EL PASO, Texas—An El Paso state appeals court has ruled it has jurisdiction over Michelin North America Inc. in a product liability case involving a used Uniroyal tire originally sold as a new tire in Texas.
However, Michelin said it is confident that its position is correct, and it is evaluating avenues of appeal.
The case began July 24, 2015, when Brenda Lopez de Santiago allowed Pedro Arambula Meraz to drive her 2002 Honda CR-V on a road in Ciudad Juarez, Mexico, just across the border from El Paso.
A Uniroyal Tiger Paw Freedom tire, built in Kitchener, Ontario, in 2005, was the right back tire on the vehicle. It failed, causing the vehicle to roll over. Lopez's daughter Eileen was killed, and Lopez and Arambula were injured in the accident, which occurred in Mexico.
Lopez sued both Arambula and Michelin in an El Paso state district court, claiming negligence and product liability against the tire maker.
In its defense, Michelin noted that the tire already was used when Lopez bought the car in 2014. It argued that because an intervening retail customer removed the tire from the stream of commerce and sold the tire again before it ended up on the vehicle Lopez purchased and later allowed to driven in Mexico where the accident occurred, the state courts had no jurisdiction over Michelin.
The district court ruled against Michelin, and in her June 27 decision Judge Yvonne T. Rodriguez of the Court of Appeals for the Eighth District of Texas upheld the lower court.
"We are unconvinced by Michelin's stream-of-commerce argument and will not today adopt a per se rule holding that intervening retail sales necessarily cut off downstream personal jurisdiction in previous liability cases," Rodriguez wrote.
While no general jurisdiction exists against Michelin in this case, the fact that the new tire was originally sold in Texas gives state courts specific jurisdiction against the tire maker, according to Rodriguez.
"Michelin failed to refute the plaintiff's claim that the original tire sale took place in Texas, and the secondary sale here arose from and (was) related to that Texas-based initial sale," she wrote.
A Michelin spokeswoman said the company was evaluating its options based on the court's decision.
"Michelin North America remains confident in its position on this matter, based on our belief that certain aspects of the law remain unclear," she said.