Thursday, December 8, 2016

Refurber Madness.

Strasner v. Touchstone Wireless Repair & Logistics, LP, No. D068865 (D4d1 Nov. 4, 2016)

Plaintiff—a California native living at the time in NYC—returned a cell phone to a T-Mobile store in New York. In the process of refurbing the phone, an employee of the Refurber found some apparently sensitive pictures of Plaintiff on the phone and posted them to her Facebook wall. Plaintiff sued T-Mobile, four companies related to the refurbing, and those companies’ parent for invasion of privacy and related torts. Refurbers moved to quash service of lack of personal jurisdiction, which the trial court granted.

None of the Refurbers—four related subsidiaries—are incorporated in, have their principal place of business in, or are registered to do business in California. They each provide elements of refurb services under a contract with T-Mobile from a facility in Texas. Refurbers’ Parent, however, is both incorporated and located here.

So under the post-Daimler rules for general jurisdiction, Parent is “at home” here (and thus subject to general jurisdiction) but Refurbers are not. Plaintiff tried to attribute Parent’s California-ness to its subs through the alter ego doctrine or an agency theory, but neither the trial court nor the Court of Appeal is game. 

Reburbers bear many of the typical hallmarks of corporate subsidiaries: their financial statements are rolled up into Parent’s SEC filings, they sometimes operated in branded operations using Parent’s name, and there is significant employee overlap. But that stuff isn’t sufficiently abusive of the corporate form to give rise alter ego. Nor does it prove the kind of pervasive and continuous control needed to make the Refurbers the agents of Parent. So no general jurisdiction.

Specific jurisdiction is a closer call. Plaintiff relies on the Calder v. Jones “effects test,” on the theory that by posting private photos to the Facebook page of an individual who they should have known to be a Californian, the Reburbers reached out to cause a tort in California and availed themselves of jurisdiction here. The California version of that test requires: (1) a deliberate act; (2) aimed at California; and (3) defendant’s knowledge that the act would cause harm here.

First off, plaintiff only showed that the poster was an employee of one of the four Refurbers. So the other three are off the hook, since there is no
act to pin on them.

As to Reburber #4, Plaintiff argued that it was evident from her Facebook account that the majority of her friends and family live in California, and that even though she was living in New York at the time of the posting, the phone used to post the picture had a 213 area code. She claimed that the posting employee could have inferred from that information that Plaintiff had substantial connections to California. 

But the court says that’s not enough to show that the poster targeted California with knowledge that harm would be caused here. In particular, the court finds that a lack of evidence connecting the posting of the picture with an intent to target the publication to Plaintiff’s California-resident friends and family. (Part of the problem is that she didn’t put in any evidence about how a Facebook post would invariably result in a dissemination to these people through the operation of the Facebook website.)

Plaintiff tried to salvage her argument by pointing out that the Refurber did have some business contacts in California. But since these contacts weren’t in any way related to the conduct that gave rise to her claim, that isn’t enough for personal jurisdiction either.


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