The Texas Supreme Court will soon decide if a woman who was injured in a plane crash in Addison can haul an Austrian manufacturer of aircraft engines into Texas court.
The state’s high court heard oral arguments Wednesday morning in the lawsuit brought by Sheema Shaik against BRP-Rotax GmbH that asks it to determine whether Texas courts have specific jurisdiction over a foreign manufacturer based on an allegedly defective engine.
BRP-Rotax has maintained any contacts with Texas were initiated by its distributor, Kodiak, and that it maintained no control of ownership over that entity. But Shaik argues — and the trial court and intermediate appellate court agreed — that the distribution agreement shows an intent to serve the Texas market, establishing jurisdiction.
“Under the Court of Appeals’ opinion, a foreign manufacturer need only place its product into the stream of commerce, without specifically targeting the Texas market, to justify exercise of jurisdiction over it in Texas,” Wallace Jefferson of Alexander Dubose and Jefferson, who represents BRP-Rotax, told the court at the beginning of his statements Wednesday. “That has never been, and cannot be, the law.”
Shaik was injured in March 2018 when the Piper Sport airplane she was a passenger in took off from an airport in Addison, Texas, allegedly suffered engine failure and crashed shortly after takeoff. She suffered a traumatic brain injury, severe burns and multiple bone fractures, including to both legs.
She and her husband, Touseef Siddiqui, who witnessed the crash, filed suit against the Czech Republic company that designed and manufactured the aircraft, Piper, which sold and marketed the aircraft, and Austrian company BRP-Rotax, which designed and manufactured the engine that was installed in the aircraft.
The couple brought claims for negligence, gross negligence and product liability.
BRP-Rotax filed a special appearance, alleging Texas courts had no jurisdiction over it. The company’s general manager told the court in a declaration that BRP-Rotax sold its engines to independent distributors outside of Texas and didn’t maintain control over, or have any knowledge of, who the ultimate end-user or purchaser would be or where the engine would end up.
On the first page of a bench exhibit BRP-Rotax filed with the Texas Supreme Court, a flow chart shows the history of the engine central to this dispute: it was manufactured in Austria, sold to Kodiak, in Austria, then sold to Lockwood Aviation Supply in the Bahamas, then sold to Excite Aircraft in Florida and finally was installed in the Piper aircraft in Texas that later crashed with Shaik onboard.
The trial court denied the special appearance in Nov. 2022 and the Dallas Court of Appeals affirmed that ruling in August 2023, according to court documents.
The Dallas appellate court found BRP-Rotax had enough contacts with Texas under the “stream-of-commerce-plus” test to allow the litigation against it to proceed here.
Justice Craig Smith authored the panel opinion, joined by Justices Ken Molberg and Cory L. Carlyle, and pointed specifically to a 2001 distribution agreement between Kodiak and BRP-Rotax, showing it was one of 15 distributors for BRP-Rotax engines worldwide, assigned a territory including the United States, Central America and South America, and was required to “promote and distribute the engines or service its customers in its assigned territory” or risk having another distributor assigned to the territory.
The deal also required Kodiak to submit annual financial statements and monthly sales and inventory reports to BRP-Rotax. And BRP-Rotax’s website linked visitors to certified service and repair centers where “Rotax-trained” mechanics could assist them. One such facility is in Bulverde, Texas, about 30 miles north of downtown San Antonio.
The website for that service and repair center, Texas Rotax and Light Sport Aircraft, tells visitors it is an official Rotax Independent Repair Center.
The Dallas Court of Appeals likened this contact with Texas to what the Texas Supreme Court found established jurisdiction in its June 2021 opinion in Luciano v. SprayFoamPolymers.com.
“As to the specific Rotax engine at issue in this case, the special appearance evidence shows that BRP-Rotax, through Kodiak and its South Texas repair center, served a market in Texas for the very engine that appellees alleged malfunctioned and caused them injury in this state,” the panel wrote. “BRP-Rotax’s assertion that it ‘did not create, control or employ’ the distribution system that brought its product to Texas is not supported by the record. BRP-Rotax required its distributors to market and sell its engines in their assigned territories to BRP-Rotax’s satisfaction or risk being pulled from the territory or having another distributor brought in to share the territory.”
“Although BRP-Rotax may not have micromanaged each decision made by Kodiak to market, sell, and maintain BRP-Rotax engines in the United States, BRP-Rotax directed and indeed contracted with Kodiak to do just that.”
Justice Jane Bland asked Jefferson to distinguish his argument from the Texas Supreme Court’s 2023 opinion in Texas v. Volkswagen Aktiengellschaft, where the court found a foreign company need not “single out Texas in a unique way” to establish specific jurisdiction. Jefferson said the distribution agreement in that case makes all the difference.
The manufacturer, he said, has to have control over the product to establish jurisdiction in Texas.
“In Volkswagen … it controlled aspects of the distribution that related particularly to the cause of action plaintiffs asserted in that case,” he said. “That’s the sort of control we’re talking about, which doesn’t exist in any form or fashion here.”
Jefferson also argued the distribution agreement has no relevance to the jurisdictional question because his client did not control how Kodiak would go about advertising the products and did not instruct Kodiak to launch the service center in Texas.
Justice Jeff Boyd asked Jefferson a series of questions aimed at discerning whether any state in the country would have personal jurisdiction over BRP-Rotax under the facts of this case. Jefferson said the answer would be no. Broadening the question, Justice Boyd asked whether any country in the world, assuming for argument they had the same laws, would have personal jurisdiction over BRP-Rotax.
Again, Jefferson answered no.
“There would have to be specific targeting of a specific country. … That’s not to say plaintiffs have no remedy,” he said, arguing Chapter 82 of the Texas Civil Practice and Remedies Code would provide an avenue.
Shannon Turner Hays of Payne Mitchell Ramsey Law Group, who represents Shaik and Siddiqui, told the court there are “several direct contacts” between BRP-Rotax and Texas, including that the distributor agreement required Rotax give permission to Kodiak to use its trademarks in operating the Bulverde service center, and that BRP-Rotax’s website connects Texas customers with the Texas Rotax and Light Sport Aircraft repair center in Bulverde.
“Per their scheme, they don’t want to have jurisdiction anywhere. You can see how many stops this engine made,” she said of the series of sales and resales of the engine before it ended up in Texas.
BRP-Rotax is also represented by James “Jamie” Parker Jr. and Jackie Robinson of Naman Howell Smith & Lee and Ralph Pagano of Fitzpatrick, Hunt & Pagano.
Shaik and Siddiqui are also represented by Andrew L. Payne of Payne Mitchell Ramsey Law Group.
The case number is 23-0756.