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Product Liability Claims Against Global Manufacturer Dismissed on Jurisdictional Grounds in Los Angeles Superior Court

Case Study

Product Liability Claims Against Global Manufacturer Dismissed on Jurisdictional Grounds in Los Angeles Superior Court

July 30, 2020

Goldberg Segalla’s Lisa P. Gruen, a partner based in Los Angeles, secured the dismissal on jurisdictional grounds of a significant product liability action in Superior Court in Los Angeles—fifteen months after Lisa drafted and filed the motion, and following a complex and fraught jurisdictional discovery process.

This matter stemmed from claims for significant damages related to a turret-winder machine manufactured by the predecessor of a third party which was an active defendant in the litigation. Our client, a global manufacturer, had purchased only the assets (not liabilities) of that company a few years prior to the subject accident. The plaintiff had suffered a complex fracture of his arm with significant residual complaints. The exposure to the client was upwards of $500,000 and possibly over $1 million.

Lisa filed the motion to dismiss on jurisdictional grounds in April of 2019. The plaintiff initially opposed the motion arguing that our client was liable based on general and specific (case-related) jurisdiction as well as based on a theory of successor liability, as the client had purchased assets only of the company that had been the manufacturer and original seller of the turret-winder machine in question. That company was still viable and was named and became an active defendant. We argued that our client argued that it was not a successor corporation and that it did not purposefully avail itself of the benefit of the laws of or of doing business in California.

The motion was originally set to be heard on June 19, 2019. Two days before the hearing, the court transferred to the case to an Independent Calendar Court at the Compton Branch court and the motion date was vacated. That court set a status conference on August 26, 2019 at which all pending motions were to be rescheduled.

In the interim, the plaintiff had served jurisdictional discovery. The discovery served was extensive and far exceeded merely jurisdictional issues; Lisa’s response to the discovery was largely objections on that basis. The plaintiff then met and conferred on the sufficiency of our discovery responses. As required in Superior Court in Los Angeles County before a motion to compel further responses could be filed by the plaintiff, the parties submitted a stipulation to submit the issues related to the jurisdictional discovery to the required informal discovery conference which was scheduled for November 1, 2019.  Judge Gary Tanaka in Compton worked with the parties for over four hours (through the court’s lunch break) on the Informal Discovery Conference. Much of the discovery was stricken or severely limited by the court.

Due to the discovery dispute, additional issues, and a motion for summary judgment filed by another defendant in the case, the case management conferences were continued from December 2019, to February 2020 and then again to April 30, 2020. As the COVID-19 pandemic unfolded, the court continued the motion from April 30, 2020 to July 2, 2020—and thus it became the longest pendency of a motion in Lisa’s years of practice.

This was not an easy motion. Personal jurisdiction motions are always tricky, particularly in the context of product liability claims, as explained in some of the recent Supreme Court cases addressing this issue, and California state courts have a well-earned reputation for hostility to corporate defendants. Lisa and her team explained why the case facts did not give rise to specific jurisdiction and why our client’s purposeful contacts with California did not create general jurisdiction. In a well-drafted ruling, the court granted our motion. The court opined that there was no evidence that the tenuous connections that our client had with California created specific or general jurisdiction and that exercising jurisdiction over our client was neither reasonable nor fair. The court also rejected the plaintiff’s argument that personal jurisdiction arose under a successor liability theory as, based on the factors in Ray v. Alad Corp., the plaintiff had failed to show that there was inadequate consideration for the asset-only purchase, had failed to prove there was any similarity of ownership or control of the two entities, and was unable to prove, based on their participation in the litigation, that the actual manufacturer had ceased to exist or was insolvent.

Lisa, a member of the leadership of the firm’s Product Liability practice and a member of the firm’s General Liability practice, focuses on counseling and defending manufacturers, distributors, retailers, component parts manufacturers, and service corporations in claims involving catastrophic personal injury and property damage related to consumer and industrial products. Her jury trial experience includes representing clients in state and federal courts throughout Central and Southern California. She well known among leading manufacturers and within the defense bar, and has long been a member of the Defense Research Institute (DRI), participating on the Steering Committee and the Products Liability Committee and serving as chair of the Fire Science and Litigation Specialized Litigation Group.