Kneeland v. Ethicon Suture Laboratories, Inc.

• Decision Date: 29 May 1953
• Docket Number: No. 15363,15363
• Citation: 118 Cal.App.2d 211,257 P.2d 727
• Court: California Court of Appeals Court of Appeals
• Parties: KNEELAND v. ETHICON SUTURE LABORATORIES, Inc. et al.

Page 727

257 P.2d 727

118 Cal.App.2d 211

KNEELAND v. ETHICON SUTURE LABORATORIES, Inc. et al.

No. 15363.

District Court of Appeal, First District, Division 1, California.

May 29, 1953.

David E. Adelson, Emeryville, for appellant.

Brown, Rosson & Berry, Oakland, for respondent.

FRED B. WOOD, Justice.

The sole question upon this appeal is whether or not defendant Ethicon Suture Laboratories, Inc., a foreign corporation, was 'doing business in this State' § 411, Code of Civ.Proc., in such a manner and to such an extent as to make it amenable to service of process and to the jurisdiction of our superior court. ¹

This question has two aspects: (1) was this defendant 'doing business' here within the meaning of that term as judicially interpreted by the courts of this state, and (2) If so, does that comport with the due process requirement of the Fourteenth Amendment to the Constitution of the United States? Bomze v. Nardis Sportswear, 2 Cir., 1948, 165 F.2d 33, 35; Rosenthal v. Frankfort Distillers Corp., 5 Cir., 1951, 193 F.2d 137, 141.

Incident to an abdominal operation upon plaintiff, his surgeon installed a wire mesh screen for the reinforcement of the abdominal muscular wall. Later the screen ruptured, to plaintiff's injury. He filed suit for damages against Bischoff's (a copartnership), the local distributor from whom the surgeon, as plaintiff's agent, purchased the screen; also, against Ethicon Suture Laboratories, Inc., a corporation, the manufacturer of the screen, and Johnson and Johnson, a foreign corporation, for whom Ethicon allegedly is an agent, a subsidiary, or a division.

In the first count of his complaint plaintiff seeks to hold the defendants, including Ethicon, responsible upon the ground that they warranted the screen to be fit and proper for the indicated use. The theory of the second count of the complaint is that Ethicon and Johnson and Johnson were negligent in the manufacture of the screen and failed to use due care in its construction and in testing it and the materials of which it was made. The local distributor (Bischoff's) and Johnson and Johnson appeared and answered the complaint.

Upon plaintiff's application, the trial court ordered service of summons upon Ethicon as provided in §§ 6501 and 6502 of the Corporations Code. ² Such service was made and thereupon Ethicon specially appeared and moved to quash service. The motion was heard and considered upon affidavits. No oral testimony was introduced. The trial court granted the motion, by an order signed and filed. From that order plaintiff has appealed. ³

Ethicon supported its motion by two affidavits: one by A. J. Bee, its treasurer and assistant secretary; the other, by Jack Edmonson, its Pacific Coast Division Manager.

Bee states that Ethicon was created and exists under the laws of New Jersey; has had and now has its home office and principal place of business at Brunswick, N. J.: has never qualified to do business in California; 'has been, and now is, engaged in selling a product referred to in the above entitled complaint as tantalum wire meshed screen to surgical supply houses for use in hospitals and by physicians and surgeons'; did not at any time, nor does it, 'keep or maintain any stock of merchandise in' California, or 'manufacture any of its products in' California; at no time has had, nor has it now, any officer or representative in California 'authorized to contract on behalf of' Ethicon 'for the sale of any of its products or to make any warranties on its behalf, either express or implied'; that at all times 'all sales by' Ethicon 'of its products in * * * California were, and such sales now are, subject to confirmation at the principal office of said corporation in New Brunswick, New Jersey, and all orders for products are filled from New Jersey, and said products are shipped into the State of California by public carrier to the purchasers of said products'; at all times, ⁴ Ethicon 'was not, and now is not, transacting a substantial part of its business in * * * California'; ⁵ neither of the causes of action set forth in the complaint 'arose in * * * California, and the above entitled court has no jurisdiction either of the subject of said action or of' Ethicon;5 that 'said corporation at no time sold in the State of California tantalum wire mesh screen to plaintiff in the above entitled action or to any agent for or on behalf of said plaintiff'. 5

Edmonson states that he is 'the Pacific Coast Division Manager of Ethicon * * *; that he resides at 12930 Greenleaf Street, North Hollywood, California; that * * * Ethicon * * * employes [sic] in California six (6) individuals, including himself; that * * * Ethicon * * * has no office in California; that all such employees of Ethicon * * * are engaged solely in sales promotion work; that the products of said Ethicon * * * are sold in California by supply house distributors; that said supply houses are independent business concerns; that sales of Ethicon * * * are consummated in New Jersey and not in California; and that no collections for sales of products to California supply houses are made in California.'

From these two affidavits it appears that Ethicon's local activity in California consists of 'sales promotion work' by and through six persons employed by it, one of whom, Jack Edmonson, describes himself as 'Pacific Coast Division Manager' of Ethicon and resides in California. The statement in Bee's affidavit that Ethicon 'was not and now is not transacting a substantial part of its business in * * * California' is consistent with the concept of transacting business in California to the extent at least of its 'sales promotion work' mentioned but not in detail described by Edmonson. This, quite clearly, would not be enough to demonstrate that Ethicon was 'doing business' within California under the earlier concept of that term. It might be within the purview of that concept as modified and developed in recent years. Before going into that, it will be well to ascertain to what extent, if at all, the affidavits furnished by plaintiff supply the details of the character and scope of Ethicon's 'sales promotion work'; i. e., to the extent that they do so consistently with the statements appearing in Ethicon's affidavits.

In opposition to the motion to quash, plaintiff presented affidavits by David Adelson, attorney for plaintiff; John F. Wight, assistant administrator of Herrick Memorial Hospital, Berkeley, California, at which institution plaintiff's operation was performed; Paul Givant, purchasing agent for Herrick Memorial Hospital; and Dr. George C. Shipounoff, the surgeon who purchased the tantalum wire mesh screen and performed the operation upon plaintiff. We summarize those portions of their affidavits which do not appear to be in conflict with the facts stated in Ethicon's affidavits.

Adelson states that at all times Ethicon 'has employed and is now employing Jack Edmonson as its Pacific Coast Manager and California Divisional Manager with offices at Suite 104, 444 North Bedford Drive, Beverly Hills, California,' and said Jack Edmonson in his capacity as California divisional manager of said corporation has been and is now supervising the activities of the local California representatives of said corporation'; at all times 'Louis J. Pacelli, residing at 68 Shearer Drive, Atherton, California, has been and now is northern California representative of' Ethicon and 'David Barry has been and was southern California representative of' Ethicon until August 1, 1951, since which date 'Merle Jutkins has been and now is said southern California representative'; at all times said northern and southern California local representatives of Ethicon 'have regularly contacted and visited, and are now contacting and visiting, California hospitals, surgical supply houses, physicians and surgeons for the purposes of (a) detailing them as to defendant's products, (b) generally soliciting their business, * * *, and (e) generally promoting good will and improving public relations of defendant corporation within the state of California'; at all times Louis J. Pacelli as northern California local representative of Ethicon 'has solicited and is now soliciting as hereinbefore described sixteen (16) northern California distributors of said defendant corporation on a weekly, bi-weekly or monthly basis, including the following located in the San Francisco-Oakland-Berkeley area * * * [the names and addresses of four firms in San Francisco, two in Oakland and one in Berkeley] * * * That during all of the times mentioned in said complaint in the above entitled action, said Louis J. Pacelli has regularly and systematically solicited and detailed, and is now soliciting and detailing hospitals in northern California in behalf of' Ethicon; at all times 'said Louis J. Pacelli has serviced and is now servicing physicians and surgeons in Northern California in behalf of' Ethicon and 'has attended California conventions of medical, surgical and hospital associations, has exhibited and promoted defendant corporation's products at said conventions and has solicited business in defendant's behalf.'

Wight states that at all times he 'has been visited and contacted and is now being visited and contacted by local representatives of out of state manufacturers of medical, surgical and hospital supplies and equipment,' and 'has been frequently visited and contacted at said hospital by Louis J. Pacelli, the northern California representative of' Ethicon; that at the time of such visits Louis J. Pacelli 'has discussed with affiant new products and new developments of * * * Ethicon * * *, has given trade literature of Ethicon * * * to affiant, and has solicited good will and has fostered sound public relations between said hospital and Ethicon * * *', that 'Louis J. Pacelli is the northern California representative of' Ethicon; that at all times 'said Louis J. Pacelli has contacted...