Reading today’s case took me back to Boston University Law School and my first-year civil procedure course, which was taught by one of those professors who yell angrily at students who are unprepared to answer Socratic questions but are really nice guys outside the classroom. (I say “guys” because there were maybe half a dozen female professors, yet women comprised at least a third of my class. And when I argued cases in the Rhode Island and Massachusetts supreme courts and the First Circuit, there were no female judges on any of them. I’m giving away my age here.) I remembered studying the first longarm statutes, the evolution of the concept of minimum contacts as a basis for in personam jurisdiction, and the Supreme Court cases that established the quantity and quality of contacts necessary to meet the requirements of the Due Process Clause.
In those days, the cases we read were concerned exclusively with whether State A’s courts could exercise personal jurisdiction over a corporation that was incorporated in State B (and not infrequently had a principal place of business in State C). The world has changed in many ways since then, and one of the changes is the source of the products we buy. The marketplace is global, and America imports vast quantities of all kinds of products from China, South Korea, Vietnam, Poland, Mexico, etc. Sometimes an imported product is defective and causes serious injury. So whether the foreign corporation that manufactured it has sufficient minimum contacts with a U.S. state to subject it to the jurisdiction of that state’s courts is a very important question, one that no doubt is frequently litigated and that often winds up in a state’s highest court because of the high stakes for both parties: on the plaintiff’s side, severe injuries and substantial damages; on the defendant’s side, the desire to establish a no-jurisdiction precedent that may help it in other states, not just in the case at bar.
A good example of such a case that recently caught my eye is Dilworth v. LG Chem, Ltd., https://courts.ms.gov/images/Opinions/CO164559.pdf (Mississippi, 10/13/22). The question presented was “Whether the exercise of personal jurisdiction over LG Chem comports with due process,” so the opinion naturally quotes a lot of Supreme Court cases, from old ones that I studied in law school, e.g., International Shoe Co. v. Washington, 326 U.S. 310 (1945), to some that came down just the other day (relatively speaking), e.g., Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021).
The plaintiff was injured when the lithium-ion battery that powered her vaping device exploded while the device was in her pocket. She “suffered second- and third-degree burns across her groin, legs, hands and fingers, and she remained at a dedicated burn center for more than a week of treatment. The battery had been purchased individually at a local Mississippi vape store and was accompanied by no warnings or instructions.” The plaintiff sued the vape store, the store’s suppliers, the manufacturer of the vaping device, and the manufacturer of the battery, LG Chem.
LG Chem filed a motion to dismiss for lack of personal jurisdiction. Its supporting affidavit asserted that its products are manufactured for “use in specific applications by sophisticated companies,” that its products are not intended or authorized for “sale to individual consumers as standalone batteries,” and that it does not sell lithium-ion cells to distributors “known to LG Chem to be engaged in the business of selling 18650 lithium-ion cells directly to consumers for use as standalone batteries.” In opposing the motion, the plaintiff
not[ed] that LG Chem did not controvert the essential jurisdictional allegations that it does business in the state by placing its goods into the stream of commerce with the expectation that they will be sold in Mississippi. Manufactured products containing LG Chem batteries are available for sale in Mississippi. Those products include golf carts, electric scooters, power tools, smartphones, tablets, and laptops. The [plaintiff] noted also that, in unrelated litigation in 2015, LG Chem indicated that it “sells in the order of $0.76 million every day attributable to the…batteries sold or imported into the United States” and that they “have yearly revenue of $278 million attributable to the…batteries sold or imported into the United States.” [Citation omitted.] LG Chem did not controvert the complaint’s allegation that it knew its batteries were “regularly purchased for and used as power sources for individual applications such as personal vaping devices.” The plaintiff argued that LG Chem’s assertion that the batteries are not intended or authorized for standalone use is not a jurisdictional argument, but rather a merits argument that may be appropriate at trial.
The trial court granted the motion. On appeal, the high court began its minimum contacts / due process analysis by weaving together a series of quotations from Supreme Court minimum contacts cases. Here’s the core of it, with citations, internal quotation marks, and internal brackets and ellipses omitted:
The defendant must take some act by which it purposefully avails itself of the privilege of conducting activities within the forum state….The contacts must show that the defendant deliberately reached out beyond its home – by, for example, exploiting a market in the forum State….The foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. Fundamentally, when a corporation purposefully avails itself of the privilege of conducting activities within the forum State, it has clear notice that it is subject to suit there….[And] a manufacturer may purposely avail itself of the protection of a state’s laws – and thereby subject itself to personal jurisdiction – by sending its goods, rather than its agents, into the forum.
The court then applied these legal principles to the facts of the case at bar:
We find that LG Chem has purposefully availed itself of the market for lithium-ion batteries in Mississippi such that the exercise of personal jurisdiction is fundamentally reasonable and fair. At oral argument for this appeal, LG Chem acknowledged that its position is that it cannot be sued in any [emphasis in original] state in the United States of America over the unauthorized standalone use of its batteries in vaping devices, despite the fact that millions of those batteries (resulting in millions of dollars in profits) have inundated the United States market….[T]he availability for sale in Mississippi of the battery that injured [the plaintiff] was related to LG Chem’s activities in the state and was not a random, isolated, or fortuitous occurrence. And significantly – for purposes of establishing a prima facie case sufficient to withstand summary judgment – LG Chem did not controvert the allegations of the complaint that it placed its product into the stream of commerce with the expectation that it would be sold in Mississippi.
Next, the court devoted four (!) pages to a discussion of, and quotations from, another exploding battery case, in which Georgia’s intermediate appellate court upheld personal jurisdiction over LG Chem. The Georgia court’s minimum contacts analysis was essentially identical to the analysis the Mississippi court had already set forth, so I’m not sure why the court felt it necessary to rely on it so heavily and at such great length. Perhaps the court was struck by the fact that, “[s]imilar to the present case, the battery exploded while in the plaintiff’s pocket. [H]e suffered permanent injuries and disfigurement to his legs, scrotum and right hand.” (Citations omitted.) I confess I had no idea of the nature and severity of the injuries inflicted by an exploding lithium-ion battery.
The court then rejected one of LG Chem’s key arguments:
LG Chem relies heavily on the position asserted in its affidavit that its batteries are not authorized for standalone use, and that it does not sell products to distributors known to them to sell the batteries directly to consumers for standalone use. While the consumer’s purported misuse of the product may be a valid merits defense for LG Chem to raise as the case proceeds in circuit court, it is not an argument that defeats a prima facie case of personal jurisdiction in a forum in which the defendant has not controverted that it does substantial business in the forum that is related to the product. For a specific jurisdiction analysis, the placement of the product in the marketplace is the relevant focus, not how the injured plaintiff used the subject product. [This is essentially the same as the plaintiff’s argument in the court below on this point. – MPA]
Finally, the court addressed the ultimate question in every minimum contacts case, namely, whether the exercise of personal jurisdiction offends “traditional notions of fair play and substantial justice.” That phrase goes all the way back to International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (which was in my first-year civil procedure textbook), and it has been quoted and requoted hundreds (maybe thousands) of times by the federal district and circuit courts, the state trial, intermediate appellate and supreme courts, and the Supreme Court itself from that day to this. Indeed, in this case the court took the quote from one of its own prior (2011) cases, which in turn was quoting from a 1985 Supreme Court case, which in turn was quoting from three previous Supreme Court cases, including International Shoe. But I digress. Here’s what the court had to say about it in the present case, with citations and internal quotation marks once again omitted:
The analysis includes a consideration of the forum state’s interest in adjudicating the dispute and the interstate judicial system’s interest in obtaining the most efficient resolution of controversies. Here, a Mississippi plaintiff was injured in Mississippi by a product she had purchased in Mississippi. The state’s interest in adjudicating the dispute is high. LG Chem’s position is that no state is an appropriate forum, and that the suit should be brought in South Korea, if anywhere. According to the [plaintiff], forty-four lawsuits, and counting, are proceeding around the United States related to exploding LG batteries. LG Chem deliberately ships millions of batteries to the United States market every year, reaping millions of dollars in profit….[A]t some point, LG Chem has to stop acting surprised. Requiring LG Chem to defend a suit in Mississippi does not offend fair play or substantial justice. (Emphasis added.)
In the second paragraph of this post, I said that whether an American court has personal jurisdiction over a foreign corporation “no doubt is frequently litigated.” If there are forty-four (!) exploding battery cases pending all over the country against LG Chem alone, it’s a safe bet that other foreign corporations are also engaged in product liability lawsuits and are raising the lack of personal jurisdiction defense. Perhaps some reader is litigating that issue at this very moment. If so, I hope you found this post useful, and I hope that other readers may find it useful in the future.
