Products Liability Law Reporter

The Supreme Court of Texas held that the state had personal jurisdiction over LG Chem in a case brought by a consumer who was allegedly injured when the 18650 model lithium-ion battery from his e-cigarette exploded in his pocket.

Texas resident Tommy Morgan purchased an 18650 model lithium-ion battery from a Texas store to charge an e-cigarette device that he bought at the same store. The battery, which was allegedly manufactured by South Korean company LG Chem, Ltd., exploded in his pocket, injuring him. He sued LG Chem and LG Chem America, Inc., among others, alleging products liability claims. The LG Chem defendants filed a special appearance, asserting that the court lacked personal jurisdiction. The defendants argued they were not subject to personal jurisdiction in that the plaintiff did not show that his claims arose from or were related to any purposeful contacts between the companies and Texas. Further, the defendants argued, they had not sold or distributed their batteries for use by individual consumers or for e-cigarettes.

The trial court denied both special appearances, and an intermediate appellate court affirmed. The appellate court reasoned that the plaintiff’s claims arose from or related to the defendants’ conduct in designing and marketing its batteries for the Texas market and in selling and distributing to Texas customers. The defendants appealed.

Affirming, the state high court noted that a Texas court may exercise personal jurisdiction over a nonresident defendant where it is authorized by the state’s long-arm statute and comports with federal due process guarantees. The court explained that the Texas long-arm statute allows courts to exercise jurisdiction over defendants who do business in the state and where the defendant has sufficient minimum contacts such that the lawsuit does not offend traditional notions of fair play and substantial justice. Citing case law, the court added that under the stream of commerce plus standard, which applies in Texas, placing a product in the stream of commerce does not establish the requisite purposeful availment unless there is conduct showing an intent to serve the market. Moreover, a plaintiff must demonstrate a substantial connection between the defendant’s contacts and the facts of the litigation.

Applying these principles, the court found that the defendants intended to serve a Texas market for their 18650 lithium-ion batteries. The court rejected the defense argument that jurisdiction was improper based on their targeting of Texas manufacturers, not consumers. The defendants sold and distributed the 18650 lithium-ion batteries in Texas, the court said, and this is the same type of battery that allegedly injured the plaintiff. The exercise of jurisdiction there would not deprive the defendants of due process notwithstanding their alleged failure to anticipate that a claim would be brought by someone outside their intended distribution network, the court noted. The court reasoned that by selling and distributing the batteries in Texas, the defendants had purposefully availed themselves of Texas and enjoyed the benefits of the state’s laws.

Accordingly, the court concluded that the defendants were subject to specific personal jurisdiction in Texas.

Citation: LG Chem Am., Inc. v. Morgan, 2023 WL 3556693 (Texas May 19, 2023).

Plaintiff counsel: AAJ members Deepak Gupta, Neil Sawhney, and Jonathan Taylor, all of Washington, D.C.; AAJ members Jennifer D. Bennett and Angela J. Nehmens, both of San Francisco; and AAJ member A. Craig Eiland, Galveston, Texas.