Affirm and Opinion Filed November 16, 2022
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-21-01056-CV
LG CHEM, LTD., Appellant
V.
CHRISTOPHER W. TULLIS, Appellee
On Appeal from the 193rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-19-05481
MEMORANDUM OPINION
Before Justices Nowell and Smith1
Opinion by Justice Nowell
Appellee Christopher W. Tullis sued appellant LG Chem, Ltd. and others for
injuries he allegedly suffered when an 18650 lithium-ion battery manufactured by
LG Chem exploded in his pocket. LG Chem, a South Korean company, filed a
special appearance, which the trial court denied. In this interlocutory appeal, LG
Chem argues the trial court erred by denying its special appearance because Tullis
failed to allege the existence of purposeful contacts between LG Chem and Texas
1
The Honorable Leslie L. Osborne participated in the submission of this case; however, she did not
participate in the issuance of this memorandum opinion due to her resignation on October 24, 2022.
that relate or give rise to his claim, and the undisputed evidence disproves the
existence of such contacts. We affirm.2
BACKGROUND
Tullis sued LG Chem and others after a lithium-ion 18650 battery used in an
e-cigarette device exploded and injured him. Tullis alleged LG Chem marketed,
manufactured, designed, and sold defective 18650 lithium-ion batteries. Further, he
alleged, LG Chem placed its products, including its 18650 lithium-ion batteries, into
the stream of commerce with the expectation and intent that they would be sold in
Texas and they were sold in Texas, such that LG Chem purposefully availed itself
of the privileges and benefits of doing business in Texas.
A. LG Chem’s Special Appearance
LG Chem filed a special appearance supported by an affidavit from Joon
Young Shin, a senior manager and authorized company representative. Shin averred
that LG Chem is not incorporated or headquartered in Texas. It is a Korean company
with its headquarters and principal offices in Seoul, South Korea. LG Chem has
2
This appeal is one of several cases in Texas involving allegedly defective 18650 battery cells
manufactured by LG Chem and used in vaping or electronic cigarette devices and in which LG Chem has
filed special appearances. See Hause v. LG Chem, Ltd., No. 08-20-00197-CV, 2022 WL 5241787 (Tex.
App.—El Paso Oct. 6, 2022, no pet. h.) (reversing trial court’s order granting LG Chem’s special
appearance); LG Chem, Ltd. v. Turner, No. 14-19-00326-CV, 2021 WL 2154075 (Tex. App.—Houston
[14th Dist.] May 27, 2021, no pet.) (mem. op.) (reversing trial court’s denial of LG Chem’s special
appearance and remanding for jurisdictional discovery); LG Chem, Ltd. v. Granger, No. 14-19-00814-CV,
2021 WL 2153761 (Tex. App.—Houston [14th Dist.] May 27, 2021, no pet.)(mem. op.) (reversing trial
court’s order denying special appearance and rendering order of dismissal for claims against LG Chem);
LG Chem Am., Inc. v. Morgan, No. 01-19-00665-CV, 2020 WL 7349483 (Tex. App.—Houston [1st Dist.]
Dec. 15, 2020, pet. filed)(mem. op.) (affirming trial court’s order denying LG Chem’s special appearance);
Schexnider v. E-Cig Cent., LLC, No. 06-20-00003-CV, 2020 WL 6929872 (Tex. App.—Texarkana Nov.
25, 2020, no pet.) (affirming trial court’s order granting LG Chem’s special appearance). In its Hause
opinion, the Eighth Court of Appeals summarized and analyzed these cases. See Hause, 2022 WL 5241787.
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never had any physical presence in Texas, registered to do business in Texas, owned
or leased any real property in Texas, or had a registered agent, telephone number,
post office box, mailing address, or bank account in Texas.
Shin averred that LG Chem manufactures lithium-ion “power cells for use in
specific applications by sophisticated companies.” The company does not design,
manufacture, distribute, advertise, or sell these power cells as standalone batteries
for sale to individual consumers and has never authorized any manufacturer,
wholesaler, distributor, retailer, or re-seller to do so either. Further, Shin averred,
LG Chem does not design, manufacture, distribute, or sell lithium-ion power cells
for use by individual consumers as replaceable, rechargeable power cells in
electronic cigarettes or vaping devices. Shin denied that the battery that allegedly
injured Tullis was designed or manufactured in Texas.
After LG Chem filed its special appearance, Tullis sought and the trial court
permitted some jurisdictional discovery.
B. Tullis’s Response to LG Chem’s Special Appearance
Tullis supported his response to the special appearance with information LG
Chem provided in discovery. In its discovery responses, LG Chem acknowledged
that if the cell that harmed Tullis was an 18650 cell, then it would have been
manufactured by LG Chem in Korea and China. Tullis asked LG Chem to identify
every purchaser, distributor, and reseller to whom it or its American subsidiaries sold
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“the LG MG1 and/or LG HG2,3 and/or the 18650 battery” in Texas since January 1,
2012. LG Chem responded with a list of ten companies, including Green Battery
Technologies LLC and Black and Decker, Inc., which has multiple manufacturing
plants in Texas. Tullis provided invoices showing LG Chem shipped 18650 batteries
to Green Battery Technologies in Texas. LG Chem also provided a “list of LG
Chem’s and its American subsidiaries’ annual revenue related to sales and shipments
of 18650 lithium-ion cells into Texas since 2012.” The revenue numbers are:
2012: $140,884
2013: $64,170
2014: $1,811,845
2015: $481,556
2016: $260,270
2017: $1,651,148
2018: $1,095,559
2019: $138,600
2020: $4,040,710.
After considering the pleadings, evidence, and arguments of counsel, the trial
court overruled LG Chem’s special appearance. This appeal followed.
GOVERNING LAW
A. Personal Jurisdiction
Whether a trial court has personal jurisdiction over a nonresident defendant is
a question of law that we review de novo. Old Republic Nat’l Title Ins. Co. v. Bell,
549 S.W.3d 550, 558 (Tex. 2018). When, as here, a trial court does not issue findings
3
No party clarified what “LG MG1” and “LG HG2” are. However, from the record, they appear to be
types of 18650 batteries.
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of fact and conclusions of law with its ruling on a special appearance, we imply all
relevant facts necessary to support the judgment that are supported by evidence. Id.
Texas courts may exercise personal jurisdiction over a nonresident if “(1) the
Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise
of jurisdiction is consistent with federal and state constitutional due-process
guarantees.” Id. The long-arm statute provides in relevant part that “[i]n addition to
other acts that may constitute doing business,” a nonresident does business in Texas
if the nonresident commits a tort in whole or in part in the state. TEX. CIV. PRAC. &
REM. CODE ANN. § 17.042. However, a plaintiff alleging that a tort was committed
in Texas does not necessarily satisfy the United States Constitution. Bell, 549
S.W.3d 559.
To establish personal jurisdiction over a nonresident, federal due process
requires that the nonresident must have “certain minimum contacts with [the forum
state] such that the maintenance of the suit does not offend ‘traditional notions of
fair play and substantial justice.’” Id. (quoting Int’l Shoe Co. v. State of Wash., Office
of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945)). A defendant
establishes minimum contacts with a state when it “purposefully avails itself of the
privilege of conducting activities within the forum state, thus invoking the benefits
and protections of its laws.” Id. Thus, the defendant’s activities “must justify a
conclusion that the defendant could reasonably anticipate being called into a Texas
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court.” Id. Courts consider three factors when determining whether a defendant
purposefully availed itself of the privilege of conducting activities in Texas:
First, only the defendant’s contacts with the forum are relevant, not the
unilateral activity of another party or a third person. Second, the
contacts relied upon must be purposeful rather than random, fortuitous,
or attenuated. . . . Finally, the defendant must seek some benefit,
advantage or profit by availing itself of the jurisdiction.
Id. (quoting Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 151 (Tex.
2013)).
A defendant’s contacts may give rise to general or specific jurisdiction. Id.
General jurisdiction, which is not at issue in this case, is established by continuous
and systematic contacts with a state. Id. Specific jurisdiction exists when the cause
of action arises from or is related to a defendant’s purposeful activities in the state.
Id. For a Texas court to exercise specific jurisdiction over a defendant, “(1) the
defendant’s contact with Texas must be purposeful, and (2) the cause of action must
arise from those contacts.” Id. When analyzing specific jurisdiction, we focus on the
relationship between the forum, the defendant, and the litigation. Id.
B. Purposeful Availment
The touchstone of jurisdictional due process is “purposeful availment.”
Luciano v. SprayFoamPolymers.com, LLC, 625 S.W.3d 1, 9 (Tex. 2021) (cleaned
up). There must be “some act by which the defendant purposefully avails itself of
the privilege of conducting activities within the forum State, thus invoking the
benefits and protections of its laws.” Id. Where the defendant has “deliberately”
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engaged in significant activities within a state, he “manifestly has availed himself of
the privilege of conducting business there.” Id. (quoting Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475–76 (1985) (cleaned up)). And because such activities
are shielded by the “benefits and protections” of the forum’s laws, it is
“presumptively not unreasonable to require him to submit to the burdens of litigation
in that forum as well.” Id. (quoting Rudzewicz, 471 U.S. at 476).
When assessing minimum contacts, we look only to the defendant’s contacts
with the forum and not the “unilateral activity” of some third party to determine
whether minimum contacts with the state are satisfied. Id. Nor will “fortuitous” or
“attenuated” contacts be relied upon to satisfy the requirements of due process. Id.
Rather, whether due process is satisfied depends upon “the quality and nature of the
activity in relation to the fair and orderly administration of the laws.” Id. (quoting
Int’l Shoe, 326 U.S. at 319).
When a corporation purposefully avails itself of the privilege of doing
business in the forum state, it has “clear notice that it is subject to suit there, and can
act to alleviate the risk of burdensome litigation by procuring insurance, passing the
expected costs on to customers, or, if the risks are too great, severing its connection
with the State.” Id. (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 297 (1980)). A nonresident defendant may “purposefully avoid” a particular
jurisdiction “by structuring its transactions so as neither to profit from the forum’s
laws nor be subject to its jurisdiction.” Id. But “a truly interstate business may not
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shield itself from suit by a careful, but formalistic structuring of its business
dealings.” Id.
“The stream-of-commerce doctrine is a useful tool to conceptualize minimum
contacts in product liability cases.” Id. Its utility derives from the recognition that
specific jurisdiction over nonresident manufacturers is often premised on “indirect”
sales by independent distributors or agents. Id. But a seller’s awareness “that the
stream of commerce may or will sweep the product into the forum State does not
convert the mere act of placing the product in the stream into an act purposefully
directed toward the forum State.” Id. at 9-10. Texas courts require “additional
conduct” evincing “an intent or purpose to serve the market in the forum State,”
whether directly or indirectly. Id. at 10 (cleaned up). Evidence of such additional
conduct may include advertising in the forum state, soliciting business through
salespersons, or creating, controlling, or employing the distribution system that
brought the product into the forum state. Id.
While “a nonresident need not have offices or employees in a forum state” to
purposefully avail itself of the forum, the operation of a sales and distribution
network or directing marketing efforts to the forum state in the hope of soliciting
sales may render a nonresident subject to the state’s jurisdiction in disputes arising
from that business. Id. (cleaned up).
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C. Burden Shifting
In a challenge to personal jurisdiction, the plaintiff and the defendant bear
shifting burdens of proof. Bell, 549 S.W.3d at 559. The plaintiff bears the initial
burden to plead sufficient allegations to bring the nonresident defendant within the
reach of Texas’s long-arm statute. Id. The plaintiff “must meet its initial burden on
a special appearance by pleading, in its petition, sufficient allegations to invoke
jurisdiction under the Texas long-arm statute. Steward Health Care Sys. LLC v.
Saidara, 633 S.W.3d 120, 129 (Tex. App.—Dallas 2021, no pet.) (en banc). Once it
has done so, the burden shifts to the defendant to negate all bases of personal
jurisdiction alleged by the plaintiff. Bell, 549 S.W.3d at 559. The defendant can
negate jurisdiction on either a factual or legal basis. Kelly v. Gen. Interior Constr.,
Inc., 301 S.W.3d 653, 659 (Tex. 2010). A defendant negates jurisdiction on a factual
basis by presenting evidence to disprove the plaintiff’s jurisdictional allegations. Id.
“The plaintiff can then respond with its own evidence that affirms its allegations,
and it risks dismissal of its lawsuit if it cannot present the trial court with evidence
establishing personal jurisdiction.” Id. (footnotes omitted). A defendant negates
jurisdiction on a legal basis by showing:
[E]ven if the plaintiff’s alleged facts are true, the evidence is legally
insufficient to establish jurisdiction; the defendant’s contacts with
Texas fall short of purposeful availment; for specific jurisdiction, that
the claims do not arise from the contacts; or that traditional notions of
fair play and substantial justice are offended by the exercise of
jurisdiction.
Id.
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ANALYSIS
A. Pleading Sufficient Jurisdictional Allegations
LG Chem, a foreign corporation with its principal place of business in South
Korea, is a nonresident defendant. Accordingly, Tullis had the initial burden of
pleading sufficient allegations to permit a court to exercise personal jurisdiction over
the company. “This minimal pleading requirement is satisfied by an allegation that
the nonresident defendant is doing business in Texas or committed tortious acts in
Texas.” Saidara, 633 S.W.3d at 126. To meet his burden, Tullis pleaded that LG
Chem placed its products, including its 18650 batteries, into the stream of commerce
with the expectation and intent that the batteries would be sold in Texas, and the
company’s 18650 batteries were sold in Texas. Further, Tullis alleged, he was
injured by one of LG Chem’s defectively designed and manufactured 18650
batteries that he purchased in Texas when it exploded. We conclude these allegations
are sufficient to meet Tullis’s minimal initial pleading burden. See id.
B. Purposeful Availment
LG Chem then bore the burden to negate all bases of jurisdiction alleged by
Tullis. See Bell, 549 S.W.3d at 559. LG Chem does not deny that it has contacts with
Texas; rather, LG Chem denies that it has ever sought to serve a Texas consumer
market for standalone batteries. LG Chem acknowledges it manufactures 18650
power cells for use in specific applications by sophisticated manufacturers, but
argues that, “[a]t most, LG Chem manufactured and placed into the stream of
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commerce a cell that eventually reached Texas and Tullis as a standalone consumer
battery because of the unilateral acts of third parties.”
LG Chem’s only evidence supporting its special appearance is Shin’s
affidavit. While Shin averred that LG Chem manufactures lithium-ion “power cells
for use in specific applications by sophisticated companies” and the batteries are not
designed or manufactured as standalone batteries for sale to individual consumers,
he did not deny that LG Chem manufactured and distributed the 18650 batteries to
Texas customers for some applications. The documents produced during
jurisdictional discovery confirm that LG Chem shipped its 18650 batteries into
Texas, it sold its 18650 batteries to at least ten Texas customers, and its sales to
Texas customers produced several million dollars in revenue for LG Chem during
the preceding eight years. Accordingly, Tullis’s undisputed jurisdictional allegations
and the evidence show that LG Chem sold batteries of the type that allegedly injured
Tullis to customers in Texas, did so for many years, and earned millions of dollars
in revenue from those sales. See Morgan, 2020 WL 7349483, at *7. Although LG
Chem did not sell the 18650 battery that injured Tullis directly to him and, based on
the evidence, did not intend to serve a consumer market in Texas, when a foreign
manufacturer “specifically targets Texas as a market for its products,” as LG Chem
did, “that manufacturer is subject to a product liability suit in Texas based on a
product sold here, even if the sales are conducted through a Texas distributor or
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affiliate.” Id. at *9 (quoting Spir Star AG v. Kimich, 310 S.W.3d 868, 874 (Tex.
2010)).
LG Chem argues that jurisdiction does not exist over a nonresident that merely
places a product into the stream of commerce with an awareness that the product
could move into the forum state, which is what happened in this case. We disagree
with LG Chem’s analysis. Tullis provided evidence of more than just a few isolated
sales from LG Chem to Texas companies. Tullis’s evidence shows LG Chem has
shipped batteries to at least ten companies in Texas, shipped batteries into Texas for
at least eight consecutive years, and earned several million dollars in revenue from
those shipments. The evidence demonstrates that LG Chem’s batteries did not
fortuitously end up in Texas after being placed in the stream of commerce; the
evidence shows LG Chem purposefully engaged in business in the Texas market.
LG Chem had more than mere knowledge that its products could end up in Texas —
LG Chem itself shipped the products to Texas. See Hause, 2022 WL 5241787, at *9
(citing Semperit, 508 S.W.3d at 582 (noting the manufacturer’s contacts went
beyond foreseeability that its products would be used in Texas because it actually
shipped those products to Texas)). LG Chem did more than place its product into the
stream of commerce.
LG Chem argues throughout “that its contacts do not evince purposeful
availment of the e-cigarette or vaping industry or the market for standalone
consumer batteries in Texas.” Id. at *10 (citing Kelly, 301 S.W.3d at 658–59). “This
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nuance is not relevant for jurisdictional purposes because the longstanding inquiry
is whether LG Chem targeted the Texas market, not whether it targeted the market
in a particular industry.” Id. (citing Bristol-Myers Squibb Co. v. Superior Court of
California, San Francisco Cnty., ––– U.S. ––––, 137 S.Ct. 1773, 1779, 198 L.Ed.2d
395 (2017) (“The primary focus of our personal jurisdiction inquiry is the
defendant’s relationship to the forum State.”); Moki Mac, 221 S.W.3d at 575
(personal jurisdiction is proper when a defendant establishes minimum contacts with
the forum state)).
The undisputed evidence shows LG Chem deliberately engaged in significant
activities in Texas and purposefully availed itself of the privileges of conducting
business in Texas, thus invoking the benefits and protections of Texas law. By
purposefully availing itself of the privilege of doing business in Texas, LG Chem
had clear notice it would be subject to suit in the state.
C. Arise from or Relate to
For specific jurisdiction, LG Chem’s alleged liability must arise from or be
related to its purposeful contacts with the state; that is, there must be a substantial
connection between the company’s forum-state contacts and the underlying
litigation. See Spir Star, 310 S.W.3d at 872; Moki Mac, 221 S.W.3d at 585. When
considering whether the substantial connection requirement is met in this case, we
separate LG Chem’s jurisdictional arguments from its arguments on the merits. See
Hause, 2022 WL 5241787, at *12. LG Chem argues it only sells its battery cells to
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“sophisticated” manufacturers and not to individual consumers for use in electronic
cigarettes or vaping devices, and Shin’s affidavit states that LG Chem manufactures
the 18650 power cells “for use in specific applications by sophisticated
manufacturers.” “LG Chem has embellished its argument with nuances that pertain
to the merits of a products liability case.” Id. (citing Morgan, 2020 WL 7349483, at
*10 (stating the same)). “That a consumer abuses a defendant’s product by using it
in an application it was not designed for or in a manner the defendant did not intend,
thereby causing injury, is not jurisdictionally relevant.” Id. (citing Bell, 549 S.W.3d
at 560 (“Jurisdiction cannot turn on whether a defendant denies wrongdoing—as
virtually all will.”)). Rather, so long as the nonresident defendant targets the forum
market for the precise product at issue in the litigation, the defendant is subject to
jurisdiction for any claims arising out of or related to its sale of the allegedly
defective products. Id. (citing Ford Motor Co. v. Montana Eighth Judicial Dist.
Court, 141 S. Ct. 1017, 1027 (2021)).
As discussed above, LG Chem does not deny it placed 18650 batteries, the
type of battery that allegedly injured Tullis, into the stream of commerce with the
expectation and intent that the batteries would be sold in Texas, and the company’s
products were sold in Texas. LG Chem fostered a market for its lithium-ion batteries
in Texas, which is the precise product at issue in this case. See Hause, 2022 WL
5241787, at *11. Tullis’s claim that these batteries are defective, which caused his
vaping device to explode and injure him, is “related to a defendant’s contacts where
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the defendant serves a market for the allegedly defective products in the forum state.
Id. (discussing Ford, 141 S.Ct. at 1027). “That is, where the defendant serves a
market for allegedly defective products in a forum state and a plaintiff sues for injury
related to the defect, jurisdiction over the defendant is proper.” Hause, 2022 WL
5241787, at *11 (discussing Ford, 141 S.Ct. at 1027).
We conclude the substantial-connection requirement also is met in this case.
D. Fair Play and Substantial Justice
Because LG Chem’s Texas contacts support jurisdiction, the next inquiry is
whether jurisdiction is consistent with traditional notions of fair play and substantial
justice. Spir Star, 310 S.W.3d at 878. However, LG Chem does not raise any
argument that a trial court exercising jurisdiction would offend traditional notions of
fair play and substantial justice. See Spir Star, 310 S.W.3d at 878–79 (party must
present “a compelling case that the presence of some consideration would render
jurisdiction unreasonable” to defeat jurisdiction). Accordingly, any argument LG
Chem could have raised has been waived. See Morgan, 2020 WL 7349483, at *13
(concluding LG Chem waived argument that asserting jurisdiction would offend
traditional notions of fair play and substantial justice by not arguing the issue).
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CONCLUSION
We overrule LG Chem’s sole issue, and we affirm the trial court’s order
denying LG Chem’s special appearance.
/Erin A. Nowell//
ERIN A. NOWELL
JUSTICE
211056f.p05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
LG CHEM, LTD., Appellant On Appeal from the 193rd Judicial
District Court, Dallas County, Texas
No. 05-21-01056-CV V. Trial Court Cause No. DC-19-05481.
Opinion delivered by Justice Nowell.
CHRISTOPHER W. TULLIS, Justice and Smith participating.
Appellee
In accordance with this Court’s opinion of this date, the trial court’s
November 12, 2021 Order overruling LG Chem, Ltd.’s special appearance is
AFFIRMED.
It is ORDERED that appellee Christopher W. Tullis recover his costs of this
appeal from appellant LG Chem, Ltd.
Judgment entered this 16th day of November 2022.
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