Direct Shipment Is Purposeful Availment

Jayone Foods, Inc. v. Aekyung Indus. Co., No. B282674 (D2d7 Jan. 22, 2019)

Plaintiffs are the heirs of Decedent, who allegedly died due to exposure to a Korean humidifier cleaning agent. They sued both the retailer and the California-based Importer and distributor of the product. Importer then tried to join the Korea-based Manufacturer of the agent on a cross-claim. But the trial court quashed service due to lack of personal jurisdiction.

The Court of Appeal reverses. Manufacturer has no offices, employees, or assets in California. But that doesn’t preclude specific personal jurisdiction here if it nonetheless purposefully availed itself of California. There wouldn’t be purposeful availment if, for instance, Manufacturer sold the product to someone in Korea and then that person brought it to California and sold it to Decedent. (That was called the “stream of commerce” theory, which was rejected by the U.S. Supreme Court in the ’70s and ’80. 

But the evidence here showed that Manufacturer knowingly directly shipped its products to California, including to Importer, who sold it to the store, who sold it to customers like Decedent. In the course of those transactions, Manufacturer and Importer were in regular contact, and on one at least one occasion representatives of Manufacturer visited Importer’s facility in Paramount, California, as well as several stores in the Los Angeles are where the product was sold.

The second prong of the specific personal jurisdiction analysis requires a relationship between defendant’s contacts and the claim. That’s satisfied here because Manufacturer’s shipment of the product to Importer in California, is factually related to Decendent’s death from use of the product. That’s enough to establish relatedness under the “substantial relationship” test that applies in California, even if it couldn’t be definitively proven that the bottles of the product that allegedly killed defendant actually came from Manufacturer.

Finally, the third element of personal jurisdiction requires the exercise of jurisdiction to be reasonable. Courts theoretically apply a multifactor test to suss that out. But at the end of the day, it’s basically a smell test. Is there something about the nature of the plaintiff, the defendant, or the lawsuit that makes it feel unfair to make the defendant litigate in the forum? Here, that’s not the case.

Reversed.