Kasper v. Samsung SDI Company Limited

• Court: District Court, D. Arizona
• Decided: February 1, 2022
• Docket: 2:21-cv-01191
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Justin Kasper, et al., No. CV-21-01191-PHX-SMB

10 Plaintiffs, ORDER

11 v.

12 Samsung SDI Company Limited, et al.,

13 Defendants. 14 15 Pending before the Court is Defendant Samsung SDI Co., Ltd.’s (“Samsung’s”) 16 Motion to Dismiss for Lack of Personal Jurisdiction. (Doc. 26.) Once the Motion was 17 fully briefed, (see Docs. 28; 29), the Court held oral argument on January 31, 2022. After 18 considering the parties’ briefing and arguments, as well as the relevant caselaw, the Court 19 will grant Samsung’s Motion to Dismiss for reasons explained below. 20 I. BACKGROUND 21 Plaintiffs’ First Amend Complaint (“FAC”) alleges that Plaintiff Justin Kasper 22 purchased a Samsung lithium-ion 18650 battery for use in his e-cigarette1 device from 23 Defendant Red Star Vapor (“Red Star”). (Doc. 11 at 6.) In early August of 2019, Plaintiff 24 Alexis Duran was standing in the bedroom doorway talking to her husband, Plaintiff Justin 25 Kasper, who was laying on his bed with his e-cigarette device on his stomach and his infant, 26 Plaintiff J.K., Jr., (“J.K.”) lying next to him. (Id.) Plaintiffs claim that “suddenly, and 27 without warning [they] heard a loud pop and saw flames shooting out from the vape pen.” 28 1 Also known as e-cigs, vapes, vape pens, and mods. (Doc. 11 at 3.) 1 (Id.) At that point, two of the batteries “shot out of the device,” and the bed—as well as 2 Plaintiff J.K.—was engulfed flames. (Id.) Plaintiff Justin Kasper tried to put out the flames 3 and, as a result, suffered scarring on his arms. (Id. at 7.) Likewise, J.K. suffered physical 4 scarring on his left ear, arm, and leg; and Plaintiffs Justin Kasper and Alexis Duran allege 5 that they suffered emotional scarring from the sight of their child on fire. (Id.) 6 Plaintiffs subsequently brough suit against Samsung for claims of design and 7 manufacturing defect, failure to warn, negligence, negligent infliction of emotion distress, 8 implied warranty of merchantability, and violation of the Magnuson-Moss Act, 15 U.S.C. 9 § 2301, et seq. (See generally Doc. 11.) Samsung moved to dismiss the FAC for lack of 10 personal jurisdiction, arguing that it has “no connection to Arizona.” (Doc. 26 at 1.) 11 II. LEGAL STANDARD 12 Before trial, a defendant may move to dismiss the complaint for lack of personal 13 jurisdiction. Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 14 1977); Fed. R. Civ. P. 12(b)(2). Plaintiff bears the burden of establishing personal 15 jurisdiction, Ziegler v. Indian River Cty., 64 F.3d 470, 473 (9th Cir. 1995), and “need only 16 make a prima facie showing of jurisdictional facts” “in the absence of an evidentiary 17 hearing,” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990) (citation omitted). In 18 determining whether a plaintiff has established a prima facie case for personal jurisdiction 19 over a defendant, the complaint’s uncontroverted allegations are accepted as true and 20 “conflicts between the facts contained in the parties’ affidavits must be resolved in 21 [plaintiff’s] favor.” Am. Tel. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 22 588 (9th Cir. 1996). 23 “When no federal statute governs personal jurisdiction, the district court applies the 24 law of the forum state.” Freestream Aircraft (Bermuda) Ltd. v. Aero Law Grp., 905 F.3d 25 597, 602 (9th Cir. 2018). Arizona exerts personal jurisdiction to the “maximum extent 26 permitted by the Arizona Constitution and the United States Constitution.” Ariz. R. Civ. 27 P. 4.2(a); see, e.g., A. Uberti and C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995). Thus, 28 analyzing personal jurisdiction under Arizona law and federal due process are identical. 1 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800–01 (9th Cir. 2004). 2 To comport with due process, “[a]lthough a nonresident's physical presence within 3 the territorial jurisdiction of the court is not required, the nonresident generally must have 4 certain minimum contacts . . . such that the maintenance of the suit does not offend 5 traditional notions of fair play and substantial justice.” Walden v. Fiore, 571 U.S. 277, 283 6 (2014) (internal quotation marks and citations omitted). This requirement ensures “that a 7 defendant be haled into court in a forum State based on his own affiliation with the State, 8 not based on the ‘random, fortuitous, or attenuated’ contacts he makes by interacting with 9 other persons affiliated with the State.” Id. at 286 (quoting Burger King Corp. v. 10 Rudzewicz, 471 U.S. 462, 475 (1985)). “Depending on the strength of those contacts, there 11 are two forms that personal jurisdiction may take: general and specific.” Picot v. Weston, 12 780 F.3d 1206, 1211 (9th Cir. 2015) (citation omitted); Cybersell, Inc. v. Cybersell, Inc., 13 130 F.3d 414, 416 (9th Cir. 1997). 14 “When a plaintiff relies on specific jurisdiction, he must establish that jurisdiction 15 is proper for ‘each claim asserted against a defendant.’” Picot, 780 F.3d at 1211 (quoting 16 Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 17 2004)). “In order for a court to exercise specific jurisdiction over a claim, there must be 18 an ‘affiliation between the forum and the underlying controversy, principally, [an] activity 19 or an occurrence that takes place in the forum state.’” Bristol-Myers Squibb Co. v. Superior 20 Court of Cal., 137 S.Ct. 1773, 1781 (2017) (quoting Goodyear Dunlop Tires Operations, 21 S.A. v. Brown, 564 U.S. 915, 919 (2011)). Without such a connection, “specific jurisdiction 22 is lacking regardless of the extent of a defendant’s unconnected activities in the State.” 23 Bristol-Myers Squibb, 137 S.Ct. at 1781. “Only contacts occurring prior to the event 24 causing the litigation . . . may be considered by the Court.” Ariz. Sch. Risk Retention Trust, 25 Inc. v. NMTC, Inc., 169 F. Supp. 3d 931, 935 (D. Ariz. 2016) (citing Farmers Ins. Exchange 26 v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 913 (9th Cir. 1990)). 27 In analyzing specific jurisdiction, courts use the three-prong minimum contacts test 28 as a guide “to determine whether a defendant has sufficient contacts with the forum to 1 warrant the court’s exercise of jurisdiction[.]” Freestream, 905 F.3d at 603. The test 2 requires that: 3 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform 4 some act by which he purposefully avails himself of the privilege of 5 conducting activities in the forum, thereby invoking the benefits and protections of its laws; 6

7 (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and 8 9 (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable. 10 11 Id. (citation omitted); see also Picot, 780 F.3d at 1211. “The plaintiff has the burden of 12 proving the first two prongs.” Picot, 780 F.3d at 1211 (citation omitted). “If the plaintiff 13 succeeds in satisfying [them], the burden then shifts to the defendant to ‘present a 14 compelling case’ that the exercise of jurisdiction would not be reasonable.” 15 Schwarzenegger, 374 F.3d at 802 (quoting Burger King, 471 U.S. at 476–78). Absent a 16 “compelling case” that exercising jurisdiction would be unreasonable, it is presumed 17 reasonable. Burger King, 471 U.S. at 477. If a plaintiff fails to meet the first prong, the 18 Court need not address the others. Ariz. Sch. Risk Retention Trust, 169 F. Supp. 3d at 936. 19 III. DISCUSSION 20 A. Failure to Establish Personal Jurisdiction 21 Plaintiffs argue only specific, and not general, personal jurisdiction. (Doc. 28 at 4 22 n. 4.) Samsung responds that it is not subject to specific jurisdiction in Arizona. (Doc. 26 23 at 5.) The Court agrees with Samsung. 24 Under the first prong of the minimum contacts test, Plaintiffs must show each 25 Defendant “either (1) ‘purposefully availed’ [itself] of the privilege of conducting activities 26 in the forum, or (2) ‘purposefully directed’ [its] activities toward the forum.” Pebble Beach 27 Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006) (citing Schwarzenegger, 374 F.3d at 28 802). This prong presents two distinct standards, with each to be applied under different 1 circumstances. Schwarzenegger, 374 F.3d at 802; Ziegler, 64 F.3d at 473 (“[W]e apply 2 different purposeful availment tests to contract and tort cases”). Because Plaintiffs bring 3 claims of negligence and products liability, the Court will apply the purposeful availment 4 test. See Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 460 (9th Cir. 2007) 5 (using purposeful availment test to evaluate personal jurisdiction for negligence and breach 6 of contract claims); see generally J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880 7 (2011) (applying purposeful availment to analyze personal jurisdiction for products 8 liability claim). 9 The purposeful availment test advances the due process notion that “a defendant 10 will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated 11 contacts, or of unilateral activity of another party or a third person.” Burger King, 471 U.S. 12 at 475 (internal quotation marks and citations omitted). “[It] is based on the presumption 13 that it is reasonable to require a defendant who conducts business and benefits from his 14 activities in a state to be subject to the burden of litigating in that state as well.” Brainerd 15 v. Governors of the Univ. of Alberta, 873 F.2d 1257, 1259 (9th Cir. 1989) (citing Burger 16 King, 471 U.S. at 476)). But simply placing “a product into the stream of commerce, 17 without more, is not an act purposefully directed toward a forum state.” Holland, 485 F.3d 18 at 459 (citing Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1987)). “Even 19 a defendant’s awareness that the stream of commerce may or will sweep the product into 20 the forum state does not convert the mere act of placing the product into the stream of 21 commerce into an act purposefully directed toward the forum state.” Holland, 485 F.3d at 22 459. Instead, only if “the sale of a product of a manufacturer or distributor . . . is not simply 23 an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve 24 directly or indirectly, the market for its product in other States, [would it be] []reasonable 25 to subject it to suit in one of those States if its allegedly defective merchandise has there 26 been the source of injury to its owner or to others.” World-Wide Volkswagen Corp. 27 Woodson, 444 U.S. 286, 297 (1980). But a defendant’s mere, uncalculated prediction that 28 its goods will reach the forum is insufficient; rather, personal jurisdiction will exist “only 1 where the defendant can be said to have targeted the forum.” Nicastro, 564 U.S. at 882. 2 Here, Samsung has not purposefully availed itself of the privilege of doing business 3 in Arizona. Samsung is incorporated under the laws of the Republic of Korea, where its 4 headquarters and principal place of business are located. (Doc. 26 at 1.) It is not licensed, 5 registered, or authorized to do business in any state, including Arizona. (Id. at 2.) It has 6 no offices, warehouses, employees, agents, distributors, or dealers in Arizona; nor does it 7 advertise or market in the state. (Id.) 8 Moreover, although Samsung acknowledges that it designs and manufactures 9 various sizes and models of batteries, including the battery at issue here, (id. at 1),2 it claims 10 that it is a “business-to-business” manufacturer—meaning that the 18650 battery cell is not 11 designed, manufactured, or marketed for use by individual persons or for use in 12 e-cigarettes. (Id.) Instead, Samsung avers that the 18650 battery is designed and marketed 13 to be used in “approved applications” by “sophisticated entities” through two distribution 14 channels: (1) the bulk sale of 18650 battery cells to “Packers” in Asia, who assemble the 15 cells into battery packs for subsequent sale and distribution; and (2) the bulk sale of 18650 16 battery cells to “Transacting Companies” involved in the manufacture or supply of 17 “authorized products,” located in Asia, Europe, and North America. (Id. at 1–2.) While 18 Samsung fails to define many of its terms—including sophisticated entities, approved 19 applications, and authorized products, (see generally Doc. 26)—it does aver that vape pens 20 are not authorized products. (Id. at 2.) Samsung states that it has never sold 18650 batteries 21 to a resident of Arizona, shipped any 18650 batteries to an Arizona address, or sold 22 batteries to or had any business with relationship with Red Star. Put simply, Samsung has 23 done nothing more than introduce its 18650 battery cell into the stream of commerce, which 24 does not satisfy the purposeful availment test or confer specific personal jurisdiction. See 25 Holland, 485 F.3d at 459. 26 Rather than dispute Samsung’s relevant factual allegations, Plaintiffs invite this

27 2 Samsung does not admit that the battery at issue was one of its batteries but acknowledges 28 that the Court may make that assumption for the purposes of Samsung’s Motion to Dismiss. (See Doc. 26 at 1 n. 1.) 1 Court to read Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021), as 2 creating a due process standard that extends specific personal jurisdiction to foreign 3 manufacturers who sell products in the United States when their products ultimately wind 4 up in the forum state. (See Doc. 28 at 8–10.) The Court declines to do so for two reasons. 5 First, as Samsung correctly highlights, this extension would swallow all personal 6 jurisdiction jurisprudence and render the “arise out of” requirement a vestigial organ of the 7 doctrine. Indeed, Ford itself does not purport to go so far and stands only for the 8 proposition that “[w]hen a company like Ford serves a market for a product in a State and 9 that product causes injury in the State to one of its residents, the State's courts may entertain 10 the resulting suit.” Ford, 141 S. Ct. at 1022. Second, the facts of Ford are readily 11 distinguishable from the facts of this case. In the opening paragraph of Ford, the Supreme 12 Court explained that “Ford did substantial business in the State—among other things, 13 advertising, selling, and servicing the model of vehicle the suit claims is defective.” Id. 14 Samsung has no such connection to Arizona, and Ford is inapposite here. 15 The only facts proffered by Plaintiffs to support jurisdiction fall into two camps: the 16 astonishingly speculative and the outright misleading. The Court addresses the former 17 category first. Plaintiffs claim that Samsung sent cease-and-desist letters to various “vape 18 stores” throughout the United States. (Doc. 28 at 3.) Notwithstanding the absence of cited 19 caselaw demonstrating how this confers personal jurisdiction,3 Plaintiffs imply that these 20 letters demonstrate that (1) Samsung identified the companies to whom it would send these 21 letters, (2) in so doing, Samsung “did something within Arizona to identify those 22 companies,” and (3) somehow this confers personal jurisdiction or warrants jurisdiction 23 discovery in Arizona. (TOA at 10.) This argument is as factually speculative as it is legally 24 meritless. See Cascade Corp. v. Hiab-Foco AB, 619 F.2d 36, 38 (9th Cir. 1980) (holding 25 that specific personal jurisdiction did not exist based on defendant sending infringement 26 letters over a series of years); Stairmaster Sports/Med. Prod., Inc. v. Pac. Fitness Corp.,

27 3 Indeed, during oral argument, Plaintiffs acknowledged that such letters “on their own” 28 would “obviously” not confer personal jurisdiction. (Transcript of Oral Argument (“TOA”) at 10, Kasper v. Samsung, No. 21-cv-01191 (Jan. 31, 2022).) 1 916 F. Supp. 1049, 1057 (W.D. Wash. 1994) (finding that specific personal jurisdiction 2 was lacking where the only possible basis for jurisdiction was the defendant’s act of 3 sending cease-and-desist letters into the forum state). 4 Now, on to the misleading. Plaintiffs’ attempt to paint Samsung as engaging in 5 jurisdiction gamesmanship by stating—during oral argument—that this case began in 6 California and was transferred to Arizona by stipulation of Samsung, who now contests 7 personal jurisdiction. This contention is wholly unfounded.4 The instant case was initiated 8 in Arizona, as Plaintiffs well know. (See Doc. 1 (Plaintiff’s initial Complaint filed with 9 this Court).) What’s more, in Plaintiffs’ own briefing on the instant motion, they make the 10 comparison between this case (initiated in Arizona) and another case that Plaintiffs’ 11 counsel has against Samsung, which was started in California and then transferred to 12 Arizona. (See Doc. 28 at 5–6.) Plaintiffs’ erroneous factual assertions aside, the Ninth 13 Circuit has rejected the proposition that defending a suit on the merits means that a party 14 has consented to personal jurisdiction in future, unrelated suits in that same jurisdiction. 15 See Dow Chem. Co. v. Calderon, 422 F.3d 827, 833 (9th Cir. 2005) (rejecting the argument 16 “that by failing to object to lack of personal jurisdiction in [a previous] suit, the [previous] 17 defendants impliedly consented to personal jurisdiction” in the instant action). 18 Plaintiffs’ final factual allegation has the unique distinction of being both 19 speculative and misleading. During oral argument, Plaintiffs’ counsel asserted (1) that 20 Samsung does a breadth of business in the United States, including California; and (2) that 21 Samsung has admitted as much. (TOA at 7–8.) To bolster this claim, she points the Court 22 to Exhibit A of Plaintiffs’ Response, as well as Samsung’s admission—in its Motion to 23 Dismiss—that it generally does business in “North America.” (Id.) Samsung’s admission 24 to doing business in North America is not an admission to doing business in the United 25 States or California. (See Doc. 26 at 2, 7.) Indeed, as it is currently constituted, the 26 continent of North America includes more than twenty countries. Worse still, is Plaintiffs’ 27

28 4 At oral argument, Plaintiffs’ counsel admitted that this case was initiated in Arizona and claims she had mistakenly “confus[ed]” the two cases. 1 contention that their attached exhibit remotely supports their claims; it does not. (See 2 Generally Doc. 28 at Exhibit A.) The words California, North America, or United States 3 do not appear in Exhibit A. (Id.) The Court reminds Plaintiffs’ counsel of her duty of 4 candor towards the tribunal. See Ariz. R. of Prof. Conduct 3.3(a)(1). 5 Therefore, the Court finds that it does not have personal jurisdiction over Samsung. 6 B. Futility of Jurisdictional Discovery 7 Plaintiffs request that, in the event the Court finds that it lacks personal jurisdiction, 8 Plaintiffs be allowed to conduct jurisdictional discovery. (Doc. 28 at 11–12.) A trial court 9 has broad discretion on whether to permit limited jurisdictional discovery. Data Disk, 557 10 F.2d at 1285 n.1 (citing Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 11 n. 24 (9th Cir. 1977)). Although “[d]iscovery should ordinarily be granted where pertinent 12 facts bearing on the question of jurisdiction are controverted or where a more satisfactory 13 showing of the facts is necessary,” Butcher’s Union Local No. 498 v. SDC Inv., Inc., 788 14 F.2d 535, 540 (9th Cir. 1986) (citation and internal quotations omitted), “[w]here a 15 plaintiff’s claim of personal jurisdiction appears to be both attenuated and based on bare 16 allegations in the face of specific denials made by the defendants, the Court need not permit 17 even limited discovery,” Pebble Beach, 453 F.3d at 1160 (quoting Terracom v. Valley Nat’l 18 Bank, 49 F.3d 555, 562 (9th Cir. 1995)). A court may deny a plaintiff’s request for 19 jurisdictional discover when that request is “based on little more than a hunch that it might 20 yield jurisdictionally relevant facts.” Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 21 2008). 22 Here, the Court finds limited jurisdictional discovery unwarranted because Samsung 23 has already specifically rebutted Plaintiffs’ unsupported jurisdictional allegations and 24 arguments. See Pebble Beach, 453 F.3d at 1160. Plaintiffs’ request to conduct discovery— 25 without providing any affidavit or evidence substantiating their requests or describing with 26 any precision how such discovery would be helpful to the Court—is unpersuasive. It is a 27 speculative request, akin to hunches that personal jurisdiction might exist, which does not 28 warrant even limited jurisdictional discovery. See Boschetto, 539 F.3d at 1020. 1 C. Denial of Motion to Transfer 2 In a fleeting sentence at the end of their Response, Plaintiffs request leave to file a motion to transfer to somewhere Samsung consents to jurisdiction. (Doc. 28 at 12.) 4|| Samsung opposes the motion because it is “under no obligation to consent to an alternative 5 || forum in the United States; particularly when there is no evidence that any particular state 6|| is an appropriate forum where specific personal jurisdiction exists.” (Doc. 29 at 11.) 7 || Samsung is correct, and Plaintiffs’ motion is denied. 8 IV. CONCLUSION 9 Accordingly, 10 IT IS ORDERED granting the Motion to Dismiss against Samsung with prejudice. (Doc. 26.) 12 IT IS FURTHER ORDERED instructing the Clerk to terminate this case and enter 13 | judgement in accordance with this order. 14 Dated this Ist day of February, 2022. 15 16 “Ss SO fonorable Susan M. Brnovich = 18 United States District Judge 19 20 21 22 23 24 25 26 27 28

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