In re Tangshan Chenyang Sports Equip. Co.

1

IN RE TANGSHAN CHENYANG SPORTS EQUIPMENT CO. LTD., Relator

No. 14-22-00370-CV

Court of Appeals of Texas, Fourteenth District

May 4, 2023

ORIGINAL PROCEEDING WRIT OF MANDAMUS 189th District Court Harris County, Texas Trial Court Cause No. 2019-50841

Panel consists of Chief Justice Christopher and Justices Wise and Jewell.

MEMORANDUM OPINION

PER CURIAM.

On May 26, 2022, relator Tangshan ChenYang Sports Equipment Co. Ltd. ("ChenYang") filed a petition for writ of mandamus in this court. See Tex. Gov't Code § 22.221; see also Tex. R. App. P. 52. In the petition, ChenYang asks this court to compel the Honorable Tamika Craft-Demming, presiding judge of the 189th District Court of Harris County, to vacate her February 7, 2023 order granting real party in interest Karl Van Davis's motion to compel jurisdictional discovery.^[1] We conditionally grant the petition.

Background

Van Davis was employed by Intergulf Corporation as a truck driver. On June 28, 2019, while Van Davis's truck was being unloaded at KM Liquids Terminals LLC, Van Davis went to the waiting room. As Van Davis was sitting down in a chair the chair's legs collapsed, and Van Davis fell to the ground. Van Davis alleges severe injuries to his back, knee ankle, and body in general.

Van Davis sued KM, which, in turn, filed a third-party petition against ChenYang, Belnick, LLC d/b/a Flash Furniture Corporation, and Staples, Inc. ChenYang manufactured the chair. Belnick purchased the chair from ChenYang and sold it to Staples. KM subsequently purchased the chair online from Staples. Van Davis then sued ChenYang, Beknick, and Staples for negligence and strict product liability.

On August 13 2021, ChenYang filed a special appearance requesting that the trial court dismiss all claims against it for lack of personal jurisdiction. In support of its special appearance, ChenYang attached the declaration of Yvan Yu, the executive sales manager for ChenYang. Yu declared the following:

3. Tangshan ChenYang is organized and exists under the laws of the country of China.

4. Tangshan ChenYang's principal place of business and headquarters is located in Tangshan, Hebei, China.

5. Tangshan ChenYang does not have any offices in the State of Texas or the United States of America.

6. Tangshan ChenYang does not provide any services or produce or sell any products in the State of Texas or the United States of America.

7. Tangshan ChenYang does not have any employees, or officers or directors in the State of Texas or the United States of America.

8. Tangshan ChenYang does not own, lease, or rent real property in the State of Texas or the United States of America.

9. Tangshan ChenYang does not maintain business records in the State of Texas or the United States of America.

10. Tangshan ChenYang does not maintain a mailing address or a telephone or fax number in the State of Texas or the United States of America.

11. Tangshan ChenYang does not maintain a physical address in the State of Texas or the United States of America.

12. Tangshan ChenYang does not maintain a bank account in the State of Texas or the United States of America.

13. Tangshan ChenYang does not have any assets in the State of Texas or the United States of America.

14. Tangshan ChenYang is not registered or licensed to do business in the State of Texas or any other state in the United States of America.

15. None of Tangshan ChenYang's employees, officers, or directors have traveled to the State of Texas for work purposes or within the scope of their business responsibility for Tangshan ChenYang.

16. Tangshan ChenYang does not specifically advertise or market products or services in the State of Texas.

17. Tangshan ChenYang has never applied for, guaranteed, or cosigned for a loan in the State of Texas or the United States of America.

18. Tangshan ChenYang does not directly produce, manufacture, design, or sell any products in the United States, and thus has never itself produced, manufactured, designed, or sold any products in the State of Texas.

19. The product at issue (Item no. BD-F002-BK-GG) in the above-captioned lawsuit was manufactured in Tangshan, China.

20. The contract between Tangshan ChenYang and Belnick, LLC concerning the sale of the product at issue in the above-captioned lawsuit was not negotiated in the State of Texas (the "Contract"). A true and correct copy of the Contract, with ChenYang's Industrial and Commercial Bank of China Account No. and SWIFT Code redacted, is attached hereto as Exhibit A.

21. The product at issue in the above-captioned lawsuit was delivered to Belnick, LLC FOB Tianjin, China pursuant to the Contract.

22. Tangshan ChenYang did not ship the product at issue in the above-captioned lawsuit outside of China. The product was received by a forwarder in Tianjin who then shipped the product at Belnick, LLC's direction.

23. Under the Contract, Tangshan ChenYang is paid in Chinese Yuan Renminbi (CNY), and payment is made to Tangshan ChenYang's account with the Tianjin branch of the Industrial and Commercial Bank of China.

On August 17, 2021, Van Davis advised ChenYang that he wanted to take the deposition of its corporate representative. After receiving no response from ChenYang, Van Davis sent another request on August 26, 2021. ChenYang responded the next day that (1) requests for depositions of Chinese citizens must be accomplished through the Chinese Central Authority under the Hague Evidence Convention; and (2) many of the topics identified by Van Davis had been addressed in Yu's declaration, thereby rendering the deposition unnecessary.

On August 30, 2021, Van Davis filed a motion to compel the deposition of ChenYang's corporate representative and motion for continuance. On September 9, 2021, Chen Yang responded that Van Davis had never served a notice of oral deposition with a list of topics or location on ChenYang. ChenYang further argued that Van Davis had not shown that he is entitled to jurisdictional discovery or identified any information relevant to jurisdiction or any deficiencies in Yu's declaration. On September 23, 2021, the trial court signed the order denying Van Davis's motion to compel the deposition of ChenYang's corporate representative and motion for continuance.

In the meantime, on August 23, 2021, Van Davis served 137 discovery requests comprised of 99 requests for admission, 28 requests for production, and 10 interrogatories on ChenYang. On September 22, 2021, ChenYang responded to the discovery requests and objected that each discovery request sought information outside the scope of jurisdictional discovery.

On November 29, 2021, Van Davis responded to ChenYang's August 13, 2021 special appearance, arguing the trial court has general jurisdiction over ChenYang because of its continuous and systematic contacts with Texas, which include the following:

i. [ChenYang's] business covers the United States from which they welcome business negotiations;

ii. [ChenYang's] business partners include major U.S. companies that do business in Texas;

iii. [ChenYang's] annual production of folding chairs is 1,700,000 units, with the highest ever being 2,800,000 units; and

iv. [ChenYang's] total annual revenue is above U.S. $100 million, with 60% of that coming from North America.

With respect to specific jurisdiction, Van Davis asserted that ChenYang's contacts with Texas are substantially connected to the alleged operative facts of this case because:

i. [ChenYang] has requested that it appear in this case; [and]

ii. [the] incident made the basis of this suit occurred in Texas.

Van Davis also requested that the special appearance hearing be continued in order to conduct jurisdictional discovery. Van Davis complained that ChenYang had objected to all of his written discovery.

On December 6, 2021, the trial court held a hearing on ChenYang's special appearance. Van Davis asked the trial court to reconsider its ruling on the deposition of ChenYang's corporate representative. The trial court granted Van Davis's motion to continue the special appearance hearing and reversed its prior ruling on the deposition of ChenYang corporate representative and, instead, ordered that Van Davis could take the deposition on the issue of personal jurisdiction.

On February 4, 2022, ChenYang filed its motion for reconsideration and clarification. ChenYang argued that Van Davis's request to reconsider the September 23, 2021 ruling was procedurally improper because he did not (1) separately brief the request for reconsideration but raised the issue in an amended reply; (2) properly notice a hearing or provide ChenYang the opportunity to respond; and (3) he did not meet the standard for conducting jurisdictional discovery. Alternatively, ChenYang requested that the court ensure Van Davis's compliance with Texas rules and observance of the process mandated under the Hague Convention. On March 29, 2022, the trial court signed an order clarifying its prior December 6, 2021 order granting Van Davis's motion to compel the deposition of ChenYang's corporate representative by instructing Van Davis to comply with the Hague Convention.^[2]

On April 19, 2022, Van Davis filed a motion to compel ChenYang's responses to the written discovery. Van Davis complained that ChenYang was attempting to limit discovery by refusing to supplement or answer his discovery requests regarding his "claims" and/or ChenYang's "defenses[.]"

On April 28, 2022, ChenYang responded to Van Davis's motion to compel responses to the written discovery by pointing out that Van Davis's motion did not address the standard for discovery on personal jurisdiction. On May 2, 2022, the trial court signed the order granting the motion to compel responses to the written discovery.^[3]

ChenYang originally...