In a pair of decisions issued in June 2025, the Texas Supreme Court reaffirmed a critical principle for businesses operating across state lines: a company must specifically target Texas in order to be subject to a lawsuit in Texas courts under the state’s long-arm jurisdiction statute.
This clarification has major implications for out-of-state companies—especially those in manufacturing, distribution, and e-commerce—that do business nationwide but don’t directly market or sell in Texas.
⚖ The Decisions: Hyundam and Rotax
In Hyundam Industrial Co. v. Swacina and BRP-Rotax GmbH v. Shaik, the Court held that Texas courts lacked specific personal jurisdiction over foreign manufacturers whose products ended up in Texas—but only through indirect distribution channels and without any intentional conduct targeting the Texas market.
The Court emphasized that foreseeability alone is not enough. Even if a company knows its products might reach Texas, that does not constitute “purposeful availment” under Texas law.
This standard is part of the so-called “stream-of-commerce-plus” test: to be sued in Texas based on conduct elsewhere, a company must take additional actions that show an intent to serve the Texas market specifically.
🔍 Key Takeaways for Businesses and Litigation Counsel
- Nationwide sales ≠ Texas jurisdiction: Just because a company does business throughout the U.S. does not mean it is automatically subject to suit in Texas.
- “Targeting Texas” is essential: Courts look for intentional actions—like marketing to Texas customers, contracting with Texas-based agents, or maintaining a presence in the state.
- Independent distributors don’t create jurisdiction: The Court rejected attempts to impute the actions of third-party distributors to the foreign manufacturer.
- Foreseeability is not enough: Knowing that your product might end up in Texas is insufficient to establish jurisdiction without additional conduct.
- State vs. federal split: As Justice Busby noted in his concurring opinion, Texas state courts apply a stricter jurisdictional test than federal courts in Texas, which could lead to inconsistent outcomes depending on the forum.
🛡 Why This Matters: Defending Against Improper Jurisdiction in Texas
At Palter Sims Martinez PLLC, our commercial litigation practice includes advising businesses—both inside and outside Texas—on how to navigate the state’s jurisdictional rules. We regularly represent companies that are:
- Doing business across the U.S. but not directly in Texas
- Named in Texas lawsuits based on indirect or third-party sales
- Seeking to challenge jurisdiction in Texas courts under Rule 120a
We understand the strategic, procedural, and substantive issues involved in contesting personal jurisdiction—and we know how to build the record to support a strong special appearance defense.
If you’ve been sued in Texas but don’t have a meaningful presence here, we can help assess whether the Texas long-arm statute applies and whether your company should be subject to litigation in the state.
📈 Questions Palter Law Group Can Help You Answer
- “Can I be sued in Texas if my company doesn’t do business there?”
- “Does selling products nationwide expose my company to lawsuits in Texas?”
- “What does it mean to “target the Texas market” for jurisdictional purposes?”
- “How do Texas courts apply the stream-of-commerce-plus test?”
- “What are the limits of the Texas long-arm statute for out-of-state businesses?”
💼 Contact Us
Based in Dallas-Fort Worth and representing clients across Texas, Palter Sims Martinez PLLC offers experienced, strategic counsel in complex commercial disputes—including jurisdictional challenges.
If your company is facing litigation in Texas or wants to better understand how to avoid being sued here, contact our office today.