SCOTX’s recent opinion in BRP-Rotax GmbH Co. KG v. Shaik (No. 23-0756; June 20, 2025) continues to make the rounds in the intermediate courts of appeal.
THD S.p.A. v. Jeffry Allen Pegg and Jennifer Pegg (No. 02-24-00490-CV; July 31, 2025) arose from alleged injuries suffered by Plaintiff Jeffry Pegg when his bowel was perforated during hemorrhoid surgery. The injury to his bowel led to significant complications, requiring hospitalization and additional surgery. Plaintiff and his wife filed health care liability claims against the surgeon and other providers. They also sued THD S.p.A., an Italian corporation, and THD America, an Iowa company, for product liability. THD America answered, but THD S.p.A. filed a special appearance denying Plaintiffs’ jurisdictional allegations, which were based on a stream-of-commerce-plus theory. After a hearing, the trial court denied the special appearance. THD S.p.A. sought interlocutory relief.
In an opinion by Justice Kerr, the court of appeals reversed and rendered in favor of THD S.p.A. The company asserted that it lacked sufficient minimum contacts with Texas and did not purposefully avail itself of the Texas market and that the trial court’s exercise of jurisdiction did not comport with traditional notions of fair play and substantial justice. Citing SCOTX’s recent opinion in BRP-Rotax, the court observed that in product liability cases, the stream-of-commerce plus test “requires a defendant to specifically target Texas; it is not enough that a defendant may foresee some of its products’ eventually arriving here. (citation omitted) Such ‘targeting’ must be shown beyond ‘merely passive awareness of a likelihood—even a substantial likelihood verging on certainty—that products may eventually arrive in our state” (citation omitted).
The court determined that THD S.p.A.’s met its burden to negate Plaintiffs’ jurisdictional allegations. conduct fell short of anything beyond merely “foreseeing” that their product could end up in Texas. The evidence showed that THD S.p.A. a foreign corporation, had never done business in Texas, had no contracts in Texas, did not maintain a regular place of business in the state, did not have a registered agent, address, or telephone number in Texas, had no Texas employees, had never paid taxes in Texas, and never owned or leased by real property here. Plaintiffs’ countered with evidence of (1) distribution agreement and marketing materials, (2) THD S.p.A.’s receipt and use of THD America’s daily sales reports, and (3) a few common officers and board members between THD American and THD S.p.A.
The court found that THD S.p.A. did not specifically target Texas through a distribution system with THD America that it controlled to bring its medical devices to Texas. The distribution agreement said nothing about Texas, only that it focused on the entire U.S. market. None of the marketing materials, product labeling, storage, or recalls had anything to do with targeting the Texas market or Texas doctors, hospitals, or patients. And none of the regulatory filings or communications with the FDA mentioned Texas or any specific contacts with Texas. Additionally, THD America’s conduct indicating that it targeted Texas cannot be attributed to THD S.p.A. Similarly, the fact that THD America had two Texas-specific sales people to distribute the product at most showed that THD S.p.A. was aware that THD America was selling products in Texas. Plaintiffs failed to adduce any evidence showing the percentage of THD America’s sales in Texas as compared to the U.S. as a whole, nor any evidence of how THD S.p.A. used the sales reports submitted to it by THD America. In short, Plaintiffs presented no evidence of purposeful availment of the privilege of conducting business activities in Texas.
As to Plaintiffs’ allegations that the two companies shared common ownership, officers and board members, the court found no evidence that THD S.p.A. actually owned or controlled THD America.THD America was neither a subsidiary of THD S.p.A. nor did THD S.p.A. have any ownership in the company. Plaintiffs’ attempt to prove alter-ego or jurisdictional veil-piercing fell far short of persuading the court to treat them as the same entity for jurisdictional purposes. The court reversed the trial court’s order and dismissed Plaintiffs’ claims against THD S.p.A. for want of personal jurisdiction.
TCJL Intern Satchel Williams researched and prepared the first draft of this article.
