We’ve discussed personal jurisdiction a lot on the Blog lately, and not so lately, and for good reason. The Supreme Court’s reining in of both general and specific jurisdiction provides additional ways for defendants to win cases – particularly where the other side isn’t paying enough attention to the now more difficult legal environment. The recent decision in Wagner v. Terumo Medical Corp., 2018 WL 6075951 (S.D. Cal. Nov. 21, 2018), is an example of what we mean.
The factual key to Wagner was that the plaintiff sued the wrong entity. The named defendant didn’t start making the medical device in question until after the plaintiff’s implantation surgery. Plaintiff’s failure to research the ownership history of the product at issue proved fatal in the current, less forgiving personal jurisdiction environment.
First, the plaintiff tried general jurisdiction, relying on the largely discredited theory that registering to do business/designating an agent for service of process constituted “consent” to general jurisdiction. That doesn’t work in California:
Plaintiff’s reliance on California Corporations Code Section 2100 to support general personal jurisdiction is misplaced. Although [defendant’s] status as a registered foreign corporation in California is relevant to the personal jurisdiction inquiry, . . . California does not require corporations to consent to general personal jurisdiction in that state when they designate an agent for service of process or register to do business. . . . The designation of an agent for service of process and qualification to do business in California alone are insufficient to permit general jurisdiction. As such, Section 2100 does not provide a basis for general personal jurisdiction.
Wagner, 2018 WL 6075951, at *5 (citations and quotation marks omitted).
The general jurisdiction argument was pretty poor, but since the plaintiff in Wagner was a California resident, one would expect plaintiff to have a better time of it with specific personal jurisdiction. Not this time, though. The specific jurisdiction test is one part “purposeful direction” of activities to the forum and one part that the case “arises out of or is related to” those aforesaid activities. Wagner assumed the first prong. In California (at least when its supreme court wasn’t trying to expand the mass tort industry), the second half of that test requires “but for” causation:
The second prong requires Plaintiff’s claim to be one which arises out of or relates to the defendant’s forum-related activities. . . . [T]he second prong of the specific jurisdiction test [i]s a “but for” test. Under the “but for” test, a lawsuit arises out of a defendant’s contacts with the forum state if a direct nexus exists between those contacts and the cause of action.
Id. at *6 (citations and quotation marks omitted). On this test, plaintiff’s failure to do the necessary homework lost the case. “Given that, at the point of plaintiff’s alleged injury, it had not yet acquired the rights to that [relevant] line of products, Plaintiff fails to show a causal nexus between [defendant’s] activities in the forum and her injury.” Id. (footnote omitted).
Thus, unless plaintiff is able to find some jurisdictional basis in “successor liability,” she is out of court. Id. at *6 n.9. Maybe plaintiff can. California’s “product line exception” is a notoriously lax form of successor liability (Pennsylvania has a version of that, too). But our general point remains the same. Personal jurisdiction is no longer a “gimme” for plaintiffs, and defendants need to be familiar with all its ins and outs, because we can win cases that way. Conversely, plaintiffs need to exercise considerably more care in where they file cases. Thus, here on the Blog, we are devoting ourselves to exploring those ins and outs.