A California Appeals Court answered that question in the affirmative, denying a writ of mandate filed by a manufacturer on the basis that the trial court improperly denied its Motion to Quash for lack of personal jurisdiction. (See Daimler Trucks North America LLC v. The Superior Court of Los Angeles County, Case # B316199.) The case involves Daimler Trucks North America, a Delaware Corporation with its principal place of business in Oregon, which manufactures Freightliner tractors. Daimler was sued by two commercial truck drivers who had driven a Freightliner from California to the East Coast. On their way back to California, the Freightliner was involved in a single vehicle accident in Oklahoma. The Plaintiffs filed suit for strict products liability and other claims against Daimler and other defendants in Los Angeles Superior Court. Daimler filed a Motion to Quash on the basis that Daimler was not subject to specific personal jurisdiction in California with respect to these claims. The trial court denied the Motion to Quash, and Daimler appealed.
A Court has specific personal jurisdiction over a defendant if three elements are satisfied: “(1) the defendant has purposefully availed itself of forum benefits with respect to the matter in controversy; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the assertion of jurisdiction would comport with fair play and substantial justice.”
Daimler first argued that it had not purposefully availed itself of California because the specific tractor at issue was not designed, built, or originally sold in California. The Court of Appeals was unpersuaded, holding that Daimler’s advertising in California and its network of dealerships in California, which not only sold the model of tractor at issue but also serviced them, was sufficient contact with the state for Daimler to have purposefully availed itself of the forum.
Daimler’s main argument addressed the second prong: that Plaintiffs’ claims did not “relate to or arise out of the defendant’s contacts with the forum.” Here, Daimler pointed to the undisputed fact that Plaintiffs’ claims were not caused by Daimler’s advertising in California or any service performed in California. The Court of Appeals was unmoved, holding that a recent United States Supreme Court case, Ford Motor Company v. Montana Eighth Judicial District Court, meant that causation between the contacts and Plaintiff’s claim was not strictly required. In its place, neither the United States Supreme Court nor the California Court of Appeals provided any bright line rule. Rather, analogizing to other cases, the Court of Appeals found that because Daimler’s activities supporting the sale and service of the model of Freightliner at issue occurred in California, Plaintiffs’ claims were “related” enough to Daimler’s contacts in the state.
Finally, with respect to the third prong of “fair play and substantial justice,” the Court of Appeals dismissed Daimler’s arguments. The Court held that because Daimler did a significant amount of business in the state, the Plaintiffs resided in California, and California has jurisdiction over Daimler’s co-defendants, jurisdiction was appropriate.
In practical terms, the Court of Appeals decision in this case further erodes the grounds upon which a large corporation can avoid suit in a jurisdiction in which the accident that is the basis of the litigation did not occur, but in which the corporation has significant other contacts. Because the Court declined to articulate a bright line rule, parties wishing to dispute personal jurisdiction in similar cases must undertake a thorough analysis of all analogous cases in considering whether such a motion is likely to succeed. In doing so, defendants should also weigh all remaining options to argue against jurisdiction, including by way of removal or transfer to a different jurisdiction where possible.
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