Judge: Melvin D. Sandvig, Case: 21STCV02112, Date: 2023-03-10 Tentative Ruling
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Case Number: 21STCV02112 Hearing Date: March 10, 2023 Dept: F47
Dept. F47
Date: 3/10/23
Case #21STCV02112
MOTION TO QUASH
Motion filed on 11/30/22.
MOVING PARTY: Defendant Lear Corporation (specially
appearing)
RESPONDING PARTY: Plaintiffs Susan Gunaian and Ararat
Issayan
NOTICE: ok
RELIEF REQUESTED: An order quashing
the purported service of the Summons and Complaint on Lear Corporation and
dismissing Lear from this action for lack of personal jurisdiction.
RULING: The motion is denied. Answer is due within 20 days.
SUMMARY OF FACTS & PROCEDURAL HISTORY
This action arises out of a motor vehicle accident that
occurred on 10/11/19 when the 2018 Chevrolet vehicle in which Plaintiff Susan
Gunaian was an occupant was rear-ended by Defendant Alma Hernandez on the I-5
Freeway in Los Angeles, California. (Complaint
¶¶3, 10, 20). Plaintiff Aarat Issayan is
Gunaian’s spouse and asserts a claim for loss of consortium. (Id. at ¶14). Plaintiffs allege that Gunaian suffered
catastrophic and permanently disabling injuries as a result of the accident. (Id. at ¶12).
On 1/19/21, Plaintiffs filed this action against General
Motors LLC; Allen Gwynn Chevrolet, Inc.; Hernandez-Sanchez and Does 1-100 for:
(1) Strict Liability and (2) Negligence.
On 8/29/22, Plaintiffs filed an Amendment to Complaint naming Lear Corporation
(Lear) in place of Doe 1.
Lear is corporation organized under the laws of the state
of Delaware, with its principal place of business in Southfield, Michigan. (Davidson Decl. ¶5). Lear is a manufacturer of seats and seating
systems for motor-vehicle manufacturers.
(Id. ¶6). Lear sells its seats to
motor-vehicle manufacturers, and other completed product manufacturers, who
then incorporate them into their vehicles and distribute them to dealers and
other third parties. (Id. ¶10). Lear manufactured brackets at its facility in
Michigan and incorporated them into seat tracks at Lear’s facility in Mexico
before shipping those components to Fisher Dynamics in Michigan. Fisher Dynamics incorporated the tracks into a
chassis before sending the componentry to Magna in Canada. Magna then suppled the overall seating system
to General Motors. (Id. ¶¶7,8 ). Lear does not sell seats directly to
consumers. (Id. ¶¶9, 11).
On 11/30/22, when this action was pending in Department
30 in the Spring Street Courthouse, Lear filed and served the instant motion
seeking an order quashing the purported service of the Summons and Complaint on
Lear and dismissing Lear from this action for lack of personal jurisdiction. Plaintiffs opposed the motion and Lear filed
a reply to the opposition. Before the
motion was ruled on, the case was transferred to this department and the matter
was rescheduled for hearing on 3/8/23.
ANALYSIS
Plaintiffs’ Request for Judicial Notice (RJN) is
granted. With regard to Requests 1, 3
and 5, the Court takes judicial notice of the existence of such documents but
not the truth of the matters asserted therein.
Lear’s evidentiary objections to exhibits to the Feit
declaration and materials from Plaintiffs’ Request for Judicial Notice are
overruled.
California courts may exercise personal jurisdiction over
a nonresident defendant such as Lear
“on any basis not inconsistent with the Constitution of
this state or of the United States.” CCP
410.10. When a nonresident defendant
moves to quash service of process based on lack of personal jurisdiction, the plaintiff
bears the initial burden of establishing facts justifying the exercise of
jurisdiction by a preponderance of the evidence. Pavolich (2002) 29 C4th 262, 273; Shisler
(2006) 146 CA4th 1254, 1259. Even if the
plaintiff meets this initial burden, a court still cannot exercise personal
jurisdiction over a defendant if the defendant can demonstrate that it would be
unreasonable. Shisler, supra.
A California state court may exercise personal
jurisdiction over an out-of-state defendant that has certain minimum contacts
with California such that the maintenance of the action in California does not
offend “traditional notions of fair play and substantial justice.” See International Shoe Co.
(1945) 326 U.S. 310, 316.
There are two types of personal jurisdiction: (1) general
or “all-purpose” and (2) specific or “conduct-linked.” See Daimler AG (2014) 571 U.S.
117, 122; Goodyear Dunlop Tires Operations, S.A. (2011) 564 U.S. 915,
919.
GENERAL JURISDICTION
A state court may assert general jurisdiction over a
foreign corporation when its affiliations with the State are so “continuous and
systematic” as to render the corporation essentially “at home” in the forum
State. Daimler, supra at
127; Goodyear, supra at 924.
Generally, a corporation is “at home” in two places: (1) its place of
incorporation; and (2) its principal place of business. Daimler, supra at 137; Goodyear,
supra at 924. However, in an
“exceptional case,” a corporation’s operations in another forum “may be so
substantial and of such a nature as to render the corporation at home in that
State.” Daimler, supra at
139, n.19.
Here, there is no dispute that Lear’s place of
incorporation is Delaware and its principal place of business is Michigan. (Davidson Decl. ¶5). It is debatable whether Lear’s operations in
California are so substantial and of such a nature so as to render Lear “at home”
in this State. There is evidence that
Lear has design and development facilities in Northern California. (Feit Decl., Ex.1, Form 10-K, p.1-10). Additionally, the evidence indicates that
Lear has two administrative/technical support facilities in San Mateo,
California and Santa Rosa, California. (Id.,
p.1-23, Feit Decl., Ex.4-7). Further, Lear
regularly participates in automotive trade events in California. (Feit Decl., Ex.8-10).
Even if the foregoing is deemed insufficient to establish
general jurisdiction over Lear in California, the Court finds sufficient bases
to subject Lear to specific jurisdiction in California.
SPECIFIC JURISDICTION
“A nonresident defendant may be subject to specific
jurisdiction if three requirements are met: (1) the defendant has purposefully
availed itself of forum benefits with respect to the matter in controversy; (2)
the controversy is related to or arises out of the defendant’s contacts with
the forum; and (3) the exercise of jurisdiction would comport with fair play
and substantial justice.” Burdick (2015) 233 CA4th 8, 18. The notion of “fair play and substantial
justice” is based on the extent of the defendant’s contacts with the forum, the
relationship between that contact and plaintiff’s claims, and whether this
makes it reasonable to require the defendant to defend the action in
California. See World-Wide
Volkswagen Corp. (1980) 444 U.S. 286, 292.
Purposeful Availment
The United States Supreme Court has held that placing
goods in the stream of commerce with the expectation that they will be
purchased by consumers in the forum state indicates an intention to serve that
market and constitutes purposeful availment.
See World-Wide Volkswagen, supra at 297-298 (“[I]f
the sale of a product of a manufacturer or distributor . . . is not simply an
isolated occurrence, but arises from the efforts of the manufacturer or
distributor to serve, directly or indirectly, the market for its product in
other States, it is not unreasonable to subject it to suit in one of those
States if its allegedly defective merchandise has there been the source of
injury to its owner or to others. The forum State does not exceed its powers
under the Due Process Clause if it asserts personal jurisdiction over a
corporation that delivers its products into the stream of commerce with the
expectation that they will be purchased by consumers in the forum State.
[Citation.]”); Ford Motor Company (2021) 141 S.Ct. 1017, 1027; Bridgestone
Corp. (2002) 99 CA4th 767, 777 (“[A] manufacturer’s placement of goods in
the stream of commerce with the expectation that they will be purchased or used
by consumers in California indicates an intention to serve the California
market ‘directly or indirectly’ [Citation] and constitutes purposeful availment
if the income earned by the manufacturer from sale or use of its product in
California is substantial.”).
This Court may exercise jurisdiction over Lear under the
stream of commerce doctrine. The
evidence indicates that Lear is the number two supplier of vehicle seats in the
world; Lear’s products were included in over 16 million vehicles sold in North
America in 2018 and in 17 million vehicles sold in North America in 2017; Lear
reports sales of $7.6 million in North America in 2018 and sales of $7.7 million
in North America in 2017; and Lear reports net sales of seating worldwide of
$16 million in 2018 and $15.8 million in 2017.
(Feit Decl., Ex.1, Form 10-K, p.1-9, p.1-5; Ex.2).
Additionally, the evidence indicates that Lear’s top five
seat customers are General Motors, Daimler, Ford, Fiat Chrysler and Volkswagen,
which are some of the largest automobile manufacturers doing business in the
United States. (Feit Decl., Ex.1, Form
10-K at p. 1-9). The sale of a critical
portion of the seat in this case by Lear to General Motors cannot be seen as an
isolated occurrence. Rather, such
conduct arises from an effort to serve the market for its product in several or
all States. Therefore, it is not
unreasonable to subject Lear to suit in California where its seat is alleged to
have caused a user of its product to suffer serious injury.
The evidence also shows that Lear benefits from, and
participates in, the California market. As
noted above, Lear has design and development facilities and administrative/technical
support facilities in California and Lear regularly participates in automotive
trade events in California. (Feit Decl.,
Ex. 1, Form 10-K at p.1-10, p.1-23; Ex.4-10).
Further evidence that Lear does business in California is
that it complies with the California Supply Chain Act. The California Transparency in Supply Chains
Act is a “reporting statute” that requires covered businesses to disclose their
efforts to eliminate slavery and human trafficking. Civil Code 1714.43(a)(1). The Supply Chains Act compliance requirements
apply to every “retail seller and manufacturer doing business in this state and
having annual worldwide gross receipts that exceed one hundred million dollars
($100,000,000).” Id. Covered businesses must post on their websites
disclosures about their efforts to prevent human trafficking. Civil Code 1714.43(b). Lear provides the requisite disclosures
required by the Supply Chains Act, which is an express acknowledgement that it
does business in California. (Feit
Decl., Ex.11, 12, 13).
The Court finds that Lear’s placement of goods in the
stream of commerce with the expectation that such goods will be purchased or
used by consumers in California, Lear’s maintenance of multiple design and
development facilities in California, and the substantial income it realizes
from doing business in California, establish that Lear has purposefully availed
itself of the benefits of conducting activities in California.
This Action Is Substantially Connected to Lear’s California
Contacts
Plaintiffs allege that Gunaian suffered catastrophic
injuries as a result of defects in a 2018 Chevrolet Equinox, sold by General
Motors LLC. (Complaint ¶¶3, 9-11). The evidence indicates that General Motors is Lear’s largest customer of
vehicle seats. (Feit Decl., Ex.1, Form
10-K, p.1-9, p.1-12). Lear strategically
locates its facilities near General Motors and other manufacturers: “Our seat
assembly facilities use lean manufacturing techniques, and our finished
products are delivered to the automotive manufacturers on a just-in-time basis,
matching our customers’ exact build specifications for a particular day, shift
and sequence thereby reducing inventories to optimum levels. These facilities
are typically located adjacent to or near our customers’ manufacturing and
assembly sites.” (Id., p.1-8). The evidence also shows that in 2018, General
Motors recognized Lear as its “Supplier of the Year.” (Feit Decl., Ex.3). Lear has also acknowledged that “a seat is an
active part of the vehicle safety system” and that it “produce[s] seat systems
that are fully assembled and ready for installation in automobiles and light
trucks. Seat systems are generally designed and engineered for specific vehicle
models or platforms.” (Feit Decl., Ex.1,
Form 10-K, p.1-7).
This case involves a seat collapse in a General Motors
vehicle that allegedly caused Gunaian’s paralysis. As such, there is a substantial connection
between the injuries alleged in this case and Lear’s business so as to subject
Lear to jurisdiction in California.
Exercise of Jurisdiction Is Fair and Reasonable
In determining whether it is reasonable to exercise
jurisdiction over a nonresident defendant, the Court may consider factors such
as: (1) the burden on the defendant of defending in California; (2) California’s
interest in settling the dispute; (3) a plaintiff’s interest in obtaining
relief; (4) “the interstate judicial system’s interest in obtaining the most
efficient resolution of the controversy; and (5) the shared interest of several
States in furthering fundamental substantive social policies.” Gilmore Bank (2014) 223 CA4th 1558, 1574
(internal quotations omitted).
Lear concedes that California may have an interest in
providing a forum to those injured in the State, but Lear argues that such
interest is insufficient because it would be a substantial burden for it to defend
this matter in California and because it lacks litigation-related contacts in
California. However, Lear’s contacts
with California are not “random, fortuitous or attenuated or because of the
unilateral activity of a third party.” See
In re Automobile Antitrust Cases I & II (2005) 135 CA4th 100, 108.
Plaintiffs, the interstate judicial system and the shared
interest of the States have strong interests in having this dispute resolved in
a single forum so as to avoid duplication of costs, efforts and judicial
resources and to avoid the possibility of inconsistent outcomes on the same
controversy.
The Court finds that based on the circumstances, Lear
should have reasonably anticipated having to litigate in this jurisdiction
where a product it designed and produced, which was incorporated into vehicle sold
in California, is alleged to have been defective and to have caused injury in
California.
Based on the foregoing, this Court’s exercise of
jurisdiction over Lear is fair and reasonable.
CONCLUSION
Based on the foregoing, the motion is denied.