Opinion
901523-19
02-27-2020
Kenneth Brandon BARBERO, Jr., Plaintiff, v. FLAWLESS VAPE WHOLESALE & DISTRIBUTION INC., Flawless Vape Shoe Inc, Flawless Labs, Inc., LG Chem, LG Chem Ltd, LG Chem America, Inc., LG Chem Power Inc., LG Corporation, LG Electronics U.S.A, Inc., LG Import Inc., LG Imports, Inc., 51 Vape Latham LLC, 51 Vape LLC, 51 Vape Brothers, Inc., David Lee, and Does 1 through 10, inclusive, Defendants.
Town, Ryan & Partners, P.C., By: James T. Towne, Jr., Esq., 450 Karner Road, Albany, New York 12212, for Plaintiff. Lewis Brisbois Bisgaard & Smith LLP, LG Chem LTD.; LG Chem America, Inc.; LG Chem Power Inc.; LG Corporation; and LG Electronics U.S.A., Inc., By: Tackjin Kim, Esq., 77 Water Street, Suite 2100, New York, New York 10005, for Defendants.
Town, Ryan & Partners, P.C., By: James T. Towne, Jr., Esq., 450 Karner Road, Albany, New York 12212, for Plaintiff.
Lewis Brisbois Bisgaard & Smith LLP, LG Chem LTD.; LG Chem America, Inc.; LG Chem Power Inc.; LG Corporation; and LG Electronics U.S.A., Inc., By: Tackjin Kim, Esq., 77 Water Street, Suite 2100, New York, New York 10005, for Defendants.
David A. Weinstein, J.
The matter before me arises out of an amended verified complaint (the "Complaint") filed by plaintiff Kenneth Brandon Barbero, Jr. on August 10, 2019. The Complaint seeks damages for injuries Barbero allegedly suffered when, on May 16, 2016, his electronic vaping cigarette, known as a Tug Mech Mod V2, exploded along with its power source — two lithium ion batteries, labeled as LG HG2 18650 ("LG Batteries") — while in Barbero's mouth (Complaint ¶¶ 59-62).
The Complaint names three groups of defendants. First, there are the "LG Defendants," consisting of LG Chem Ltd. ("LGC Ltd"); LG Chem America Inc. ("LGCAI"); LG Chem Power Inc. ("LGCPI"); LG Corporation ("LG Corp"); LG Electronics U.S.A., Inc. ("LGEUS"); LG Import, Inc.; and LG Imports; Inc.. The Complaint alleges that each of the LG Defendants "develops, designs, manufactures, distributes and sells lithium-ion batteries, including the subject batteries" at issue in this litigation (see Complaint ¶¶ 17-50). The second group consists of the "Flawless Defendants," which are: Flawless Vape Wholesale & Distribution Inc., Flawless Vape Shop, Inc., Flawless Labs, Inc. Those defendants — which have not appeared — are alleged to "manufacture[ ], develop[ ], design[ ] distribute[ ] and sell[ ] electronic vaping cigarettes and related electronic cigarette accessories including, but not limited to, the subject electronic cigarette and subject batteries" (id . ¶¶ 5-16). The third group will be referred to as the "51 Vape Defendants," and consists of 51 Vape Latham LLC, 51 Vape LLC, 51 Vape Brothers Inc., and an individual known as David Lee (collectively the "Vape Defendants"). The Vape Defendants are alleged to maintain places of business in Albany and Saratoga County, and Lee is alleged to be a resident of Albany County (id. ¶¶ 51-55), although the Complaint does not present any specific allegations regarding their connection with the incident at issue, except as part of those made collectively as to all defendants, that they sold and distributed the electronic cigarette that caused plaintiff injury.
The LG Defendants, with the exception of LG Import, Inc. and LG Imports, Inc., have all now moved, pursuant to CPLR 3211(a)(8), to dismiss the claim as against them for lack of personal jurisdiction. Each of the moving defendants contends that it has not engaged in any purposeful activities directed toward the State of New York or connected to plaintiff's claims for personal injury and product liability that would permit the exercise of personal jurisdiction over them, consistent with due process (see five Affirmations of Tackjin Kim, Esq., dated August 8 and August 12, 2019 [Kim Affs] ¶¶ 11-12).
At oral argument, counsel for the LG Defendants represented that it had "never heard of those entities," and as far as counsel is aware, they are not related to the other LG Defendants (Oral Argument Transcript ["Tr"] at 3).
Each of the five moving LG Defendants has submitted an affidavit from a corporate representative in support of its application. The affidavits submitted by the representatives of three of these corporations (LG Corp, LGCPI and LGCAI) make materially identical points: they aver on personal knowledge that the defendant has no contacts with New York State — they never were incorporated in New York, owned property there, had employees there or had a New York phone or fax. Moreover, these defendants aver generally that they have not sold any products into New York, except (in the case of LGCAI) for petrochemical products (see Kim Affs, Ex C [Affidavits of Kwang Su Kim of LG Corp, sworn to on August 12, 2019 ["K Kim Aff"] ¶ 9; Jeremy Hagemeyer of LGCPI, sworn to August 6, 2019 ["Hagemeyer Aff"] ¶ 5; and HyunSoo Kim of LGCAI, sworn to on August 1, 2019 ["H Kim Aff"] ¶ 10] ). Further, they assert that they have never manufactured or distributed LG H2 Batteries, nor have they sold any lithium-ion power cells for electronic cigarette or vaping devices, or done business with or authorized the sale or distribution of LG Batteries by any of the Flawless or 51 Vape Defendants (K Kim Aff ¶¶ 12-15; Hagemeyer Aff ¶¶ 6-9; H Kim Aff ¶¶ 10-12). The affidavit submitted on behalf of LGCPI also avers that the company ceased to exist in March 2018, when it merged with LG Chem Michigan, Inc. (Hagemeyer Aff ¶ 2).
The affidavits supporting the motions of the remaining two defendants largely mirror those described above, but differ in certain respects. The affidavit supporting LGEUS's motion indicates that it is incorporated in Delaware with its principal place of business in New Jersey. Like the submissions of the other moving defendants, it states that it has had no dealings with the Flawless or Vape defendants (Affidavit of Steven Scalera of LGEUS, sworn to August 7, 2019 ["Scalera Aff"] ¶¶ 5-6). The affiant also says that LGEUS has never designed, manufactured, distributed or sold LG HG2 batteries, or sold any 18650 lithium-ion power cells for use by individual consumers in vaping devices or e-cigarettes, as its business is "limited exclusively to the import, distribution and manufacture" or consumer electronic products, such as televisions, mobile phones and refrigerators (id. ¶¶ 3-4). This language leaves open the possibility that LGEUS distributes 18650 lithium-ion power cells for other purposes, as in connection with its consumer electronic products. The affidavit also does not include language indicating that the company has no address, phone, employees or real estate in New York.
The affidavit supporting the motion of Defendant LGC Ltd by Sung Han Ryu states that the company is based in South Korea, with its principal place of business in Seoul (Aff in Support of LGC Ltd Motion, Ex C [Affidavit of Sung Han Ryu of LGC, sworn to on August 12, 2019] ¶¶ 2), and, like the initial three defendants, does not own any property, bank accounts, telephone number, address or employees in New York State (id. ¶¶ 3-8). Unlike the affiants for the other LG Defendants, however, Ryu acknowledges that the company manufactures lithium-ion batteries, albeit "for use in specific applications by sophisticated companies" (id . ¶ 10). However, he states that LGC Ltd has never distributed or sold LG Batteries in New York, nor does it design or manufacture lithium-ion power cells for sale to individual consumers as standalone batteries (id . ¶¶ 9, 11). Moreover, according to Ryu, LGC Ltd also does not "distribute, advertise, or sell HG2 18650 power cells directly to consumers, and has never authorized any manufacturer, wholesaler, distributor, retailer, or re-seller to distribute, advertise, or sell LGC's lithium-ion power cells directly to consumers as standalone batteries" (id . ¶ 11). Furthermore, the company does not design, manufacture, distribute, advertise or sell LG Batteries "for use by individual consumers as replaceable, rechargeable batteries in electronic cigarette devices" (id . ¶ 12). Additionally, Ryu states that LGC Ltd has never done business with or authorized the sale or distribution of LG Batteries by any of the Vape Defendants, and has never authorized any distributor, retailer or re-seller to sell or distribute LG Batteries for use in electronic cigarette or vaping devices (id . ¶ 15).
In opposition to the LG Defendants' motions, plaintiff — through counsel's five identical affidavits opposing each separate motion — contends that personal jurisdiction over the LG Defendants is proper because the complaint alleges that a tortious act occurred in New York, which caused injury to plaintiff (Affirmations of James T. Towne, Jr., Esq., dated December 2, 2019 ["Towne Affs"] ¶¶ 8-9). On this ground and on the basis of the allegations in the complaint, plaintiff argues that this Court may exercise long arm jurisdiction over the LG Defendants in accordance with CPLR 302 (id . ¶ 13). Further, Barbero seeks permission to conduct jurisdictional discovery to determine the relationship between the LG Defendants and the other named defendants, although he does not identify what additional facts may exist to establish personal jurisdiction, and his basis for potential jurisdiction rests solely on the allegation that plaintiff purchased an LG battery in New York that caused him injury (id . ¶ 17-18).
The Vape Defendants also opposed the LG Defendants' motions by unsworn letter dated December 23, 2019. They argued that LGC Ltd's sale of batteries that cause injury in New York could give rise to jurisdiction under New York's long arm statute, notwithstanding its assertion that it did not market its batteries for use in vaping equipment. They further contended that movants' submissions do not show "how many LG 18650 power cells it brings to the US on a yearly basis; and whether LG knows that its LG 18650 power cells are of a standard size such that they can be used in many applications, including their use in consumer devices including vaping" (Ltr of Whritenour to Ct of 12/23/20). The letter does not address whether there is a basis for jurisdiction over movants under the Due Process Clause.
On January 22, 2020, counsel for plaintiff and the LG Defendants appeared for oral argument. At the argument, plaintiff's counsel acknowledged that he was not arguing that the LG Defendants' affidavits are fraudulent (Tr 25), but urged the Court to permit limited jurisdictional discovery to determine the extent, if any, that a relationship existed between the LG Defendants and the other defendants. Although counsel agreed that it had been in communication with attorneys for the non-moving defendants, he could not offer any factual information to support the existence of such a relationship.
At the argument, I asked if LGC Ltd if any of the United States distributors for its 18650 lithium ion battery cells were based in New York State. In a subsequent letter, its counsel represented that LGC Ltd "never had a distributor" for such batteries in New York (Ltr of Strauss to Court of 2/29/20).
Discussion
When the defense of lack of personal jurisdiction is timely asserted — as it was here — a reviewing court may not exercise jurisdiction over a non-domiciliary unless two requirements are satisfied (1) the action is permissible under CPLR 302, New York's long arm statute and (2) the exercise of jurisdiction comports with due process (see Williams v. Beemiller , Inc . 33 NY3d 523, 528 [2019] ). The absence of either one of these prerequisites mandates dismissal of the action (id .).
In regard to the statute, plaintiff maintains that jurisdiction may be appropriate under CPLR 302(a)(3), which provides for the exercise of jurisdiction over a defendant who "commits a tortious act without the state causing injury to person or property within the state," provided the defendant "(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce." I will assume without deciding that plaintiff can meet this standard, as I find it cannot demonstrate that jurisdiction over movants in New York is consistent with due process in any case.
The Due Process Clause requires that before nondomiciliaries such as the LG Defendants may be subject to jurisdiction in a State, they must have "certain minimum contacts" with that State and plaintiff must show " ‘that the maintenance of the suit does not offend traditional notions of fair play and substantial justice’ " ( Williams , 33 NY3d at 528 , quoting International Shoe Co. v. Washington , 326 US 310, 316 [1945] ). To meet the "minimum contacts" threshold, a nondomiciliary must "purposefully avail[ ] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of the forum state's laws" (id. [internal quotation and citation omitted] ). This test "envisions something more than the ‘fortuitous circumstance’ that a product sold in another state later makes its way into the forum jurisdiction through no marketing or other effort of defendant" (id ., citing World-Wide Volkswagen Corp. v. Woodson , 444 US 286, 295 [1980] ). In other words, "the mere likelihood that a product will find its way into the forum cannot establish the requisite connection between defendant and the forum such that defendant should reasonably anticipate being haled into court there" (id . [finding that Ohio firearm merchant could not be sued in New York simply because a gun it sold in Ohio fortuitously made its way to New York via the black market and was used in a shooting] ).
In making a minimum contacts assessment, the inquiry "focuses on the relationship among the defendant, the forum and the litigation" (id . [internal quotation and citation omitted] ). Thus, " ‘it is the defendant's conduct that must form the necessary connection with the forum State that is the basis for its jurisdiction’ " — not the mere allegations in the complaint (id. , quoting Walden v. Fiore , 571 US 277, 285 [2014] ). In order for a relationship between the defendant and the forum State to satisfy due process, it "must arise out of defendant's own contacts with the forum and not contacts between the plaintiff (or third parties) and the forum State" (id . [internal quotation and citation omitted] ).
A corporate defendant may also be subject to "general jurisdiction" — that is, jurisdiction "to hear any and all claims against [it]," when it has contacts with the forum state "so continuous and systematic as to render it essentially at home [there]" (Daimler AG v. Bauman , 517 US 117, 122 [2014] [citations omitted] ). Plaintiff does not allege that general jurisdiction in New York exists over any of the moving defendants, nor would there be any basis for such a contention.
Here, three of the defendants (LG Corp, LGCPI and LGCAI) have established prima facie that they have no contacts of any sort with New York State, or with the sale of lithium batteries. All of them have presented affidavits based on the personal knowledge of the affiant that they do not distribute products here, own property, or have any employees. In response, plaintiff has failed to point to any conduct on their part or any type of connection with New York or with this action to provide a basis for personal jurisdiction.
While LGEUS does not deny contacts with New York generally, it denies selling any products except consumer electronics, and says it has not "developed, designed, manufactured, distributed, marketed, advertised, or sold LG HG2 lithium-ion power cells." In order for jurisdiction to be exercised over LGEUS in this case, the suit must "aris[e] out of or relat[e] to the defendant's contacts with the forum" ( Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S Ct 1773 [2017] ). Defendant has demonstrated prima facie that its only contacts with the State involve the sale of consumer electronics, it did not manufacture the battery at issue, it sold no batteries in connection with vaping or e-cigarette products, and had no dealings with the distributor or retailer defendants. Given these showings, LGEUS has established that to the extent it had contacts with New York State, they were unrelated to plaintiff's causes of action.
For this reason, plaintiff's citation at oral argument of Wilson v. Dantas (128 AD 176 [1st Dept 2015]) (see Tr 6) is unavailing. In that case, the First Department found the requisite contacts to allow for jurisdiction over defendants in a suit against them arising out of a foreign investment program, where "the operative contracts establishing the program were negotiated and executed in New York" (id. at 179). In other words, the basis for the suit arose out of agreements defendants entered into in this State. That case has no relevance here, where the moving defendants' affidavits specifically rebut any claim that any contacts they have with New York bear any relation to the subject matter of this suit.
For its part, LGC Ltd concedes that it manufactures lithium-ion power cells, but avers that it did not purposefully direct these batteries to New York. As with the gun merchant in Williams , LGC Ltd's affirmation establishes that to the extent the batteries it manufactured made their way to New York, this was only by happenstance. In particular, its affiant states unequivocally that this defendant "has never distributed or sold LG HG2 18650 lithium-ion power cells in New York," and sells them only to "sophisticated companies" and not for use by individual consumers or connection with vaping products (Ryu Aff ¶¶ 9-11, 15). The potential that such a battery could nonetheless wind up in an vaping device — a use for which it was not designed — does not establish the requisite connection between LGC Ltd and New York such that it should have reasonably anticipated being sued here. At most, such would constitute the sort of "random, fortuitous, or attenuated contacts" which have been found insufficient to establish jurisdiction consistent with due process (see Williams , 33 NY3d at 529, citing Walden v. Fiore , 571 U.S. 277, 286 [2014] ). In the absence of the requisite minimum contacts, this Court may not exercise personal jurisdiction over LGC Ltd or any of the other LG Defendants.
Plaintiff contends that even if he cannot rebut such evidence on the current record, he is entitled to jurisdictional discovery, and thus the motion should be denied on that basis. To oppose such a motion on this ground, however, plaintiff must "come forward with some tangible evidence which would constitute a 'sufficient start' in showing that jurisdiction could exist (see Mandel v. Busch Entertainment Corp. , 215 AD2d 455, 455 [2d Dept 1995], citing Peterson v. Spartan Indus ., 33 NY2d 463, 467 [1974] ; see also SNS Bank, N.V. v. Citibank, N.A. , 7 AD3d 352, 354 [1st Dept 2004] [same] ).
Plaintiff fails to make any showing that he has made such a start, or that calls into question in any way the information set forth in defendants' affidavits. Although plaintiff's counsel at oral argument stated that he had been in contact with counsel for other defendants (Tr 16), he did not produce any documents or make any factual representations to suggest evidence of a relationship between the LG Defendants and the other defendants to demonstrate that minimum contacts with New York may exist (see Karpovich v. City of New York , 162 AD3d 996, 998 [2d Dept 2018 ["mere hope that discovery may reveal facts essential to justify opposition ‘does not warrant denial of motion’ "] ). Indeed, while the amended verified complaint was filed on May 10, 2019, and oral argument on the motions was not held until January 22, 2020, plaintiff did not obtain any tangible evidence during the passage of these eight months to indicate that facts may exist concerning any such relationship. Under these circumstances — where plaintiff offers nothing but "bare conclusory allegations" — a motion under CPLR 3211[a][8] cannot be defeated ( Matter of Spira , 59 Misc 3d 1227(A), *4 [Sur Ct Queens County 2018] [granting motion to dismiss for lack of personal jurisdiction where petitioner offered nothing but conclusory theory in opposition]; see also Granat v. Bochner , 268 AD2d 365 [1st Dept 2000] [request for additional discovery denied where plaintiff failed to come forward with tangible evidence to support long-arm jurisdiction] ).
The same can be said of the arguments made by the Vape Defendants. The information they indicate would be sought in discovery — the number of power cells LG Chem Ltd sells in New York each year and its knowledge that those cells could be used for other purposes — would not, regardless of what is revealed, establish the requisite nexus between LG Chem Ltd's sale of batteries to "sophisticated companies" as set forth in its affidavit and the basis for the cause of action. In any case, this is mere speculation, untethered to any evidence or factual basis.
Accordingly,
It is hereby ORDERED that the LG Defendants' respective motions to dismiss the complaint as to them due to lack of personal jurisdiction is granted.
This constitutes the Decision & Order of the Court. This Decision & Order is being electronically filed with the County Clerk. The signing of this Decision and Order and electronic filing with the County Clerk shall not constitute notice of entry under CPLR Rule 5513, and counsel is not relieved from the applicable provisions of that Rule respecting to filing and service of Notice of Entry.