Olaf Eriksen v. Lg Chem, Ltd. ( 2020 )

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON
OLAF ERIKSEN, an individual,
No. 79473-6-I (consolidated with
Appellant-Cross Respondent, No. 79595-3-I)
v. DIVISION ONE
ECX, LLC, a limited liability company organized UNPUBLISHED OPINION
under the laws of the State of Washington,
d/b/a ecigExpress;
ECX IMPORTS, LLC, a limited liability
company organized under the laws of the State
of Washington;
LG CHEM, Ltd., a South Korean company, and
DOES 1-100, inclusive,
Respondent-Cross Appellant.
LEACH, J. — Olaf Eriksen appeals and ECX, LLC cross-appeals the trial court’s
dismissal of all claims against LG Chem, Ltd., a South Korean company, for lack of
personal jurisdiction. Eriksen and ECX also challenge the denial of their requests for
reconsideration and for jurisdictional discovery. We affirm.
FACTS
On November 7, 2015, Olaf Eriksen purchased an “Efest” lithium-ion battery for
his e-cigarette from ECX, LLC (d/b/a ecigExpress) in Seattle. On April 11, 2016,
Eriksen took a break from his job as a shipyard welder to smoke his e-cigarette. On his
way back to work from his break, Eriksen put the e-cigarette in his front right pant
Citations and pin cites are based on the Westlaw online version of the cited material.
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pocket. The e-cigarette’s battery exploded in his pocket. He caught on fire and
sustained third degree burns to his inner right thigh. Eriksen sued ECX, LLC, and its
distributor ECX Imports, LLC, alleging product liability and negligence. 1
After conducting a CT scan of the battery, Eriksen determined that LG Chem,
Ltd. (LG) manufactured it. LG is a South Korean company with its principal place of
business in Seoul, South Korea. It manufactures “18650” lithium-ion power cells. The
battery that burned Eriksen was stamped “IMR 18650 3.7V 2900mAh.” LG does not sell
IMR 18650 3.7V 2900mAh batteries but acknowledges it could have sold an 18650
battery to a buyer who relabeled it as an “Efest” battery. The parties have called the
buying, relabeling, and reselling products process “rewrapping.”
With this information, Eriksen filed a second amended complaint that asserted
claims against LG. LG asked the trial court to dismiss the claims against it for lack of
personal jurisdiction relying on Court Rule 12(b)(2). LG argued it did not have a
physical presence in, purposefully direct business to, or maintain purposeful minimum
contacts in Washington State. LG noted it has never registered to conduct business nor
has it owned or leased property in Washington State. It never had an office, telephone
number, mailing address, or bank account in Washington State. LG also argued it did
not have a relationship with ECX or Efest, and did not authorize Efest or any other
manufacturer, wholesaler, distributor, or retailer to rewrap and sell its batteries. Eriksen
asked the court to allow him to amend his complaint again to assert additional
1 We refer to ECX, LLC and ECX Imports, LLC collectively as ECX.
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No. 79473-6-I/3
jurisdictional facts showing minimum contacts for personal jurisdiction. The trial court
granted Eriksen’s request.
Eriksen then filed a third amended complaint and ECX asserted a cross claim
against LG. Eriksen alleged LG had continuing contacts with King County and
Washington State “by manufacturing, distributing, and/or selling goods with the
reasonable expectation that they will be used” there. Eriksen asserted the trial court
had specific personal jurisdiction because LG “purposefully availed itself of the
privileges and benefits of doing business in Washington,” has sufficient minimum
contacts with Washington State, placed the battery into the stream of commerce with
the expectation that Washington State residents would purchase it, and maintained an
active “website where it can exchange information with Washington residents.”
LG asked the court to dismiss Eriksen’s and ECX’s claims against it. LG made
the same arguments as before and supported its position with a declaration from LG’s
Senior Manager Joon Young Shin. Shin stated LG has never conducted business in
Washington State, and that if the Efest battery was in fact an LG battery, LG did not
authorize its rewrapping. LG argued Eriksen failed to allege sufficient facts to show a
prima facie case of personal jurisdiction. It argued Eriksen had not alleged a sufficient
connection between his claims, LG, and the State of Washington, and that Washington
State courts cannot exercise jurisdiction based on the conduct of the third party that
rewrapped LG’s battery. LG also argued it maintains its website from outside of
Washington State, that Eriksen did not allege he consulted the website, and that the
website includes a warning not to use LG’s batteries with e-cigarettes.
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No. 79473-6-I/4
Eriksen and ECX opposed LG’s request. In the alternative, they asked for
additional time to conduct jurisdictional discovery. Eriksen noted LG was involved in
eight cases in Washington State where parties alleged LG purposely placed defective
batteries into the stream of commerce.
During the hearing on the LG’s dismissal request, ECX mentioned it maintained
an inventory of LG batteries.
[W]ith respect to this limited discovery is my client’s in kind of a unique
situation, in that we do have an inventory system that’s still able to bring
up product types.
THE COURT: Counsel, I’m uncomfortable hearing the things that are
outside the record.
MR. JORDAN: Sure.
THE COURT: And so, hearing about your inventory system, I think, would
be outside of the record.
The trial court excluded discussion of the inventory because that information was
outside the record.
On October 26, 2018, the trial court granted LG’s request to dismiss all claims
against it due to lack of personal jurisdiction. It determined Eriksen failed to sufficiently
allege LG is “‘at home’ in Washington,” LG “purposefully directed activities toward
Washington,” and Eriksen’s injuries arose out of LG’s forum related activities. LG
lacked sufficient contacts with Washington State to satisfy specific jurisdiction. The trial
court also determined additional jurisdictional discovery would be untimely and
inappropriate.
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No. 79473-6-I/5
Eriksen then asked the trial court to reconsider its decision, claiming he learned
about ECX’s inventory for the first time during the hearing. He asserted ECX
maintained an “inventory of thousands of LG batteries in the state of Washington.” ECX
claimed that between September 2014 and October 2018 it sold approximately 9,500
LG batteries excluding LG batteries that were rewrapped as “Efest” batteries. In
support of his reconsideration request, Eriksen submitted his counsel’s declaration
citing seven cases where a third party rewrapped LG batteries and then those batteries
were sold in Washington State where they exploded and caused injuries. The
declaration asserts LG knew third parties were rewrapping and reselling its batteries in
the State of Washington.
ECX supported Eriksen’s motion for reconsideration and asserted the additional
jurisdictional discovery would target information about “LG Chem’s knowledge of, and
acquiescence in, the rewrapping and distribution of its batteries to e-cigarette retailors in
the United States, and Washington State.”
The trial court denied Eriksen’s requests for reconsideration and for jurisdictional
discovery. The trial court later granted ECX’s request for entry of final judgment and
certification of immediate appeal. Eriksen and ECX appeal the trial court’s dismissal of
their claims against LG, and denial of the requests for jurisdictional discovery and for
reconsideration.
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No. 79473-6-I/6
ANALYSIS
Specific Personal Jurisdiction
Eriksen and ECX claim Washington State courts have specific personal
jurisdiction over LG for purposes of resolving their claims against it. We disagree and
affirm the trial court.
This court reviews CR 12(b)(2) dismissals for lack of personal jurisdiction de
novo. 2 We accept allegations in the complaint as true. 3 The plaintiff bears the burden
of establishing a prima facie case that jurisdiction exists. 4
“For a Washington court to exercise specific personal jurisdiction over a
defendant, the plaintiff must allege that the defendant purposefully availed itself of the
privilege of doing business in Washington, thus invoking the benefits and protections of
our laws.” 5 “Without any such allegation, exercising jurisdiction would not comport with
due process.”6
“Under Washington’s long arm jurisdiction statute, RCW 4.28.185, personal
jurisdiction exists in Washington over nonresident defendants and foreign corporations
as long as it complies with federal due process.” 7 The due process clause requires
2State v. LG Electronics, Inc., 186 Wash. 2d 169, 176, 375 P.3d 1035 (2016), cert.
denied, 137 S. Ct. 648, 196 L. Ed. 2d 522 (2017); Noll v. American Biltrite Inc., 188 Wash.
2d 402, 411, 395 P.3d 1021, 1026 (2017).
3 Noll, 188 Wash. 2d at 411.
4 Noll, 188 Wash. 2d at 411.
5 Noll, 188 Wash. 2d at 405.
6 Noll, 188 Wash. 2d at 405.
7 Noll, 188 Wash. 2d at 411.
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No. 79473-6-I/7
“that individuals have ‘fair warning that a particular activity may subject [them] to the
jurisdiction of a foreign sovereign.’” 8
The United States Supreme Court and our State Supreme Court examine three
elements to determine whether the exercise of personal jurisdiction satisfies due
process. (1) There must be purposeful “minimum contacts” between the defendant and
the forum state, (2) the plaintiff’s injuries must arise out of or relate to the defendant’s
minimum contacts, and (3) the exercise of jurisdiction must be reasonable and
consistent with notions of “fair play and substantial justice.” 9
Eriksen and ECX assert the trial court had personal jurisdiction because (1) the
alleged facts establish LG purposefully availed itself of the privilege of doing business in
Washington State when it placed its batteries in the stream of commerce with the
expectation the batteries would end up in Washington, (2) Eriksen’s injuries arose out of
LG’s contacts with Washington, and (3) the exercise of personal jurisdiction would not
violate traditional notions of fair play and substantial justice.
“Specific personal jurisdiction analyzes the defendant’s contacts with the forum
state that are related to the plaintiff’s claims and arose or existed at the time that the
relevant event occurred.” 10 Specific personal jurisdiction requires purposeful minimum
8LG Electronics, 186 Wash. 2d at 176 (quoting Burger King Corp. v. Rudzewicz,
471 U.S. 462, 472, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) (quoting Shaffer v. Heitner,
433 U.S. 186, 218, 97 S. Ct. 2569, 53 L. Ed. 2d 683 (1977)).
9 LG Electronics, 186 Wash. 2d at 176-77 (quoting Grange Ins. Ass’n v. State, 110
Wash. 2d 752, 758, 757 P.2d 933 (1988) (quoting Burger King, 471 U.S. at 472-78)).
10 Noll, 188 Wash. 2d at 412 (citing Goodyear Dunlop Tires Operations, SA v.
Brown, 564 U.S. 915, 923-24, 131 S. Ct. 2846, 180 L. Ed. 2d 796 (2011)).
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No. 79473-6-I/8
contacts by the defendant with the forum. 11 “To establish purposeful minimum contacts,
there must be some act by which the defendant ‘purposefully avails itself of the privilege
of conducting activities within the forum State thus invoking the benefits and protections
of its laws.’” 12
“A foreign manufacturer…does not purposefully avail itself of a forum when the
…unilateral act of a consumer or other third party brings the product into the forum
state.”13 The “relationship must arise out of the contacts that the defendant itself
creates with the forum,” 14 and cannot be based “on the ‘random, fortuitous, or
attenuated’ contacts he makes by interacting with other persons affiliated with the
State.” 15
Washington State courts utilize the stream of commerce theory from Justice
Breyer’s concurring opinion in J. McIntyre Machinery, Ltd. v. Nicastro. 16 “[W]here a
foreign manufacturer seeks to serve the forum state’s market, the act of placing goods
into the stream of commerce with the intent they will be purchased by consumers in the
forum state can indicate purposeful availment.” 17 But, personal jurisdiction cannot be
11Noll, 188 Wash. 2d at 412 (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316,
66 S. Ct. 154, 90 L. Ed. 95 (1945)).
12 LG Electronics, 186 Wash. 2d at 177 (quoting Burger King, 471 U.S. at 475
(quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 2 L. Ed. 2d 1283
(1958)).
13 LG Electronics, 186 Wash. 2d at 177 (quoting World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 295, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980)); Noll, 188 Wash. 2d
at 415.
14 Noll, 188 Wash. 2d at 414.
15 Noll, 188 Wash. 2d at 415 (citing Walden v. Fiore, 571 U.S. 277, 286, 134 S. Ct.
1115, 1123, 188 L. Ed. 2d 12 (2014) (citing Burger King, 471 U.S. at 475)).
16 564 U.S. 873, 131 S. Ct. 2780, 180 L. Ed. 2d 765 (2011).
17 LG Electronics, 186 Wash. 2d at 177.
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No. 79473-6-I/9
“based on the mere foreseeability that the product may end up in a forum state.”18
Personal jurisdiction may exist where a substantial volume of a foreign defendant’s
“sales took place in a state as part of the regular flow of commerce.” 19 But, there must
be evidence of “‘something more,’ such as special state related design, advertising,
advice, or marketing.” 20
In State v. LG Electronics, Inc., our State Supreme Court determined that to
establish purposeful availment in stream of commerce cases the plaintiff must show the
defendant had actual knowledge and intended their product be incorporated into other
products and sold in large quantities in Washington State. 21 The court affirmed this
court’s determination that the State alleged purposeful minimum contacts sufficient to
establish personal jurisdiction by demonstrating LG Electronics dominated the global
market, sold its product globally with the intent their product would reach Washington
State, and intended to elevate the price of their products purchased in Washington
State. 22 The court also determined the presence of millions of LG Electronics products
in Washington State was attributable to its actions and was not a random act of a third
party. 23
Recently, in Noll v. Special Electric Company, Inc., this court remanded a case to
the trial court to enter findings of fact because the record contained insufficient
18 LG Electronics, 186 Wash. 2d at 178.
19 Noll, 188 Wash. 2d at 414 (citing LG Electronics, 186 Wash. 2d at 181).
20 J. McIntyre, 564 U.S. at 889.
21 186 Wash. 2d at 182.
22 LG Electronics, 186 Wash. 2d at 182.
23 LG Electronics, 186 Wash. 2d at 182.
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No. 79473-6-I/10
information for this court to determine the issue of personal jurisdiction. 24 On remand,
the trial court determined “substantial evidence” supported the finding that the
defendant had a substantial amount of sales in the United States and the State of
Washington. 25 This court determined that “Noll demonstrated a regular flow of Special
Electric’s asbestos into Washington State and that the presence of its product in
Washington ‘was not the result of chance or random acts of third parties,’” and “Special
Electric was aware of CertainTeed’s connection to Washington.”26 It reversed the trial
court’s original dismissal for lack of personal jurisdiction. 27
The facts of Death v. Mabry 28 are more similar to this case. Death sued LG
Chem for manufacturing a defective rewrapped battery in his e-cigarette that exploded
and injured him. 29 Death argued “that by indirectly placing these batteries into the
stream of commerce LG Chem knew that its transactions could have consequences in
Washington, and that this is enough to establish that it purposefully availed itself of the
privilege of doing business here.” 30 LG Chem argued the trial court lacked specific
personal jurisdiction because LG Chem did not authorize the company to rewrap its
batteries, it did not manufacture the batteries to be used in e-cigarettes, and Death did
not show “a single act it undertook to place products here.” 31 LG Chem also argued it
24 Noll v. Special Electric Company, Inc., 9 Wash. App. 2d 317, 319, 444 P.3d 33
(2019).
25 Noll, No. 77888-9-I, slip op. at 5-6 (Wash. July 13, 2020).
26 Noll, slip op. at 6.
27 Noll, slip op. at 6.
28 2018 WL 6571148 (Wash. Dec. 13, 2018).
29 Death, 2018 WL 6571148 at 1.
30 Death, 2018 WL 6571148 at 1, 4.
31 Death, 2018 WL 6571148 at 4.
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No. 79473-6-I/11
did not have a place of business, real estate, bank, mailing address, or phone number
in the State of Washington. 32 The Unites States District Court for the Western District of
Washington dismissed the claims against LG Chem for lack of specific personal
jurisdiction because “Death has alleged only unilateral acts of an unidentified third party;
he has not described one act by LG Chem. And that has not been enough to support
the assertion of specific personal jurisdiction, even under a stream of commerce
theory.” 33 Here, the trial court determined Eriksen and ECX failed to allege LG had
sufficient purposeful minimum contacts with Washington State. The trial court explained
it was an “intervening act by another that [brought] the product into Washington.”
Eriksen and ECX argue LG was aware that thousands of its batteries are
rewrapped and sold in Washington State and it substantially profits from those sales.
So, it should have reasonably anticipated or expected it to be haled into court in
Washington State. Eriksen and ECX also argue the sale of LG’s batteries is not a result
of random, fortuitous, or attenuated contacts or a third party’s actions. ECX notes that
while LG claims it does not authorize the rewrapping or sale of its batteries for use in
e-cigarettes, it does not prohibit others from doing so.
Like in Death, Eriksen and ECX do not allege that LG sold its products directly to
Washington State consumers. Unless LG directed a third party to sell products in the
State of Washington, this court only considers LG’s actions. Because Eriksen and ECX
do not allege LG sold its batteries directly to Washington State consumers, and
32 Death, 2018 WL 6571148 at 1.
33 Death, 2018 WL 6571148 at 4.
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provides no evidence that LG directed third parties to market and sell its rewrapped
batteries in Washington State, Eriksen and ECX have not shown that LG reasonably
anticipated or expected to be haled into court in the State of Washington.
Next, Eriksen and ECX argue the large volume of rewrapped LG batteries flowing
into Washington State through the stream of commerce is enough to establish minimum
contacts. But, the inventory Eriksen and ECX provided does not show a targeted,
regular flow of sales to Washington State.
ECX asserts a number of unsupported arguments. ECX argues,
LG Chem maintains an interactive website, places labels on its batteries in
English, and on information and belief designs its batteries to comply with
applicable United States regulation, has put indemnification clauses into
its contracts with its distributors and has liability insurance applicable to
lawsuits in the United States and Washington.
The record does not contain evidence of an interactive website, an effort to comply with
United States regulations, or contracts with indemnification clauses. Similarly, ECX
argues LG engages in other business, research, design, manufacturing, and sells other
products in the United States and Washington State. ECX has not provided sufficient
evidence to support this argument.
ECX also claims a disclaimer written in English on LG’s website demonstrates it
is complicit in funneling batteries to Washington. This claim is also unsupported
because ECX does not show the disclaimer demonstrates LG’s intent to be in the
e-cigarette market nor does it show the disclaimer is a form of marketing directed at
Washington State consumers. While the disclaimer may show LG is aware that some
people may improperly put its batteries into e-cigarettes, this showing does not satisfy
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No. 79473-6-I/13
the requirements for purposeful availment because it only shows knowledge. And,
purposeful availment requires knowledge plus intent.
Similarly, ECX argues LG had notice, knowledge, and the expectation its
batteries were being used and injuring consumers in the United States and in
Washington State because LG is involved in various state and federal lawsuits. To
support this claim, ECX cites other cases involving LG. But, as previously discussed,
knowledge is not enough to establish purposeful availment. Without an intentional act
directing the batteries to Washington State, the personal availment prong of specific
personal jurisdiction is not satisfied. Eriksen and ECX have not alleged the same
quantum of facts to satisfy the intent requirement that the parties provided in LG
Electronics or Noll.
Eriksen and ECX did not sufficiently allege, and there are not enough facts to
establish, that LG purposefully directed its batteries to the State of Washington. Eriksen
and ECX did not allege the “something more” that Justice Breyer articulated in
J. McIntyre Machinery. 34 So, we cannot say that LG purposefully availed itself to
personal jurisdiction with Washington State.
Because Eriksen and ECX’s claim that LG purposefully availed itself of
Washington State’s jurisdiction fails and our analysis ends. We do not reach the
second or third prong of the personal jurisdiction analysis of whether Eriksen’s injury
arose out of LG’s contacts and whether it would offend notions of fair play and
substantial justice to hale LG into court in Washington State.
34 J. McIntyre Machinery, 564 U.S. at 889.
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Jurisdictional Discovery
Eriksen and ECX argue the trial court abused its discretion in denying their
request for jurisdictional discovery. They request remand and argue additional
discovery will support jurisdiction.
We review the denial of a request for jurisdictional discovery for abuse of
discretion. 35 The trial court abuses its discretion when it exercises it in a “manifestly
unreasonable, or exercised on untenable grounds, or for untenable reasons.” 36 Trial
courts have broad discretion to grant jurisdictional discovery where pertinent facts
bearing on the question of jurisdiction are controverted or where a more satisfactory
showing of the facts is necessary. 37 “If a plaintiff presents factual allegations that
suggest ‘with reasonable particularity’ the possible existence of the requisite ‘contacts
between [the party] and the forum state,’ the plaintiff’s right to conduct jurisdictional
discovery should be sustained.”38 We do not sustain that right where the plaintiff’s
claims are “based on little more than a hunch that it might yield jurisdictionally relevant
facts.” 39
Here, the trial court explained it denied additional jurisdictional discovery
because Eriksen and ECX did not plead with reasonable particularity the possible
existence of sufficient minimum contacts between LG and Washington State or that LG
35Doe v. Puget Sound Blood Ctr., 117 Wash. 2d 772, 777, 819 P.2d 370 (1991);
Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 455 (3rd Cir. 2003).
36 State ex rel. Carroll v. Junker, 79 Wash. 2d 12, 26, 482 P.2d 775, 784 (1971).
37 Data Disc, Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir.
1977).
38 Toys “R” Us, 318 F.3d at 456.
39 Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008).
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No. 79473-6-I/15
could reasonably foresee being haled into court in Washington State. Because we find
no abuse of discretion, we affirm. Under a de novo standard of review, we might have
reached a different result.
Motion to Reconsider
Eriksen argues the trial court abused its discretion when it denied his request for
reconsideration based on newly discovered evidence of ECX’s inventory. He argues
ECX’s inventory shows substantial volumes of LG batteries flow into the State of
Washington.
We review the denial of a reconsideration request for abuse of discretion. 40
“[R]econsideration is warranted if the moving party presents new and material evidence
that it could not have discovered and produced at trial.” 41 “If the evidence was available
but not offered until after that opportunity passes, the parties are not entitled to another
opportunity to submit that evidence.”42
In Go2Net, Inc. v. C I Host, Inc., we wrote, “A new trial may be granted on the
basis of newly discovered evidence only if the evidence (1) will probably change the
result of the trial; (2) was discovered since the trial; (3) could not have been discovered
before trial by the exercise of due diligence; (4) is material; and (5) is not merely
cumulative or impeaching.” 43 This court affirmed the trial court’s denial of a motion for
40Wagner Dev., Inc. v. Fid. & Deposit Co. of Maryland, 95 Wash. App. 896, 906,
977 P.2d 639, 645 (1999).
41 Wagner Dev., 95 Wash. App. at 906; Go2Net, 115 Wash. App. 73, 60 P.3d 1245
(2003); CR 59(a)(4).
42 Wagner Dev., 95 Wash. App. at 907.
43 115 Wash. App. 73, 88, 60 P.3d 1245 (2003).
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No. 79473-6-I/16
reconsideration based on newly discovered evidence where the party produced the
evidence the day before the trial court’s hearing. 44
Eriksen argues this case differs from Go2Net because he “only learned of ECX’s
inventory list when its counsel referenced it at the hearing on the motion to dismiss.”
LG argues Eriksen cannot meet the Go2Net factors. LG argues the inventory was not
newly discovered evidence because ECX had records of the inventory, and Eriksen had
previously served ECX with discovery requests for information about the supply of the
Efest battery.
Because the inventory was available when the parties filed their other pleadings,
and when the trial court held the hearing on the motion to dismiss, the trial court did not
abuse its discretion in denying the motion for reconsideration.
CONCLUSION
Because Eriksen and ECX do not sufficiently allege that LG has enough
purposeful minimum contact with Washington State, and the trial court did not abuse its
discretion in denying Eriksen and ECX’s requests for jurisdictional discovery and
reconsideration, we affirm.
WE CONCUR:
44 Go2Net, 115 Wn. App at 88-89.
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