Judge Christian R. Gullon, Case Number: 23PSCV02440, Date: 2024-03-11 Tentative Ruling

Judge: Christian R. Gullon, Case: 23PSCV02440, Date: 2024-03-11 Tentative Ruling

(1) Defendants TBC Corporation’s and TBC Brands, LLC’s (collectively, the “TBC Defendants”) MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT (“TBD Motion”) IS GRANTED.

(2) Defendants Shandong Linglong Tyre Co., Ltd.’s (“Shandong”) and Linglong Americas’s, Inc. (“Linglong”) (collectively, the “Linglong Defendants”) MOTION TO QUASH SERVICE OF SUMMONS AND COMPLAINT (“Linglong Motion”) is GRANTED. The claims against the moving Defendants are dismissed with prejudice.

This case arises from a car accident that happened in Virginia wherein the subject tire separated from the vehicle, causing decedent (Maryland resident) to lose control of his vehicle and crash into a guardrail.[1]

On August 9, 2023, Plaintiffs BENJAMIN ANDREWS, an individual, as personal representative of the ESTATE OF CRAIG RICARDO ARTHURS, deceased, and on behalf of decedent’s heirs and successors in interest TRINITY ARTHURS, and CRAIG ARTHURS, JR. filed suit against Defendants SHANDONG LINGLONG TYRE CO., LTD, F/K/A ZHAOYUAN LEO RUBBER CO., LTD., A/K/A SHANDONG LINGLONG RUBBER CO., LTD., LINGLONG AMERICAS, INC., HORIZON TIRE NJ, LLC D/B/A HORIZON TIRE, INC., TBC CORPORATION, D/B/A TBC-TIRE and BATTERY CORPORATION, TBC BRANDS, LLC, D/B/A TBC-TIRE and BATTERY CORPORATION for the following causes of action (COAs):[2]

On January 1, 2024, HORIZON TIRE NJ, LLC D/B/A HORIZON TIRE, INC. (“Horizon”) filed its answer.

On January 26, 2024, TBD and Linglong Defendants (collectively, “Defendants”) filed the instant motions to quash.

On March 1, 2024, moving Defendants filed a ‘Notice of Non-Opposition to Defendants’ Motion to Quash Service of Summons and Complaint’ indicating that they have not received an opposition to their motions.[3]

Defendants argue the court lacks personal jurisdiction over Defendants, a point which they make by heavily relying upon a federal court’s evidentiary and legal findings.[4]

The Virginia Action made an evidentiary finding that the subject tire was built/manufactured by Defendant Shandong. (Complaint ¶6, emphasis added; see also Linglong Motion p. 1:11-14 [“Judge Novak specifically found that the tire at issue [] manufactured no later than September 6, 2014 [], was sold in China by Shandong to Defendant [] Horizon]; see also Linglong Motion p. 2:24-26 [“[T]he subject tire was sold in China by Shandong.”]; see also Linglong Motion p. 4:10-14 [“The uncontroverted facts stand as …Shandong asserts that it sold and shipped the subject tire . . . to [] Horizon …[Horizon] makes no denial that took possession of the tire in China in 2014.”], emphasis added.) Therefore, the Virginia Action made it clear that Linglong never had any contact with the Tire.

As to the basis of Defendants relationships and relevant facts, they are as follows:

In 2006, Shandong and Horizon entered into an agreement wherein Horizon became the exclusive distributor of Defendant Shandong’s “Crosswind” line of tires. (Complaint ¶38); Prior to 2014, SHANDONG entered into a contract with the TBD wherein TBD would distribute the Defendant the tires throughout the US (¶29); From 2006 through 2023, Defendant Shandong, made approximately 2,832 shipments of tires to different ports in the state of California including Los Angeles and Oakland (¶30); From 2009 through 2010, Defendant SHANDONG, made approximately 119 shipments of tires through the ports of California, including 5 shipments of Crosswind tires to Defendant HORIZON (¶31); From on or about August 31, 2014 through to September 6, 2014, Defendant SHANDONG , manufactured the SUBJECT TIRE for the purposes of exporting the Subject Tire to the United States (¶33); Alternatively, prior to June 4, Shandong placed the Subject Tire into the stream of commerce via either Horizon (¶34), Linglong (¶35), or TBD (¶36), one which then imported the Subject Tire into the United States and placed the Subject Tire into the stream of commerce in the United States (¶¶37-39); Sometime in late 2014 to early 2015 the exclusive distributorship agreement between Defendant SHANDONG and Defendant HORIZON, began to break down as the two companies fought over the price of Crosswind tires. As a result, Defendant SHANDONG created a subsidiary, Defendant Linglong to compete with and ultimately replace the distribution function formerly performed by Defendant HORIZON (¶40);[5] From approximately 2014 through the present, Defendant SHANDONG, made approximately 489 shipments of tires though ports located in the state of California which were consigned by Defendant LINGLONG (¶42); Beginning in May 2015 through April 2016, Defendant SHANDONG, made 9 shipments of new tires to the Defendant LINGLONG through ports located in the state of California (¶43).

It is undisputed that neither Shandong or Linglong are incorporated, have their headquarters, or their principal place of business in California. These facts alone are sufficient to determine that Defendants are not “at home.” (See Goodyear Dunlop Tire Operations, S.A. v. Brown (2011) 564 U.S. 915, 924 [For a corporation, its domicile, place of incorporation, and/or principal place of business within a state constitute the paradigm bases for establishing general jurisdiction.].)

To the extent that Plaintiffs attempt to impute minimum contacts via a stream of commerce theory, that “may bolster an affiliation germane to specific jurisdiction … ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant.” (Linglong Motion p. 8, citing Goodyear, supra, 564 U.S. at p. 927.)

Therefore, as the paradigm bases for the exercise of general jurisdiction are not met and there no facts to demonstrate that this is an exceptional case to render Shandong and Linglong at home, the court, exercising “even more caution”, finds no general jurisdiction. (Motion p. 7, quoting In re Automobile Antritrust Cases I and II (2005) 135 Cal.App.4th 100, 109.)

California courts routinely apply a three-part test to determine whether a court may exercise specific jurisdiction over a nonresident defendant:

(1) the defendant has purposefully availed himself or herself of forum benefits,

(2) the controversy is related to or arises out of the defendant’s purposeful contacts with the forum, and

(3) the assertion of personal jurisdiction would comport with fair play and substantial justice. (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, emphasis added.)

Here, the court will focus on the second prong as there is a dispositive fact: Plaintiffs do not allege that the tire entered California. (See Motion Linglong Motion p. 13, quoting Morrison v. Ross Stores, Inc. (N.D. Cal., Nov. 14, 2018, No. 18-CV-02671-YGR) 2018 WL 5982006 [“Based upon Bristol-Myers and Walden, a plaintiff, as here, who is not a California resident, does not allege to have suffered harm in California, and does not allege any conduct by the defendant occurred in California, has not established specific personal jurisdiction as to her claims.”].)[6]

To the extent that the subject tire may have entered California, that, as Judge Novak observed, is based on pure speculation, which falls wholly short of the preponderance of evidence requirement. (See Motion p. 7, quoting Aquila, Inc. v. Super. Ct., 148 Cal. App. 4th 556, 568 (2007) [“The plaintiff must establish the facts of jurisdiction by a preponderance of the evidence.”].) Accordingly, absent an opposition to contend otherwise, the facts and evidence indicate that Linglong Defendants conducted no activity whatsoever in California.

Therefore, without an affiliation between California and the underlying controversy, specific jurisdiction is lacking “regardless of the extent of a defendant's unconnected activities in the State.” (Bristol-Myers Squibb Co., supra, 582 U.S. at p. 256.)

As the arguments, allegations, and cited case law are largely similar to those presented in the Linglong Motion (including a federal opinion regarding these defendants), the court will not provide a thorough analysis.

TBD is neither incorporated in California nor has its principal place of business in California. To the extent that Plaintiff seeks this court to find general jurisdiction based upon the allegation that TBD is “engaging in business” in California (¶11), that falls wholly short of the standard that the corporation’s presence be “so substantial and of such a nature as to render the corporation at home in that State.” (Daimler AG. v. Bauman, 571 U.S. 117, 139, n.19 (2014); see also Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984); see BNSF Ry. Co. v. Tyrrell (2017) 581 U.S. 402.)

As with the Linglong Defendants, the analysis ends with the following fact: there is no connection between TBC Defendants, the decedent, California, the tire, and the accident that gives rise to Plaintiff’s claims. (See also TBC Motion p. 12.)

Therefore, as Plaintiffs have not satisfied the second prong of the jurisdictional analysis, TBC Defendants are not subject to specific jurisdiction.

All in all, as to both moving Defendants, Plaintiff has not alleged where or when the subject tire was sold, other than that the tire arrived in Maryland by some unknown means at some unknown point in time before the decedent purchased the tow truck from Divaz Towing. As there are no sufficient allegations, let alone evidence, the motions are granted.

Based on the foregoing, motions are granted; the court grants the motions to quash the summons for lack of personal jurisdiction and dismisses the claims against them with prejudice.

[1] According to the instant motions, the decedent bought the tow truck with the subject tire already installed from Maryland Company Divaz Towing, and the company does not know where the tire came from. (TBC Motion pp. 2-3.)

[2] According to the complaint, Shandong is a foreign corporation; Linglong (the American affiliate of Shandong) is a Ohio corporation with its principal place of business (PPB) in Ohio who “engag[es] in the business of manufacturing and packaging certain products, including automobile tires, for sale to and for use by members of the general public;” TBC Brand Defendants (both the LLC and Corporation) are Delaware corporations headquartered in Florida who “engag[e] in the manufacturing and packaging of certain products, including automobile tires, for sale to and for use by members of the general public;” Horizon is a California corporation with a with a principal place of business located in 4818 4th Street, Irwindale, CA 91706 that is “engaged in the business of importing, shipping, selling and distributing tires, including the SUBJECT TIRE.” (See generally Complaint pp. 3-4.)

[3] Failure to file an opposition may be treated as “an admission that the motion is meritorious, and therefore [the court may] refuse to hear oral argument from such party. The purpose is to prevent introduction of legal theories without notice to opposing counsel and the court.” (C. Opposing the Motion—and Rebutting the Opposition, Cal. Prac. Guide Civ. Pro. Before Trial Ch. 9(I)-C, ¶ 9:105.10.)

[4] Andrews v. Shandong Linglong Tyre Co., No. 3:21cv794 (DJN), 2022 U.S. Dist. LEXIS 119316, at *22 (E.D. Va. July 6, 2022) (“Andrews I”); Andrews v. Shandong Linglong Tyre Co., 656 F. Supp. 3d 583, 589 (E.D. Va. 2023) (“Andrews II”) (collectively, the “Virginia Action”). (See Akerman Decl.)

[5] The court doesn’t dispute that placing a product into the stream of commerce without more is not an act purposefully directed toward the forum state. (See e.g., Pavlovich, infra, 29 Cal.4th at p. 274; see also Motion p.11, citing Harvest USA, LLC v. Boley Int’l HK Ltd., 2020 U.S. Dist. LEXIS 247232, at *21 (C.D. Cal. Sept. 22, 2020) [shipments via a California port are insufficient to establish foreign corporation was “expressly aiming” California]; see Motion p. 11, citing Aurora Corp. of Am. v. Michlin Prosperity Co., 2015 U.S. Dist. LEXIS 133340, at *16 (C.D. Cal. Sept. 29, 2015) [shipment of goods through California is insufficient to establish minimum contacts]. But Defendants do not address the issue that competing with a California corporation could support a finding that Defendants purposefully availed themselves of California (prong #1 for specific jurisdiction). After all, the purposeful availment inquiry “focuses on the defendant's intentionality… [it] ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts [citations], or of the ‘unilateral activity of another party or a third person.’” (Pavlovich, infra, 29 Cal.4th at p. 269, quoting Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 572-473.) Competing with a California corporation by changing the course of business is not random, but deliberate (i.e., intentional conduct). To the extent that competition with Horizon was mentioned by the federal court, it was in relation to Virginia. (See Akerman, Ex. 4, p. 4 of opinion, fn. 5, p. 52 of 78 of PDF [“Plaintiff invites the Court to make an inferential leap that Linglong distributed tires in Virginia, because it competed with Horizon, who distributed tires in Virginia. However, such an inference requires the Court to leap over gaps in Plaintiff's evidence - such as that Linglong competed with Horizon in Virginia - which it will not do.”].)

[6] In Bristol-Myers Squibb Co. v. Super. Ct., 582 U.S. 255 (2017), the plaintiffs, who were mostly of non-California residents, sued the Bristol–Myers Squibb Company (BMS), a corporation incorporated in Delaware and headquartered in New York, and that maintains substantial operations in both New York and New Jersey, in California state court. The plaintiffs alleged that the pharmaceutical company's drug had damaged their health. Aside from conducting some business in California and selling the subject drug in California, “BMS did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in the State. And the nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured by Plavix in California, or that they were treated for their injuries in California.” (Ibid.) The Supreme rejected an assertion of specific jurisdiction where the non-resident plaintiffs had not “identif[ied] any adequate link between the State and the nonresidents' claims.” In Walden v. Fiore, 571 U.S. 277, 284 (2014), the Court emphasized that what is needed is a connection between the forum and the specific claims at issue.

[7] As with the instant, Plaintiffs did not oppose TBC Defendants’ Motion to Dismiss the federal case. (See TBC Motion pp. 1, 14.)