Judge: Gary I. Micon, Case: 23CHCV01659, Date: 2024-08-08 Tentative Ruling
Case Number: 23CHCV01659 Hearing Date: August 8, 2024 Dept: F43
Dept. F43
Date: 8-8-24
Case #23CHCV01659,
Interinsurance Exchange of the Automobile Club vs. Air Vent, Inc., et al.
Trial Date: N/A
MOTION TO QUASH SERVICE OF SUMMONS
MOVING PARTY: Cross-Defendant
Powermax Electric Co. Ltd. Guangdong
RESPONDING
PARTY: Defendant/Cross-Complaint Air Vent, Inc.
RELIEF
REQUESTED
Cross-Defendant
has requested that the Court quash the service of summons.
RULING:
Motion is granted.
SUMMARY OF
ACTION
Cross-Defendant
Powermax Electric Co. Ltd. Guangdong (Powermax) filed this motion to quash
service of summons on May 8, 2024, pursuant to CCP §§ 418.10 and 1167.4(a). Powermax
filed the motion on the basis that this Court lacks personal jurisdiction over
Defendant. Powermax is a company based in the People’s Republic of China. Powermax
argues that it lacks sufficient minimum contacts with California for the Court
to exercise general jurisdiction over Powermax and that Powermax has not
purposefully availed itself of forum benefits for specific jurisdiction to
exist.
Cross-Complainant
Air Vent, Inc. (Air Vent) argues in its opposition that California courts would
have general and specific jurisdiction over Powermax. Air Vent argues that
general jurisdiction exists because Powermax’s contacts with California have
been substantial, continuous, and systematic because Powermax’s products are
available for purchase in California and throughout the United States.
Similarly, Air Vent argues that specific jurisdiction exists because Powermax has
purposefully availed itself of the jurisdiction of California courts because it
has been doing business with Air Vent. Air Vent also argues that Powermax exports
its products directly to ports in California. Finally, Air Vent argues that the
Plaintiff’s claims in this case arise out of Powermax’s business activities in
California and that exercising jurisdiction over Powermax is reasonable.
Alternatively, Air Vent argues that Powermax’s motion should be denied without
prejudice to allow discovery on jurisdictional issues.
Powermax argues
in its reply that Air Vent fails to set forth any relevant, admissible evidence
with respect to jurisdiction in its supporting declaration. Powermax also
argues that Air Vent appears to make the assumption that DM (Asia) Ltd (DMA)
and Powermax are one in the same, and Powermax argues that they are not. Next,
Powermax argues that even if it did contract directly with Air Vent, which it
argues it did not, Air Vent is a Texas company, so that would still not create
jurisdiction in California. Powermax also argues that the exhibits submitted
with Air Vent’s declaration do not show Powermax as contracting with any
California companies.
Powermax next
argues in its reply that Air Vent has failed to meet its burden to show that
Powermax is “at home” in California and thus cannot establish general
jurisdiction. Powermax also argues that Air Vent has failed to establish why
specific jurisdiction exists pursuant to the “stream of commerce plus” theory
or any other theory. Finally, Powermax argues that Air Vent’s request for
additional jurisdictional discovery should be denied.
Air Vent’s Request
for Judicial Notice: Air Vent has requested that the Court take judicial notice
of a Nevada case and a San Bernardino County case that denied Powermax’s motion
to dismiss and motion to quash in similar cases. The Court takes judicial
notice of these documents, but only as to their existence, and not for the
truth of any matter asserted therein.
ANALYSIS
CCP §
418.10(a)(1) allows a defendant to serve and file a notice of motion to quash
service of summons on the ground of lack of jurisdiction of the court.
Where a
nonresident defendant challenges jurisdiction by a motion to quash, the
plaintiff bears the burden of establishing by a preponderance of the evidence
the factual bases justifying the exercise of jurisdiction. (Viaview, Inc. v.
Retzlaff (2016) 1 Cal.App.5th 198, 216.) To satisfy this burden, a
plaintiff must present competent evidence showing that the defendant’s conduct
related to the pleaded causes of action is such as to constitute minimum
contacts with the forum to justify jurisdiction. (Id. at 217.)
General
Jurisdiction
A nonresident
defendant is subject to the forum’s general jurisdiction where the defendant’s
contacts are substantial, continuous, and systematic. (DVI, Inc. v. Superior
Court (2002) 104 Cal.App.4th 1080, 1090.) A court has no general
jurisdiction when the company has no offices, employees, bank accounts, or real
property in California. (See Cassiar Mining Corp. v. Superior Court
(1998) 66 Cal.App.4th 550, 554.)
In this case, Air
Vent have provided no evidence that Powermax has offices, employees, bank
accounts, or real property in California. Powermax is a Chinese corporation
headquartered in China. Powermax does not appear to have contacts that are
substantial, continuous, and systematic.
In its
opposition, Air Vent appears to confuse the standards for general and specific
jurisdiction. Air Vent argues that the Court has general jurisdiction over
Powermax because it allegedly sold and marketed its products to customers in
California. However, that is not one of the indications of substantial,
continuous, and systematic contact required for a forum to have general
jurisdiction over a nonresident defendant. Such arguments regarding the selling
and marketing of products are more applicable to the standard for specific
jurisdiction. Accordingly, Air Vent has not provided evidence that the Court
has general jurisdiction over Powermax.
This Court does
not have general jurisdiction over Powermax.
Specific
Jurisdiction
If a
nonresident’s contacts are not substantial and systematic, a court may exercise
specific jurisdiction over a nonresident defendant only if (i) the defendant
has purposefully availed itself of forum benefits by purposefully and
voluntarily directing its activities toward the forum, (ii) the controversy is
related to or arises out of the defendant’s contacts with the forum, and (iii)
the forum’s assertion of personal jurisdiction over the defendant would comport
with fair play and substantial justice. (Jensen v. Jensen (2019) 31
Cal.App.5th 682, 686-687.)
In determining
whether a defendant has purposefully availed itself of the benefits of the
forum state, the relevant inquiry is “the degree to which a foreign corporation
interjects itself into the forum state” such that the defendant can “reasonably
expect to be haled into court there.” (Felix v. Bomoro Kommanditgesellschaft
(1987) 196 Cal.App.3d 106, 115-117.)
First, Powermax
argues that it has not purposefully availed itself of forum benefits by
purposefully directing its activities toward the forum. Powermax argues that it
does not direct any business activities toward the State of California and that
even if it had manufactured the product, it sold the product to DMA, and that
sale occurred in China, not California. Air Vent’s opposition includes
declarations that claim that Powermax distributed millions of motors directly
from the Powermax facility to Air Vent (which is a Texas corporation) and that Powermax
exports its products directly to ports in California. (See Holland and Jakofsky
Declarations.)
Powermax argues
in its reply that none of the exhibits provided by Air Vent establish a direct
connection between Powermax and California. The exhibits only vaguely reference
business contacts with the United States with no mention of California, or show
that Powermax’s products arrived in California or passed through California
through the stream of commerce. There is also no evidence that Powermax
expected its motors to be purchased by consumers in California or purposefully
availed itself of the benefits of the California forum. Additionally, Air Vent
indicates that the relevant motors that it purchased from DMA (which bought the
motors from Powermax in China), were shipped to Air Vent’s Texas facility and
then incorporated into an attic fan manufactured in Texas, not California.
Powermax also
argues that the exhibits submitted by Air Vent, including the Amazon
screenshots showing Powermax as a manufacturer and purported contracts with
various hardware stores, are not authenticated and lack foundation or
verifiable links. (Reply at pp. 3-4.) These exhibits were attached to the
declarations of a private investigator, Air Vent’s attorney, and the Director
of Quality and Technical Services for Air Vent. These individuals simply claimed
that these were true and correct copies without more. Furthermore, the sales
contracts that Air Vent provided are with the DMA entity, not Powermax. Though
Air Vent claims that DMA is Powermax’s marketing agent/partner, Air Vent has
provided no evidence of this and appears that its assertions on this matter are
just based on speculation. The Court agrees with Powermax’s objections to these
exhibits and sustains Powermax’s objections to Air Vent’s exhibits.
Based on the
foregoing, there is no evidence that Powermax purposefully availed itself of
the forum benefits.
Second, Powermax
argues that Air Vent’s claims do not arise from any contact by Powermax with
the state of California. Air Vent’s claims arise from Air Vent purchasing the
motor at issue from DMA. Powermax has submitted evidence that it did not sell
the motor directly to any California entity or any individual in the United
States, as Powermax’s sale to DMA took place in China. Air Vent argues in its
opposition that Powermax sold the motor knowing that it would be purchased in
California, but Air Vent provides no evidence to support this argument.
Furthermore, Powermax sold the motors to DMA in China, and DMA sold the motors
to Air Vent in Texas, not California. There is no evidence that Plaintiff’s
claims arise out of any activities on the part of Powermax in California.
Third, Powermax
argues that the exercise of specific jurisdiction would offend traditional
notions of fair play and substantial justice. When considering whether the
assertion of personal jurisdiction would comport with “fair play and
substantial justice,” the Court must consider (1) the burden on Powermax, (2)
the interests of the forum state, (3) Cross-Complainant’s interests in
obtaining relief, (4) the interstate and international judicial system’s
interest in obtaining the most efficient resolution of controversies, and (5)
shared interest of the various jurisdictions in furthering fundamental
substantive social policies. (Snowney v. Harrah’s Entertainment (2005)
35 Cal.4th 1054, 1062.)
Powermax argues
that the burden on it in defending this action would far outweigh any interest
the State of California has, if any, in adjudicating the allegations against
Powermax. Powermax argues that California has no interest in regulating the
products sold by a company from China outside the State of California. It also
argues that it would be unfair and unreasonably burdensome to force Powermax to
defend itself over 11,500 miles from its place of business. Air Vent only
argues that it would be reasonable because Air Vent has established that
Powermax has minimum contacts with California. However, the Court found that
Powermax does not have minimum contacts with California. It would be unfair and
overburdensome to require Powermax to defend this case in a California court.
As for the
parties differing interpretations of Asahi Metal Industry Co., Ltd. v.
Superior Court of California, Solano County (1987) 480 U.S. 102, the Court
agrees with Powermax that minimum contacts, and thus personal jurisdiction,
cannot be established based simply on the arrival of components from outside
the United States into the forum State through the stream of commerce. As for Bridgestone
Corp. v. Superior Court (2002) 99 Cal.App.4th 767, that case involved a Japanese
company selling a product directly to a company in California. The present case
is distinguishable because Powermax sold to DMA in China, and then DMA sold to
Air Vent in Texas.
This Court does
not have specific jurisdiction over Powermax.
Additional Discovery
Air Vent
requested in the alternative that additional discovery on the jurisdictional issue
should be ordered. Air Vent has already done limited discovery in opposing this
motion. Air Vent has not indicated how additional discovery may help in
determining the jurisdictional issue. No additional discovery will be ordered.
CONCLUSION
Based on the
foregoing, Powermax’s motion to quash service of summons is granted. Powermax
is dismissed from this action.
Moving party to
give notice.