LG Chem, Ltd. v. Superior Court, No. D079718 (D4d1 Jun. 27, 2022)
Plaintiff was injured when a lithium-ion battery called an “18650” that he bought from a San Diego vape shop blew up in his pocket. He sued a Korean Manufacturer that makes 18650 batteries. Manufacturer moved to dismiss for lack of personal jurisdiction. The trial court granted the motion, and the Manufacturer took a writ.
Jurisdictional discovery revealed that Manufacturer did sell a large number of 18650 batteries to three customers in California. These customers all approached Manufacturer—it did not market, advertise, or solicit their business. And these customers were all industrial. They would encase the batteries in an enclosure with protective circuitry for use in products like electric cars and power tools. Manufacturer did not sell to anyone in California that re-sold batteries for direct sale to consumers, including vape shops or vape shop supply businesses. Indeed, owing out of a vaping battery incident in 2016, Manufacturer made all of its customers certify that its batteries would used only for the aforementioned industrial uses and that they would not be sold or re-sold for individual consumer use.
On these facts, the court finds specific personal jurisdiction to be lacking. It finds that the sales were adequate to constitute purposeful availment. But the jurisdiction founders on the second—relatedness—element of the specific jurisdiction test. There’s not much dispute that Plaintiff’s injury does not “arise” out of Manufacturer’s industrial sales in California. But the question is whether the claims “relate” to those contacts, a la, the Supreme Court's Ford decision, which we recently discussed in the Daimler Trucks case.*
The Court rejects the Ford analogy, however, based on both the quality and quantity of the contacts. First, unlike Ford, manufacturer did not extensively market and advertise sales of its product to anyone in California. And second, the California market that Manufacturer served was industrial, not consumer. So unlike Ford—where Ford sold trucks in Montana, just not plaintiffs truck—hereManufacturer did not systematically serve a market for consumers like Plaintiff to purchase or use its 18650 batteries.
Writ granted.
Interestingly, this falls on the other side of the “junior varsity general jurisdiction” line I discussed in my post on Daimler Trucks. As I said there, in Ford, the U.S. Supreme Court basically created a third jurisdictional category for certain tort cases—one with a more malleable relatedness prong—where there are (1) home-state plaintiffs; (2) defendants who would have satisfied the pre-Daimler“systematic and continuous” test; and (3) where the instrumentality that hurt the plaintiff is marketed and sold to others in the jurisdiction where the defendant lives. Unlike in Daimler, this case fails in both elements (2)—Manufacturer doesn’t satisfy the old systematic and continuous test from Helicopteros Nacionales v. Hall—and (3) Manufacturer didn’t market or sell 18650 batteries to consumers in California.
*Daimler Trucks was actually decided a few weeks after this case. I was in trial when this case came down and I am working through some backlog.