texas.” We affirm the trial court’s order.
Background
Appellee is a German stock company with its effective place of business in Stuttgart, Germany. It manufactures Mercedes-Benz automobiles in Germany and sells the vehicles in Germany to Mercedes-Benz USA, LLC (MBUSA), a Delaware limited liability company with its principal place of business in New Jersey. MBUSA is wholly-owned by Daimler-Chrysler North American Holding Corporation (DNAHC). Appellee owns one hundred percent of the stock of DNAHC. Therefore, MBUSA is a wholly-owned indirect subsidiary of appellee. MBUSA holds the rights to import, distribute, and advertise Mercedes-Benz vehicles and component parts in the United States, including Texas.
Each appellant in this case purchased a model CLK480 Mercedes-Benz automobile. Appellants sued appellee and other defendants, alleging the front bumpers of
has purposefully and voluntarily directed its activities toward the State of Texas with respect to the manufacture and sale of Mercedes-Benz automobiles, including the CLK430’s, and has purposefully availed itself of the Texas market by causing automobiles manufactured by it in Germany, including the CLK4S0's, to be distributed and sold in Texas through its wholly owned subsidiary [MBUSA] which is controlled by [appel-lee].
Appellee filed a special appearance, cоntending it was not subject to personal jurisdiction in Texas. After the trial judge granted appellee’s special appearance, this appeal ensued.
Standards of Review
Whether a trial court has personal jurisdiction over a non-resident defendant is a question of law.
BMC Software Belgium, N.V. v. Marchand,
However, a defendant is not required to negate the plaintiff’s assertion that personal jurisdiction exists under an alter ego theory.
See BMC Software,
In addition, a trial judge must frequently resolve fact questions before deciding the jurisdictional question.
BMC Software,
A Tеxas court may exercise personal jurisdiction over a defendant only if the defendant has minimum contacts with the state and the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice.
See BMC Software,
Personal jurisdiction exists if the nonresident defendant’s minimum contacts give rise to either general or specific jurisdiction.
Helicopteros Nacionales de Colombia, S.A. v. Hall,
Appellants contend appellee is subject only to specific jurisdiction. Specific jurisdiction is established if the nonresident defendant’s alleged liability arises from or is related to activity conducted within the forum.
BMC Software,
The “touchstone” of jurisdictional due process analysis is “purposeful availment.”
Michiana,
In addition to minimum contacts, the exercise of personal jurisdiction must comport with traditional notions of fair play and substantial justice.
BMC Software,
Evidentiary Challenge
After appellee filed its vеrified special appearance, appellants filed a brief in opposition. In support of their arguments, appellants offered the affidavit of John T. Evans, the owner of a Mercedes-Benz vehicle. The trial judge declined to consider Evans’s affidavit on the ground it was conclusory. Appellants assign this ruling as error. We disagree.
Texas Rule of Civil Procedure 120a requires affidavits submitted in opposition to a special appearance to be made on personal knowledge and set forth specific facts that would be admissible in evidence. Tex.R. Civ. P. 120a(3). In his affidavit, Evans states appellee controls the distribution system that brings Mercedes-Benz automobiles to Texas; appellee purposefully distributes its cars to the United States, including Texas; appellee has sold over 10 billion Euros worth of Mercedes-Benz automobiles in the United State each year from 2000 through 2005; and there has been more thаn one Mercedes-Benz dealer in Texas for more than the past twenty-five years. Evans claims these statements are based on his review of ap-pellee’s filings with the Security and Exchange Commission (SEC), the affidavit of Dr. Peter Herz, appellee’s associate counsel, and “other matters of [Evans’s] personal knowledge.” However, these documents are not attached to the affidavit or otherwise included in the record. Further, nothing in Evans’s affidavit establishеs Evans’s competence to review these documents and reach the expressed opinions. In light of this, the trial judge did not err in refusing to consider these statements.
See Earle v. Ratliff,
Evans’s final statement in his affidavit is that there has been one or more Mercedes-Benz dealer in Texas for the last twenty-five years. However, appellants pleaded jurisdiction over appellee based solely on appellee’s availing itself of the Texas market through its control of MBU-SA. Appellants do not dispute appellee has no control over the independent retail dealers in Texas and, accordingly, Evans’s statement regarding the existence of Mercedes-Benz dealerships in Texas does not impact the jurisdictional analysis.
We conclude the trial judge did not err in refusing to consider Evans’s affidavit; therefore, we do not consider those statements in weighing the sufficiency of the evidence. Furthermore, even if we were to consider the contested portions of Evans’s affidavit, we would reach the same conclusion.
Findings of Fact
Appellants next contend several of the trial judge’s findings аre legal conclusions and that there is no evidence to support the finding appellee did not create, employ, or control any distribution system to Texas. 1
In finding number 7, the trial judge found that “[o]nce title to the vehicles passes to MBUSA in Germany, DCAG has no control over their ultimate destination within the United States.” In finding number 28, the trial judge found “DCAG has never created, employed or controlled any distribution system in or to Texas.” Appellants challenge both these findings although in their reply brief, appellants withdrew their challenge to finding seven to the extent the ultimate destination of the vehicle means the consumer who purchased the car. Appellants concede appel-lee has no control over to whom the retail dealer sells the vehicle.
Appellants first argue whether appellee had control over MBUSA’s distribution system is a question of law. We disagree.
Appellants next challenge the legal sufficiency of the evidence to support the trial judge’s finding appellee did not control MBUSA or the distribution system that brought the vehicles to Texas, arguing ap-pellee necessarily had such control because MBUSA is a wholly-owned indirect subsidiary of appellee. Although appellants rely solely on appellee’s ownership of stock to establish control over MBUSA and have disclaimed any alter ego theory, alter ego law is instructive regarding whether personal jurisdiction cаn be asserted over a parent company simply because its indirect subsidiary does business in the forum state.
Wolf,
Generally, a foreign parent company is not subject to jurisdiction in a forum merely because a subsidiary is present or doing business there.
BMC Software,
Appellants finally argue there is no evidence to support the trial judge’s finding appellee did not control the distribution system that brought the vehicles to Texas because the evidence established only that appellee did not create, employ, or control the distribution system in, rather than to, Texas. However, in his affidavit, Herz stated appellee sold the vehicles to MBUSA in Germany. Further, MBUSA has the exclusive right to import, distribute, and advertise Mercedes-Benz automobiles in the United States and is responsible for the distribution of the vehicles in the United States. Herz also stated that although MBUSA is an indirect subsidiary of appellee, appel-lee and MBUSA are independent companies and strictly observe all corporate formalities. Appellee does not exercise any day-to-day control over MBUSA, including control with respect to sales of Mercedes-Benz vehicles and component parts in the United States, and does not exercise control over any Mercedes-Benz retail dealer in Texas. Finally, Herz stated appellee has never created, employed, or controlled any distribution system in Texas, and appellee did not sell any vehicle to appellants.
The record contains more than a scintilla of evidence that appellee did not control MBUSA or the distribution system that brought the Mercedes-Benz automobiles to Texas. Accordingly, the evidence is legally sufficient to support the trial judge’s finding.
In findings eleven, thirteen, and twenty-nine, the trial judge determined ap-
Based on Herz’s affidavit, the trial judge found appellee did not sell Mercedes-Benz automobiles in Texas, did not advertise in Texas, and did not contact any customers in Texas. Appellee is not qualified, licensed, or authorized to do business in Texas and does not maintain an office, agency, or representative in Texas. Ap-pellee does not have officers, employees, or agents stationed to work in Texas. Appel-leе does not conduct any sales, service, or other business activities in Texas. Appel-lee does not have a bank account in Texas. Appellee owns no real property in Texas and has never paid Texas taxes. Appellee has never sold any Mercedes-Benz vehicle in Texas and has never designed any Mercedes-Benz vehicle specifically for the Texas market.
Further, based on Herz’s affidavit, the trial judge found appellеe is a German stock company, appellee sold automobiles to MBUSA in Germany, and title to the vehicles passed to MBUSA in Germany.
See Schott Glas v. Adame,
These unchallenged findings establish appellee structured its business to avoid doing or engaging in business in Texas. Thus, appellee did not purposefully avail itself of the Texas market.
See Michiana,
Conclusions of Law
Appellants offer objections and comments to nineteen of the trial judge’s thirty-two conclusions of law. As to appellants’ comments on the accuracy and completeness of conclusions six (breadth of the Texas long-arm statute); seven (standard for asserting personal jurisdiction); eight and nine (relating to general jurisdiction); eleven (statement of law on fair play and substantial justice prong of jurisdictional analysis); fifteen (necessity for contacts to relate to litigation in specific jurisdiction analysis); sixteen (minimum contacts must be directed toward forum state); seventeen (merely placing product into stream of commerce insufficient to establish minimum contacts); twenty-six, twenty-seven, and twenty-eight (concluding based on
Samuels v. BMW of North Am., Inc.,
In conclusion of law number ten, the trial judge concluded that “[i]n addition to minimum contacts, in order for there to be personal jurisdiction over a non-resident defendant such as DCAG, ‘plaintiffs must show that the exercise of
in 'personam
jurisdiction comports with fair play and substantial justice.’ ” Appellants challenge this conclusion, based on
Schlobohm v. Schapiro,
In conclusion nineteen, the trial judge determined appellee’s alleged liability does not arise out of or relate to any conduct purposefully directed toward Texas because appellee had nothing to do with the vehicles once title passed to MBUSA in Germany and appellee had no control over where MBUSA distributed the vehicles. In conclusion twenty-three, the trial judge concluded the fact MBUSA was an indirect subsidiary of appellee was insufficient to establish appellee controlled the distribution system that brought the automobiles to Texas. Appellants challenge these conclusions, again contending that because MBUSA is appellee’s wholly-owned indirect subsidiary, appellee necessarily had control over the distribution of the vehicles. However, as noted previously, stock ownership alone is insufficient to impute the jurisdictional contacts of a subsidiary to the parent corporation.
BMC Software,
Appellants finally challenge conclusions thirty, thirty-one, and thirty-two that the exercise of jurisdictiоn over appellee would be burdensome and inconvenient to appel-lee; Texas’s interest in adjudicating the dispute, and appellants’ interest in obtaining relief, would not be diminished by dismissing appellee because the claims could continue against other defendants; and to require appellee to defend itself in Texas would violate traditional notions of fair play and substantial justice. We have already determined, based on findings of fact unсhallenged by appellants, that there is sufficient evidence appellee did not purposefully avail itself of the Texas market and did not have minimum contacts sufficient to support specific jurisdiction in Texas. Further, merely because MBUSA is a wholly-owned indirect subsidiary of appellee does not subject appellee to jurisdiction in Texas based on MBUSA’s contacts with Texas. Accordingly, we need not consider whether the exercise of jurisdiction over appellee would violate traditional notions of fair play and substantial justice.
We overrule appellants’ three issues and affirm the trial court’s judgment.
Notes
. Appellants raised other issues which we do not address. In their original appellate brief, appellants challenge the trial judge's finding that appellee never marketed Mercedes-Benz vehicles through a distributor in Texas who agreed to serve as a sales agent for the automobiles. However, because appellants withdrew their challenge to this finding in their reply brief, we do not address this argument. In their reply brief, appellants challenge the factual and legal sufficiency of the evidence to support several findings of fact and argue jurisdiction is proper because appellee employed MBUSA’s distribution system. Appellants pleaded jurisdiction over appellee based solely on its control of MBUSA and did not argue to the trial judge that appellee employed MBUSA’s distribution system. Because appellants did not present this argument to the trial judge, they may not raise it for the first time on appeal. Furthermore, appellants did not argue this issue in their original appellate brief. The Texas Rules of Appellate Procedure do not allow an appellant to include in a reply brief a new issue not raised in the appellant’s original brief. Tex. R.App. P. 38.3;
Dallas County v. Gonzales,