Cal. Capital Ins. Co. v. Broan-Nutone, LLC
| Decision Date | 23 November 2021 |
| Docket Number | 1:21-cv-00388-NONE-SKO |
| Parties | CALIFORNIA CAPITAL INSURANCE COMPANY, Plaintiffs, v. BROAN-NUTONE, LLC, et al., Defendants. |
| Court | U.S. District Court — Eastern District of California |
FINDINGS AND RECOMMENDATIONS TO GRANT DEFENDANT A. O SMITH CORPORATION'S MOTION TO DISMISS [DOC. 6] [THIRTY-DAY OBJECTION DEADLINE]
Plaintiff California Capital Insurance Company (hereinafter “CCIC”) as subrogee of GSF Jackson Park Place Investors L.P. initiated this action by filing a complaint on January 29, 2021, against Defendants Broan-Nutone, LLC (hereinafter “Broan”) and A.O. Smith Corporation (hereinafter “Smith”) in the Fresno County Superior Court. (Doc. 1.) Defendant Smith removed the action to this Court on March 10, 2021, pursuant to 28 U.S.C. § 1441(b) based on diversity. (Doc. 1.) Plaintiff contends that a fan motor assembly manufactured by Defendant Smith and installed in an exhaust fan constructed, designed manufactured, assembled, distributed and sold by Defendant Broan, failed and caused a fire which resulted in substantial damage to property insured by Plaintiff CCIC. (Doc. 1 at 13-14.) Plaintiff asserts causes of action for: 1) negligence; and 2) strict products liability. (Doc. 1 at 14-16.) Plaintiff seeks compensatory damages for costs of repairs to the subject property, plus interest from the date of its payments. (Doc. 1 at 16-17.)
On March 17, 2021, Defendant Smith filed a motion to dismiss on the ground that this Court lacks jurisdiction over it. (Doc 6.) Plaintiff CCIC filed an opposition on April 1, 2021. (Doc. 9.) Defendant Smith filed its reply on April 8, 2021. (Doc. 10.)
On October 18, 2021, the pending motion to dismiss was referred to the undersigned for preparation of Findings and Recommendations pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 302.
I. DISCUSSION
Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, a defendant may seek dismissal of an action for lack of personal jurisdiction. In opposing such a motion, the burden of proof to show that jurisdiction is appropriate lies with the plaintiff. See Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015); Love v. Associated Newspapers, Ltd., 611 F.3d 601, 608 (9th Cir. 2010); Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). When a defendant's motion to dismiss is to be decided on the pleadings, affidavits, and discovery materials, the plaintiff need only make a prima facie showing that personal jurisdiction exists in order for the action to proceed. See Picot, 780 F.3d at 1211; Love, 611 F.3d at 608; Boschetto, 539 F.3d at 1015.
In determining whether plaintiff has met his burden to show personal jurisdiction, the court accepts plaintiff's allegations as true, and any conflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor. Love, 611 F.3d at 608; Boschetto, 539 F.3d at 1015; Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). In meeting its burden, however, a plaintiff “cannot simply rest on the bare allegations of its complaint.” Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977).
“Where, as here, there is no applicable federal statute governing personal jurisdiction, the law of the state in which the district court sits applies.” Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1484 (9th Cir. 1993); see also Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006) (en banc) (same). “California's long-arm statute allows courts to exercise personal jurisdiction over defendants to the extent permitted by the Due Process Clause of the United States Constitution.” Core-Vent Corp., 11 F.3d at 1484; see also Cal. Civ. Proc. Code § 410.10 (); Love, 611 F.3d at 608-09. Thus, only constitutional principles constrain the jurisdiction of a federal court in California. See Love, 611 F.3d at 608-09; Boschetto, 539 F.3d at 1015; Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990).
Under the Fourteenth Amendment's Due Process Clause, courts may exercise personal jurisdiction over nonresident defendants only so long as there exist sufficient “minimum contacts” between the defendant and the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980); see also Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015); Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003). Maintenance of the suit must “not offend traditional notions of fair play and substantial justice.” Yahoo!, 433 F.3d at 1205 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Generally, there are two different types of personal jurisdiction which meet this due process standard: general jurisdiction and specific jurisdiction. Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., __ U.S. __, 141 S.Ct. 1017, 1024, 209 L.Ed.2d 225 (2021); Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773, 1779-80 (2017); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.15, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Picot, 780 F.3d at 1211. Here, Defendant Smith contends the Court lacks both general and specific personal jurisdiction over it. (Doc. 6 at 2-9.) In its opposition, Plaintiff does not dispute that the Court lacks general personal jurisdiction; Plaintiff claims, however, that the Court has specific personal jurisdiction. (Doc. 9 at 2-4.)
“A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (quoting Int'l Shoe, 326 U.S. at 317, 66 S.Ct. 154); see also Ford Motor Co., 141 S.Ct. at 1024. “With respect to a corporation, the place of incorporation and principal place of business are ‘paradig[m] ... bases for general jurisdiction.'” Daimler AG v. Bauman, 571 U.S. 117, 137, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (internal citation omitted); see also Ford Motor Co., 141 S.Ct. at 1024. Thus, “[a] corporation that operates in many places can scarcely be deemed at home in all of them.” Cahen v. Toyota Motor Corp., 147 F.Supp.3d 955, 965 (N.D. Cal. 2015) (quoting Daimler AG, 571 U.S. at 139 n.20, 134 S.Ct. 746).
Here, Defendant Smith is a Delaware corporation with its principal place of business in Milwaukee, Wisconsin. (Doc. 6-2 at 2.) Thus, Defendant Smith is “at home” in Delaware and Wisconsin, and subject to general personal jurisdiction there. Defendant Smith's “affiliations with [California] are [not] so ‘continuous and systematic' as to render [it] essentially at home” in California to support general jurisdiction. Goodyear, 564 U.S. at 919 (quoting Int'l Shoe, 326 U.S. at 317). Therefore, the Court should decline to exercise general jurisdiction over Defendant Smith. Plaintiff CCIC does not contend otherwise in its opposition.
Specific jurisdiction exists where the litigation is derived from obligations that “arise out of or are connected with the [company's] activities within the state.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). In determining whether a court has specific jurisdiction over a non-resident defendant, the Ninth Circuit has set forth a three-pronged test for determining whether a defendant has sufficient minimum contacts with the forum state:
Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1142 (9th Cir. 2017) (citing Schwarzenegger, 374 F.3d at 802); see also Picot, 780 F.3d at 1211; Williams v. Yamaha Motor Co. Ltd., 851 F.3d 1015, 1023 (9th Cir. 2017). Plaintiff has the burden of establishing the first two of these prongs, and a “strong showing on one axis will permit a lesser showing on the other.” Yahoo!, 433 F.3d at 1210. “If the plaintiff fails to satisfy either of these prongs, personal jurisdiction is not established in the forum state.” Schwarzenegger, 374 F.3d at 802. “If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to ‘present a compelling case' that the exercise of jurisdiction would not be reasonable.” Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)); see also CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir. 2011); Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988).
Under the first prong of the three-part specific jurisdiction test a plaintiff must establish that the defendant either purposefully availed itself of the privilege of conducting activities in California, or purposefully directed its activities toward California. Schwarzenegger, 374 F.3d at 802 (emphasis added). Purposeful availment and purposeful direction are two distinct concepts. Id. Where the cause of...
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