Lin v. Solta Medical, Inc.

• Court: District Court, N.D. California
• Decided: June 21, 2022
• Docket: 4:21-cv-05062
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA

7 HSIN LIN, Case No. 21-cv-05062-PJH 8 Plaintiff,

9 v. ORDER RE MOTION TO DISMISS

10 SOLTA MEDICAL, INC., et al., Re: Dkt. Nos. 41, 42, 51 11 Defendants. 12

13 Defendants’ motion to dismiss came on for hearing before this court on May 5, 14 2022. Plaintiff appeared through her counsel, Carter Zinn and Jeremy Pollack. 15 Defendants appeared through their counsel, David Norden and Ryan Lewis. Having read 16 the papers filed by the parties and carefully considered their arguments and the relevant 17 legal authority, and good cause appearing, the court hereby DENIES the motion in part, 18 without prejudice for the following reasons. 19 BACKGROUND 20 This is a products liability action filed by a California resident, Hsin Lin (“plaintiff”), 21 against two out-of-state corporations, Solta Medical, Inc. (“Solta”) and Bausch Health 22 Americas, Inc. (“BHA”) (collectively “defendants”). Dkt. 36, ¶¶ 1–3. Plaintiff alleges that 23 she suffered injuries as a result of a skin treatment she received in Taiwan that utilized 24 the Thermage CPT device manufactured by defendants. Id. ¶ 30. Specifically, plaintiff 25 alleges she learned about the Thermage CPT procedure from defendants’ 26 “advertisements online.” Id. ¶ 23. Plaintiff also alleges she learned from Solta’s website 27 that the Thermage CPT procedure was available in Taiwan. Id. ¶ 24. According to 1 Id. Plaintiff alleges that in January 2019, her friend put her in touch with a consultant at U 2 Beaute Clinic in Taipei. Id. ¶ 25. On January 23, 2019, plaintiff received her treatment 3 and suffered severe second-degree burns as a result. Id. ¶¶ 27–30. 4 On January 21, 2021, plaintiff filed a four-page form complaint in the Alameda 5 County Superior Court. Dkt. 1-1. On June 30, 2021, defendants removed the case to 6 federal court pursuant to 28 U.S.C. § 1441(a). Dkt. 1. On July 7, 2021, defendants 7 moved to dismiss the case for lack of personal jurisdiction and failure to state a claim. 8 Dkt. 8. On December 6, 2021, the court denied defendants’ motion to dismiss in part and 9 granted plaintiff’s request for jurisdictional discovery. Dkt. 35. The court found that it 10 lacked general jurisdiction over defendants due to insufficient contacts with the forum 11 state, but it deferred ruling on the existence of specific jurisdiction until jurisdictional 12 discovery was conducted. Id. at 7–11. The court also found that plaintiff’s form 13 complaint lacked the specificity to state a claim and granted leave to amend. Id. at 12. 14 On December 20, 2021, plaintiff filed her first amended complaint (“FAC”). Dkt. 15 36. Plaintiff alleges that the Thermage CPT was designed, engineered, and 16 manufactured in California. Id. ¶ 13. Plaintiff also alleges the Thermage CPT device is 17 accompanied by a user manual that contains defective warnings regarding the potential 18 for serious burns. Id. ¶¶ 16–19. Plaintiff asserts three products liability causes of action: 19 (1) defective design, (2) manufacturing defect, and (3) failure to warn. Id. at 8–15. 20 Plaintiff also asserts causes of action for (4) negligence, (5) breach of express warranty, 21 and (6) breach of implied warranty. Id. at 16–20. In effect, all claims relate to the 22 allegedly defective Thermage CPT device. In her brief in opposition to the motion to 23 dismiss, filed after jurisdictional discovery, plaintiff alleged that the Thermage CPT user 24 manual was written in California in 2010. Dkt. 50 at 9. 25 On February 2, 2022, defendants moved to dismiss plaintiff’s FAC for lack of 26 personal jurisdiction. Dkt. 41.DISCUSSION 27 A. Legal Standard 1 dismiss for lack of personal jurisdiction. The party seeking to invoke a federal court’s 2 jurisdiction bears the burden of demonstrating jurisdiction. See Picot v. Weston, 780 3 F.3d 1206, 1211 (9th Cir. 2015). Where the defendant’s motion is based on a written 4 record and no evidentiary hearing is held, the “plaintiff need only make a prima facie 5 showing of jurisdictional facts.” Id. (internal quotation marks omitted). That is, the 6 plaintiff “need only demonstrate facts that if true would support jurisdiction over the 7 defendant.” Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 8 (9th Cir. 2003) (internal quotation marks omitted). 9 A prima facie showing is not a “toothless” standard. In re Boon Glob. Ltd., 923 10 F.3d 643, 650 (9th Cir. 2019). The “party asserting jurisdiction cannot simply rest on the 11 bare allegations of its complaint; however, uncontroverted allegations in the complaint 12 must be taken as true.” Id. (internal quotation marks omitted). “Conflicts between parties 13 over statements contained in affidavits must be resolved in the plaintiff’s favor.” Id. 14 (internal quotation marks omitted). But the court “may not assume the truth of allegations 15 in a pleading which are contradicted by affidavit.” Mavrix Photo, Inc. v. Brand Techs., 16 Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (internal quotation marks omitted). 17 Federal courts “ordinarily follow state law in determining the bounds of their 18 jurisdiction over persons.” Daimler AG v. Bauman, 571 U.S. 117, 125 (2014); see Fed. 19 R. Civ. P. 4(k)(1)(a). California’s long arm statute permits exercise of personal 20 jurisdiction to the fullest extent permissible under the U.S. Constitution, therefore, the 21 court’s inquiry “centers on whether exercising jurisdiction comports with due process.” 22 Picot, 780 F.3d at 1211; see Cal. Code Civ. P. § 410.10. 23 The Due Process Clause of the Fourteenth Amendment “limits the power of a 24 state’s courts to exercise jurisdiction over defendants who do not consent to jurisdiction.” 25 Martinez v. Aero Caribbean, 764 F.3d 1062, 1066 (9th Cir. 2014). Due process requires 26 that the defendant “have certain minimum contacts with it such that the maintenance of 27 the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe 1 “contacts may be so continuous and systematic as to render a defendant essentially at 2 home in the forum state and amenable to any suit there.” Glob. Commodities Trading 3 Grp., Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101, 1106 (9th Cir. 2020). 4 “Alternatively, a court may exercise jurisdiction over issues deriving from, or connected 5 with, the very controversy that establishes jurisdiction.” Id. (internal quotation marks 6 omitted). The Supreme Court has referred to these “different bases for personal 7 jurisdiction as ‘general’ and ‘specific’ jurisdiction.” Id. at 1106–07. 8 In order for a court to exercise specific jurisdiction, “the suit must arise out of or 9 relate to the defendant's contacts with the forum.” Bristol-Myers Squibb Co. v. Superior 10 Ct. of California, San Francisco Cty., 137 S. Ct. 1773, 1780 (2017) (internal quotation 11 marks and alterations omitted). The “primary focus of [a] personal jurisdiction inquiry is 12 the defendant's relationship to the forum State.” Id. at 1779. 13 The Ninth Circuit’s three-part test for specific jurisdiction is as follows: (1) the 14 defendant “must purposefully direct his activities or consummate some transaction with 15 the forum or resident thereof; or perform some act by which he purposefully avails 16 himself of the privilege of conducting activities in the forum, thereby invoking the benefits 17 and protections of its laws;” (2) “the claim must be one which arises out of or relates to 18 the defendant's forum-related activities;” and (3) “the exercise of jurisdiction must 19 comport with fair play and substantial justice, i.e. it must be reasonable.” 20 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). 21 The “plaintiff bears the burden on the first two prongs, but once both are 22 established, the defendant must come forward with a compelling case that the exercise of 23 jurisdiction would not be reasonable.” Ayla, LLC v. Alya Skin Pty. Ltd., 11 F.4th 972, 979 24 (9th Cir. 2021) (internal quotation marks omitted). 25 The first prong of specific jurisdiction is satisfied by “purposeful availment of the 26 privilege of doing business in the forum; by purposeful direction of activities at the forum; 27 or by some combination thereof.” Yahoo! Inc. v. La Ligue Contre Le Racisme Et 1 inquiry depends on the nature of the claim at issue.” Picot, 780 F.3d at 1212. For 2 contract claims, a court generally applies “a purposeful availment analysis and ask[s] 3 whether a defendant has purposefully availed himself of the privilege of conducting 4 activities within the forum State, thus invoking the benefits and protections of its laws.” 5 Id. (internal quotation marks and alterations omitted). For a court to find purposeful 6 availment, a “defendant must have performed some type of affirmative conduct which 7 allows or promotes the transaction of business within the forum state.” Boschetto v. 8 Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008) (internal quotation marks omitted). For tort 9 claims, a court applies a “purposeful direction test and look[s] to evidence that the 10 defendant has directed his actions at the forum state, even if those actions took place 11 elsewhere.” Picot, 780 F.3d at 1212 (internal quotation marks omitted). “At bottom, both 12 purposeful availment and purposeful direction ask whether defendants have voluntarily 13 derived some benefit from their interstate activities such that they will not be haled into a 14 jurisdiction solely as a result of random, fortuitous, or attenuated contacts.” Arc Wood & 15 Timbers, LLC v. Riverwood Flooring & Paneling, Inc., No. 21-CV-04885-HSG, 2021 WL 16 5771136, at *3 (N.D. Cal. Dec. 6, 2021) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 17 462, 474–75 (1985) (internal quotation marks omitted). 18 On the second prong, specific jurisdiction “demands that the suit arise out of or 19 relate to the defendant's contacts with the forum.” Ford Motor Co. v. Montana Eighth 20 Jud. Dist. Ct., 141 S. Ct. 1017, 1026 (2021) (internal quotation marks omitted). Specific 21 jurisdiction can be satisfied with a causal showing or “another activity or occurrence 22 involving the defendant that takes place in the State.” Id. (internal quotation marks and 23 alterations omitted). 24 For the third prong, reasonableness is measured by “(1) the extent of the 25 defendants' purposeful injection into the forum state's affairs; (2) the burden on the 26 defendant of defending in the forum; (3) the extent of the conflict with the sovereignty of 27 the defendant's state; (4) the forum state's interest in adjudicating the dispute; (5) the 1 plaintiff's interest in convenient and effective relief; and (7) the existence of an alternative 2 forum.” CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1079 (9th Cir. 2011) 3 (internal quotation marks omitted). 4 B. Analysis 5 The court is tasked with determining whether it may exercise specific personal 6 jurisdiction over Solta and BHA.1 Under the first prong, the parties do not dispute that the 7 court reviews defendants’ activities in California under the purposeful availment test. As 8 such, a defendant must take “some act by which it purposefully avails itself of the 9 privilege of conducting activities within the forum State” in order for a court to exercise 10 specific jurisdiction. Ford Motor Co., 141 S. Ct. at 1024 (internal alterations omitted). Put 11 another way, a defendant must “deliberately reach[] out beyond its home.” Id. at 1025 12 (internal quotation marks omitted). 13 Plaintiff has satisfied her burden on the first prong of specific jurisdiction, and 14 defendants’ attorneys waived their arguments on this prong at the court’s May 5, 2022 15 hearing. It is undisputed that Solta designed the Thermage CPT in Hayward, California. 16 It is also undisputed that Solta manufactured the Thermage CPT exclusively in Hayward, 17 California from the years 2009 to 2015. And it is undisputed that Solta created the 18 Thermage CPT user manual in Hayward, California in 2010. In sum, Solta’s activities in 19 California are not simply the result of placing “a product into the stream of commerce.” 20 LNS Enterprises LLC v. Cont’l Motors, Inc., 22 F.4th 852, 860 (9th Cir. 2022) (internal 21 quotation marks omitted). Nor are Solta’s contacts with the forum “random, isolated, or 22 fortuitous.” Id. at 859 (internal quotation marks omitted). Indeed, Solta’s activities in 23 California are distinctly tied to the creation and manufacture of the Thermage CPT—the 24 product at issue in this products liability suit. See id. at 861 (noting purposeful availment 25 can be found where a defendant “design[s] the product for the market in the forum State”) 26 (internal quotation marks omitted). Thus, Solta has purposefully availed itself of the 27 1 privileges of conducting business in the forum state even if the extent of that business 2 has diminished over the years. 3 To meet the second prong of specific jurisdiction, a plaintiff's claims must “arise 4 out of or relate to the defendant's contacts with the forum.” Ford Motor Co., 141 S. Ct. at 5 1026 (internal quotation marks and citation omitted). Plaintiff alleges this prong is met for 6 the following reasons: (1) the Thermage CPT device was designed in California; (2) the 7 Thermage CPT user manual, which allegedly contains defective warnings, was written 8 and published in California in 2010; (3) defendants advertised the Thermage CPT in 9 California, which relates to plaintiff’s breach of warranty claims; and (4) the Thermage 10 CPT was exclusively manufactured in California from 2009 to 2015. Dkt. 50 at 16–17. 11 At this stage of the litigation, the court is satisfied that the second prong is met. 12 This is a products liability lawsuit in which plaintiff alleges, and defendants do not dispute, 13 that the Thermage CPT was developed and designed in California. Courts routinely 14 consider the forum of design and development when deciding whether specific 15 jurisdiction exists. For example, in rejecting specific jurisdiction, the Ninth Circuit noted 16 the defendant “did not itself manufacture, design, or service the plaintiffs' aircraft in 17 Arizona (or anywhere).” LNS Enterprises LLC, 22 F.4th at 864; see Bristol-Myers Squibb 18 Co. 137 S. Ct. at 1778 (2017) (finding against specific jurisdiction where the defendant 19 “did not develop [the product] in California, did not create a marketing strategy for [the 20 product] in California, and did not manufacture, label, package, or work on the regulatory 21 approval of the product in California”). True, Solta’s activities and contacts in California 22 have significantly decreased since 2015 when Solta started to transition the 23 manufacturing of the Thermage CPT from Hayward, California to Bothell, Washington. 24 See Dkt. 50 at 8. And Solta’s headquarters in California closed in 2018, and its 25 remaining location in California serves predominantly as a small customer support center. 26 Dkt. 41 at 16. However, the court is unaware of any authority holding that this decrease 27 in Solta’s current activities in California somehow precludes a finding that its activities at 1 considered. As to the third prong, the court is also persuaded that the exercise of 2 personal jurisdiction would not be unreasonable. Accordingly, given the current record, 3 the court finds that plaintiff has made a prima facie showing sufficient to support a finding 4 of specific jurisdiction over defendant Solta. 5 However, there remain several material factual issues that could change the 6 court’s analysis. For instance, if the device actually used for plaintiff’s procedure was not 7 designed or manufactured in California, or if the manual actually used during plaintiff’s 8 procedure was not written and published in California, the court would likely not find that 9 the claim arises out of Solta’s forum-related activities. The court would likely give little 10 weight to further evidence about Solta’s call center in California since the claims and 11 injuries are unrelated to the call center. Thus, the denial of the motion to dismiss for lack 12 of personal jurisdiction is without prejudice to a further motion based on a more complete 13 factual record. The court will entertain a motion to reconsider this order after the close of 14 discovery if, but only if, based on evidence other than what is currently before the court. 15 With respect to defendant BHA, however, the court grants defendants’ motion and 16 finds there is no personal jurisdiction. Plaintiff argues that personal jurisdiction exists 17 over BHA because Solta acted as BHA’s agent. “To satisfy the alter ego test, a plaintiff 18 must make out a prima facie case (1) that there is such unity of interest and ownership 19 that the separate personalities of the two entities no longer exist and (2) that failure to 20 disregard their separate identities would result in fraud or injustice.” Ranza v. Nike, Inc., 21 793 F.3d 1059, 1073 (9th Cir. 2015) (internal quotation marks and alterations omitted). 22 The unity of interest and ownership prong “envisions pervasive control over the 23 subsidiary, such as when a parent corporation dictates every facet of the subsidiary's 24 business—from broad policy decisions to routine matters of day-to-day operation.” Id. 25 (internal quotation marks omitted). 26 Plaintiff provides no evidence to support that Solta acted as BHA’s agent, and, 27 contrary to plaintiff’s suggestion, the court may not simply take her allegations as true, 1 “unity of interest and ownership” between BHA and Solta. Plaintiff inaccurately asserts 2 that Scott Hirsch—a division president of BHA—declares that BHA “directs and controls” 3 Solta. Dkt. 50 at 14. In fact, Scott Hirsch declares that BHA is Solta’s parent company 4 and nothing more. Dkt. 50-1 at 45. Accordingly, plaintiff fails to show an agency 5 relationship between BHA and Solta. 6 OTHER REQUESTS 7 1. Request for Judicial Notice 8 Defendants request that the court take notice of publicly available documents from 9 the Food and Drug Administration (“FDA”) website: (1) a Thermage CPT 510(k) 10 Premarket Notification and (2) a January 8, 2019 FDA Clearance Letter. Dkt. 42. 11 Defendants argue these documents are records of official action that are readily 12 determined and cannot reasonably be questioned. Plaintiff does not oppose. 13 A court may take judicial notice of matters that are either “generally known within 14 the trial court's territorial jurisdiction” or “can be accurately and readily determined from 15 sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). 16 Matters of public record may be judicially noticed, but disputed facts contained in those 17 records may not. See Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 18 2018). 19 The court takes judicial notice of the requested documents because they cannot 20 be reasonably questioned. Indeed, courts in this district routinely grant judicial notice of 21 similar documents from the FDA. See, e.g., Eidmann v. Walgreen Co., 522 F. Supp. 3d 22 634, 642 (N.D. Cal. 2021) (“Documents published on government-run websites are 23 proper for judicial notice given their reliability”); Wilson v. Frito-Lay N. Am., Inc., 260 F. 24 Supp. 3d 1202, 1207 (N.D. Cal. 2017) (“Courts routinely take judicial notice of similar 25 FDA guidance documents, many of which also appear on the FDA's public website”). 26 2. Motion to Seal 27 Plaintiff filed a motion to “consider whether another party’s material should be 1 Thermage CPT and the Thermage NXT for the years 2009 to 2021 in California. Id. at 4. 2 Defendants filed a statement in support of this sealing. Dkt. 53. Defendants argue that 3 Solta’s yearly revenue for the Thermage devices amounts to sensitive financial 4 information constituting “business information that might harm a litigant’s competitive 5 standing.” Id. at 2. Defendants also assert that the information constitutes protectable 6 trade secrets. Id. 7 Courts generally apply a “compelling reasons” standard when considering motions 8 to seal documents. Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 9 2006). “[A] strong presumption in favor of access is the starting point.” Id. at 1178 10 (internal quotation marks omitted). To overcome this strong presumption, the party 11 seeking to seal a judicial record attached to a dispositive motion must “articulate 12 compelling reasons supported by specific factual findings that outweigh the general 13 history of access and the public policies favoring disclosure, such as the public interest in 14 understanding the judicial process” and “significant public events.” Id. at 1178–79 15 (internal quotation marks omitted). “In general, compelling reasons sufficient to outweigh 16 the public's interest in disclosure and justify sealing court records exist when such court 17 files might have become a vehicle for improper purposes, such as the use of records to 18 gratify private spite, promote public scandal, circulate libelous statements, or release 19 trade secrets.” Id. at 1179 (internal quotation marks and alterations omitted). “The mere 20 fact that the production of records may lead to a litigant's embarrassment, incrimination, 21 or exposure to further litigation will not, without more, compel the court to seal its 22 records.” Id. 23 The compelling reasons standard is not met here. Defendants fail to establish that 24 disclosure of the Thermage revenue information would harm Solta’s competitive 25 standing. In the past, courts have sealed financial information where there was 26 information on pricing terms and price-related contracts. See, e.g., In re Elec. Arts, Inc., 27 298 F. App'x 568, 569 (9th Cir. 2008) (sealing “the pricing terms, royalty rates, and 1 19-CV-08098-LHK, 2020 WL 8669859, at *3 (N.D. Cal. Nov. 6, 2020) (finding “the 2 competitive harm that would result from the disclosure of Plaintiff's pricing and contracts 3 with third parties is a compelling reason that outweighs the general history of access and 4 the public policies favoring disclosure”). 5 But boilerplate statements of competitive harm are insufficient to withhold 6 information from the public. See Hodges v. Apple Inc., No. 13CV01128WHOWHO, 2013 7 WL 6070408, at *2 (N.D. Cal. Nov. 18, 2013) (noting an “unsupported assertion of unfair 8 advantage to competitors without explaining how a competitor would use the information 9 to obtain an unfair advantage is insufficient”) (internal quotation marks and alterations 10 omitted). Here, defendants rely exclusively on conclusory assertions to support their 11 position. Defendants assert that the Thermage revenue information “would give an unfair 12 business advantage to [] Solta’s competitors,” but they provide no explanation as to what 13 business advantage Solta’s competitors would gain. Dkt. 53 at 2. Likewise, defendants 14 assert, without any support, that “Solta’s confidential financial information [] constitutes 15 trade secret information that should be protected from disclosure.” Id. at 4. But 16 defendants do not explain why Solta’s revenue information gives Solta “an opportunity to 17 obtain an advantage over competitors who do not know or use it.” In re Elec. Arts, Inc., 18 298 F. App'x at 569 (internal quotation marks omitted). Accordingly, the motion to seal is 19 DENIED. 20 CONCLUSION 21 Solta’s motion to dismiss is DENIED without prejudice. BHA’s motion to dismiss is 22 GRANTED without leave to amend. Defendants’ request for judicial notice is granted. 23 Plaintiff’s motion to seal is DENIED. 24 IT IS SO ORDERED. 25 Dated: June 21, 2022 26 /s/ Phyllis J. Hamilton PHYLLIS J. HAMILTON 27 United States District Judge