Judge: Laura A. Seigle, Case: 22STCV32540, Date: 2022-12-06 Tentative Ruling

Case Number: 22STCV32540    Hearing Date: December 6, 2022    Dept: 15

[TENTATIVE] ORDER RE MOTION TO QUASH

            Plaintiffs Elaine Adelia Hickey Herman and Jacob Russell Herman filed this case against Defendant Bristol Myers Squibb Company, among others, alleging Elaine Herman was injured as a result of exposure to asbestos-containing products, including Jean Nate branded talcum powder.  On November 7, 2022, Defendant filed a motion to dismiss for lack of personal jurisdiction. 

A defendant may move to quash service of summons on the ground of lack of jurisdiction of the court over him or her.  (Code Civ. Proc., § 418.10, subd. (a)(1).)  The court may dismiss without prejudice the complaint in whole, or as to that defendant, when dismissal is made pursuant to Section 418.10.  (Code Civ. Proc., § 581, subd. (h).) 

“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.”  (Code Civ. Proc., § 410.10.)  “The Due Process Clause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’”  (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 471-472.)  A state court may not exercise personal jurisdiction over a party under circumstances that would offend “traditional notions of fair play and substantial justice.”  (Asahi Metal Industry Co., Ltd., v. Superior Court of California, Solano County (1987) 480 U.S. 102, 113.) 

When a defendant moves to quash service of process on jurisdictional grounds, the plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction.  (Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543, 553.)  Once facts showing minimum contacts with the forum state are established, the defendant has the burden to demonstrate that the exercise of jurisdiction would be unreasonable.  (Ibid.)  “The plaintiff must provide specific evidentiary facts, through affidavits and other authenticated documents, sufficient to allow the court to independently conclude whether jurisdiction is appropriate.  [Citation.]  The plaintiff cannot rely on allegations in an unverified complaint or vague and conclusory assertions of ultimate facts.  [Citation.]”  (Strasner v. Touchstone Wireless Repair & Logistics, LP (2016) 5 Cal.App.5th 215, 222.)

A defendant is subject to a state’s general jurisdiction if its contacts “are so continuance and systematic as to render [it] essentially at home in the forum State.”  (Saimler AG v. Bauman (2014) 571 U.S. 117, 127.)  A nonresident defendant may be subject to the specific jurisdiction of the forum “if the defendant has purposefully availed himself or herself of forum benefits [citation], and the ‘controversy is related to or “arises out of” a defendant’s contacts with the forum.’  [Citations.]”  (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 446.)  This test does not require a “causal relationship between the defendant’s in-state activity and the litigation.”  (Ford Motor Co. v. Montana Eighth Judicial District Court (2021) 141 S.Ct. 1017, 1026.)  The “arise out” of standard “asks about causation,” but “relate to” does not.  (Ibid.)  “[W]hen a corporation has ‘continuously and deliberately exploited [a State’s] market, it must reasonably anticipate being haled into [that State’s] court[s]’ to defendant actions ‘based on’ products causing injury there.”  (Id. at p. 1027.) 

Plaintiffs do not contest that there is no general jurisdiction over Defendant.

            Defendant argues there is no specific jurisdiction concerning Jean Nate products because Defendant did not develop, manufacture, market, advertise, or distribute those products.  (Motion at p. 1.)  Defendant submits evidence that Charles of the Ritz, a separate company, made Jean Nate products up to 1971.  In 1971, Squibb Beech-Nut, Inc. acquired Charles of the Ritz, and Squibb Beech-Nut, Inc. changed its name to Squibb Corporation.  Squibb Corporation owned the stock of Charles of the Ritz but operated it as an independent subsidiary.  In 1986, Squibb Corporation sold Charles of the Ritz to Yves Saint Laurent S.A.  In 1989, Bristol-Myers Company merged with Squibb Corporation to form Defendant.  (See Scott Decl.; Ambrosio Certification.)  Defendant argues that the fact that Defendant’s predecessor was the parent company of Charles of the Ritz does not create jurisdiction because generally jurisdiction over a subsidiary cannot be imputed to a parent.  (Motion at p. 6.)  Plaintiffs does not deny the general rule but instead argue specific jurisdiction exists because Charles of the Ritz was Defendant’s alter ego and agent.  (Opposition at 4.) 

            First, Plaintiffs contend this case satisfies the standard in Anglo Irish Bank Corp. v. Superior Court (2008) 165 Cal.App.4th 969.  That case explained that specific jurisdiction over a parent corporation can be established “based on the parent’s ‘manipulation’ and control of its California subsidiary to the detriment of the subsidiary’s creditors.”  (Anglo Irish Bank, supra, 165 Cal.App.4th at p. 982.)  “[A] parent corporation’s purposefully causing its subsidiary to engage in forum contacts may constitute purposeful availment by the parent even if the separateness of the corporations is maintained and alter ego is not established.”  (Ibid.)  Thus, [t]he proper jurisdictional question is not whether the defendant can be liable for the acts of another person or entity under state substantive law, but whether the defendant has purposefully directed its activities at the forum state by causing a separate person or entity to engage in forum contacts.”  (Id. at p. 983.) 

            Plaintiffs argue, “Basic logic confirms that Charles of the Ritz would not have sold Jean Nate products in California had BMS –as its parent – not directed, instructed, approved, ratified, or otherwise condoned such activity.”  (Opposition at p. 5.)  However, that logic would do away with the general rule that a parent is not subject to specific jurisdiction merely because its subsidiary is.  Entering the California market through a subsidiary is not enough to create jurisdiction over the parent.  (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 552.)  Plaintiffs do not present evidence that Defendant purposefully directed its activities at California by causing Charles of the Ritz to engage in business in California.

            Second, Plaintiffs argue that Charles of the Ritz was the agent of Defendant because Defendant exercised control over Charles of the Ritz “so pervasive and continual that the [Charles of the Ritz] may be considered an agent or instrumentality of [Defendant].”  (Opposition at p. 5.)  Plaintiffs do not present evidence of this.  Defendant presents some evidence that Charles of the Ritz remained separate, as it had its own officers, executive officers, and facilities.  (Scott Decl., ¶¶ 6-7.)

            Third, Plaintiffs argue that personal jurisdiction exists if the parent uses the subsidiary to do what the parent otherwise would have done.  (Opposition at p. 5.)  Plaintiffs cite F. Hoffman-La Roche v. Superior Court (2005) 130 Cal.App.4th 782 for this rule.  This may occur where the local company “performs functions in furtherance of the foreign company’s, as opposed to its own, business.”  (Id. at pp. 798-799.)  Plaintiffs assert Defendant admitted that Charles of the Ritz “was merely doing what BMS would have done as part of its own consumer product operations.  BMS only used Charles of the Ritz in order to create the impression of an exclusive brand of product . . . .”  (Opposition at p. 5.)  Plaintiffs submit no evidence in support of this assertion.

            In sum, Plaintiffs did not present evidence supporting their assertion that the separateness of the parent/subsidiary relationship should be disregarded here.  Plaintiffs request jurisdictional discovery.  The court will continue the hearing on this motion to allow jurisdictional discovery on Plaintiffs’ contentions that Defendant’s predecessor controlled or purposely directed Charles of the Ritz’ activities in California, Defendant’s predecessor exercised pervasive and continual control over Charles of the Ritz, and that Charles of the Ritz was performing functions in furtherance of Defendant’s predecessor’s business.

The motion is CONTINUED to April 12, 2023 at 9 a.m. Plaintiffs may file a supplemental opposition nine court days before that date, and Defendant may file a supplemental reply five court days before that date.

The moving party is to give notice.