It is not unusual to face a situation where a product implicated in a loss is manufactured by a foreign defendant. Typically, the product has been manufactured in another country and distributed by a domestic company or otherwise sold by a domestic retailer. In such situations there can be a reluctance to pursue the foreign defendant given the expense and uncertainty of actually naming and serving the foreign entity. To effectively serve a foreign defendant, a claimant must have the complaint translated and then formally served (usually via The Hague Convention). There are of course third-party vendors that can handle the translation and service of the complaint but again, this process can be expensive and time-consuming.
Under Texas product liability law, a “seller” of a product is generally not responsible for damages caused by the product unless one of the statutorily mandated exceptions apply. One such exception exists for manufacturers who are “not subject to the jurisdiction of the court.” If a claimant can establish that the manufacturer of the product suspected of causing damages is not subject to the jurisdiction of the court, the seller can be liable for the harm caused to the claimant by that product. In order to establish that a nonresident manufacturer is not subject to the jurisdiction of the court, the manufacturer must fail to answer the complaint after being served through the Texas secretary of state consistent with the Texas Civil Practice and Remedies Code’s provisions pertaining to service on non-resident defendants. Once service is perfected on the secretary of state and the foreign manufacturer fails to answer or otherwise make an appearance in the time required by law, it is conclusively presumed that the foreign manufacturer is not subject to the jurisdiction of the court unless the seller is able to secure personal jurisdiction over the manufacturer in the action. If the seller cannot secure personal jurisdiction over the foreign defendant, it can be liable for the claimant’s damages.
When handling a loss in Texas where a product manufactured by a foreign defendant is implicated, a claimant would be wise to assess whether the seller or distributor is a sufficient target to pursue. If it is, the claimant should serve the foreign defendant via the Texas secretary of state and if the foreign manufacturer fails to answer, the seller or distributor can be liable for the damages sustained unless it can secure personal jurisdiction over the product manufacturer. Such an approach effectively shifts the burden to secure jurisdiction over the foreign manufacturer to the seller and allows the claimant to potentially avoid the expense and headache involved with personally serving a foreign manufacturer.