Womble Bond Dickinson (US) LLP v. Kim

• Jurisdiction: Hawaii,United States
• Parties: WOMBLE BOND DICKINSON (US) LLP; Shook, Hardy & Bacon L.L.P. ; and Covington & Burling LLP, Petitioners, v. The Honorable Robert D.S. KIM, Chief Judge of the Circuit Court of the Third Circuit, State of Hawai‘i, Respondent Judge, and Marvin Manious; Valerie Manious; R.J. Reynolds Tobacco Company; Philip Morris USA, Inc.; Liggett Group LLC ; Greenspoon Marder LLP; Foodland Super Market, Limited; J. Hara Store, Inc.; and Walmart Inc., Respondents.
• Citation: 153 Hawai‘i 307,537 P.3d 1154
• Decision Date: 18 October 2023
• Court: Hawaii Supreme Court
• Docket Number: SCPW-23-0000076

153 Hawai‘i 307

537 P.3d 1154

WOMBLE BOND DICKINSON (US) LLP; Shook, Hardy & Bacon L.L.P. ; and Covington & Burling LLP, Petitioners,

v.The Honorable Robert D.S. KIM, Chief Judge of the Circuit Court of the Third Circuit, State of Hawai‘i, RespondentJudge,andMarvin Manious; Valerie Manious; R.J. Reynolds Tobacco Company; Philip Morris USA, Inc.; Liggett Group LLC ; Greenspoon Marder LLP; Foodland Super Market, Limited; J. Hara Store, Inc.; and Walmart Inc., Respondents.

SCPW-23-0000076

Supreme Court of Hawai‘i.

October 18, 2023

Geoffrey Michael(Edmund K. Saffery, Deirdre Marie-Iha, Thomas J. Hughes, David M. Louie, Nicholas R. Monlux, Honolulu, Lincoln S.T. Ashida, Hilo, Thomas Benedict, on the briefs) for petitioners

Phillip Holden(Wayne Parsons, Sergio Rufo, Alejandro Alvarez on the briefs) for respondentsMarvin Manious and Valerie Manious

Melvyn M. Miyagi, Ross T. Shinyama, Honolulu, Lisa M. Yang, Rihui Yuan, W. Randall Bassett, Spencer M. Diamond, Philip R. Green(on the briefs) for respondentR.J. Reynolds Tobacco Company

David M. Louie, Nicholas R. Monlux, Honolulu, Lincoln S.T. Ashida, Hilo, (on the briefs) for respondentPhilip Morris USA, Inc.

RECKTENWALD, C.J., McKENNA, AND EDDINS, JJ., CIRCUIT JUDGE TONAKI IN PLACE OF NAKAYAMA, J., RECUSED, AND CIRCUIT JUDGE MALINAO, IN PLACE OF WILSON, J., RECUSED

OPINION OF THE COURT BY EDDINS, J.

I.

Three law firms petition this court to order a judge to get them out of a case.They argue the Circuit Court of the Third Circuit lacks jurisdiction to hale them into Kona - side by side with the tobacco companies they long-counseled - in a products liability, fraud, and conspiracy suit.

The circuit court relied on conspiracy jurisdiction to invoke jurisdiction.Not only is that theory of specific personal jurisdiction unconstitutional, the law firms maintain, but this court has never endorsed conspiracy jurisdiction.And we shouldn't now.But if we did, the court still lacks jurisdiction - the pleadings and the evidence produced at a Hawai‘i Rules of Civil Procedure Rule 12(b)(2) motion to dismiss were insufficient.

We adopt conspiracy jurisdiction.Still, the circuit court lacked personal jurisdiction.The law firms are out.

II.

In March 2022, Marvin Manious and Valerie Manious(plaintiffs) sued ten defendants: Philip Morris USA Inc.(Philip Morris); RJ Reynolds Tobacco Company(Reynolds); Liggett Group LLC(Liggett); Shook, Hardy & Bacon L.L.P. (Shook); Covington & Burling L.L.P. (Covington); Greenspoon Marder L.L.P.; Womble Bond Dickinson (US) L.L.P. (Womble); Foodland Super Market; J. Hara Store; and Walmart.The Maniouses filed their suit in the Circuit Court of the Third Circuit.

Plaintiffs are Hawai‘i residents.Marvin Manious has laryngeal cancer.Smoking cigarettes caused his cancer, the Maniouses allege.Those cigarettes were "designed, manufactured, advertised, marketed, distributed and/or sold" by DefendantR.J. Reynolds Tobacco Company.Plaintiffs say Philip Morris, Reynolds, and Liggett advertised and marketed cigarettes in Hawai‘i and that Foodland, J. Hara, and Walmart operated retail outlets where Marvin Manious bought his cigarettes.

Plaintiffs brought product liability, fraud, and conspiracy claims against the cigarette manufacturers and retailers.They also brought two conspiracy counts specifically against the law firms.

Why sue the law firms?Plaintiffs allege the cigarette companies "utilized" the law firms as in-house and outside counsel to "conceal and misrepresent the harms of smoking cigarettes, secondhand smoke, ... and the addictive qualities of nicotine."Their complaint claims the cigarette companies hired the law firms beginning in the 1950s "to assist them in their conspiratorial activities which included to conceal and misrepresent the harms of smoking and its addictive nature to the public."

According to Plaintiffs, the law firms "played a central role in the creation and perpetuation of the conspiracy and the implementation of its fraudulent schemes throughout the United States as well as in Hawai‘i."Plaintiffs say that the law firms oversaw scientific research, reviewed advertisements, and provided false testimony to government agents.They directed their conduct "throughout the United States, including to the State of Hawai‘i."

Plaintiffs allege that the law firms orchestrated a conspiracy through an association known over time as the "Committee of Counsel."One count claims that the law firms conspired to commit fraudulent concealment: "As a direct and foreseeable result of the law firms’ fraudulent conduct in assisting Philip Morris, RJ Reynolds, Liggett and their co-conspirators conceal the health effects and addictive nature of cigarettes, consumers in Hawai‘i, including Marvin Manious, were not aware of the true harms and addictive nature of cigarettes."

The complaint alleges in another count that the law firms conspired to commit fraudulent misrepresentations.Factually, the complaint's fraudulent concealment and fraudulent misrepresentations counts are mirror images.

The law firms each moved to dismiss under Hawai‘i Rules of Civil Procedure (HRCP)Rule 12(b)(2) for "lack of jurisdiction over the person."They make similar, though not identical, arguments for dismissal.They contend that Hawai‘i courts lack general and specific jurisdiction over them.

Plaintiffs counter that the complaint supports specific jurisdiction because it alleges that the law firms were engaged in a conspiracy with a goal to maximize the sale of cigarette products throughout the United States, including Hawai‘i.Plaintiffs maintain that the law firms conspired with the cigarette companies and retailers to specifically target Hawai‘i "with fraudulent advertisements and marketing materials, misinformation, and misleading statements."

Plaintiffs submitted 49 exhibits, totaling hundreds of pages, to back their position that the law firms "conspired with others to create a massive fraud that reached into Hawai‘i."And for the first time, Plaintiffs introduced conspiracy jurisdiction to support the court's specific personal jurisdiction.

Shook's reply memorandum points out that watermarks populate Plaintiffs’ documents, meaning that "most of Plaintiffs’ exhibits come from the searchable Truth Tobacco Industry Documents database."That database is "[a]n archive of 14 million documents created by tobacco companies about their advertising, manufacturing, marketing, scientific research and political activities."See https://industrydocuments.ucsf.edu/tobacco/ [https://perma.cc/4UB8-HLT2].

In October 2022, the circuit court ruled it had jurisdiction over three of the law firms (Shook, Covington, and Womble).The court entered pithy orders denying the motions to dismiss.Conspiracy jurisdiction defeated the law firms’ 12(b)(2) motions."The Court finds and concludes that it may exercise personal jurisdiction ... based on conspiracy jurisdiction."The court did not make minimum contacts findings or undertake any due process analysis.

The court granted without prejudice Greenspoon's motion to dismiss.Later, Plaintiffs and Greenspoon submitted a joint stipulation dismissing that law firm as a defendant with prejudice.The court signed off.Greenspoon was out.

The remaining law firms moved for leave to file an interlocutory appeal and stay the proceedings.The court denied those motions.

About one week later, the law firms petitioned this court.They request a writ of prohibition enjoining the circuit court from exercising personal jurisdiction over them, or alternatively for a writ of mandamus ordering dismissal for lack of personal jurisdiction.The law firms urge us to reject conspiracy jurisdiction as a way to invoke specific personal jurisdiction.But should we adopt conspiracy jurisdiction, it does not operate to hale them into the third circuit, they maintain.The law firms’ writ poses two questions:

1.Does a circuit court violate the Due Process Clause of the U.S. Constitution and thus exceed its jurisdiction when it purports to exercise personal jurisdiction over a defendant based on the "conspiracy theory of personal jurisdiction"?

2.Even if the "conspiracy theory of personal jurisdiction" were valid under current U.S. Supreme Court precedent, did the circuit court exceed its jurisdiction here where it purported to exercise personal jurisdiction over the Law Firms despite the absence of any evidence that substantial steps in furtherance of the conspiracy were taken in Hawai‘i, or that the alleged conspiracy targeted Hawai‘i?

We answer question 1 No.

We answer question 2 Yes.

III.

A.

To bring a defendant to our courts, a plaintiff must establish personal jurisdiction.Courts invoke personal jurisdiction through general or specific jurisdiction.SeeGoodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796(2011).

The parties agree on one thing.There is no general jurisdiction.

There's no place other than home for general jurisdiction.A business entity has two home states: its place of incorporation and its principal place of business.BNSF Ry. Co. v. Tyrrell, 581 U.S. 402, 413, 137 S.Ct. 1549, 198 L.Ed.2d 36(2017).The law firms are not "at home" in Hawai‘i.SeeFord Motor Co. v. Montana Eighth Jud. Dist. Ct., ––– U.S. ––––, 141 S. Ct. 1017, 1024, 209 L.Ed.2d 225(2021).Here, Shook is incorporated in Missouri, and has its principal place of business there.Covington is incorporated under Delaware law and has its principal place of business in the District of Columbia.Womble is incorporated in North Carolina, and has its principal place of business there.

Since the court lacks general jurisdiction, Plaintiffs must show specific jurisdiction.

B.

Hawai‘i courts first consider whether Hawai‘i Revised Statutes (HRS) § 634-35(2016) allows specific jurisdiction.SeeYamashita v. LG Chem, Ltd., 152 Hawai‘i 19, 21, 518 P.3d 1169, 1171(2022).Typically, Hawai‘i's long-arm statute is not decisive.Instead, it blends into the due process...