Court of Appeal of California, First Appellate District, Division Four
Blanca Hernandez, et al., v. Volkswagen Aktiengesellschaft, et al.
The plaintiffs allege that the decedent, Raul Hernandez, had occupational exposure to asbestos over a 40-year career as an automobile mechanic, including exposure to asbestos-containing brakes and clutches from Toyota cars at a Toyota dealership from 1977 to 2009. The decedent was subsequently diagnosed with mesothelioma. The plaintiffs further claim these Toyota vehicles incorporated OEM and genuine Toyota replacement parts with asbestos-containing friction components supplied by Akebono Brake Industry Co., Ltd. (ABIC) and its wholly owned subsidiaries. As such, the plaintiffs claim ABIC was liable for the conduct and defective products of its subsidiaries. The plaintiffs filed a complaint in California naming ABIC among other defendants, and asserted causes of action for strict products liability, negligence, and fraud.
ABIC specially appeared and filed a motion to quash service of summons by contending, among other things, the trial court did not have personal jurisdiction over it because ABIC did not purposefully avail itself of the California market. ABIC argued that ABIC is not registered to do business and never maintained a principal place of business in California. ABIC further argued that its subsidiaries were not alternate entities of ABIC. Rather, they were separate corporations and entities. The plaintiffs opposed ABIC’s motion by arguing ABIC is subject to specific jurisdiction in California because ABIC itself and then in conjunction with its newly-created subsidiary supplied brakes and clutches to California from the 1970s through the 2000s. The plaintiffs also sought written jurisdictional discovery. The trial court ultimately granted ABIC’s motion after a hearing by finding ABIC did not purposefully avail itself of the California market. The plaintiffs filed a timely appeal.
California’s long-arm statute allows the exercise of personal jurisdiction to the full extent permissible under the United States Constitution. See CA Code Civ. Proc., § 410.10; see also Daimler AG v. Bauman, 571 U.S. 117, 125 (2014). A California court may exercise personal jurisdiction over a defendant where that defendant has such minimum contacts with the state that the assertion of jurisdiction “does not offend traditional notions of fair play and substantial justice.” Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 92 U.S. 351, 358 (2021). “‘Minimum contacts’ may support either general (also called ‘all-purpose’) jurisdiction or specific (also called ‘case-linked’) jurisdiction.” Ibid. A court may exercise specific jurisdiction over a non-resident defendant only if: (1) the defendant has purposefully availed himself or herself of forum benefits; (2) the plaintiff’s claims are related to or arise out of the defendant’s contacts with the forum state; and (3) the forum state’s assertion of personal jurisdiction would comport with fair play and substantial justice. See Pavlovich v. Superior Court, 29 Cal.4th 262, 273 (2002); see also Ford Motor, supra, 592 U.S. at 359.
The Appellate Court initially concluded ABIC purportedly availed itself of the California market through its subsidiaries. The Appellate Court specifically found ABIC sold brake and clutch products to its subsidiaries and, thereafter, its subsidiaries regularly and continuously sold these products in California during the 1970s and 1980s. The Appellate Court next determined that the plaintiffs’ claims related to ABIC’s minimum contacts because ABIC purposefully supplied its friction products to its subsidiaries – which thereafter sold ABIC products in California – and the decedent was allegedly injured by ABIC friction products in California during the relevant timeframe. Lastly, the Appellate Court did not find the exercise of jurisdiction over ABIC would be unreasonable, given ABIC’s efforts to serve the California market through its subsidiaries, and therefore ABIC should have reasonably anticipated being required to defend itself in a California court. Consequently, the Appellate Court reversed the trial court’s judgment.
Read the full decision here.