Out-of-State Defendant? Out-of-State Exposure? File Suit Somewhere Else: Defendants Escape Jurisdiction in California Asbestos Case

On August 11, 2015, Judge Emilie Elias of the Superior Court for the County of Los Angeles granted 5 separate motions to quash on grounds that may be available to many non-California defendants. The case, Malek v. Blackmer Pump Co., involved a plaintiff who now resides in California, but for whom all the alleged exposures occurred while plaintiff resided in Iran. The moving parties relied on Daimler AG v. Bauman (2014) 134 S. Ct. 746, which, as this blog has previously reported (here and here), holds that jurisdiction rests only (1) where the tort occurred or (2) where the defendant is “at home,” such as where it has its principal place of business. Daimler held that a California court may not exercise general jurisdiction over a foreign company solely due to the in-state activities of its subsidiaries, but the principle is not limited to cases involving parent and subsidiary corporations.

The moving parties in this case, including John Crane, Inc., Fisher Controls, RJ Reynolds and Exxon Mobil, all are readily acknowledged to be “doing business” in California, but are not “at home” in California, so under the guidelines of Daimler California lacks special jurisdiction over them. Plaintiffs’ counsel, Weitz & Luxenberg, filed oppositions and argued the motions.

Judge Elias discussed with counsel the potential challenges that her ruling may present. Plaintiff’s counsel commented that they may be obliged to sue the dismissed defendants in other jurisdictions where they are “at home.” This presents the potential for multiple cases for the same plaintiff against different defendants in different jurisdictions. Nevertheless, Judge Elias felt she was bound by Daimler and subsequent California decisions, both federal and state.

For example, in Senne v. Kansas City Royals Baseball Corp., the Northern District of California made clear that the concept of “at home” in the context of general jurisdiction should be construed very narrowly – observing Daimler’s emphasis that merely [even] engaging in a “substantial, continuous and systematic course of business” is not enough to establish general jurisdiction.

Similarly, in BNSF Ry. Co. v. Superior Court, the California Court of Appeal applied Daimler in a directly analogous asbestos personal injury case to reverse the trial court’s exercise of general jurisdiction over a defendant with admittedly substantial and continuous business in California. Although the California Supreme Court has granted review and thereby depublished this decision, its rationale is likely to be followed, as it was in Malek.

For those cases in which asbestos plaintiffs seek to file suit in a jurisdiction in which they cannot establish special jurisdiction (i.e. where the tort occurred), and in which the target defendants are not “at home,” these authorities and the recent order of Judge Elias present significant challenges. At least in Los Angeles going forward, one can expect defendants to seriously consider motions to quash for their corporate defendants incorporated elsewhere and with corporate offices elsewhere.