An appellate court in Texas filed an opinion last week that very helpfully defines and applies the standard for specific personal jurisdiction under a factual scenario that is extremely common in our line of work—a plaintiff trying to sue a foreign company that sells products (medical devices) in the U.S. through a U.S.-based affiliate. The court held that the foreign company’s mere awareness that the stream of commerce will take its product into the forum state is not sufficient to establish personal jurisdiction. Additional conduct “evincing an intent or purpose to serve the market in the forum state” is required—a so-called “plus factor.”
In THD S.P.A. v. Pegg, No 02-24-00490, 2025 WL 2177387 (Tex. Ct. App. July 31, 2025), the plaintiff had surgery involving a device made by an Italian company, and he later developed complications evidently caused by a bowel perforation. The plaintiff and his spouse therefore sued the surgeon and others for medical malpractice, and they also asserted product liability claims against the Italian manufacturer and its affiliated Iowa-based U.S. distributor.
The U.S. distributor answered the complaint. The Italian manufacturer, however, contested jurisdiction on the basis that it never sold devices in Texas or the U.S., that it did not conduct any business in the U.S., and that its affiliated U.S. distributor had independently performed all the relevant conduct—including selling the device in Texas.
The trial court found that it had specific personal jurisdiction over the Italian manufacturer, but the Texas Court of Appeals reversed and held that the plaintiffs did not meet their burden of establishing sufficient forum contacts. Relying mainly on the Texas Supreme Court’s recent opinion in BRP-Rotax GmbH & Co. KG v. Shaik, No. 23-0756, 2025 WL 1727903 (Tex. June 20, 2025), the Court of Appeals recited the familiar rules that a defendant establishes “minimum contacts” with a state when it “purposefully avails itself of the privilege of conducting activities within the forum state.” Further, specific jurisdiction exists “when the cause of action arises from, or is related to a defendant’s purposeful activities in the state.”
Where this opinion adds something is when it holds that “purposeful” really means purposeful. There has to be conduct showing an intent, a demonstrated purpose to serve the forum state and specific targeting of the forum beyond the foreign company’s mere knowledge and expectation that its product will wind up there. This additional conduct is known as the aforementioned “plus factor.”
Quoting the Texas Supreme Court, the Court of Appeals held that
the “test requires a defendant to specifically target Texas; it is not enough that a defendant may foresee some of its products eventually arriving here.” . . . Indeed, such “targeting” must be shown beyond “merely passive awareness of a likelihood—even a substantial likelihood verging on certainty—that products may eventually arrive in our State.” (emphasis in original, citations omitted).
This is strong language. Even when a foreign company knows that its products will reach a forum to a “substantial likelihood verging on certainty,” that is not sufficient to trigger personal jurisdiction over disputes involving that very product. (Pause here while we sigh over our home state of California, whose courts often act like they never met a lawsuit they didn’t like.)
Against this standard, the plaintiffs in THD S.P.A. failed to establish jurisdiction over the Italian device manufacturer. The Italian manufacturer submitted evidence that it was an Italian company that has never done business in Texas, does not maintain a place of business in Texas, has never owned or leased property in Texas, has no employees in Texas, etc. That shifted the burden to the plaintiffs to come forward with evidence establishing sufficient forum contacts.
They failed. The plaintiff emphasized the Italian company’s distribution agreement with its U.S. affiliate, which sold the devices in Texas through sales representatives assigned to Texas. That distribution agreement, however, “says nothing about Texas” and focused on the United States as a whole. This is not targeting. The plaintiffs further emphasized the Italian company’s “knowledge” of its affiliate’s sales in Texas, based on the testimony of the U.S. affiliate’s corporate representative that the Italian manufacturer receives daily sales reports, including devices sold in Texas.
That is not targeting, either. The Italian company’s mere awareness that the U.S. affiliate was distributing its products in Texas shows only awareness, which is not sufficient. Moreover, the witness testified that she worked for the U.S. company, not the Italian company, and “ha[d] no idea what they’re using [the daily sales reports] for.”
Finally, the plaintiffs argued that the Italian manufacturer and the U.S. distributor had common ownership, officers, and board members. The plaintiffs did not, however, prove that the U.S. distributor was the Italian company’s alter ego, such that the court could impute the distributor’s forum contacts to the foreign manufacturer. Texas law presumes that corporations are separate legal persons, and the evidence did not show that one defendant controlled the other. Most notably, the Italian company did not own the U.S. distributor; they are “sister” companies that share some common leadership—not parent and subsidiary. Even acknowledging that several individuals held leadership positions in both companies, the “sister” relationship did not support piercing the corporate veil and did not establish that the Italian manufacture targeted Texas.
The only minus here is that the Court of Appeal’s opinion is not published. It does, however, provide a valuable roadmap, especially by reference to the Texas Supreme Court’s opinion in BRP-Rotax GmbH & Co. KG v. Shaik, a case involving aircraft engines. Oddly, the publication status of that opinion is “pending.” Either way, we recommend it.