Tuesday, April 26, 2022

Parent Cos. Own Acts Establish Personal Jurisdiction

SK Trading Int’l Co. Ltd. v. Superior Court, A163590 (D1d4 Apr. 12, 2022)

Petitioner in this case is a Korean outfit whose California subsidiary is alleged to have engaged in a conspiracy to manipulate the price of a gasoline blendstock called CARBOB. Petitioner argues that there’s no personal jurisdiction. When the trial court disagreed, it took a writ under Code of Civil Procedure § 418.10(c).

It has long been established that having a domestic subsidiary is not, own its own, enough to give rise to personal jurisdiction over a foreign parent. The test, instead, looks to whether the parent’s own acts are significant enough, and sufficiently related to the claims that it’s fair to hale them into court here. 

In this case, the evidence showed that Petitioner/parent was not just a passive owner of a domestic sub. Parent’s execs took an active role in managing the California-based conduct that was part of the conspiracy. They had a role in hiring key, California-based personnel. They facilitated the creation and operation of a joint venture arrangement through which the conspiracy was carried out. That’s enough to meet the test.

The Court makes an interesting point in a footnote. For a long time, there was a open debate about how closely the in-state conduct needed to relate to the claims to satisfy the test. As I discussed in a post eight years ago, there were basically there takes. Some courts required the conduct to be the cause of the claim, some applied an “arising from or related to” test, and some asked whether the claims and contacts were “substantially connected.” The last test—generally viewed as the most liberal—had been adopted by the California Supreme Court. See Snowney v. Harrah’s Entmt. Inc., 35 Cal.4th 1054, 1068 (2005). But subsequent decisions of the U.S. Supreme Court—including a case that reversed the Cal Supremes—appear to have settled on the “arising from or related to” standard. See Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773, 1781 (2017) (casting doubt on the adequacy of substantial connection); Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S.Ct. 1017, 1026 (2021) (rejecting proof-of-causation requirement).

Writ denied.

No comments:

Post a Comment

That's Not a Debate

Taylor v. Tesla , No. A168333 (D1d4 Aug. 8, 2024) Plaintiffs in this case are also members of a class in a race discrimination class action ...