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LLOG Exploration Co., L.L.C. v. Federal Flange, Inc.

United States District Court, E.D. Louisiana

August 27, 2019

LLOG EXPLORATION COMPANY, L.L.C.
v.
FEDERAL FLANGE, INC., et al.

         SECTION M (4)

          ORDER & REASONS

          BARRY W. ASHE UNITED STATES DISTRICT JUDGE.

         Before the Court is a motion to dismiss for lack of personal jurisdiction filed by third-party defendant Silbo Industries, Inc. (“Silbo”).[1] Third-party defendant and third-party plaintiff CGP Manufacturing, Inc. (“CGP”) opposes Silbo's motion to dismiss, [2] and Silbo replies in further support of the motion.[3] Also before the Court is a motion to dismiss for lack of personal jurisdiction filed by third-party and cross-defendant R.N. Gupta & Company, Ltd. (“Gupta”).[4]CGP and third-party plaintiff Federal Flange, Inc. (“Federal Flange”) oppose Gupta's motion to dismiss, [5] and Gupta replies in further support of the motion.[6] Having considered the parties' memoranda and the applicable law, the Court denies the motions to dismiss for lack of personal jurisdiction. This Court's exercise of specific personal jurisdiction over Silbo and Gupta (collectively “Defendants”) comports with federal due process under the stream-of-commerce doctrine.

         I. BACKGROUND

         This is a products liability case. Plaintiff LLOG Exploration Company, L.L.C. (“LLOG”) is a Louisiana company “engaged in the exploration, development and production of oil and gas.”[7] LLOG operates two wells located off the Louisiana coast on the outer continental shelf in the Gulf of Mexico.[8] In 2014, LLOG purchased four warrantied “6 x 6” target elbows from Federal Flange to install on its wells. The target elbows connected subsea piping at ¶ 90-degree angle and maintained a flow path.[9] While in use, the target elbows cracked due to alleged non-apparent manufacturing defects.[10] LLOG shut down its operations to remove and replace the subsea target elbows which LLOG alleged resulted in millions of dollars of damage.[11]

         The allegedly defective target elbows, originally manufactured as solid tee forgings (also known as shaped forgings or cushion tees, hereinafter “tees”), were imported or possessed by each of the parties in this case prior to LLOG's installing them on its wells. Gupta originally manufactured the tees, traceable by batch heat number H-3501, which were sold by Silbo to CGP, later machined, or hollowed out, by CGP, and then machine finished by Federal Flange into the target elbows at issue.[12] Gupta is a foreign manufacturer and exporter of forgings, flanges, and general engineering component parts, with its principal place of business in Ludhiana, Punjab, India.[13] Gupta's website publicizes that it exports its goods to the United States and that it manufactures forgings for various applications, including oil and gas.[14] Gupta does not limit or restrict where sales or distribution of its products could be made in the United States.[15] While Gupta does not market or advertise to Louisiana, its representatives have visited at least one Louisiana customer on three or four occasions over the course of approximately 20 years.[16] Between 2010 and 2012, Gupta sold approximately $10.2 million of its goods directly to purchasers in Louisiana, including over $2.4 million in sales of tees (or 105, 892 tees), through its U.S. importer, Silbo.[17]

         Silbo is an importer and supplier of “various carbon and stainless-steel pipe, tubing, fittings, forgings, flanges and other steel products.”[18] Silbo is incorporated under the laws of Delaware, with its principal place of business in Montvale, New Jersey.[19] While Silbo sources its products from various foreign manufacturers, Gupta is Silbo's only manufacturer of the tees at issue.[20] Silbo sells goods nationwide and neither limits nor restricts the states to which it direct its sales.[21] Silbo claims that it does not advertise directly to Louisiana, but its representatives visit and call on Louisiana customers on occasion to foster business relationships and attempt to increase sales.[22] Silbo readily admits it has done “substantial business” in Louisiana.[23] Between 2010 and 2012, Silbo sold over $16 million in goods directly to at least six different Louisiana customers, including over $3.6 million in sales of tees (or 121, 586 tees).[24]Although Gupta and Silbo's import-export relationship is non-exclusive, they maintain “a long-term business relationship” and consistently conduct business in Louisiana, [25] including regular distribution to at least one Louisiana customer, which Gupta representatives visited in Louisiana.[26]

         In 2011, Gupta sold a bulk order of tees to Silbo, including the tees from heat number H-3501; Silbo then sold the tees to CGP, a Texas customer and manufacturer.[27] Gupta delivered the tees directly to CGP at its principal place of business in Houston, Texas.[28] In April 2014, Federal Flange ordered four target elbows from CGP, at which time CGP machined the tees bearing heat number H-3501 into target elbows and sold them to Federal Flange.[29] Federal Flange is a supplier and manufacturer of pressure connectors with a principal place of business in Texas.[30]

         In June 2014, Federal Flange machine finished the four target elbows for its customer LLOG.[31] Before delivery, Federal Flange coordinated non-destructive testing on the four target elbows with G&S Non-Destructive Testing (“G&S”) in Houston.[32] After testing, Federal Flange delivered the target elbows to LLOG, which alleges discovering defects in the elbows after their installation on its wells.[33]

         LLOG filed an action against Federal Flange for (1) breaches of express and implied warranties, (2) breach of contract, (3) breach of the Louisiana Products Liability Act, (4) redhibition, (5) negligence, and (6) detrimental reliance.[34] Federal Flange filed a third-party complaint against CGP, G&S, and Gupta for indemnification or contribution.[35] CGP filed a crossclaim against Gupta, and a third-party complaint against Silbo, for indemnification or contribution.[36] LLOG settled and dismissed its claims against Federal Flange on February 19, 2019.[37] Only third-party claims remain in this action.

         II. PENDING MOTIONS

         Silbo filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction.[38] Silbo argues that it is not subject to general or specific personal jurisdiction in Louisiana, claiming it is not at home in Louisiana and none of its Louisiana contacts are related to the instant litigation.[39] Silbo further argues that jurisdiction does not attach under a stream-of-commerce theory because: first, this theory did not survive the United States Supreme Court's ruling in Bristol-Myers Squibb v. Superior Court of California, 137 S.Ct. 1773 (2017); and, second, even assuming the theory remains viable, (i) the tees exited the stream upon their delivery to CGP in Texas, and (ii) Silbo did not expect, or have specific knowledge, that the imported tees would be distributed to a Louisiana end user.[40]

         CGP opposes Silbo's motion to dismiss, arguing that Silbo is subject to specific personal jurisdiction under a stream-of-commerce theory. CGP states that Silbo imported the tees into a regular stream of commerce intending to serve as broad of a market as possible without restriction or limitation, aware that the stream may continue to an oil-and-gas-industry end user in Louisiana, where the stream did, in fact, deliver the allegedly defective tees, causing harm in the state.[41]

         Gupta also filed a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction.[42]Gupta's arguments mirror Silbo's, contending that Gupta is also not subject to general or specific personal jurisdiction in Louisiana and that, assuming the stream-of-commerce doctrine is viable, Gupta did not have the requisite awareness that its tees would wind up in Louisiana to give rise to personal jurisdiction.[43]

         Federal Flange and CGP each oppose Gupta's motion on the same grounds that CGP opposed Silbo's motion, arguing that specific personal jurisdiction attaches under a stream-of-commerce theory, wherein Gupta could foresee a Louisiana end user and the regular stream did, in fact, deliver the tees to Louisiana where they allegedly caused harm.[44]

         CGP and Federal Flange requested jurisdictional discovery in their opposition briefs.[45]This Court ordered limited discovery primarily focused on whether Silbo or Gupta delivered the subject tees into the stream of commerce with an expectation or awareness that they would be purchased or used by consumers in Louisiana.[46] Following discovery, the parties filed supplemental briefs reasserting their positions on Defendants' motions to dismiss.[47] In CGP's supplemental brief opposing Silbo's motion, CGP outlined facts obtained through jurisdictional discovery regarding Silbo's Louisiana contacts and its knowledge about the nature of its sales and the market in Louisiana.[48] Specifically, CGP contends that Silbo had substantial sales in Louisiana, including $3.6 million in sales of tees, between 2010 and 2012; that Silbo knew that it did not sell to end users; that the tees Silbo imported from Gupta were used in the oil-and-gas industry; and that Louisiana is a known oil-and-gas market.[49]

         In supplemental briefs opposing Gupta's motion, Federal Flange and CGP likewise outline Gupta's contacts with Louisiana and its knowledge about the nature of its exports and the Louisiana market.[50] Specifically, Federal Flange and CGP note that Gupta made over $10.3 million in sales in Louisiana between 2010 and 2012; that Gupta knew Silbo sold Gupta's oil-and-gas utilized products directly to Louisiana customers; and that Gupta representatives visited one such customer in Louisiana.[51] Further, Federal Flange and CGP contend that Gupta knew Louisiana to be an oil-and-gas industry leader and that Silbo did not sell its tees to end users.[52]

         III. LAW & ANALYSIS

         A. Personal Jurisdiction Standard

         Federal Rule of Civil Procedure 12(b)(2) confers a right to dismissal of claims against a defendant where personal jurisdiction is lacking. Personal jurisdiction is “an essential element of the jurisdiction of a district court, without which the court is powerless to proceed to an adjudication.” Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (internal quotation marks omitted). A federal court may exercise personal jurisdiction over a non-resident defendant if (1) the forum state's long-arm statute confers personal jurisdiction over the defendant, and (2) the exercise of personal jurisdiction comports with due process under the United States Constitution. Electrosource, Inc. v. Horizon Battery Techs., Ltd., 176 F.3d 867, 871 (5th Cir. 1999). This case, involving alleged damage to wells located on the outer continental shelf adjacent to Louisiana, arises under the Outer Continental Shelf Lands Act (“OCSLA”). See Tenn. Gas Pipeline Co. v. Houston Gas Co., 881 F.Supp. 245, 250-51 (W.D. La. 1995), aff'd, 87 F.3d 150 (5th Cir. 1996). Under OCSLA, the law of the adjacent state applies in the absence of federal law. 43 U.S.C. § 1333. Therefore, the Court applies Louisiana's long-arm statute here because Louisiana is the adjacent state. See Hughes v. Lister Diesels, Inc., 642 F.Supp. 233, 235 (E.D. La. 1986) (applying Louisiana's long-arm statute to an action arising under OCSLA because there is no federal long-arm statute); see also Mote v. Oryx Energy Co., 893 F.Supp. 639, 642 (E.D. Tex. 1995) (observing that platforms on outer continental shelf “may be considered within the boundaries of the adjacent state for the purposes of determining where an accident ‘occurred' for long-arm jurisdiction purposes”). Louisiana's “long-arm statute authorizes the exercise of personal jurisdiction to the limits of due process.” Choice Healthcare, Inc. v. Kaiser Found. Health Plan of Colo., 615 F.3d 364, 365 (5th Cir. 2010). Hence, “the Court need only consider whether the exercise of jurisdiction in this case satisfies federal due process requirements.” Embry v. Hibbard Inshore, LLC, 2019 WL 2744483, at *2 (E.D. La. July 1, 2019) (citing Dickson Mar. Inc. v. Panalpina, Inc., 179 F.3d 331, 336 (5th Cir. 1999)).

         An individual's liberty interest is protected by federal due process through the requirement that individuals have “fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (quoting Shaffer v. Heitner, 433 U.S. 186, 218 (1977) (Stevens, J., concurring)). For purposes of personal jurisdiction, the due-process inquiry determines whether the defendant has purposefully availed itself of the benefits and protections of the forum state through “minimum contacts” with the forum, and whether the exercise of jurisdiction over the defendant “does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

         Personal jurisdiction may be general or specific. Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). For a court to exercise general jurisdiction, the defendant's contacts with the forum must be “so continuous and systematic” as to render the defendant “at home” in the forum state. Daimler AG v. Bauman, 571 U.S. 117, 127 (2014) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). To exercise specific jurisdiction, a court must determine:

(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.

Seiferth, 472 F.3d at 271 (quoting Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002)). Upon establishing the first two factors, the burden then shifts to the defendant to demonstrate that an exercise of personal jurisdiction would be unfair or unreasonable. Burger King, 471 U.S. at 477 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)). In determining reasonableness, a court considers “the burden on the defendant, the interests of the forum State, and the plaintiff's interest in obtaining relief, ” Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 113 (1987), as well as “the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies.” World-Wide Volkswagen, 444 U.S. at 292.

         A plaintiff need only present a prima facie case of personal jurisdiction when a court rules on a Rule 12(b)(2) motion without an evidentiary hearing. Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008). In resolving personal jurisdiction, the court may review “pleadings, affidavits, interrogatories, depositions, oral testimony, exhibits, any part of the record, and any combination thereof.” Command-Aire Corp. v. Ontario Mech. Sales & Serv. Inc., 963 F.2d 90, 95 (5th Cir. 1992) (citing Stuart v. Spademan, 772 F.2d 1185 (5th Cir. 1985)). The plaintiff's uncontroverted allegations must be taken as true, and “conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor.” Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008) (quoting D.J. Invs., Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 546 (5th Cir. 1985)). But a court is not required “to credit conclusory allegations, even if uncontroverted.” Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001).

         B. The Stream-of-Commerce Standard

         In a products liability action, a defendant's minimum contacts may be analyzed under a stream-of-commerce theory. The stream-of-commerce “doctrine recognizes that a defendant may purposely avail itself of the protection of a state's laws - and thereby will subject itself to personal jurisdiction - ‘by sending its goods rather than its agents' into the forum.” In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prod. Liab. Litig., 888 F.3d 753, 778 (5th Cir. 2018) (quoting J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 882 (2011)).

         The appropriate standard under the stream-of-commerce doctrine divides the circuits. Id. at 778. The Fifth Circuit has long applied Justice Brennan's foreseeability standard, see Id. (citing Choice Healthcare, 615 F.3d at 373), which reasons:

As long as a participant in [the stream of commerce] is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is no corresponding benefit. A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State's laws that regulate and facilitate commercial activity.

Asahi, 480 U.S. at 117 (Brennan, J., concurring) (citing Bean Dredging Corp. v. Dredge Tech. Corp., 744 F.2d 1081 (5th Cir. 1984)). Therefore, under this standard, a plaintiff “need only show that [a defendant] delivered the product [at issue] ‘into the stream of commerce with the expectation that it would be purchased by or used by consumers in the forum state.'” DePuy, 888 F.3d at 778 (quoting Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 177 (2013)).

         “The foreseeability required in the product liability context is ‘not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.'” Seiferth, 472 F.3d at 273 (quoting World-Wide Volkswagen, 444 U.S. at 297); see also Nicastro, 564 U.S. at 888 (Breyer, J., concurring) (observing that a single isolated sale, alone, is insufficient to confer personal jurisdiction); Burger King, 471 U.S. at 475 (noting that a defendant's contacts must be more than “random, fortuitous, or attenuated, or of the unilateral activity of another party or a third person”) (quotation marks and citations omitted); Asahi, 480 U.S. at 117 (Brennan, J., concurring) (“The stream of commerce refers not to unpredictable currents or eddies, but to the regular and anticipated flow of products from manufacture to distribution to retail sale.”).

         In support of their motions to dismiss for lack of personal jurisdiction, Defendants principally argue that Bristol-Myers sounded a “death knell” for the stream-of-commerce doctrine and urge this Court to begin the interment.[53] However, this Court declines to follow the lone, non-binding case[54] offered by Defendants in support of their position and instead adheres to long-standing and controlling Fifth Circuit precedent applying the stream-of-commerce doctrine. Indeed, the Fifth Circuit recently renewed its position on the stream-of-commerce doctrine in a case decided after Bristol-Myers. See DePuy, 888 F.3d at 778-79 (applying stream-of-commerce theory to confer personal jurisdiction over a parent company). Further, this Court has no trouble squaring the holding of Bristol-Myers with the Fifth Circuit precedent, particularly since the Bristol-Myers Court makes no mention of the stream-of-commerce doctrine.

         In Bristol-Myers, the Supreme Court rejected a sliding-scale approach to specific jurisdiction in favor of concretely defining personal jurisdiction as either general or specific. 137 S.Ct. at 1781. The Court held that a California state court did not have personal jurisdiction over a non-resident drug manufacturer for claims by non-resident plaintiffs for harm that occurred outside the forum, despite the manufacturer's minimum contacts with the forum. Id. at 1782. Notably, the state court did exercise specific jurisdiction over the non-resident manufacturer with respect to claims brought by forum-resident plaintiffs because their harm occurred within the forum. Id. at 1779. This aspect of the case was uncontested by the parties. The non-resident plaintiffs in Bristol-Myers did not rely on the stream-of-commerce theory to support jurisdiction, but instead, hypothesized that “the more wide ranging the defendant's forum contacts, the more readily is shown a connection between the forum contacts and the claim.” Id. at 1778. The Court was never asked to address or discuss the stream-of-commerce theory, nor did it.

         Yet, Defendants argue that the Bristol-Myers Court's recitation of its own precedent is the proverbial nail in the stream-of-commerce coffin. Specifically, Defendants point to the Court's citation of one of its prior decisions for the proposition that “[f]or specific jurisdiction, a defendant's general connections with the forum are not enough. … [A] corporation's ‘continuous activity of some sort within a state … is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.'” Bristol-Myers, 137 S.Ct. at 1781 (citing Goodyear, 564 U.S. at 927 (quoting Int'l Shoe, 326 U.S. at 318) (internal quotation marks omitted)). Defendants also note that “[e]ven regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales.” Goodyear, 564 U.S. at 930 n.6. But these propositions do nothing more than reinforce the fundamental distinction between general and specific jurisdiction - precisely the Court's objective in Bristol-Myers.

         It is unclear how a clarification of this bedrock principle would now conflict with the long-standing stream-of-commerce doctrine built upon it. No. party is advocating a sliding-scale approach to jurisdiction, asserting general jurisdiction, or arguing that general contacts alone suffice for personal jurisdiction here. CGP and Federal Flange contend that specific personal jurisdiction exists over Defendants because: Defendants placed their goods in a stream of commerce with an awareness that they could find their way to the forum; and, critically, these goods allegedly caused harm in the forum. See Bristol-Myers, 137 S.Ct. at 1779 (noting that specific jurisdiction over non-resident-manufacturer defendant was uncontested for resident plaintiffs whose harm arose in the forum). The second factor of the Fifth Circuit's three-factor test for specific jurisdiction provides that a defendant must have more than general connections with a forum, expressly requiring “the plaintiff's cause of action [to] arise[] out of or result[] from the defendant's forum-related contacts.” Seiferth, 472 F.3d at 271. Under a stream-of-commerce theory, if goods injected into a stream of commerce reach a forum the defendant could reasonably anticipate and cause harm, giving rise to litigation there, the requisite nexus exists between the defendant's contacts, the forum, and the litigation to confer specific jurisdiction, so long as exercise of jurisdiction is not unfair or unreasonable. See DePuy, 888 F.3d at 778 (“[A] defendant] may purposely avail itself of the protection of a state's laws - will subject itself to personal jurisdiction - ‘by sending its goods rather than its agents' into the forum.”) (quoting Nicastro, 564 U.S. at 882); Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 470 (5th Cir. 2006) (“[The Fifth Circuit] has consistently held that ‘mere foreseeability or awareness [is] a constitutionally sufficient basis for personal jurisdiction if the defendant's product made its way into the forum state while still in the stream of commerce.'”) (quoting Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 419 (5th Cir. 1993)). This Court need not speculate about the demise of the steam-of-commerce doctrine because it is alive, well-settled, and governs today in the Fifth Circuit, having been reaffirmed once again in this circuit after Bristol-Myers. See DePuy, 888 F.3d at 777-81; Ainsworth, 716 F.3d at 176 (interpreting Nicastro and reaffirming the stream-of-commerce doctrine on the same day the Supreme Court decided Goodyear). With the applicable standard settled, this Court proceeds to apply the Fifth Circuit's stream-of-commerce precedent to the facts of this case.

         C. Specific Jurisdiction Analysis - Silbo

         CGP relies on a stream-of-commerce theory in support of specific personal jurisdiction over Silbo; CGP does not contend that Silbo is subject to general jurisdiction. Thus, the Court addresses only specific jurisdiction.

         1. Purposeful availment

         Silbo is a self-professed nationwide seller and importer of tees.[55] Silbo sells tees without restriction or limitation on the states to which it directs its sales. Thus, Silbo directs “substantial” sales to consumers in Louisiana, to whom Silbo's representatives have made occasional sales visits and phone calls.[56] Between 2010 and 2012, Silbo sold over $16 million in goods directly to at least six different Louisiana customers, including over $3.6 million in sales of tees (or 121, 586 tees).[57] The four distinct tees at issue, bearing batch number H-3501, were undisputedly imported by Silbo, travelled by way of Texas into Louisiana, and allegedly failed on a well off the coast of Louisiana operated by a Louisiana company. A defect in the tees allegedly caused economic harm to LLOG, CGP, and Federal Flange. Thus, CGP has made the necessary prima facie showing that Silbo delivered tees “into the stream of commerce with the expectation that [the tees] would be purchased by or used by consumers in the forum state.” Ainsworth, 716 F.3d at 177. It is reasonable to infer that Silbo expected or should have expected its tees would go to Louisiana because Silbo itself sold and delivered thousands of tees into this forum. Such purposeful availment of a forum, in conjunction with an alleged product defect causing harm in the forum to a forum resident, gives rise to specific personal jurisdiction here. See DePuy, 888 F.3d at 778.

         Silbo argues that it did not control CGP's distribution nor did it possess specific knowledge about where and for what purpose CGP would resell the tees from batch number H-3501 three years after Silbo's sale to CGP. The unique traceability of the tees at issue in this case, by batch number, should not muddy the stream-of-commerce analysis. Analysis under the foreseeability test used by the Fifth Circuit does not turn on the likelihood that a particular good will make its way into the forum, “[r]ather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” Seiferth, 472 F.3d at 274. “Minimum-contacts analysis is more realistic than mechanical, turning on matters of substance rather than form.” DePuy, 888 F.3d at 779 (internal quotations omitted). The touchstone for stream-of-commerce analysis is not the defendant's specific knowledge, nor its control, nor a traceable route of the goods; instead, it is the defendant's purposeful availment of the forum through the stream of its goods rather than its agents. See id at 778; World-Wide Volkswagon, 444 U.S. at 297. Silbo need not have a particularized knowledge of the destination, or route, of each individual tee that it places into a stream of commerce in order to be subject to personal jurisdiction in a forum destination of one of its products said to be defective; indeed, many manufacturers and distributors do not have such a clearly traceable stream. See Ainsworth, 716 F.3d at 179 (holding the stream-of-commerce threshold is reasonable expectation rather than specific knowledge or control). The analysis turns on Silbo's direct or indirect conduct toward the forum market. See World-Wide Volkswagon, 444 U.S. at 297.

         Silbo cannot, on the one hand, sell thousands of tees directly into the forum and then, on the other, claim it did not avail itself of the forum market or reasonably expect its tees to end up in the forum. Such an outcome would deprive a forum state of protection from defective products and subvert the purpose of the stream-of-commerce doctrine. That the allegedly defective tees at issue took a route through Texas should not strip Louisiana of the ability to protect its consumers against such products for harm occurring within the state. Silbo benefitted financially from the Louisiana market on a regular basis, both directly and through secondary markets. Deriving revenue from the forum as part of a nationwide sales or distribution stream of commerce is the “quid pro quo for requiring the defendant to suffer a suit in the foreign forum.” Choice Healthcare, 615 F.3d at 373.

         Silbo urges this Court to disregard its direct Louisiana sales in the contacts analysis. In doing so, Silbo misapprehends the significance of the evidence concerning Silbo's direct sales into Louisiana. The significance of this evidence is not that it itself establishes a pattern of continuous and systematic contacts, which would be more relevant to a general-jurisdiction or fairness analysis; instead, the significance of the sales evidence is that it establishes the reasonableness of an inference that Silbo had or should have had an expectation that its tees would ...


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