Reynolds v. Ezricare LLC

• Docket Number: Case No. 3:23-cv-01632-JSC
• Decision Date: 30 October 2023
• Citation: Reynolds v. Ezricare LLC, 700 F.Supp.3d 830 (N.D. Cal. 2023)
• Parties: Milton REYNOLDS, et al., Plaintiffs, v. EZRICARE LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of California

700 F.Supp.3d 830

Milton REYNOLDS, et al., Plaintiffs, v. EZRICARE LLC, et al., Defendants.

Case No. 3:23-cv-01632-JSC

United States District Court, N.D. California

Signed October 30, 2023

Kathryn Rachel Lanier, Joshua Upham, Pro Hac Vice, Lanier Law Firm, Houston, TX, Michael A. Akselrud, Lanier Law Firm, Westlake Village, CA, David Kuttles, Pro Hac Vice, The Lanier Law Firm, PLLC, New York, NY, for Plaintiffs.

Adrienne L. Byard, Pro Hac Vice, Sarah Jones, Pro Hac Vice, Bryan T. Pratt, Pro Hac Vice, Shook, Hardy and Bacon L.L.P., Kansas City, MO, David Polyakov, Edward Bohatch Gaus, Shook, Hardy & Bacon L.L.P., San Francisco, CA, for DefendantsEzriCare LLC, EzriRx LLC.

Julie LeMaye Hussey, Jacob Logan Speckhard, Melissa H. Rose, Perkins Coie LLP, San Diego, CA, for DefendantAmazon.com, Inc.

ORDER RE: MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION, MOTIONS TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT, MOTION TO STAY

Re: Dkt. Nos. 41, 42, 43, 44

JACQUELINE SCOTT CORLEY, United States District Judge

Milton and Danae Reynolds allege eye drops caused Mr. Reynolds to lose his sight in one eye and make various product liabilities claims against EzriCare, LLC("EzriCare"), EzriRx, LLC("EzriRX"), Global Pharma Healthcare Private Limited("Global"), and Amazon.com, Inc.("Amazon").After carefully considering the parties' submissions, and the oral argument on October 26, 2023, the Court DENIES EzriRx's motion to dismiss for lack of personal jurisdiction, DENIES in part and GRANTS in part EzriCare's motion to dismiss, DENIES ExriCare's motion to stay, and DENIES Amazon's motion to dismiss.Plaintiffs allege relatively straightforward product liability claims and plead cognizable claims against all Defendants.

BACKGROUND

Global designed, manufactured, and packaged lubricating eye drops in India.(Dkt. No. 36 ¶¶ 7, 20.)Aru Pharma imported and distributed those eye drops to companies in the United States, including EzriCare.(Id.¶ 20.)EzriCare designed an exterior label for those eye drops and marketed those eyedrops as "EzriCare Artificial Tears" to customers.(Id.)Ezricare listed the EzriCare Artificial Tears for sale on a few online platforms, including Amazon.(Dkt. 42at 11.)EzriCare did not disclose the true manufacturer of Artificial Tears on the product's labeling.(Dkt. No. 36 ¶ 51.)

Milton Reynolds purchased two bottles of EzriCare Artificial Tears from Amazon.(Id.¶ 35.)After using the eye drops dozens of times, Mr. Reynolds developed an infection in his right eye.(Id.¶¶ 35-36.)Doctors informed Mr. Reynolds he was suffering from a rare strain of bacteria: Pseudomonas aeruginosa.(Id.¶¶ 16, 38.)Eventually, Mr. Reynolds lost sight in his right eye.(Id.¶ 40.)

In early 2023, the U.S. Center for Disease Control and Prevention ("CDC") reported an outbreak of Pseudomonas aeruginosa, and asserted the outbreak was linked to the use of EzriCare Artificial Tears.(Id.¶ 16; CDC, Outbreak of Extensively Drug-resistant Pseudomonas aeruginosa Associated with Artificial Tears(Feb. 1, 2023)https://emergency.cdc.gov/han/2023/han00485.asp.)The CDC's investigation into EzriCare's Artificial Tears is ongoing.(Dkt. No. 36 ¶ 16.)The Food and Drug Administration ("FDA") has advised citizens to stop using EzriCare Artificial Tears.(Id.¶ 17.)

Plaintiffs bring claims against Defendants for Strict Liability (Manufacturing Defect, Design Defect, and Failure to Warn), Negligence and Gross Negligence, Negligent Failure to Warn, Negligent Failure to Recall, Breach of Implied Warranty, Fraud, and Loss of Consortium.(Dkt. No. 36at 1.)

EZRIRX'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

I.FACTUAL BACKGROUND

Mr. Reynolds purchased the artificial tears from Amazon's website while in his home in California and alleges injuries occurring in California due to his use of those tears.(Dkt. No. 36 ¶¶ 10-11.)

EzriRx is an online marketplace platform that assists pharmacies in purchasing prescription medications, over-the-counter drugs, and pet medication.(Dkt. No. 41-1 ¶ 7.)EzriRX's headquarters and its principal place of business are both in New Jersey.(Id.¶ 5.)

II.DISCUSSION

A.Legal Standard

Plaintiff"bears the burden" of establishing personal jurisdiction exists.In re Boon Global Ltd., 923 F.3d 643, 650(9th Cir.2019)."Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, 'the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.' "Ranza v. Nike, Inc., 793 F.3d 1059, 1068(9th Cir.2015)(quotingCollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073(9th Cir.2011)).The Court may consider declarations and other evidence outside the pleadings to determine whether it has personal jurisdiction.SeeBoon Global, 923 F.3d at 650."[U]ncontroverted allegations in plaintiff's complaint must be taken as true," but courts"may not assume the truth of allegations in a pleading which are controverted by affidavit."Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223(9th Cir.2011)(cleaned up).Any "factual disputes" must be "resolve[d] . . . in the plaintiff's favor."Id.

When there is no applicable federal statute governing personal jurisdiction, as is the case here, the law of the forum state determines personal jurisdiction.Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800(9th Cir.2004).California's long arm statute is co-extensive with federal due process requirements, and therefore the jurisdictional analyses under California law and federal due process are the same.SeeCal. Civ. Proc. Code § 410.10;Mavrix, 647 F.3d at 1223.

Courts recognize two forms of personal jurisdiction, general and specific.Bristol-Myers Squibb Co. v. Super. Court of Cal., S.F. Cty., 582 U.S. 255, 262, 137 S.Ct. 1773, 198 L.Ed.2d 395(2017)(citingGoodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 918, 131 S.Ct. 2846, 180 L.Ed.2d 796(2011)).General jurisdiction over a nonresident corporation "is appropriate only when the corporation's contacts with the forum state are so constant and pervasive as to render it essentially at home in the state."Martinez v. Aero Caribbean, 764 F.3d 1062, 1066(9th Cir.2006)(cleaned up);see alsoTuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1169(9th Cir.2006)("[T]he standard for general jurisdiction is high" and "a defendant must not only step through the door, it must also [sit] down and [make] itself at home.")(quotations and citations omitted).By contrast, specific jurisdiction requires a nonresident defendant's "suit-related conduct [to] create a substantial connection with the forum State."Walden v. Fiore, 571 U.S. 277, 284, 134 S.Ct. 1115, 188 L.Ed.2d 12(2014).

Plaintiff does not contend general jurisdiction exists.(Dkt. No. 53at 5 n.3.)So, the Court must analyze whether Plaintiff has made a prima facie showing of specific jurisdiction.

B.Specific Jurisdiction

The Ninth Circuit applies a three-part test to determine if the exercise of specific personal jurisdiction over a nonresident is appropriate: (1)the defendant must purposefully direct its activities toward the forum or purposefully avail itself of the privileges of conducting activities in the forum; (2)the plaintiff's claim must arise out of or relate to those activities; and (3) the assertion of personal jurisdiction must be reasonable.Schwarzenegger, 374 F.3d at 802.It is Plaintiff's burden to plead allegations that satisfy the first two prongs, whereupon the burden shifts to Defendants to show why the exercise of specific personal jurisdiction would not be reasonable under prong three.Id.(citingBurger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78, 105 S.Ct. 2174, 85 L.Ed.2d 528(1985)).

1.EzriRx Purposefully Directed its Activities to California

Because Plaintiffs' claims sound in tort, the Court applies the "purposeful direction test" and asks whether Defendant"(1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state."Axiom Foods, Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1069(9th Cir.2017)(cleaned up).

Plaintiffs assert "EzriRx also participated in the marketing and distribution of Artificial Tears."(Dkt. No. 36 ¶ 47.)Plaintiffs cite to EzriRx's Facebook page, which displays a photo of a conference where EzriRx's booth displayed EzriCare's products, including EzriCare's Artificial Tears.(Id.¶ 48.)Plaintiffs contend "EzriRx specifically directed its activities to California" because "EzriRx specifically calls pharmacies . . . in California . . . to market and sell products."(Id.¶ 49.)

EzriRx does not contest it "purposely directed" is activities to California."[C]alling pharmacies . . . in California" is an intentional act, satisfying the first prong of the test.SeeSchwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 806(9th Cir.2004)(defining an intentional act as "an intent to perform an actual, physical act in the real world," and holding placing an advertisement in a regional paper is an intentional act).Plaintiff has also made a prima facie showing EzriRx's acts were expressly aimed at the forum state—California—which requires "something more" than "a foreign act with foreseeable effects in the forum state."Pakootas v. Teck Cominco Metals, Ltd., 905 F.3d 565, 577(9th Cir.2018)(cleaned up).An action is expressly aimed when "the 'defendant himself' creates [contacts] with the forum State."Walden, 571 U.S. at 284-85, 134 S.Ct. 1115(quotingBurger King, 471 U.S. at 475, 105 S.Ct. 2174).Here, EzriRx expressly aimed its products at California by calling pharmacies in California to market its products.Finally, by marketing products to California, EzriRx likely knew any injuries caused by those products were "likely to be suffered" in California.So, Plaintiffs have established EzriRx purposefully directed its conduct to...