Leeland Davis v. LG Chem, LTD.

• Court: Court of Appeals for the Eleventh Circuit
• Decided: March 16, 2021
• Docket: 20-13837
• Status: Unpublished

Opinion

USCA11 Case: 20-13837 Date Filed: 03/16/2021 Page: 1 of 8

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 20-13837 Non-Argument Calendar ________________________

D.C. Docket No. 1:19-cv-05234-SDG

LEELAND DAVIS,

Plaintiff-Appellant,

versus

LG CHEM, LTD.,

Defendant-Appellee. ________________________

No. 20-13838 Non-Argument Calendar ________________________

D.C. Docket No. 1:20-cv-02653-SDG

ETHAN FULLERTON,

Defendant-Appellee. USCA11 Case: 20-13837 Date Filed: 03/16/2021 Page: 2 of 8

________________________

Appeals from the United States District Court for the Northern District of Georgia ________________________

(March 16, 2021)

Before BRANCH, GRANT, and BRASHER, Circuit Judges.

PER CURIAM:

Appellants Leeland Davis and Ethan Fullerton appeal the district court’s order

dismissing their suits against LG Chem, Ltd. for lack of personal jurisdiction. The

issue presented on appeal is whether the district court had specific personal

jurisdiction over LG Chem. Upon consideration, we conclude that it did not, and

AFFIRM the district court’s order dismissing both cases for lack of personal

jurisdiction.

I.

Davis and Fullerton are both Oklahoma residents. They suffered similar

injuries in Oklahoma, though in separate instances occurring several months apart—

each was walking with an LG 18650 lithium-ion battery in his pants pocket when

the battery exploded, caught fire, and burned his leg. In both cases, Davis and

Fullerton were using the LG 18650 battery as a replaceable, rechargeable battery to

power an e-cigarette device. The batteries that injured Davis and Fullerton were

manufactured and sold by LG Chem, a Korean company with headquarters and

2 USCA11 Case: 20-13837 Date Filed: 03/16/2021 Page: 3 of 8

principal offices in Seoul, South Korea. But LG Chem does not market the battery

as a replaceable, rechargeable e-cigarette battery, and Davis and Fullerton did not

purchase their batteries directly from LG. Instead, they purchased them from

Oklahoma retailers, who had acquired the batteries from third parties. In both cases,

the third party had removed the exterior LG wrapper and re-wrapped the battery in

its own wrapper before placing it back into the stream of commerce en route to its

final destination in Oklahoma.

Davis and Fullerton originally sued LG Chem in Oklahoma state court. LG

Chem moved to dismiss for lack of personal jurisdiction. To support its motion, LG

Chem introduced uncontroverted evidence showing that it did not market the LG

18650 battery as a replaceable, rechargeable battery for use in an e-cigarette device,

that it never authorized anyone else to do so, and that it never conducted business

with the third parties or retailers who handled the batteries that injured Davis and

Fullerton. The Oklahoma state court dismissed the claims against LG Chem, finding

that both general and specific personal jurisdiction were lacking.

Davis and Fullerton then filed lawsuits against LG Chem in Georgia state

court, also naming LG Chem’s Atlanta-based subsidiary, LG Chem America, Inc.,

as a defendant. The claims against Chem America were dismissed as time barred.

LG Chem then removed the case to federal district court, availing itself of the court’s

diversity jurisdiction.

3 USCA11 Case: 20-13837 Date Filed: 03/16/2021 Page: 4 of 8

Once in federal court, LG Chem moved to dismiss both actions for lack of

personal jurisdiction. At a hearing on the motions, the district court clarified with

Davis and Fullerton’s counsel whether their arguments were about specific

jurisdiction or general jurisdiction; they explained that they were arguing only under

a theory of specific jurisdiction and not that Georgia courts had general personal

jurisdiction over LG Chem. The court issued a written order granting LG Chem’s

motions to dismiss, holding that Davis and Fullerton had failed to comply with

Georgia’s long-arm statute because neither had shown that their claims arose out of

any business that LG Chem had transacted in the state. Davis and Fullerton appealed.

II.

Davis and Fullerton raise several arguments on appeal. First, they argue that

Georgia’s long-arm statute provides for personal jurisdiction over a nonresident

corporation transacting any business in the state, regardless of whether those

transactions are related to the events giving rise to the controversy. Alternatively,

they argue that their claims do in fact arise out of LG Chem’s in-state business

transactions. Second, if they can satisfy Georgia’s long-arm, they argue that

constitutional limitations on the exercise of personal jurisdiction over LG Chem

derive from the Fifth Amendment rather than the Fourteenth Amendment. Personal

jurisdiction over LG Chem should therefore be based on its contact with the United

States, rather than the state of Georgia. Davis and Fullerton contend that they have

4 USCA11 Case: 20-13837 Date Filed: 03/16/2021 Page: 5 of 8

alleged sufficient facts to satisfy this nationwide minimum contacts test. Third and

finally, Davis and Fullerton argue that, rather than affirm, the Court should remand

for jurisdictional discovery into LG Chem’s contacts with Georgia. Upon

consideration, we conclude that the district court correctly applied Georgia’s long-

arm statute and correctly dismissed both cases for lack of personal jurisdiction, so

we need not reach the constitutional due process arguments. And because further

discovery would not clarify whether Davis and Fullerton’s claims arise from LG

Chem’s contact with Georgia, the district court correctly denied their request for

jurisdictional discovery.

We review de novo a district court’s decision to dismiss a complaint for lack

of personal jurisdiction. Waite v. All Acquisition Corp., 901 F.3d 1307, 1312 (11th

Cir. 2018) (citing Carmouche v. Tamborlee Mgmt., Inc., 789 F.3d 1201, 1203 (11th

Cir. 2015)).

“A federal court sitting in diversity undertakes a two-step inquiry in

determining whether personal jurisdiction exists: the exercise of jurisdiction must

(1) be appropriate under the state long-arm statute and (2) not violate the Due

Process Clause of the Fourteenth Amendment to the United States Constitution.”

Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d 1249, 1257–58

(11th Cir. 2010). This two-step inquiry is necessary because what is allowed under

a state’s long-arm statute is not always coextensive with what is allowed by

5 USCA11 Case: 20-13837 Date Filed: 03/16/2021 Page: 6 of 8

procedural due process. Instead, the long-arm statute “imposes independent

obligations that a plaintiff must establish for the exercise of personal jurisdiction that

are distinct from the demands of procedural due process.” Id. at 1259.

Georgia’s long-arm statute states that a court “may exercise personal

jurisdiction over any nonresident . . . as to a cause of action arising from any of the

acts, omissions, ownership, use, or possession enumerated in this Code section, in

the same manner as if he or she were a resident of this state,” provided that he

“[t]ransacts any business within this state.” O.C.G.A. § 9-10-91 (emphasis added).

In other words, “Georgia’s long-arm statute permits jurisdiction where a plaintiff’s

cause of action ‘arises out of’ a nonresident defendant’s ‘transact[ion] of any

business within [Georgia].’” Diamond Crystal, 593 F.3d at 1264 (quoting O.C.G.A.

§ 9–10–91(1)).

“[W]e interpret and apply Georgia’s long-arm statute in the same way as

would the Georgia Supreme Court.” Id. at 1258. That court has adopted a rule of

“literal construction” of the state’s long-arm statute. Innovative Clinical &

Consulting Servs., LLC v. First Nat. Bank of Ames, 620 S.E.2d 352, 354 (Ga. 2005)

(citing Gust v. Flint, 356 S.E.2d 513, 514 (Ga. 1987)). Relevant here, the statute

requires that, for a Georgia court to exercise personal jurisdiction over a nonresident

defendant, the cause of action must be one “arising from” the defendant’s contact

with the state. Georgia courts have held that to satisfy the long-arm statute’s “arising

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from” requirement, a plaintiff must establish a connection between the defendant’s

contact with the state and the claims at issue. See Stubblefield v. Stubblefield, 769

S.E.2d 78, 82 (Ga. 2015) (holding that Georgia’s long arm statute was satisfied

where plaintiffs’ claims were “related directly” to defendants’ purposeful acts in

Georgia); Stanton v. Harris, 848 S.E.2d 186, 188 (Ga. Ct. App. 2020) (“[T]he Long

Arm Statute confers jurisdiction over a nonresident if the cause of action arises from

that nonresident’s transacting any business within the state.”). Thus, Davis and

Fullerton were required to show that their cause of action was one “arising from”

LG Chem’s contacts with Georgia. 1

Davis and Fullerton have failed to identify any connection between business

that LG Chem transacted in Georgia and the events of this case. Plaintiffs are

Oklahoma residents, they purchased their LG 18650 batteries in Oklahoma from

Oklahoma retailers, and their injuries occurred in Oklahoma. They have not alleged

that the batteries that injured them ever passed through Georgia. The sole connection

allegedly tying this case to Georgia is LG Chem’s Georgia-based subsidiary, Chem

America. But Chem America did not sell the batteries at issue here. It is undisputed

that the batteries that injured Davis and Fullerton were re-wrapped in another

1 As explained above, Davis and Fullerton expressly asked the district court not to consider whether LG Chem might be subject to general jurisdiction. Cf. Mitsubishi Motors Corp. v. Coleman, 658 S.E.2d 843 (Ga. App. 2008). “It is a cardinal rule of appellate review that a party may not challenge as error a ruling or other trial proceeding invited by that party.” United States v. Ross, 131 F.3d 970, 988 (11th Cir. 1997). Accordingly, we do not address that theory of personal jurisdiction. 7 USCA11 Case: 20-13837 Date Filed: 03/16/2021 Page: 8 of 8

company’s branded wrapper and sold to an Oklahoma retailer by third party

wholesalers. Accordingly, Davis and Fullerton have failed to show that their cause

of action is one “arising from” LG Chem’s contacts with Georgia.

Nor would Davis and Fullerton be aided by jurisdictional discovery. A district

court’s denial of a request for jurisdictional discovery is reviewed for abuse of

discretion. United Techs. Corp. v. Mazer, 556 F.3d 1260, 1280 (11th Cir. 2009).

Davis and Fullerton request jurisdictional discovery “concerning LG’s Georgia

business and other contacts.” Even if such evidence existed, it would not affect the

outcome of this case. The district court’s decision was not based on the sufficiency

of LG Chem’s contact with Georgia, but whether Davis and Fullerton’s claims arise

from those contacts at all. The district court’s conclusion that they did not was based

on undisputed evidence and Plaintiff’s own statements at the hearing held on the

motions to dismiss. Accordingly, Davis and Fullerton are not entitled to

III.

For these reasons, we conclude that the district court correctly granted LG

Chem’s motions to dismiss for lack of personal jurisdiction, and correctly denied

Davis and Fullerton’s request for jurisdictional discovery. AFFIRMED.