LG Chem, Ltd. v. Superior Court

CourtCalifornia Court of Appeal
DecidedJune 27, 2022
DocketD079718
StatusPublished

This text of LG Chem, Ltd. v. Superior Court (LG Chem, Ltd. v. Superior Court) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LG Chem, Ltd. v. Superior Court, (Cal. Ct. App. 2022).

Opinion

Filed 6/27/22

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

LG CHEM, LTD., D079718

Petitioner, (San Diego County Super. Ct. No. 37-2019-00047411- v. CU-PO-CTL)

THE SUPERIOR COURT OF SAN DIEGO COUNTY,

Respondent;

RYAN LAWHON,

Real Party in Interest.

ORIGINAL PROCEEDING in mandate. Timothy Taylor, Judge. Petition granted. Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller and Wendy S. Dowse for Petitioner. No appearance for Respondent. Singleton Schreiber McKenzie & Scott, Singleton Schreiber, J. Domenic Martini, Benjamin I. Siminou and Harini P. Raghupathi for Real Party in Interest. INTRODUCTION Ryan Lawhon, a California resident, alleged he was severely injured when an 18650 lithium-ion battery he bought from a San Diego vape shop suddenly exploded in his pants pocket. In addition to the vape shop and vape distributor, he sued LG Chem Ltd. (LG Chem), the South Korean manufacturer of 18650 lithium-ion batteries (18650 batteries), for negligence and product liability. The trial court denied LG Chem’s motion to quash service of summons for lack of personal jurisdiction, finding the court’s exercise of specific jurisdiction over LG Chem comported with federal due process. LG Chem petitioned this court for writ of mandate directing the trial court to vacate its order denying the motion to quash. We issued an order directing real party-in-interest Lawhon to show cause why the relief sought should not be granted. We now grant the petition and direct the trial court to vacate its order denying the motion to quash and enter a new order granting the motion. The jurisdictional facts are not disputed: LG Chem sold 18650 batteries as industrial component products to original equipment manufacturers and battery packers who sell to original equipment manufacturers. It did not design, manufacture, distribute, advertise or sell the batteries for sale to or use by individual consumers as standalone, replaceable batteries. It had no connection to the vape shop or the vape distributor responsible for selling the defective battery that injured Lawhon. Its activities in California consisted of sales of 18650 batteries to three California companies in the electric vehicle industry for use in electric vehicles. The question presented is whether Lawhon’s personal injury claims arise out of or relate to those sales. We conclude they do not. Thus, the

2 exercise of jurisdiction over LG Chem in this California lawsuit is not consistent with due process. FACTUAL AND PROCEDURAL BACKGROUND I. Lawhon’s Claims

Lawhon alleged he purchased an 18650 battery 1 at a San Diego vape shop called Vapin’ the 619. The battery did not come in a package. The vape shop “simply placed it in a plastic bag.” On February 7, 2019, Lawhon put the battery in his pants pocket, along with another identical battery he previously purchased from the same vape shop and his car keys. One of the batteries “suddenly exploded” in his pocket, severely burning his leg and hand. Lawhon spent “nearly a week” in the hospital, and missed “multiple weeks of work” as a result of his injuries. On September 9, 2019, Lawhon filed an unverified complaint for damages against four named defendants: Vapin America LLC (Vapin America), a Nevada limited liability corporation with its principal place of business in San Diego County; and It Is What It Is-II, LLC, Morija, LLC, and Flame LLC, three California limited liability corporations with their principal places of business in San Diego County that were in “some combination” doing business as Vapin’ the 619. He alleged, on information and belief, that Vapin America sold the battery that injured him to the vape shop. Lawhon also alleged, on information and belief, there were unknown defendants, Does 1 through 50, who were “in some manner responsible” and

1 The parties explain that “18650” refers to the size and shape of the batteries: they are 18 millimeters wide, 65 millimeters longor approximately 0.7 inches wide and 2.6 inches longand cylindrical.

3 legally liable to him because they “design[ed], manufactur[ed], or distribut[ed] the defective product.” On December 17, 2020, Lawhon substituted LG Chem for Doe 3 with a form amendment to the complaint. Against all defendants, Lawhon asserted a cause of action for negligence and strict liability causes of action for design defect, manufacturing defect, and failure to warn. II. LG Chem’s Motion to Quash Service of Summons On June 9, 2021, LG Chem specially appeared and moved to quash service of summons for lack of personal jurisdiction. Lawhon was granted leave to conduct jurisdictional discovery. On October 29, Lawhon filed his opposition to the motion to quash. He conceded the trial court could not assert general jurisdiction over LG Chem but argued LG Chem’s contacts with California were sufficient to support specific jurisdiction. The trial court agreed with Lawhon and denied LG Chem’s motion to quash on November 12. LG Chem filed its petition for writ of mandate on November 22. We summarize the jurisdictional evidence produced by LG Chem, on which both sides relied, and the relevant proceedings. A. Jurisdictional Evidence In support of its motion to quash, LG Chem submitted a declaration from Kiwon Choi, a former LG Chem sales professional responsible for sales of the type of battery that allegedly injured Lawhon. During jurisdictional discovery, LG Chem responded to written discovery and produced Choi to be

4 deposed as its designated representative. 2 The following jurisdictional facts are derived from these sources. LG Chem is a South Korean company with headquarters and principal

offices in Seoul, South Korea. 3 It had no office or employees in California, nor was it registered to do business in California. It did not own or lease real property in this state. It did not have a registered agent for service of process in California.

2 LG Chem’s responses to jurisdictional discovery were produced pursuant to a stipulated protective order prohibiting dissemination of any trade secret information disclosed in the responses. To the extent the parties included LG Chem’s assertedly protected trade secret information in subsequent filings, the information was redacted from the filed documents and the unredacted documents were lodged conditionally under seal. In this court, LG Chem moved for an order sealing the unredacted versions of the following trial court submissions on the ground they contain its trade secrets, namely, confidential customer- and product-specific pricing information: Lawhon’s unredacted opposition brief, excerpts of the transcript of LG Chem’s designated representative, LG Chem records of sales to three California companies, and a spreadsheet summarizing these sales. On December 22, 2021, we issued an order granting the motion to seal pursuant to California Rules of Court, rules 2.550(d) and 8.46(d)(6). Accordingly, in this opinion, we do not include the names of LG Chem’s California customers, the specific number of batteries sold, or the specific dollar amounts generated from these sales, based on our prior determination that this is confidential trade secret information of LG Chem.

3 LG Chem’s evidence did not specify the company’s legal form of organization (e.g., corporation, limited liability corporation, etc.). The legal form of a business entity is relevant to the determination of its citizenship. (See, e.g., BouMatic, LLC v. Idento Operations, BV (7th Cir. 2014) 759 F.3d 790

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LG Chem, Ltd. v. Superior Court, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lg-chem-ltd-v-superior-court-calctapp-2022.