H. Heller & Company, Inc. and Gulf Performance Polymers, Inc. v. Louisiana-Pacific Corporation--Appeal from 270th District Court of Harris County

Affirmed and Majority and Dissenting Opinionsfiled December 7, 2006.

In The

Fourteenth Court of Appeals

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NO. 14-06-00481-CV

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H. HELLER & CO, INC. AND GULF PERFORMANCE POLYMERS, INC., Appellants

V.

LOUISIANA-PACIFIC CORP., Appellee

On Appeal from the 270th District Court

Harris County, Texas

Trial Court Cause No. 2005-45951

D I S S E N T I N G O P I N I O N

Because I disagree with the majority=s conclusion that the facts of this case show appellants purposefully availed themselves of the benefits and protections of Alabama law, I respectfully dissent.

I disagree with the majority=s analysis in two respects. First, the quality and quantity of appellants= contacts with Alabama were minimal. They sent only three shipments from Texas to Alabama, and the sales were initiated by the buyer without appellants marketing or soliciting any business in Alabama. The authority the majority distinguishes actually supports the conclusion that jurisdiction is improper in this case. In CMMC v. Salinas, the court found no personal jurisdiction based on the shipment of one winepress to Texas because ACMMC=s only contacts with Texas are that it made isolated sales of equipment to customers here, and that it knew the machine it sold KLR was being shipped here.@ 929 S.W.2d 435, 437 (Tex. 1996). The sale was an isolated event without any marketing or advertising in Texas. Id. at 439. We followed CMMC in C-Loc Retention Systems, Inc. v. Hendrix, in which we held that a sales agreement and single or occasional shipments to Texas were insufficient to establish personal jurisdiction, particularly in light of a lack of advertising or other efforts by the seller to direct products to Texas. 993 S.W.2d 473, 479 (Tex. App.CHouston [14th Dist.] 1999, no pet.). Last year, the Texas Supreme Court relied on CMMC in holding that the sale of a single RV to Texas was an insufficient basis to support jurisdiction. See Michiana Easy Livin= Country, Inc. v. Holten, 168 S.W.3d 777, 784B87 (Tex. 2006). The court noted that the sale was initiated at the buyer=s request and that the seller did not market to Texas or in any way gear its products toward Texas. Id. at 784, 786. Although these three cases differ from this case in some minor factual details, they all clearly indicate that when, as here, the buyer initiates the sale to a forum that the seller has not targeted and the volume of sales are single or occasional at best, personal jurisdiction is not proper because the seller has not purposefully availed itself of the laws of the forum.

Second, the majority does not place enough significance on the terms of the shipping contract, which stated that goods were shipped F.O.B. Texas, meaning ownership and risk of loss transferred to appellants in Texas rather than Alabama. The majority views this as a mere Atechnicalit[y]@ and gives it little consideration. However, this court and the Texas Supreme Court have held that F.O.B. status is not a mere technicality but an important consideration in jurisdictional analysis because it shows a party=s efforts to Apurposefully structure[] transactions to avoid the benefits and protections of a forum=s laws.@ Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 808 (Tex. 2002); accord Schott Glas v. Adame, 178 S.W.3d 307, 317B18 (Tex. App.CHouston [14th Dist.] 2005, pet. denied); Zamarron v. Shinko Wire Co., 125 S.W.3d 132, 144 (Tex. App.CHouston [14th Dist.] 2003, pet. denied). An F.O.B. term alone Adoes not prevent a court from exercising personal jurisdiction over a non-resident defendant where other factors, such as the quantity and regularity of shipments, suggest that jurisdiction is proper.@ Luv n= Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 471B72 (5th Cir. 2006). However, as discussed above, those other factors do not suggest jurisdiction is proper here.

Thus, based on appellants= three shipments to Alabama, which were initiated at the buyer=s request, the absence of any efforts to direct their products to Alabama, and the F.O.B. term showing a clear intent to avoid the benefits and protections of Alabama=s laws, I would hold that the trial court erred in denying appellants= plea to the jurisdiction.

/s/ Leslie Brock Yates

Justice

Judgment rendered and Majority and Dissenting Opinions filed December 7, 2006.

Panel consists of Chief Justice Hedges and Justices Yates and Seymore (Hedges, C.J., majority).