Sullivan v. LG Chem, Ltd.

• Decision Date: 14 February 2022
• Docket Number: Case No. 21-11137
• Citation: 585 F.Supp.3d 992
• Parties: Michael SULLIVAN, Plaintiff, v. LG CHEM, LTD. and LG Energy Solution Michigan, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

585 F.Supp.3d 992

Michael SULLIVAN, Plaintiff,
v.
LG CHEM, LTD. and LG Energy Solution Michigan, Inc., Defendants.

Case No. 21-11137

United States District Court, E.D. Michigan, Southern Division.

Signed February 14, 2022

585 F.Supp.3d 996

Wolf Mueller, Mueller Law Firm, Novi, MI, Mark Granzotto, Mark Granzotto, P.C., Berkley, MI, for Plaintiff.

Anthony A. Agosta, Daniel J. Scully, Jr., Clark Hill, Detroit, MI, Dell P. Chappell, Rachel A. Hedley, Nelson Mullins Riley & Scarborough LLP, Columbia, SC, Jose T. Brown, Cline, Cline, Flint, MI, for Defendants.

OPINION AND ORDER GRANTING LG CHEM'S MOTION TO DISMISS [3]

LAURIE J. MICHELSON, UNITED STATES DISTRICT JUDGE

The facts of this case, it turns out, are not unusual. A plaintiff purchases lithium-ion batteries—allegedly manufactured by LG Chem—in his or her home state for use in an electronic cigarette. The batteries later explode and cause the plaintiff serious injuries. The plaintiff sues LG Chem. Cases based on similar facts have been filed in at least 10 jurisdictions.¹ Each

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time, LG Chem, a South Korean corporation, has filed a motion to dismiss for lack of personal jurisdiction, arguing that it lacks the necessary contacts with each state to satisfy the forum's long-arm statute and the Due Process Clause of the Fourteenth Amendment. In all but two of these cases, LG Chem has been successful. See Berven v. LG Chem, Ltd. , No. 118CV01542DADEPG, 2019 WL 4687080 (E.D. Cal. Sept. 26, 2019) ; Tieszen v. EBay, Inc. et. al , No. 4:21-CV-04002-KES, 2021 WL 4134352 (D.S.D. Sept. 10, 2021).

But two things make this case unusual. First, with the benefit of jurisdictional discovery, Sullivan provided the Court with specific facts about LG Chem's activities in Michigan, including direct shipments of LG 18650 batteries to Michigan as well as two contracts with Michigan entities for 18650 batteries. Second, the Supreme Court's most recent opinion on specific personal jurisdiction clarified that "some relationships [between a defendant and a forum] will support jurisdiction without a causal showing," at least where the defendant serves a market in a state for the very product that injured the plaintiff. See Ford Motor Co. v. Montana Eighth Jud. Dist. Ct. , ––– U.S. ––––, 141 S. Ct. 1017, 1026–28, 209 L.Ed.2d 225 (2021). With these benefits, the Court concludes that LG Chem's contacts with Michigan satisfy the requirements of the Due Process Clause, at least at the motion-to-dismiss stage. However, in this Court's view, Michigan's long-arm statute might offer additional protection to LG Chem. Yet Sullivan treats Michigan's long-arm statute as if it has the same scope as the Due Process Clause. Because Sullivan has not shown that his cause of action "ar[ose] out of" LG Chem's contacts with Michigan as that phrase is used in the long-arm statute, this Court dismisses the case for want of personal jurisdiction.

I. Background

As discussed at length below, when deciding a 12(b)(2) motion to dismiss for lack of personal jurisdiction without an evidentiary hearing, the Court takes the pleadings and affidavits in the light most favorable to the plaintiff, in this case Sullivan. See Theunissen v. Matthews , 935 F.2d 1454, 1459 (6th Cir. 1991).

A. Factual Background

In March 2018, Michael Sullivan's wife purchased an electronic cigarette and four LG HG2 18650 lithium-ion batteries from a local Michigan smoke shop. (ECF No. 1-1, PageID.22.) About seven months later, Sullivan had two of the LG 18650 batteries in his front, left pants pocket when they suddenly exploded. (Id. ) The explosion caused flames and sparks to "shoot out of his pocket," and Sullivan immediately tried to put out the fire with his hand. (Id. ) But

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before it could be extinguished, the flames caused "severe second-and third-degree burns to his left hand and left upper thigh." (ECF No. 1-1, PageID.23.) He was soon transferred to a burn unit, where he underwent debridement treatments to remove the burned skin and received skin graft surgery. (ECF No. 10, PageID.337.)

B. Procedural Background

On December 22, 2020, Sullivan filed a complaint in Genesee County Circuit Court against defendants LG Chem and LG Chem's Michigan-based subsidiary, LG Energy Solutions Michigan (LGESMI). (ECF No. 1-1, PageID.24.) He asserted claims for negligence and gross negligence against both parties. (Id. at PageID.24–27.)

LG Chem then removed this action to federal court based on diversity of citizenship, alleging that LGESMI had been fraudulently joined. (ECF No. 3-4, PageID.291.) Sullivan acknowledged this argument, but neither asked this court to remand the case nor contested that LGESMI had been fraudulently joined, so he appears to have waived his claims against LGESMI. See (ECF No. 10, PageID.340); Kennedy v. Comm'r of Soc. Sec. , 87 Fed.Appx. 464, 466 (6th Cir. 2003) ("[I]ssues which are adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived." (internal quotation marks omitted)). So LGESMI is dismissed.

In time—and in keeping with similar cases—LG Chem filed a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). (ECF. No. 3, PageID.235.) Sullivan opposed the motion, conceding that LG Chem is a South Korean corporation, but arguing that LG Chem has "significant contacts with the state of Michigan relating to its lithium-ion battery business." (ECF No. 10, PageID.338; ECF No. 3-2, PageID.268.) He also requested oral argument or jurisdictional discovery. (ECF No. 10, PageID.328.)

The Court held a hearing on the motion and granted Sullivan "limited written jurisdictional discovery on the issue of LG Chem's contacts with Michigan related to the 18650 batteries." (ECF No. 18; ECF No. 20, PageID.708); see also Malone v. Stanley Black & Decker, Inc. , 965 F.3d 499, 506 (6th Cir. 2020) (explaining that a consumer in a products liability case may need discovery to reveal whether the defendant is amenable to suit). Discovery has since concluded, and the parties have submitted their supplemental briefs. (See ECF Nos. 21, 25.) Sullivan has not asked for further discovery or for an evidentiary hearing, though he did request a second round of oral argument. (See ECF No. 25.) But given the extensive briefing and record, the Court considers the motion without additional oral argument. See E.D. Mich. LR 7.1(f). For the reasons below, the Court finds that it lacks general and specific personal jurisdiction over LG Chem and DISMISSES this case.

II. Legal Standard

"The party seeking to assert personal jurisdiction bears the burden of demonstrating that such jurisdiction exists." Schneider v. Hardesty , 669 F.3d 693, 697 (6th Cir. 2012). But the plaintiff's burden varies depending on the district court's response to the motion to dismiss, as the court may (1) decide the motion on the basis of written submissions and affidavits alone, (2) permit discovery in aid of the motion, or (3) conduct an evidentiary hearing on the merits of the motion. Theunissen v. Matthews , 935 F.2d 1454, 1458 (6th Cir. 1991).

The Court here selected the second option and permitted Sullivan to take limited jurisdictional discovery. Because there is a factual dispute about precisely how many shipments of 18650 batteries LG Chem

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sent to Michigan, the burden of proof on Sullivan is the prima facie standard. See Schneider , 669 F.3d at 697 (discussing potential "exception" to the normal prima facie standard where there is neither a factual dispute nor a dispute as to the extent of discovery); see also Lyngaas v. Curaden AG , No. 17-CV-10910, 2018 WL 1251754, at *2 (E.D. Mich. Mar. 12, 2018) (discussing standard and collecting cases).

A prima facie showing of the court's personal jurisdiction requires that the plaintiff establish "with reasonable particularity sufficient contacts between [the defendant] and the forum state to support jurisdiction." Neogen Corp. v. Neo Gen Screening, Inc. , 282 F.3d 883, 887 (6th Cir. 2002). In response to a motion to dismiss, "the plaintiff may not stand on his pleadings, but must show the specific facts demonstrating that the court has jurisdiction." Miller v. AXA Winterthur Ins. Co. , 694 F.3d 675, 678 (6th Cir. 2012). The pleadings and affidavits submitted on a 12(b)(2) motion are "received in a light most favorable to the plaintiff[,] ... [and] the court disposing of a 12(b)(2) motion does not weigh the controverting assertions of the party seeking dismissal." Theunissen , 935 F.2d at 1459 (citing Serras v. First Tennessee Bank Nat. Ass'n , 875 F.2d 1212, 1214 (6th Cir. 1989) ). But the Court is not precluded from considering the undisputed factual representations of the defendant that are consistent with the plaintiff's representations. Kerry Steel, Inc. v. Paragon Indus., Inc. , 106 F.3d 147, 153 (6th Cir. 1997). As another court in this circuit succinctly summarized: "The upshot seems to be this: in opposing a motion to dismiss for lack of personal jurisdiction, a plaintiff cannot rely on mere allegations in the complaint, unless they are uncontroverted by the defendant-movant—in which case they can be accepted as true, as can the averments in the plaintiff's declarations (even if contradicted) and the defendant's undisputed factual assertions." Shelter Mut. Ins. Co. v. Bissell Homecare, Inc. , No. 3:20-CV-00813, 2021 WL 1663585, at *3 (M.D. Tenn. Apr. 28, 2021). And "[d]ismissal [at the 12(b)(2) stage] is proper only if all the specific facts which the plaintiff ... alleges collectively fail to state a prima facie case for jurisdiction." CompuServe, Inc. v. Patterson , 89 F.3d 1257, 1262 (6th Cir. 1996) (citing Theunissen , 935 F.2d at 1458 ).

Having laid out the standard, the Court also finds it helpful to highlight Sullivan's specific jurisdictional allegations.

Sullivan's response to the motion to dismiss references the following from its complaint: (1) LG Chem's filings in a patent infringement case that...