Judge: Bruce G. Iwasaki, Case: 25STCV08772, Date: 2025-06-05 Tentative Ruling

Case Number: 25STCV08772    Hearing Date: June 6, 2025    Dept: 14

SUPERIOR COURT OF THE STATE OF CALIFORNIA¿¿¿¿ 

FOR THE COUNTY OF LOS ANGELES¿¿ 

¿ 

DEPARTMENT 14¿ 

¿ 

¿ 

¿¿ 

¿ 

¿ 

I.                Background 

            On March 25, 2025, Plaintiffs Cynthia Crane, Sandra, Edward, and Amanda Millard and Allison Smith (“Plaintiffs”) filed their complaint for wrongful death alleging Mr. Gerald Millard (“Mr. Millard”) developed mesothelioma from occupational exposure to asbestos and asbestos-containing materials during his work at naval shipyards between approximately the 1960s and 1990s, direct non-occupational exposure to asbestos-containing construction products between the 1960s and the 1980s, and direct non occupational use to asbestos containing cosmetic talc products between the 1980s and 2010. As against Defendant Vanderbilt Minerals LLC and its predecessor in interest the Western Talc Company (“Defendant” or “Vanderbilt”) Plaintiffs allege that Mr. Millard was exposed to asbestos contaminated talc incorporated in DAP caulk, DAP 33 glazing putty, and DAP panel adhesive from the mid-1970s to the early 1980s and Kaiser Gypsum joint compound in 1973 and 1974.

On May 5, 2025, Vanderbilt filed this motion to quash service of summons and complaint for lack of personal jurisdiction arguing Plaintiffs failed to present evidence of any relation between Defendant’s activities in California and Plaintiffs claims against it. On May 23, 2025, Plaintiffs filed their opposition arguing Defendant is subject to general jurisdiction based on its predecessor entity’s contacts with California, or in the alternative, because Defendant supplied talc for incorporation into the construction products Plaintiffs allege Mr. Millard used. On May 30, 2025, Vanderbilt filed its reply. On June 6, 2025 the court held a hearing.

The court continues Vanderbilt’s motion to quash to permit time for targeted and focused jurisdictional discovery into the agreement between the Western Talc Company and Vanderbilt Minerals which resulted in the “merging” of those entities to determine whether this court has general jurisdiction over Vanderbilt as a successor in interest to the Western Talc Company. Separately, Plaintiffs may conduct jurisdictional discovery to present admissible evidence of Kaiser Gypsum and DAP Inc.’s use of Vanderbilt talc in the products Plaintiffs identified Mr. Millard using.

II.             Objections

Defendant’s Objections:

Because, as explained further herein, the court finds Plaintiffs failed to show sufficient evidence of general jurisdiction, but did present sufficient evidence to support a continuance for jurisdictional discovery, the court exercises its discretion to defer ruling on Defendant’s evidentiary objections until after supplemental evidence has been filed directed towards the issues discussed further herein.

III.           Discussion

Based on the papers, there appears to be two issues at dispute in this motion. First, whether there is general jurisdiction over Vanderbilt due to a merger between Vanderbilt and its undisputed predecessor entity, the Western Talc Company.  The second is whether Plaintiffs presented sufficient evidence that Plaintiffs’ claims arose from or related to Vanderbilt’s contacts with California. In particular, the dispute is over whether Plaintiffs presented sufficient evidence that Vanderbilt sold talc into California for incorporation into the construction products Plaintiffs allege Mr. Millard was exposed to.

A. General Jurisdiction

General jurisdiction over a corporate defendant exists when the corporation's “affiliations with the State are so ‘continuous and systematic’ as to render it essentially at home in the forum State.” (Daimler, supra, 571 U.S. 117, 139 [quoting Goodyear Dunlop Tires Operations, S.A. v. Brown (2011) 564 U.S. 915, 919].) For a corporation, the paradigmatic examples of such affiliations are the locations where the defendant is incorporated and of the defendant’s principal place of business. (Daimler, supra, 571 U.S. at p. 137.) Under the traditional rule of successor liability, “the purchaser [corporation] does not assume the seller [corporation]'s liabilities unless (1) there is an express or implied agreement of assumption, (2) the transaction amounts to a consolidation or merger of the two corporations, (3) the purchasing corporation is a mere continuation of the seller, or (4) the transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for the seller's debts.” (Ray v. Alad Corp. (1977) 19 Cal.3d 22, 28.)

As to general jurisdiction, there are certain facts which appear to be undisputed. There does not appear to be any dispute that Vanderbilt purchased the Western Talc Company, a California Corporation, in 1963. Accordingly, there does not appear to be any dispute that during the entire existence of the Western Talc Company, it would have been subject to general jurisdiction in California. (See Daimler, supra, 571 U.S. at p. 137.) There also does not appear to be any dispute that the Western Talc Company was initially acquired and operated as a separate subsidiary entity of Vanderbilt pursuant to the 1963 Capital Stock Purchase and Sale Agreement. (Stock Decl. Ex. 10; Opposition at p. 5 [“VML purchased the Western Talc Company in Tecopa, California in 1963 and operated the mine until at least 1974.”]) Plaintiffs therefore do not appear to argue that the Capital Stock Purchase and Sale Agreement rendered Vanderbilt subject to jurisdiction in California. (DVI, Inc. v. Superior Court (2002) 104 Cal.App.4th 1080, 1097 [“a parent company's ownership or control of a subsidiary corporation does not, without more, subject the parent corporation to the jurisdiction of the state where the subsidiary does business.”] There is also no dispute that the Western Talc Company ceased operations in approximately 1974. (Stock Decl. Ex. 3 25:2-10, reply at p. 9.)

The key dispute is as to whether there was a transaction which constituted a formal or de-facto merger between the Western Talc Company and Vanderbilt. Plaintiffs argue that the deposition testimony of Mr. Matthew Stewart, taken in the Beach case this year establishes an admission by Defendant that such a merger occurred. (See Stock Decl. Ex. 3 25:4-16 [“You said that Western Talc Company was mothballed in 1974. What do you mean by that? A. Operations ceased. Q. Okay. And then what happened to it as a corporate entity? A. Nothing. The operations just ceased. Q. Okay. Is the Western Talc Company a part of Vanderbilt Minerals, LLC? A. Yes. Q. How so?  A. It's -- it was merged into -- it was merged into Vanderbilt Minerals.”].) Defendant argues that Mr. Stewart’s deposition is inadmissible and in the alternative that the facts Mr. Stewart testified to are not sufficient to establish a formal merger under Corporations code section 1101. [“(a) The board of each corporation that desires to merge shall approve an agreement of merger. The constituent corporations shall be parties to the agreement of merger and other persons, including a parent party (Section 1200), may be parties to the agreement of merger. The agreement shall state all of the following:…”].) Defendant also argues that there is insufficient evidence of a de-facto merger as discussed in CenterPoint Energy, Inc. v. Superior Court (2007) 157 Cal.App.4th 1101, 1121. “In Marks, supra, 187 Cal.App.3d 1429, 232 Cal.Rptr. 594, the trial court set out a checklist for determining whether a de facto merger had taken place that would render the successor company liable for the plaintiff's product liability claim: ‘(1) was the consideration paid for the assets solely stock of the purchaser of its parent; (2) did the purchaser continue the same enterprise after the sale; (3) did the shareholders of the seller become the shareholders of the purchaser; (4) did the seller liquidate; and (5) did the buyer assume the liabilities necessary to carry on the business of the seller? [Citations.]’ [Citaitons.]” (Ibid.)

Here, regardless of the admissibility of the Stewart deposition in the Beach matter under Evidence Code sections 1200 and 702 (as interpreted by the court in LAOSD Asbestos Cases (2023) 87 Cal.App.5th 939), the court finds that Plaintiffs do not present sufficient evidence of the existence of a legal agreement which constituted a formal merger under Corporations Code section 1101, or a de-facto merger under Centerpoint. Plaintiffs do not present evidence of the actual terms of the agreement between Defendant and the Western Talc Company. Accordingly the court is unable to evaluate whether a formal merger under Corporations Code section 1101 or the corporations code of any other state under which this transaction may have occurred. With regards to the de-facto merger, Mr. Stewart’s testimony barely discusses the process by which Western Talc Company merged into Vanderbilt. (Stock Decl. Ex. 3.) It is also unclear when such a merger occurred. (Id. at 25:17-20 [“Q. When did the -- when was the Western Talc Company merged into Vanderbilt Minerals? A. I don't remember the date.”].) There is no evidence of whether any consideration was paid by Vanderbilt before the purported merger. There is very limited evidence about the operations of either entity immediately before, during, or after the merger was effectuated. Therefore, Plaintiffs have not yet satisfied their burden to establish the existence of necessary jurisdictional facts to support their theory of general jurisdiction. (Centerpoint, supra, 157 Cal.App.4th at p. 1121.)

B. Jurisdictional Discovery

However, the court finds that jurisdictional discovery is merited on the topic of general jurisdiction. A plaintiff attempting to assert jurisdiction over a nonresident defendant is entitled to an opportunity to conduct discovery of the jurisdictional facts necessary to sustain its burden of proof[.]” (Hardell v. Vanzyl (2024) 102 Cal.App.5th 960, 975-976; Goehring v. Superior Court (Bernier) (1998) 62 Cal.App.4th 894.) This court has “discretion to continue the hearing on a motion to quash service of summons for lack of personal jurisdiction to allow the plaintiff to conduct discovery on jurisdictional issues.” (HealthMarkets, Inc. v. Superior Court (2009) 171 Cal.App.4th 1160, 1173.) However, “In order to prevail on a motion for a continuance for jurisdictional discovery, the plaintiff should demonstrate that discovery is likely to lead to the production of evidence of facts establishing jurisdiction.” (In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 127.)

            Here, the court finds that Plaintiffs have demonstrated through former testimony from Vanderbilt’s corporate representative, regardless of its admissibility at this time, that at some point after 1974 Vanderbilt “merged” with the Western Talc Company. However, the terms of this “merger” are unclear. The court finds that jurisdictional discovery is merited here because it may lead to the production of evidence concerning the existence of a formal merger agreement between Vanderbilt and the Western Talc Company, or other facts which may support or negate a finding of a de-facto merger between those entities.

Defendant argues Plaintiffs did not expressly request jurisdictional discovery regarding general jurisdiction, and therefore discovery on this topic should not be provided. (Reply at p. 14. [“The Millard Heirs must be precluded from conducting any jurisdictional discovery regarding general jurisdiction, as they have effectively waived any such request since it was not requested in their Opposition.”].) However, the court interprets Plaintiffs’ request for a continuance for jurisdictional discovery to encompass discovery interpreted to each of Plaintiffs theories of jurisdiction, even if the most specific requests appear to directed predominantly towards specific jurisdiction. (See opposition at pp. 17-18 [“Plaintiffs hereby request the Court continue the hearing to permit Plaintiffs the opportunity to conduct jurisdictional discovery. Such discovery is likely to lead to the production of additional evidence, which will ground specific jurisdiction over VML – including further evidence showing VML’s sale of its asbestos-containing talcum powder products to DAP and Kaiser Gypsum in the state of California during the relevant time period as well as other manufacturers of similar products.”].) Accordingly, the court grants Plaintiffs’ request for a continuance to conduct jurisdictional discovery. The court expects all parties to proceed cooperatively and efficiently with respect to this discovery.

C. Specific Jurisdiction

            As to the second issue, specific jurisdiction, the key dispute is whether Plaintiffs presented sufficient evidence that Plaintiffs’ claims arose from or related to Vanderbilt’s contacts with California. The undisputed evidence is as follows: Plaintiffs presented evidence that Mr. Millard used “Kaiser Gypsum joint compound from approximately 1973 to 1974” (Allison Millard Smith Decl. ¶ 5) and used “DAP caulking, DAP-33 glazing putty, and DAP panel adhesive for flooring” between “the mid-1970's to early 1980's” (Edward Millard Decl. ¶ 4.) Plaintiffs present 26 exhibits, approximately 1400 pages, of documents and deposition transcripts produced in prior litigation that purport to show Vanderbilt’s sale of talc to DAP and Kaiser Gypsum, including for incorporation into the products at issue in this case. Vanderbilt objects to the vast majority of these documents as hearsay, irrelevant, or lacking authentication. (See generally, Vanderbilts objections.) Vanderbilt does not object to the admissibility of certain sales records (See Stock Decl. Ex. 11, 16) which show sales of talc to both DAP and Kaiser Gypsum at various times. However, none of the unobjected to records show sales to Kaiser Gypsum in California during the 1973-1974 exposure period at issue for its products or the mid-1970s to early 1980s period at issue for DAP products. (See e.g, Stock Decl. Ex. 16 VMI_GLI090965 [showing sale of Westal 202 talc to Kaiser Gypsum in California in November 1971.].)

As stated, the court grants Plaintiffs’ request for a continuance to conduct jurisdictional discovery. Given that many of Vanderbilt’s objections to Plaintiffs’ evidence center on the documents or testimony having been provided by Vanderbilt or other corporate entities in prior litigation, this jurisdictional discovery presents an opportunity for the parties to engage in case specific discovery regarding Vanderbilt’s supply of talc to Kaiser Gypsum and DAP for use in the products identified by Allison Millard Smith and Edward Millard. In supplemental opposition to this motion, Plaintiffs may use the continuance to conduct case-specific jurisdictional discovery regarding Vanderbilt’s supply of talc to these entities for these products. If such discovery is propounded and relied upon in supplemental opposition, Vanderbilt may object to in supplemental reply. Plaintiffs may also elect to stand on their previous evidentiary submissions at which time the court will rule on each of Defendant’s evidentiary objections made in this motion.

IV.           Conclusion

Targeted and focused jurisdictional discovery into the agreement that led to the Western Talc Company’s “merger” into Vanderbilt is reasonably likely to lead to the production of evidence bearing on the issue of personal jurisdiction. Plaintiffs may also use this continuance to conduct targeted and focused jurisdictional discovery regarding the issue of relatedness, i.e., Vanderbilt’s supply of talc to Kaiser Gypsum and DAP for use in the products Plaintiffs identified. Accordingly, Defendant’s motion to quash service of summons and complaint for lack of personal jurisdiction is continued to August 5, 2025 to permit time to conduct targeted and focused jurisdictional discovery. The parties are ordered promptly to meet and cnfer to coordinate jurisdictional discovery. Defendant Vanderbilt Minerals, LLC is ordered to give notice.