Case Number: ****0355 Hearing Date: February 02, 2021 Dept: O
Case Name: Kadow v. Shenzhen Eigate Technology, Co., Ltd., et al.
Case No.: ****0355
Calendar #: 15
Complaint Filed: 10/18/17
Motion C/O: None
Discovery C/O: None
Trial Date: None
SUBJECT: MOTION TO QUASH FOR LACK OF PERSONAL JURISDICTION
MOVING PARTY: Specially Appearing Defendant LG Chem America, Inc.
RESP. PARTY: Plaintiff Cody Kadow
Specially Appearing Defendant LG Chem America, Inc.’s (LGCAI) Motion to Quash for Lack of Personal Jurisdiction is GRANTED.
I. General jurisdiction fails because no evidence that LGCAI is “at home” in California
As an example of an exceptional case where general jurisdiction was asserted over a corporation outside of its state of incorporation or principal place of business, the Supreme Court cited to Perkins v. Benguet Col. Mining Co., 342 U.S. 437, 447-448 (1952). See Daimler AG, supra, 57 1 U.S. at 139, fn 19. Perkins involved a corporation whose principal place of business and place of incorporation was the Phillipines. Perkins, supra, 342 U.S. at 439. However, due to WWII and the Japanese occupation of the Phillipines, the corporation’s president, who was located in Ohio, was doing all of the corporation’s business there and to the extent the company was doing any business at all during and immediately after the occupation, it was doing so in Ohio. Id. at 447-448.
Thus, in Perkins, the corporation was essentially using Ohio as its “headquarters,” conducting all of its activities from Ohio and making the corporation essentially “at home” in Ohio. See Bristol-Myers Squibb Co. v. Superior Court (2016), 1 Cal. 5th 783,
787 (rev’d on other grounds by Bristol-Myers Squibb v. Superior Court (2017) 137 S. Ct.
1773). “A defendant corporation's substantial sales in a state are insufficient to establish general jurisdiction, as the general jurisdiction analysis turns on the nature of the defendant's continuous corporate operations within a state.” Strasner v. Touchstone Wireless Repair & Logistics, LP (2016) 5 Cal.App.5th 215, 222–223.
LGCAI is not like the “exceptional case” referenced in Daimler that would allow for general jurisdiction over an entity outside of its state of incorporation or principal place of business. Daimler AG, supra, 57 1 U.S. 117, 139, fn 19; Perkins v. Benguet Col. Mining Co., 342 U.S. 437, 447-448 (1952). LGCAI is a Delaware company with its principal place of business in Georgia. See Supplement Response filed on 12-11-20, Dec. of H. Kim at ¶¶5-6. There are only 7 LGCAI employees in California and two subleased office spaces, only one of which is actively being used for marketing and tech support and external technology research. Id. at ¶7. LGCAI does not own any property in California. Id. at ¶8. California is not the state from which LGCAI derives the most revenue, and LGCA’s California operations comprise of an estimated 4.35% of its annual revenue in the US. See Supplemental Response filed on 12-11-20, Ex. B, LGCAI’s Response to SI No. 8. The majority of Defendant’s business customers and partners are not located in California. Id., Ex. B, LGCAI’s response to RFA No. 25 and Form Rog 17.1 as to RFA No. 25. LGCAI does not coordinate marketing campaigns for LG products in California. Id., Ex. B, RFA Nos. 26-27.
The Court finds the evidence submitted by Plaintiff is not enough to support general jurisdiction. After allowing for discovery, Plaintiff still fails to provide evidence sufficient to support general jurisdiction. The Court denies Plaintiff’s motion to compel further responses to previously propounded written discovery.
II. Specific Jurisdiction fails on “arising out of relating to” prong
Plaintiff argues specific jurisdiction but fails to provide evidence establishing its elements as to LGCAI: “(1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant's contacts with the forum; and (3) the assertion of jurisdiction would comport with fair play and substantial justice.” Snowney v. Harrah's Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062; Farina v. SAVWCL III, LLC (2020) 50 Cal.App.5th 286, 294. As the party asserting jurisdiction over LGCAI, Plaintiff is responsible for establishing all elements of specific jurisdiction. See Ziller Electronics Lab GmbH v. Sup. Ct. (1988) 206 Cal.App.3d 1222, 1232.
“In order for a state court to exercise specific jurisdiction, the suit must arise out of or relate to the defendant's contacts with the forum.” Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County 137 S.Ct. 1773, 1780 (2017) (defendant’s contacts with California could not form the basis for specific jurisdiction in connection with plaintiff’s claims where plaintiff’s injuries were completely unrelated to defendant’s California contacts, i.e. plaintiff was not prescribed defendant’s medication in California, did not purchase defendant’s medication in California, did not consume it in California and was not injured by medication in California). “A claim need not arise directly from the defendant’s forum contacts in order to be sufficiently related to the contact to warrant the exercise of specific jurisdiction. Rather, as long as the claim bears a substantial connection to the nonresident’s forum contacts, the exercise of specific jurisdiction is appropriate.” Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543, 560 (“relatedness” prong of specific jurisdiction established by evidence that defendant sold cleaning product that caused plaintiff’s death to CA distributor who then sold product to CA store from which decedent purchased the cleaning product).
Plaintiff offers no evidence that would satisfy the “related to or arises out of” prong of specific jurisdiction. Defendant evidence affirmatively rebuts any assertion that Plaintiff’s claim is related to arises out of Defendant’s forum contacts. The evidence of LG Chem, Ltd.’s manufacturing of lithium batteries, its website marketing these batteries and its shipping log into California is irrelevant to whether the Court may assert jurisdiction over LGCAI, a separate entity. Although it is undisputed that LG Chem, Ltd. is the parent company of LGCA, neither ownership nor control of a subsidiary corporation by a foreign parent corporation, without more, subjects the parent to the jurisdiction of the state where the subsidiary does business. See DVI, Inc. v. Superior Court (2002) 104 Cal.App.4th 1080, 1092. The “more” required includes alter ego status, an agency relationship specific to the contacts or a degree of control over the subsidiary beyond that incident to a parent’s ownership of a subsidiary. Id. at 1092-1094. There is no evidence of anything “more” than a parent-subsidiary relationship between LG Chem, Ltd. and LG Chem America, Inc.
Likewise, Plaintiff asserts LG Chem, Ltd. has no offices in the US but fails to cite to any evidence in support of this fact. See Plaintiff’s Opposition, 9:8-12. The Court cannot assume that LG Chem, Ltd. has no offices, and even if there were evidence of that fact, it cannot assume that LGCA must therefore provide all distribution and retail services for LG Chem, Ltd.’s products. The brief submitted by LGCAI in connection with a Massachusetts state action based on similar facts is not probative of LGCAI’s contacts. The brief merely restates LGCA’s position on the motion to quash that it lacks contacts for assertion of personal jurisdiction.
Plaintiff’s expert opinion that the battery that injured Plaintiff was an “LG Chem” battery does not establish LGCAI’s minimum contacts with California. See Dec. of A. Nehmens filed on 5-7-19, Ex. H, Dec. of R. Yuan, ¶10. The expert does not state that “LG Chem” batteries are manufactured, sold or distributed by LGCAI, nor would she be qualified to testify as to such facts.
Similarly, the Court cannot rely on the facts recited in the district court opinion in Celgard, LLC v. LG Chem, Ltd., 2015 WL 2412467, at *26-28 (May 21, 2015) to assert personal jurisdiction over LGCA. See Dec. of A. Nehmens filed on 5-7-19, Ex. F. Celgard involved North Carolina’s assertion of jurisdiction over LGCA, not California’s. None of the evidence presented in Celgard is before this Court, nor would LGCA’s activities in North Carolina be relevant. Moreover, Celgard did not apply or discuss the “at home” analysis under Daimler AG v. Bauman, 571 U.S. 117, 137, and it acknowledged that is assertion of general jurisdiction over LGCAI in North Carolina based on percentage revenue and continuous contacts was a “close call.” Celgard, LLC, supra, 2015 WL 2412467, at 28 (“While this case presents a close call, the court finds that the evidence of LGCAI's physical presence in North Carolina, as well as its participation in the state's economic markets through its sales to companies here, is sufficient to support a prima facie case of general jurisdiction”).
Moreover, Defendant’s evidentiary showing establishes that specific jurisdiction does not apply. As Defendant’s compliance manager testifies, LGCAI sells and distributes petrochemical materials and products and it does not have any manufacturing plants. See Dec. of H. Kim, ¶4. LGCAI is a Delaware company with its principal place of business in Georgia. Id. at ¶5. There are only 7 LGCAI employees in California and two subleased office spaces, only one of which is actively being used for marketing and tech support and external technology research. Id. at ¶8. LGCAI does not manufacture, design, distribute, advertise or sell MXJO 18650 Lithium Ion Rechargeable Batteries, which is the type of battery responsible for Plaintiff’s injury, nor does it distribute, sell or advertise 18650 lithium ion cells for individual use in ecig devices. Id. at ¶¶9 and 13. These facts establish that Plaintiff’s injury does not arise from or relate to Defendant’s contacts with California, an essential element of specific jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown 564 U.S. 915, 931 (2011) (even regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales).
Finally, to the extent Plaintiff is seeking to assert specific jurisdiction against LGCAI based on the contacts of LG Chem, Ltd. through a stream of commerce theory, the Court has already found that Plaintiff’s claims do not arise out of or relate to LG Chem, Ltd.’s contacts with the forum state.
Case Name: Kadow v. Shenzhen Eigate Technology, Co., Ltd., et al.
Case No.: ****0355
Calendar #: 15
_____________________________________________________________________________SUBJECT: MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL
INTERROGATORIES AND RFAs
MOVING PARTY: Plaintiff Cody Kadow
RESP. PARTY: Specially Appearing Defendant LG Chem America, Inc. (“America”)
Plaintiff Kadow’s Motion to Compel Further Responses to Special Interrogatories and RFAs is DENIED. The responses to the discovery requests are sufficiently complete. Plaintiff’s SI No. 23 is overbroad and unduly burdensome. The Court has already allowed extensive jurisdictional discovery. Plaintiff fails to establish any further discovery is warranted. See e.g Young v. Daimler AG (2014) 228 Cal. App. 4th 855, 867 n.7 (“additional discovery into the intricate and detail-rich relationships between Daimler and its subsidiaries would hardly have been likely to lead to the production of facts establishing general jurisdiction over Daimler in California”).
Case Number: ****0355 Hearing Date: August 13, 2020 Dept: O
Case Name: Kadow v. Shenzhen Eigate Technology, Co., Ltd., et al.
Case No.: ****0355
Calendar #: 11
SUBJECT: DEFENDANT LG CHEM, LTD'S MOTION TO QUASH FOR LACK OF PERSONAL JURISDICTION
MOVING PARTY: Specially Appearing Defendant LG Chem, Ltd.
RESP. PARTY: Plaintiff Cody Kadow
Specially Appearing Defendant LG Chem, Ltd’s (“LG Chem”) Motion to Quash is DENIED. Plaintiff’s RJN filed on 10-2-19 is GRANTED.
As the party asserting jurisdiction over LG Chem, Plaintiff is responsible for establishing either general or specific jurisdiction over LG Chem. See Ziller Electronics Lab GmbH v. Sup. Ct. (1988) 206 Cal.App.3d 1222, 1232. Plaintiff does not argue general jurisdiction.
Plaintiff asserts specific jurisdiction based on a “stream of commerce theory.” In general, specific jurisdiction requires that “(1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant's contacts with the forum; and (3) the assertion of jurisdiction would comport with fair play and substantial justice.” Snowney v. Harrah's Entertainment, Inc. (2005) 35 Cal.4th 1054, 1062.
I. Purposeful Availment with Respect to the Matter in Controversy
Where jurisdiction is based on a “stream of commerce” theory, the “purposeful availment” requirement is not satisfied by the mere fact that the defendant placed the product into the stream of commerce. In J. McIntyre Machinery, Ltd. V. Nicastro, 564 U.S. 873,882-883 (2011), the Supreme Court addressed the question of whether in “stream of commerce” cases, the “purposeful availment” requirement for specific jurisdiction could be satisfied by a showing that a foreign manufacturer placed the goods into commerce “with the expectation that they will be purchased by consumers in the forum State,” (“injection into the stream of commerce” or “foreseeability” that the product would be sold in the forum state) or if “purposeful availment” required such “stream of commerce plus” other activities by the foreign defendant directed at the forum state. See J. McIntyre Machindery, Ltd., supra, 564 U.S. at 882-883.
The plurality of the Supreme Court in J. McIntyre Machinery resolved the conflict in favor of the “stream of commerce plus” position articulated by Justice O’Connor in Asahi Metal Industry Co. v. Supr. Ct. of Cal., Solano City, 480 U.S. at 881-883. “This Court's precedents make clear that it is the defendant's actions, not his expectations, that empower a State's courts to subject him to judgment.” Id. at 883.
The concurrence also found that based on precedent, a single sale would not support jurisdiction, even if accompanied by a defendant’s efforts and intent to sell the product in the US generally. Id. at 888. The concurrence acknowledged that under the “stream of commerce plus” test, the court lacked jurisdiction over the defendant. Id. The concurrence also found the court lacked jurisdiction based on “stream of commerce” plus a regular flow or regular course of sale to the forum state, because there was no evidence of such regular sales. Id. at 889.
In light of J. McIntyre, the Court of Appeal in Dow Chemical Canada ULC v. Supr. Ct. (Fandino) (2011) 202 Cal.App.4th 170, 179 found plaintiff failed to establish purposeful availment, because the record did not reflect any “activities in California that reveal an intent to invoke or benefit from the protection of its laws. Nor is there any evidence that the design of Dow's product was in any way California-specific. It is not sufficient for jurisdiction in this case that the defendant Dow might have predicted or known that its products would reach California.” Dow Chemical Canada ULC v. Supr. Ct. (Fandino), supra, 202 Cal.App.4th at 179. Thus, “mere knowledge, without something more, is insufficient to establish jurisdiction in a forum state.” Bombardier Recreational Products, Inc. v. Dow Chemical Canada ULC (2013) 216 Cal.App.4th 591, 604 (citing Fandino)(even if foreign manufacturer’s knowledge that its product would be incorporated into goods intended for sale in the U.S., including California, were admitted into evidence, that would be insufficient to establish purposeful availment).
However, the Court of Appeals in Bombardier noted that J. McIntyre did not clearly define what “more” is needed. Bombardier, supra, 216 Cal.App.4th at 602. The Court then noted that purposeful availment has clearly been found where “a nonresident defendant purposefully directs its activities at residents of the forum, purposefully derives benefit from its activities in the forum, creates a ‘substantial connection’ with the forum, deliberately has engaged in significant activities within the forum, or has created ‘continuing obligations’ between itself and residents of the forum.” Bombardier, supra, 216 Cal.App.4th at 602.
Direct sales to distributors based in California have been deemed sufficient to satisfy the purposeful availment requirement where the sales themselves were significant and the foreign manufacturer knew that the sales would result in consumer use in California. See Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543, 553 (Korean manufacturer purposefully availed itself of California’s benefits where plaintiff presented substantial evidence of manufacturer’s repeated sales of its products to various California distributors over a seven-year period, manufacturer’s repeated direct shipments of products from Korea to California and manufacturer’s significant revenues from California sales ($2 million)); Luberski, Inc. v. Oleficio F.LLI Amato S.R.L. (2009) 171 Cal.App.4th 409, 415 (purposeful availment established against Italian olive oil manufacturer where manufacturer negotiated agreement for sale of olive oil to California company in Italy and California, goods were to be shipped to California with expectation that they would be used in California, and amount of goods sold per the contract (more than $400,000) was clearly substantial); cf. Caretti v. Italpast (2002) 101 Cal.App.4th 1236, 1239-1240 (no purposeful availment where California distributor traveled to Italy to purchase foreign manufacturer’s products, manufacturer delivered product to shipper in Italy selected by California distributor, and California distributor arranged for shipping to California).
As this Court previously stated in its 10-11-19 Ruling, it could not rely on the facts cited in the Findings and Recommendations and the Order Adopting Findings and Recommendations made in Berven v. LG Chem, Ltd. (Case No. 1:18-CV01542-DAD-EPG, USDC, E.D (Slip Opn 4-18-2019); 2019 WL 1746083.)) to establish LGC’s purposeful availment. See Plaintiff’s RJN, Exs. A and B. While the Court may judicially notice the existence of these documents, the evidence of specific jurisdiction relied on in Berven is not before the Court. The order denying LGC’s motion to quash in Berven relied heavily on extremely detailed and specific jurisdictional allegations against LGC in Berven’s complaint. See Plaintiff’s RJN Ex. A, 2:25 to 7:21 and Ex. B, 2:27-28 to 3:1-3:28. Those allegations pertained to LGC’s sale and export of 18650 lithium batteries to California. As noted by the magistrate judge in the Findings and Recommendations, LG Chem “does not contest, for purposes of this motion, the plethora of contacts alleged in the amendment complaint.” See Plaintiff’s RJN Ex. A, 13:2-4.
On 10-11-19, the Court granted Plaintiff leave to conduct discovery to confirm and bring before this Court those same contacts relied upon in Berven to find purposeful availment. In its discovery responses, Defendant LG Chem admits that (1) it sells distributes and supplies LG lithium ion 18650 batteries into California; (2) its batteries arrive in California through California ports; (3) LG Chem expects its batteries to be reached and used by California residents for the sale of those batteries; (4) LG Chem derived revenue from sales of those batteries in California; (5) LG Chem worked with it subsidiary to facilitate sales and interface with California based customers; and (6) LG Chem purposefully directed battery cells to certain specific customers in California. See Dec. of A. Nehmens ISO of Plaintiff’s Supplemental Response in Opposition, Exs. A and B.
Based on the undisputed evidence of these contacts, the Court finds Defendant LG Chem purposefully availed itself of California’s benefits.
II. Defendant’s Attempt to Narrowly Define “Matter in Controversy” and
“Controversy Related to or Arises From Forum Contacts”
Purposeful Availment with respect to “Matter in Controversy.” While LG Chem admits it has contacts with California, LG Chem argues that Plaintiff’s injury does not “arise from” LG Chem’s forum contacts. LG Chem argues (1) it did not sell to consumers like Plaintiff Kadow, i.e. individual consumers, (2) it has no contacts with Shenzhen MXJO, the company that allegedly rewrapped an 18650 lithium ion power cell as an “MXJO” brand battery to be distribute to consumers, and (3) it has no relationship with any of the manufacturer/distributor/retailer defendants that began Shenzhen MXJO and the sale of the MXJO battery to an individual consumer in California.
As cogently explained by the federal court in the Berven opinion, Defendant’s attempts to narrowly define the “product” at issue here and to narrowly interpret the “arising out of or relating to” prong of specific jurisdiction are unpersuasive. See Plaintiff’s RJN, Ex. A, pp. 13-16. Plaintiff’s case is a stream of commerce case alleging products liability. The product is a 18650 lithium battery that was allegedly manufactured by LGC. The fact that the battery was allegedly repackaged without LGC’s authorization and resold for unauthorized and unintended consumer use does not alter the fact that the battery itself was allegedly manufactured by LGC. For jurisdictional purposes, the question is whether LGC purposefully directed its activities to California in connection with the sale and distribution of 18650 lithium batteries.
As discussed in Berven, LG Chem’s contacts with California are extensive and satisfy the “stream of commerce plus” necessary to find personal jurisdiction in stream of commerce cases. See Plaintiff’s RJN filed on 13:26-28 to 14:1-21. For the same reasons stated in Berven, this Court rejects Defendant’s attempts to narrowly define the product “as limited to a certain battery distributed in a certain way, for a certain use, in certain packaging…When it comes to evaluating contacts for jurisdiction under case law, including Asahi’s stream of commerce plus test, the ‘product’ is the product being sold, which, in the present case is the 18650 battery.” See Plaintiff’s RJN filed on 10-2-19, 15:1-6. While the manner of packaging and use is relevant to liability, “the question for personal jurisdiction is whether [LG Chem] placed this product in the stream of commerce with such additional contacts related to that product to fairly subject [LG Chem] to personal jurisdiction in California.” Id. at 15:7-15.
“Controversy Relates to or Arises from Defendant’s Contacts.” With regard to the “arises out of” or “relating to” prong, whether LGC intended to sell its 18650 lithium batteries to consumers like Plaintiff or through unauthorized distributors is not determinative. The ‘arising out of or relating to’ standard is in the disjunctive, and is intended as a relaxed, flexible standard.” Gilmore Bank v. AsiaTrust New Zealand Limited (2014) 223 Cal.App.4th 1558, 1573. “A claim need not arise directly from the defendant's forum contacts in order to be sufficiently related to the contact to warrant the exercise of specific jurisdiction. Moreover, the forum contacts need not be directed at the plaintiff in order to warrant the exercise of specific jurisdiction. Indeed, only when the operative facts of the controversy are not related to the defendant's contact with the state can it be said that the cause of action does not arise from that contact.” Snowney v. Harrah's Entertainment, Inc. (2005) 35 Cal.4th 1054, 1068.
The California Supreme Court has declined to impose a proximate cause or “but for” test in determining whether the relatedness requirement is satisfied. Id. at 1068; Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 464, 468-469 (narrow proximate cause test criticized as improperly importing common law policies limiting tort liability into the entirely unrelated field of jurisdiction). Such tests are “overly mechanical” and fail to “concentrate on the central issue presented by a motion to quash for lack of specific jurisdiction—that is, whether the defendant's forum contacts and the plaintiff's claim are related sufficiently so that it is fair to subject the defendant to jurisdiction in the forum.” Id. at 468-469 (referring to “but for” test).
The United States Supreme Court recently interpreted the relatedness requirement in Bristol-Myers Squibb Co. v. Supr. Ct., 137 S.Ct. 1773, 1781 and rejected the California Supreme Court’s “sliding scale” approach to that requirement. Under the “sliding scale” approach, the greater the defendant’s forum contacts, the less the connection required between the forum and the specific plaintiff’s claims at issue. Id. at 1779 and 1781. The United States Supreme Court found the approach to be incompatible with precedent, which requires an “affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State. When there is no such connection specific jurisdiction is lacking regardless of the extent of the defendant’s unconnected activities in the State.” Id. at1781. Thus, California did not have personal jurisdiction over the defendant in Bristol-Myers Squibb Co. as to claims by nonresident plaintiffs who “were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California and were not injured by Plavix in California.” Id.
In Jayone Foods, Inc., supra, the Court of Appeals reversed the trial court’s finding that the plaintiff’s injuries did not arise from or relate to the defendant’s contacts, finding the trial court interpreted the relatedness prong too narrowly.” Jayone Foods, Inc., supra, 31 Cal.App.4th at 559. The trial court’s finding was based on the failure to demonstrate that the decedent “purchased or used the bottles of the Humidifier Mate that Aekyung shipped to Jayone” during the relevant period. Requiring the x-complainant to establish that the specific bottles of cleaner that injured decedent came from one of x-defendant’s shipments “applied the relatedness prong too narrowly.” Id.
The Court of Appeals found a substantial nexus between the Aekyung’s forum contacts and the underlying wrongful death claim. The evidence supported a finding that Jayone purchased the product in question from Aekyung during the relevant period and that the x-complainant sold that product to the retailer from whom decedent purchased the product during that period. Id. at 560.
Given the authority interpreting the relatedness and “arising from prong of specific jurisdiction, the mere fact that LGC’s battery was rewrapped by an unrelated entity and sold through unauthorized channels of distribution to Plaintiff does not necessarily establish lack of a substantial nexus. Certainly, unlike the nonresident plaintiffs in Bristol-Myers Squibb, Plaintiff Kadow’s claims have an “affiliation” with California. Bristol-Myers Squibb, supra, 137 S.Ct. at 1781. Plaintiff Kadow alleges he is a California resident who was injured in California by a battery he purchased in California. See Complaint filed on 10-18-17, ¶¶1, 24 and 33. Defendant’s assertion that its purposeful contacts were not intended to reach consumers like Plaintiff is irrelevant to the “arising from” analysis. See Snowney v. Harrah's Entertainment, Inc., supra, 35 Cal.4th at 1068 (“forum contacts need not be directed at the plaintiff in order to warrant the exercise of specific jurisdiction”).
The Court finds Plaintiff’s “controversy” “arises from” Defendant’s admitted forum contacts for these reasons and adopts the reasoning articulated in the Berven opinion addressing this issue. See Plaintiff’s RJN filed on 10-2-19, Ex. A, pp. 14-19; Ex. B, p. 3. As such, the motion to quash must be denied, unless Defendant establishes that assertion of jurisdiction would violate notions of fair play and substantial justice.
III. Assertion of jurisdiction does not violate notions of fair play and substantial justice
Once a plaintiff shows that the nonresident defendant has “purposefully availed” itself of benefits and protections of forum law, that defendant bears the burden of proving it would be unreasonable for local courts to exercise jurisdiction, i.e. violate notions of fair play and substantial justice. See Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 475. Defendant LG Chem does not contest the assertion of jurisdiction would violate notions of fair play and substantial justice in its original briefing or its supplemental reply.
PLAINTIFF'S MOTION FOR LEAVE TO SERVE NEW JURISDICTIONAL DISCOVERY
MOVING PARTY: Plaintiff Cody Kadow
RESP. PARTY: Specially Appearing Defendant LG Chem America, Inc. (“LG Chem America”)
Plaintiff Kadow’s Motion for Leave to Serve New Jurisdictional Requests is GRANTED IN PART AND DENIED IN PART.
Under the Court’s Protective Order issued April 21, 2020, Plaintiff withdrew all jurisdictional discovery previously served, and stipulated to seek leave of Court prior to serving new discovery requests. Plaintiff now moves for leave to serve discovery in accordance with the Court’s protective order. Regarding Plaintiff’s requests for jurisdictional discovery, the Court of Appeal stated in its Notice of Intent “[Plaintiff’s] discovery essentially asks for almost every marketing and financial record relating to defendant’s operations in California and nationwide. As such, the discovery is not sufficiently tailored to meet the limited discovery to determine a ‘home,’ if any, for purposes of general jurisdiction outside a defendant’s place of incorporation and principal place of doing business.” The Court of Appeal directed this Court to “fashion a protective order limiting discovery to petitioner’s operations in California and, to the extent the responses to that discovery support additional discovery under the applicable law, to permit real party to seek a further order from the court to conduct such additional discovery.” (Emphasis added.) The Court issued such an order on April 21, 2020, leaving open the specific scope of discovery that would be permitted to be decided based the courts review of specific discovery requests to be sought by Plaintiff. In the April 21, 2020 order, however, the Court declined to limit Plaintiff’s right to jurisdictional discovery to the issue of specific jurisdiction, and declined to limit discovery solely to the sale or distribution of 18650 lithium ion battery cells, “without prejudice to considering any and all appropriate objections to any new specific discovery request…” See 4-21-20 Protective Order, p. 2.
I. General Jurisdiction Discovery
Following the direction of the Court of Appeal, the Court limits the discovery sought by Plaintiff’s to LG Chem’s activities in California that may prove or tend to prove where LG Chem America’s jurisdictional “home” is, if any, outside its place of incorporation and principal place of doing business. To that end the Court is guided by the standard for determining general jurisdiction stated in Daimler AG v. Bauman (2014) 571 U.S. 117, 139 and explained in Bristol-Myers Squibb Co. v. Superior Court (2016) 1 Cal.5th 783, 787, (reversed on other grounds by Bristol-Myers Squibb Co. v. Superior Court (2017) 137 S.Ct. 1773.)) The standard for determining a corporation’s general jurisdiction “home” is best summarized by the California Supreme Court in Bristol-Myers Squibb, supra, 1 Cal. At 795-798 in the following excerpts:
“More recently, in Goodyear (…) and Daimler (…) the high court significantly elaborated upon its analysis of general jurisdiction, clarifying that in order to support the exercise of general jurisdiction over a corporation its contacts with the forum state must be so extensive as to render the company essentially “ ‘at home’ ” in the state.” Id at 794.
Further, “The Goodyear court explained its “at home” rule for corporations as analogous to a natural person’s domicile in the forum state: “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” (Citation.) Id at 795.
““[t]he court [in Daimler] reiterated its observation in Goodyear that a corporation’s state of incorporation and its principal place of business are the two “paradigm all-purpose forums.” (Citation.) Although it did not limit general jurisdiction to those two circumstances, the Daimler court explained that general jurisdiction may not be based merely on activities in the forum state that can be characterized as continuous and systematic; rather, the corporation’s activities must be “ ‘so “continuous and systematic” as to render [it] essentially at home in the forum State.’ ” (Citation.) Id. at p. 796.
“The Daimler court acknowledged that in an exceptional case such as Perkins [342 U.S. 437], “a corporation’s operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State.” (Citation.) The court, however, emphasized the truly “ ‘exceptional facts’ ” of Perkins, where “[g]iven the wartime circumstances, Ohio could be considered ‘a surrogate for the place of incorporation or head office.’ ” 1 Cal.5th at 796
“Furthermore, in responding to a concurring opinion by Justice Sotomayor, the Daimler majority made clear that the general jurisdiction inquiry “does not ‘focu[s] solely on the magnitude of the defendant’s in-state contacts.’ ” (Daimler, supra, 571 U.S. at p. ––––, fn. 20, 134 S.Ct. at p. 762, fn. 20.) Instead, general jurisdiction “calls for an appraisal of a corporation’s activities in their entirety, nationwide and worldwide.” (Ibid.) Otherwise, a corporation with significant operations in many states would be deemed at home in all of them.” Id.
Applying these standards to the evidence presented in Bristol-Myers Squibb, the California Supreme Court concluded the Plaintiffs failed to prove the defendant, BMS, was subject to general jurisdiction stating:
“BMS may be regarded as being at home in Delaware, where it is incorporated, or perhaps in New York and New Jersey, where it maintains its principal business centers. Although the company’s ongoing activities in California are substantial, they fall far short of establishing that is it at home in this state for purposes of general jurisdiction….
“Similar to the California subsidiary in Daimler, BMS has sold large volumes of its products in California. Nevertheless, the high court plainly rejected the theory that a corporation is at home wherever its sales are “sizeable.” (Citation.) BMS employed approximately 164 people in California in addition to its 250 sales representatives in this state. But the company’s total California operations are much less extensive than its activities elsewhere in the United States. As noted earlier, in New York and New Jersey alone, BMS employed approximately 6,475 people, 51 percent of its United States workforce. In assessing BMS’s California business activities in comparison to the company’s business operations “in their entirety, nationwide,” we find nothing to warrant a conclusion that BMS is at home in California. (Citation.) As the high court warned in Daimler, to conclude that BMS may be sued in California on any cause of action, whether or not related to its activities here, under a theory of general jurisdiction, would be to extend globally the adjudicatory reach of every state in which the company has significant business operations.”
Bristol-Myers Squibb Co. v. Superior Court, supra, 1 Cal.5th at 797.
Preliminary, the Court did not categorically prohibit general jurisdiction discovery in its April 21, 2020 protective order. Based on the guidance of the Court of Appeal, Plaintiff initially will not be permitted to conduct any discovery into LG Chem America’s out of state or national activity. For purposes of general jurisdiction, Plaintiff is limited to discovery into the “nature” of America’s continuous corporate activity in this state and whether these contacts amount to America’s use of California as its headquarters or “home.” See Daimler, supra, 571 U.S. at 137-139. Therefore, relevant discovery will initially be limited to obtaining the information that shows or tends to show that LG Chem America’s home is located in California based on its operations in California.
To this end, the Court GRANTS, in part and DENIES, in part, Plaintiff’s request for General Jurisdiction discovery as follows:
- The Court grants Plaintiff leave to propound Plaintiff’s Second Set of Special Interrogatory - General Jurisdiction Nos. 2, 8, 10, 12- 18, 23-24, 26-30.
- The Court denies leave to propound Plaintiffs Second Set of Special Interrogatory – General Jurisdiction Nos. 1, 3-7, 9, 11, 19-22, 25 and 31
- The Court grants Plaintiff leave to propound Plaintiff’s Second Set of Request For Production - General Jurisdiction Nos. 1-4, 9, and 13.
- The Court denies the request for leave to propound Second set of Requests for Production of Documents nos. 5-8, 10-12, 14-16.
- The Court grants the request for leave as to the following General Jurisdiction Requests for Admission (RFA) Nos. 2-5, 8-17, 25- 27.
- The Court denies the request for leave as to the General Jurisdiction RFA Nos. 1, 6-7, 18-24.
- The Court grants leave to propound General Jurisdiction Form Rog 17.1.
II. Specific / Case-Linked Jurisdiction Discovery
“Personal jurisdiction can be all-purpose (also called “general”) or case-linked (also called “specific”). (Bristol-Myers, supra, 137 S.Ct. at pp. 1779–1780.) (We use the more descriptive labels instead of the “general”/“specific” names.) Farina v. SAVWCL III, LLC (2020) 50 Cal.App.5th 286, 294 “To assess case-linked jurisdiction, courts apply a three-prong test. Case-linked jurisdiction exists where: (1) the defendant has purposefully availed itself of a forum’s benefits; (2) the controversy relates to or arises out of the defendant’s contacts with the forum; and (3) the exercise of jurisdiction comports with fair play and substantial justice.” Id at 294. Applying these principles,
- The Court grants Plaintiff leave to propound Plaintiff’s Second Set of Requests for Admission -Specific Jurisdiction Nos. 1-8 and Form Interrogatory 17.1.
- The Court grants Plaintiff leave to propound Special Interrogatory Nos. 2-3, 5-7 and 10 (mis-numbered as No. 3).
- The Court denies the request for leave to propound Special Jurisdiction Special Interrogatory nos. 1, 4, 8-9, and 11
SUBJECT: LG CHEM AMERICA’S MOTION TO QUASH FOR LACK OF PERSONAL JURISDICTION
MOVING PARTY: Specially Appearing Defendant LG Chem America, Inc.
RESP. PARTY: Plaintiff Cody Kadow
Specially Appearing Defendant LG Chem America, Inc.’s Motion to Quash for Lack of Personal Jurisdiction is CONTINUED TO ______________________. Plaintiff’s request for ADDITIONAL jurisdictional discovery is GRANTED. Based on Plaintiff’s evidence, there is a likelihood that discovery will reveal additional contacts between LG CHEM AMERICA and California that would support personal jurisdiction. See Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.