In re Internet Lending Cases

Filed 8/17/20
CERTIFIED FOR PARTIAL PUBLICATION *
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
T.A.W. PERFORMANCE,
LLC,
Plaintiff and Appellant, A157400, A157841
v. (Sonoma County
Super. Ct. No. SCV263262)
BREMBO, S.P.A.,
Defendant and Respondent.
Plaintiff T.A.W. Performance, LLC (TAW) appeals from the trial
court’s (1) grant of defendant Brembo, S.p.A.’s (Brembo) motion to
quash service of the summons for lack of personal jurisdiction; and (2)
denial of TAW’s motion for reconsideration. We affirm.
I. BACKGROUND
On July 1, 2014, Brembo, an Italian joint stock corporation with
its headquarters in Italy, and TAW, a California limited liability
company with its principal office in North Carolina, entered into a
written “Exclusive Distribution Agreement” (hereinafter the
agreement). Brembo manufactured brake systems for vehicles
(hereinafter referred to as products), which were exported for
*Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this
opinion is certified for publication with the exception of Parts III and
IV.
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international sale. Under the agreement, TAW was appointed as the
sole and exclusive distributor of Brembo’s products to be resold by TAW
to third parties within the “Territory” of the United States, Canada,
and Mexico.
The agreement had a five-year term, from July 1, 2014 to June
30, 2019. Early termination could be effectuated by either party giving
at least one (1) year’s notice in writing. In the event of a dispute not
resolved by mediation, the parties consented “to the exclusive
jurisdiction of the state and federal courts of the State of New York for
all disputes or controversies which may arise between the Parties out
or in connection with this Agreement or its construction, interpretation,
effect, performance or non-performance, or the consequences thereof.
Each Party agrees that such courts, to the exclusion of all other courts,
tribunals and administrative bodies, shall have exclusive jurisdiction
with respect to any and all such disputes and controversies and that
any and all such disputes and controversies shall be determined only by
litigation in one of such courts . . ..” The parties also agreed that the
agreement and “any dispute or claim arising out of or in connection
with it or its subject matter or formation” would be governed by the
laws of the State of New York.
On August 1, 2016, Brembo sent a termination notice letter to
TAW at its North Carolina address providing that the agreement would
terminate in one year’s time, on July 31, 2017. Both parties filed
lawsuits in advance of the agreement’s termination date. TAW first
filed in New York federal court but then voluntarily dismissed its
lawsuit. In July 2017, Brembo filed a New York state lawsuit seeking
damages for TAW’s alleged failure to pay for products shipped to TAW
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in North Carolina. TAW filed a counterclaim seeking damages based
on Brembo’s alleged failure to enforce the agreement’s exclusivity
provisions against other distributors and its termination of the
agreement without explanation. In its counterclaim, TAW confirmed it
had specifically consented to the exclusive jurisdiction of the New York
courts for all disputes arising between the parties in connection with
the agreement.
In 2018, while Brembo’s New York state lawsuit was pending,
TAW filed this California lawsuit seeking monetary damages based on
Brembo’s alleged wrongful termination of the agreement without cause.
In its first amended complaint (FAC), TAW alleged it was a “California
limited liability Company, formerly headquartered in Sonoma
California, currently located in Cramerton, North Carolina with offices
in Sonoma, California” and that “Richard Martin is the principal and
controlling member of [TAW]. He is a United Kingdom citizen and non-
immigrant alien, living in the United States pursuant to a valid E-2
Visa, who at all relevant times has been residing in Sonoma,
California.” TAW further alleged Brembo was “an Italian corporation
located in Italy that does business in the State of California by and
through subsidiaries and California based distributors.”
The FAC included causes of action for breach of contract and
violations of California’s Franchise Relations Act (Bus. & Prof. Code
§ 20001(a)-(c)) (Franchise Act). As to the Franchise Act, TAW alleged
the parties’ agreement met the elements of a franchise agreement, and
Brembo’s termination violated the Franchise Act as: (a) no franchisor
may terminate a franchise prior to the expiration of its term except for
good cause; and (b) “any condition, stipulation or provision purporting
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to bind any person to waive compliance with any provision” of the
franchise law “is contrary to public policy and void.” According to TAW,
Brembo’s termination of the agreement pursuant to its provision
allowing for unilateral termination upon one-year’s notice did not
constitute good cause for termination under the Franchise Act.
II. THE MOTION TO QUASH SERVICE OF SUMMONS FOR LACK OF
PERSONAL JURISDICTION WAS PROPERLY GRANTED
A. The Motion to Quash Service
Brembo moved to quash service of summons on the ground it did
not have sufficient contacts with California for the court to exercise
either general or specific jurisdiction.
Relying on a declaration of its in-house chief legal and corporate
affairs officer, Umberto Simonelli, Brembo asserted the court had no
basis to exercise general jurisdiction for the following reasons: Brembo
was an Italian corporation with its principal place of business and
corporate headquarters in Italy; it was not authorized to do business in
California; it maintained no offices in California; no current employees
resided in California; it had no assets in California; and it paid no taxes
in California. Additionally, Brembo designed and manufactured self-
branded design equipment for motorcycles and motor vehicles in Italy;
it did not manufacture any equipment in California; it did not sell
products to the general public in California but instead sold equipment
to distributors; it did not maintain a dealer network in California; and
it did not engage in marketing efforts directed at California. Brembo
had one United States subsidiary, Brembo North America, Inc., which
was a distinct and separate entity, incorporated in Delaware with a
principal place of business in Plymouth, Michigan.
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Brembo further asserted the court had no basis to exercise
specific jurisdiction for numerous reasons, including that TAW had
moved its principal place of business to North Carolina prior to
entering into the agreement and Brembo’s act of contracting with a
California entity was not sufficient to support specific jurisdiction.
TAW’s contacts with California were likewise insufficient as all
purchase orders were sent by TAW to Brembo in Italy and Brembo did
not ship any products to TAW in California. Further, the parties
agreed New York was to be the exclusive forum for dispute resolution
and never looked to California as shown by TAW’s earlier dismissed
federal lawsuit and its counterclaim filed in Brembo’s pending New
York state lawsuit.
In opposition, TAW asserted it did not need to establish general
jurisdiction over Brembo because TAW could “easily” establish Brembo
had “minimum contacts” to support specific jurisdiction since it had
entered into an agreement with TAW (a California resident) to resell its
products in California, and TAW now claimed damages based on
Brembo’s breach of that agreement. Relying on a declaration from its
managing member Richard Martin, TAW also asserted Brembo had
“many” other contacts with California supporting an exercise of specific
jurisdiction: (1) Brembo purposefully directed its activities at California
by creating a continuing obligation between itself and a California
resident to resell large amounts of its products in California, over many
years; (2) TAW had sold more than $2.7 million of Brembo’s products in
California over the past three years; (3) California accounted for 28.7
percent of TAW’s sales of Brembo’s products in the United States; (4)
before TAW moved to North Carolina, Brembo shipped its products
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directly to California, handled warranties in California, and directly
marketed its products in California; (5) TAW’s California lawsuit arose
out of Brembo’s forum-related activities, namely, Brembo’s wrongful
termination of the 2014 agreement, which out-of-state forum selection
clause was expressly void under the Franchise Act.
In reply, Brembo noted TAW conceded Brembo was not subject to
general jurisdiction by failing to make any argument in support of that
basis for jurisdiction. Brembo further asserted that evidence of certain
events that preceded the 2014 agreement or that occurred after
Brembo’s alleged breach of the 2014 agreement, and its general
activities in California, were not related to the wrongful termination
claim and therefore could not support specific jurisdiction.
On March 28, 2019, the court granted Brembo’s motion to quash
service as TAW had not met its burden of demonstrating that Brembo
had a sufficient nexus with California to support personal jurisdiction.
In so concluding, the court explained that TAW conceded there was no
general jurisdiction. As to specific jurisdiction, the court found TAW
failed to satisfy its burden to demonstrate Brembo’s contacts with
California for a variety of reasons that fundamentally boiled down to
the agreement being between “a company doing business in Italy, and
one doing business in North Carolina, who had agreed to settle any
claims per New York law” and TAW’s failure to demonstrate Brembo
had any special connection with California that would support the
exercise of jurisdiction over Brembo.
In light of its determination that Brembo was not subject to
specific jurisdiction, the trial court did not address whether the exercise
of personal jurisdiction over Brembo would be reasonable. Nor did the
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court address Brembo’s request to either stay or dismiss the action on
the ground that California is an inconvenient forum for the action.
TAW timely appealed the March 28 order.
B. Guiding Principles
Under Code of Civil Procedure section 410.10, our courts are
authorized “to exercise jurisdiction on any basis not inconsistent with
the Constitution of the United States or the Constitution of California.
‘The Due Process Clause of the Fourteenth Amendment constrains a
State’s authority to bind a nonresident defendant to a judgment of its
courts. [Citation.] Although a nonresident’s physical presence within
the territorial jurisdiction of the court is not required, the nonresident
generally must have “certain minimum contacts . . . such that the
maintenance of the suit does not offend ‘traditional notions of fair play
and substantial justice.’ ” ’ ” (Halyard Health, Inc. v. Kimberly-Clark
Corp. (2019) 43 Cal. App. 5th 1062, 1069 (Halyard Health), quoting in
part Walden v. Fiore (2014) 571 U.S. 277, 283; International Shoe Co. v.
Washington (1945) 326 U.S. 310, 316; Milliken v. Meyer (1940) 311 U.S.
457, 463.) “Personal jurisdiction may be either general or specific.”
(Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal. 4th 434, 445
(Vons).)
“When a defendant moves to quash service of process on
jurisdictional grounds, the plaintiff has the initial burden of
demonstrating facts justifying the exercise of jurisdiction. [Citation.]
Once facts showing minimum contacts with the forum state are
established, however, it becomes the defendant’s burden to
demonstrate that the exercise of jurisdiction would be unreasonable.
[Citation.] When there is conflicting evidence, the trial court’s factual
7
determinations are not disturbed on appeal if supported by substantial
evidence. [Citation.] When no conflict in the evidence exists, however,
the question of jurisdiction is purely one of law and the reviewing court
engages in an independent review of the record. [Citation.]” (Vons,
supra, 14 Cal.4th at p. 449.)
C. General Jurisdiction
“A court may assert general jurisdiction over foreign (sister-state
or foreign-country) corporations to hear any and all claims against
them when their affiliations with the State are so ‘continuous and
systematic’ as to render them essentially at home in the forum State.
[Citation.]” (Goodyear Dunlop Tires Operations, S.A. v. Brown (2011)
564 U.S. 915, 919 (Goodyear).)
In Daimler AG v. Bauman (2014) 571 U.S. 117 (Daimler), the
high court explained that “Goodyear made clear that only a limited set
of affiliations with a forum will render a defendant amenable to all-
purpose [general] jurisdiction there” (id. at p. 137), and “for a
corporation, . . . the place of incorporation and principal place of
business [are the] ‘paradig[m] . . . bases for general jurisdiction’ ” (ibid).
In other words, “the inquiry under Goodyear is not whether a foreign
corporation’s in-forum contacts can be said to be in some sense
‘continuous and systematic,’ it is whether that corporation’s ‘affiliations
with the State are so “continuous and systematic” as to render [it]
essentially at home in the forum State.’ ” (Daimler, supra, 571 U.S. at
pp. 138-139, fn. omitted, quoting Goodyear, supra, 564 U.S. at p. 919.)
Our de novo review is limited to issues which have been
adequately raised and supported in the trial court and in TAW’s briefs.
Neither in the trial court nor on appeal does TAW make any attempt,
8
by substantive argument or evidence, to demonstrate that Brembo was
subject to general jurisdiction based on such continuous or systematic
affiliations with California so as to render it essentially at home in
California. And, indeed, no such argument could be made on this
record as the common bases for general jurisdiction over Brembo do not
exist: at all relevant times, Brembo was a joint stock company
incorporated in Italy with its principal place of business in Italy and its
North American subsidiary was a corporation incorporated in Delaware
with its principal place of business in Plymouth, Michigan.
D. Specific Jurisdiction
In contrast to general jurisdiction, specific jurisdiction “depends
on an ‘affiliatio[n] between the forum and the underlying controversy,’
principally, activity or an occurrence that takes place in the forum
State and is therefore subject to the State’s regulation. [Citations.] In
contrast to general, all-purpose jurisdiction, specific jurisdiction is
confined to adjudication of ‘issues deriving from, or connected with, the
very controversy that establishes jurisdiction.’ [Citation.]” (Goodyear,
supra, 564 U.S. at p. 919.) In other words, “[w]hen determining
whether specific jurisdiction exists, courts consider the ‘ “ ‘relationship
among the defendant, the forum, and the litigation.’ ” ’ ” (Pavlovich v.
Superior Court (2002) 29 Cal. 4th 262, 269 (Pavlovich), quoting
Helicopteros Nacionales de Colombia, S.A. v. Hall (1984) 466 U.S. 408,
414 (Helicopteros), quoting Shaffer v. Heitner (1977) 433 U.S. 186, 204
(Shaffer).)
Thus, “[a] court may exercise specific jurisdiction over a
nonresident defendant only if: (1) ‘the defendant has purposefully
availed himself or herself of the forum benefits’ (Vons, supra, 14
9
Cal.4th at p. 446); (2) ‘the “controversy is related to or ‘arises out of’
[t]he defendant’s contacts with the forum” ’ (ibid., quoting Helicopteros,
supra, 466 U.S. at p. 414); and (3) ‘ “the assertion of personal
jurisdiction would [be reasonable in that it would] comport with ‘fair
play and substantial justice.’ ” ’ (Vons, supra, 14 Cal.4th at p. 447,
quoting Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 472-473
[85 L. Ed. 528, 105 S. Ct. 2174] (Burger King)).” (Pavlovich, supra, 29
Cal.4th p. 269.)
In addressing the purposeful availment prong, the high court has
explained that, under the Due Process Clause, individuals are entitled
to a “ ‘fair warning that a particular activity may subject [them] to the
jurisdiction of a foreign sovereign,’ ” thereby giving potential
defendants the ability “ ‘to structure their primary conduct with some
minimum assurance as to where that conduct will and will not render
them liable to suit.’ ” (Burger King, supra, 471 U.S. at p. 472, quoting
Shaffer, supra, 433 U.S. at p. 218 (Stevens. J., concurring in judgment)
& World-Wide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 297
(World-Wide Volkswagen).) “Where a forum seeks to assert specific
jurisdiction over an out-of-state defendant who has not consented to
suit there, this ‘fair warning’ requirement is satisfied if the defendant
has ‘purposefully directed’ his activities at residents of the forum,
[citation], and the litigation results from alleged injuries that ‘arise out
of or relate to’ those activities, [citation].” (Burger King, supra, at pp.
472-473, fns. omitted.) By “ ‘purposefully avail[ing] itself of the
privilege of conducting activities within the forum State,’ [citation], [a
defendant] has clear notice that it is subject to suit there, and can act to
alleviate the risk of burdensome litigation by procuring insurance,
10
passing the expected costs on to customers, or, if the risks are too great,
severing its connection with State. ” (World-Wide Volkswagen, supra, at
p. 297.)
“In defining when it is that a potential defendant should
‘reasonably anticipate’ out-of-state litigation, [the high court]
frequently has drawn from the reasoning of Hanson v. Denckla [(1958)
357 U.S. 235, 253 (Hanson)]: ‘The unilateral activity of those who claim
some relationship with a nonresident defendant cannot satisfy the
requirement of contact with the forum State. The application of that
rule will vary with the quality and nature of the defendant’s activity,
but it is essential in each case that there 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.’ ” (Burger King, supra, 471 U.S. at p. 474.)
1. TAW’s Contentions
TAW argues that its jurisdictional arguments are supported by
either (1) facts that were not challenged in the trial court, (2) facts to
which the court overruled Brembo’s evidentiary objections, and (3) facts
to which the court “simply erred in its application of law by refusing to
consider an otherwise sound fact based solely on relevance.”
In reviewing the trial court’s ruling, we need not separately
address TAW’s specific challenges to the court’s reasons for its ruling as
a trial court’s ruling must be affirmed even if “ ‘given for a wrong
reason. If right upon any theory of the law applicable to the case, it
must be sustained regardless of the considerations which may have
moved the trial court to its conclusion.’ ” (D’Amico v. Board of Medical
Examiners (1974) 11 Cal. 3d 1, 19.) Our analysis “ ‘is not susceptible of
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mechanical application; rather, the facts of each case must be weighed
to determine whether the requisite “affiliating circumstances” are
present’ ” (Snowney v. Harrah’s Entertainment, Inc. (2005) 35 Cal. 4th
1054, 1061 (Snowney), and “ ‘ “[t]his determination is one in which few
answers will be written ‘in black and white, [with] [t]he greys . . .
dominant and even among them the shades are innumerable’ ” ’ ”
(Pavlovich, supra, 29 Cal.4th at p. 268, quoting Kulko v. California
Superior Court (1978) 436 U.S. 84, 92, quoting Estin v. Estin (1948) 334
U.S. 541, 545).
With these considerations in mind, we now address TAW’s
contentions.
2. Analysis
In ascertaining whether specific jurisdiction may be exercised
over a foreign corporation in commercial contract litigation, we are
guided by high court decisions which “long ago rejected the notion that
personal jurisdiction might turn . . . on ‘conceptualistic . . . theories of
the place of contracting or of performance.’ [Citation.] Instead, [the
high court . . . [applies] a ‘highly realistic’ approach that recognizes that
a ‘contract’ is ordinarily but an intermediate step serving to tie up prior
business negotiations with future consequences which themselves are
the real object of the business transaction. [Citation.]” (Burger King,
supra, 471 U.S. at pp. 478-479, and the cases cited therein.) Pertinent
to the matter before us, the Burger King court specifically found that a
choice of law provision by which the parties stipulated “in advance to
submit their controversies for resolution” in a specific jurisdiction may
be germane to the jurisdictional analysis. (Id. at p. 472, fn. 14; see Id.
at pp. 482-483 [Burger King court admonished Court of Appeals for
12
failure to give adequate consideration to choice of law provision in
parties’ franchise agreement in determining question of personal
jurisdiction over defendant franchisee].)
TAW argues Brembo should have anticipated being brought into
a California court to defend this lawsuit based on the following “key
relevant” factors: (1) Brembo profited from TAW’s resale of Brembo
products in California, which accounted for almost one-third of TAW’s
United States sales, as an expected and foreseeable consequence of the
agreement; (2) Brembo knew it was entering into an agreement with a
California entity; (3) Brembo negotiated with the managing member of
TAW and TAW’s attorney, who were both located in California; (4)
Brembo knowingly and expressly transacted millions of dollars of
business with a California entity; (5) Brembo maintained regular
communication with TAW staff and management in California; (6)
Brembo clearly targeted the California market by (a) appointing TAW
as the exclusive distributor for Brembo products in California; (b)
marketing its products in California through its interactive website and
trade shows; (c) making direct sales to customers in California with an
obligation under the agreement to reimburse TAW for those sales; and
(d) issuing warranties for its products purchased by California
customers and thereby creating continuing obligations to thousands of
California residents; and (7) the bulk of harm to TAW will be felt in
California which accounts for TAW’s largest United States sales of
Brembo’s products.
We agree with the trial court that the record does not show that
Brembo purposefully availed itself of the benefits and protections of the
laws of California such that it had “fair warning” and should have
13
anticipated being brought into a California court to defend this lawsuit.
While the parties had a prior relationship in California, six months
before and at the time of the execution of the 2014 agreement the
parties’ relationship was no longer “California-directed in any
meaningful sense.” (Halyard Health, supra, 43 Cal.App.5th at p. 1076.)
TAW had moved its principal place of business to North Carolina and
the distribution agreement was not limited to California but included
the entirety of the United States, Canada, and Mexico. Under the
agreement, Brembo shipped its products to TAW’s principal place of
business in North Carolina. Of particular significance given the 2014
agreement’s anticipation of nationwide and international distribution
of Brembo products through resales by TAW, Brembo made a
commercially reasonable effort “to alleviate the risk of burdensome
litigation” in any portion of the designated distribution territory by
including choice of law and forum selection clauses limiting the forum
in which TAW could file a lawsuit to New York. (World-Wide
Volkswagen, supra, 444 U.S. at p. 297.)
We see no merit to TAW’s assertion that Brembo’s shipment of its
products to North Carolina is insignificant, compared to where the
products were eventually resold by TAW (i.e. California), because
pursuant to the Uniform Commercial Code title to the goods passed to
TAW in California where TAW was required to pay state excise taxes
on the products it resold in the state. As our high court has
admonished, we do not look at TAW’s contacts with California, but
instead limit our analysis to an evaluation of Brembo’s contacts with
the state. Even assuming title to the goods passed to TAW in
California, we fail to see how that circumstance demonstrates that
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Brembo purposefully availed itself of the benefits and protections of the
laws of California. Simply put, TAW’s unilateral resale of Brembo’s
products in California is not sufficient to demonstrate that Brembo
purposefully availed itself of the privilege of conducting business in
California. (Hanson, supra, 357 U.S. at p. 253 [“[t]he unilateral activity
of those who claim some relationship with a nonresident defendant
cannot satisfy the requirement of contact with the forum State”].)
Nor are we persuaded by TAW’s assertion that Brembo knew
that TAW resold Brembo’s products in California for “millions of
dollars.” While “the foreseeability of causing injury in another State
should be sufficient to establish” sufficient contacts in that state “when
policy considerations so require, . . . this kind of foreseeability is not a
‘sufficient benchmark’ for exercising personal jurisdiction. [Citation.]
Instead, ‘the foreseeability that is critical to due process analysis . . . is
that the defendant’s conduct and connection with the forum State are
such that he should reasonably anticipate being haled into court there.’
[Citation.]” (Burger King, supra, 471 U.S. at p. 474, fn. omitted.)
Brembo’s mere knowledge that TAW would resell Brembo products in
California, without Brembo having some significant control over the
ultimate distribution of its products, does not “establish purposeful
availment under the effects test.” (Pavlovich, supra, 29 Cal.4th at p.
276; see Ibid. [“ ‘[t]he fact that a defendant’s actions in some way set
into motion events which ultimately injured a California resident’
cannot, by itself, confer jurisdiction over that defendant”].)
We similarly find no merit to TAW’s argument that the
agreement’s choice-of-law and forum selection clauses are irrelevant.
As recognized with approval by the high court, choice-of-law and forum
15
selection provisions are frequently used in commercial contracts as
mechanisms allowing “ ‘potential defendants to structure their primary
conduct with some minimum assurance as to where that conduct will or
will not render them liable to suit.’ ” (Burger King, supra, 471 U.S. at p.
472 & fn. 14, quoting World-Wide Volkswagen, supra, 444 U.S. at p.
297.) Regarding the relevance of choice-of-law provisions, the Burger
King court explained that a “choice-of-law analysis – which focuses on
all elements of a transaction, and not simply on the defendant’s conduct
– is distinct from minimum-contacts jurisdictional analysis – which
focuses at the threshold solely on the defendant’s purposeful connection
to the forum. Nothing in our cases, however, suggests that a choice-of-
law provision should be ignored in considering whether a defendant has
‘purposefully invoked the benefits and protections of the State’s law’ for
jurisdictional purposes.” (Burger King, supra, 471 U.S. at pp. 481-482;
italics in original.)
Choice-of-law and forum selection clauses, “standing alone”, are
not dispositive, and may be discounted where a foreign corporation’s
other minimum contacts establish jurisdiction in the forum state.
However, they may “reinforce” whether or not a foreign corporation has
made such “a deliberate affiliation with the forum state” as to support a
conclusion that it should have reasonably foreseen “possible litigation
there.” (Burger King, supra, 471 U.S. at p. 482; see ibid. [Burger King
court found nonresident defendant franchisee was required to defend
against plaintiff franchisor’s lawsuit in Florida where, among other
things, defendant had “ ‘purposefully availed himself of the benefits
and protections of Florida’s laws’ by entering into contracts expressly
16
providing that those laws would govern franchise disputes” at issue in
lawsuit].)
Here, Brembo’s contacts with the United States were already
directed away from California before the parties entered into the
agreement. TAW had moved its principal place of business to North
Carolina, Brembo was shipping its products to North Carolina, and
TAW’s resale of Brembo’s products was expanded to include the
entirety of the United States, Canada, and Mexico. Given these
circumstances, Brembo made a concerted effort to “alleviate the risk of
burdensome litigation” (World-Wide Volkswagen, supra, 444 U.S. at p.
297) by limiting dispute resolution to New York. The agreement’s
choice of law and forum selection clauses reinforces our finding that
Brembo did not have fair warning and could not have reasonably
anticipated being brought into a California court to defend against
TAW’s lawsuit concerning the termination of the agreement. To
conclude otherwise would appear to conflict with the high court’s
admonishment that a state should not interfere with a foreign
corporation’s reasonable efforts “ ‘ to structure their primary conduct
with some minimum assurance as to where that conduct will and will
not render them liable to suit.’ ” (Daimler, supra, 571 U.S. at p. 139,
quoting in part Burger King, supra, 471 U.S. at p. 472; see also Halyard
Health, supra, 43 Cal.App.5th at p. 1076 [appellate court rejected
plaintiff’s argument that parties’ execution of distribution agreement
was “California-directed” where, among other factors, parties’ choice of
law selection reflected “a deliberate affiliation” with both parties’ state
of incorporation (Delaware), and not California].)
17
We also see no merit to TAW’s reliance on the fact that its
lawsuit is premised on a violation of the Franchise Act. In Shaffer,
supra, 433 U.S. 186, the high court specifically rejected the plaintiff’s
assertion that “if a State’s law can properly be applied to a dispute, its
courts necessarily have jurisdiction over the parties to that dispute.”
(Id. at p. 215.) In other words, even if a forum state’s law governs the
obligations of a defendant, such a finding “does not demonstrate that
[the defendant has] ‘purposefully avail[ed itself] of the privilege of
conducting activities within the forum State,’ . . . in a way that would
justify bringing [it] before” the forum state. (Id. at p. 216.) Whether or
not the enforceability of the parties’ 2014 agreement is governed by
California law “has nothing to do with whether enforceability may be
determined by a California court. The required relationship among
[Brembo, California, and this lawsuit] cannot be based on what [TAW’s]
argument assumes, i.e. that California substantive law applies.”
(Halyard Health, supra, 43 Cal.App.5th at p. 1072, fn. 7 [Halyard
Health court found that plaintiff’s assumption that California law
would apply “is not one that leaps off the pages” of the contract in
which the parties agreed that the contract “ ‘shall be governed by and
construed and enforced in accordance with the substantive laws of the
State of Delaware and the federal laws of the United States of America
applicable therein, as though all acts and omissions related hereto
occurred in Delaware’ ”].)
Lastly, we are not persuaded by TAW’s assertions that the trial
court abused its discretion by refusing to consider Brembo’s direct
sales, marketing, advertising, and issuance of warranties for its
products that were resold by TAW to California consumers as relevant
18
factors. Such evidence would not be relevant, let alone material, to the
subject of this lawsuit, Brembo’s alleged wrongful termination of the
agreement. The controversy therefore lacks any substantial connection
to Brembo’s purported contacts with California through its direct sales,
marketing and advertising activities and its issuance of warranties for
its products sold in California. (Cf. Snowney, supra, 35 Cal.4th p. 1070
[plaintiff who filed lawsuit based on defendant hotels’ failure to provide
notice of energy surcharges during reservation process and in their
advertising met the relatedness requirement as “the injury allegedly
suffered by plaintiff in this case relates directly to the content of
defendants’ advertising in California;” italics in original].) The fact
that TAW resold Brembo products in California for millions of dollars
and therefore the termination could have an effect on TAW in
California “does not establish the requisite connection between
[Brembo,] this forum and the specific claim[ ] at issue in this suit.
[Citation.]” (Halyard Health, supra, 43 Cal.App.5th at p. 1073; see Id.
at p. 1069 [specific jurisdiction not demonstrated where, among other
factors, defendant foreign corporation’s California “sales” in the
millions were not sufficiently connected to the gist of plaintiff’s
declaratory relief action concerning the meaning and enforceability of
an indemnification clause in the parties’ agreement].)
In sum, we conclude an affirmance is required because TAW has
not shown on this record that Brembo had minimum contacts with
California justifying an exercise of either general or specific jurisdiction
over it. Accordingly, we do not reach whether an exercise of personal
jurisdiction would be reasonable or whether California would be a
convenient forum for this lawsuit.
19
III. TAW’S REQUEST FOR DISCOVERY WAS PROPERLY DENIED
On March 28, 2019, the trial court also denied TAW’s request for
discovery (1) to determine Brembo’s connection with its North
American subsidy, Brembo NA and (2) regarding Brembo’s connections
with California, including whether Brembo maintains any employees in
California. The denial was premised on TAW’s concession that there
was no basis for general jurisdiction and the requested discovery did
not pertain to questions of specific jurisdiction. In other words, TAW
had not demonstrated the requisite nexus between the requested
discovery and whether it would be proper to subject Brembo to the
jurisdiction of the California Court.
We find no merit to TAW’s argument that reversal is required
because if it had been allowed discovery it would have been likely to
ascertain jurisdictional facts to support an exercise of either general or
specific jurisdiction. “The granting of a continuance for discovery lies
in the discretion of the trial court, whose ruling will not be disturbed in
the absent of manifest abuse. [Citation.]” (Beckman v. Thompson
(1992) 4 Cal. App. 4th 481, 487 (Beckman).) We find no abuse of
discretion.
TAW asserts it could have made a general jurisdiction argument
based on information it sought concerning Brembo’s relationship with
any purported in-state subsidiary, affiliate, or partner, and the
presence of its employees in this state. However, TAW’s requested
discovery “would have us look beyond the exemplar bases Goodyear
identified, and approve the exercise of general jurisdiction in every
State in which a corporation ‘engages in a substantial, continuous, and
systematic course of business.’ [Citation.] That formulation, . . ., is
20
unacceptably grasping.” (Daimler, supra, 571 U.S. at pp. 137-138; see
also Strasner v. Touchstone Wireless Repair & Logistics, LP (2016) 5
Cal. App. 5th 215, 222-223.) While the high court has recognized that
“in an exceptional case . . . a corporation’s operations in a forum other
than its formal place of incorporation or principal place of business may
be so substantial and of such a nature as to render the corporation at
home in that State” (Daimler, supra, 571 U.S. p. 139, fn. 19), TAW has
failed to demonstrate, “[i]n light of the showings already made,” that
discovery would “likely lead to production of evidence establishing”
general jurisdiction over Brembo. (Beckman, supra, 4 Cal.App.4th at p.
487.)
Nor do we see any merit to TAW’s argument that the court
improperly denied its request for information directed at establishing
specific jurisdiction based on Brembo’s direct sales, marketing,
advertising, and issuance of warranties for its products that were
resold by TAW to California consumers. As is clear, the action here is
about how the parties intended to or were legally obligated to terminate
their agreement prior to its expiration. Evidence of Brembo’s
purported direct sales, marketing, and advertising in California, and
Brembo’s issuance of warranties to California consumers who
purchased Brembo products, would not be relevant, let alone material,
to the subject of this lawsuit, Brembo’s alleged wrongful termination of
the agreement.
Accordingly, we find no abuse of discretion in the court’s denial of
discovery. “In light of the showings already made, the court could
reasonably conclude further discovery would not likely lead to
21
production of evidence establishing jurisdiction.” (Beckman, supra, 4
Cal.App.4th p. 487.)
IV. TAW’S MOTION FOR RECONSIDERATION WAS PROPERLY
DENIED
A. The Motion for Reconsideration
TAW sought reconsideration based on both newly discovered
evidence and other evidence already in its possession it inadvertently
failed to previously present to the court, in support of its argument that
Brembo had mislead the court concerning its contacts with California.
TAW submitted declarations from TAW managing member Richard
Martin, TAW member Ken Gordon, TAW President Wayne Rogers, and
TAW counsel Merrill C. Haber. TAW also submitted the complete
transcript of the March 13, 2019, deposition testimony of Brembo’s
counsel Simonelli, which was first available to TAW after the motion to
quash had been argued and submitted on February 27, 2019.
In opposition, Brembo submitted a declaration from its outside
counsel Lydia Ferrarese, Herzfeld & Rubin, P.C. Ferrarese
participated in the negotiations of the 2014 agreement from her New
York office and was representing Brembo in the pending New York
state lawsuit against TAW.
On June 28, 2019, the court filed its order denying TAW’s request
for reconsideration:
“Here, [TAW] contends that it first discovered ‘new’ evidence
when [Brembo] belatedly produced 4,760 pages of documents in
the New York litigation, which was after the hearing on
[Brembo’s] motion to quash. However, although these documents
were purportedly ‘new’ to [TAW], [it] has not provided a
‘satisfactory explanation’ for its failure to locate and produce
these documents at an earlier time and failed to demonstrate
that it could not, with reasonable diligence, have discovered and
22
produced this evidence as part of its opposition to the original
motion. . . .
“First, [TAW] contends that of all the ‘new’ evidence it has
obtained, ‘[m]ost significantly, [Brembo] produced an email chain
between it and [TAW’s] president, which shows [Brembo] had
insisted that all invoices for [Brembo] products sold to [TAW], be
billed and sent to [its] offices in Sonoma, California. . . . .
However, as the motion concedes, these emails were sent to/from
[TAW’s] President, Wayne [Rogers], in April 2014, i.e., nearly five
years before the motion to quash was filed, and admittedly, these
emails have been available to him since that time. In fact, [TAW]
acknowledges that the ‘invoices and emails discussing invoices
were in [its] possession at the time of the motion to quash.’ . . .
The fact that [TAW] inadvertently overlooked these emails at the
time, and did not understand their relevance to the motion, is not
a ‘satisfactory’ reason for not producing them earlier and does not
demonstrate that the evidence could not, with reasonable
diligence, have been discovered and produced in opposition to the
motion to quash. Further, [TAW] concedes that these emails
‘predate the Agreement at issue in this case’ and thus, even if
they were ‘new,’ they have limited relevance to the motion to
quash.
“Second, [TAW] attaches various invoices which purportedly
show a billing address for [TAW] in California. . . . As with the
emails, the invoices, which show that the products were shipped
to North Carolina but billed to California, have been available to
[TAW] since long before [Brembo’s] motion to quash and [TAW]
has not stated a ‘satisfactory’ reason they weren’t discovered or
presented earlier. Thus, the invoices are not ‘new’ evidence.
“Third, [TAW] cites to the deposition testimony from [Brembo’s]
chief in-house counsel and contends that the testimony was
‘extremely evasive’ and ‘call[s] into question all of [his] testimony
submitted in the motion to quash . . . [and] . . . should preclude
[Brembo] from now arguing that [TAW] should have located the
evidence sooner.’. . . However, [TAW’s] focus on the testimony of
[Brembo’s] in-house counsel is not helpful here and does not
support [TAW’s] burden to show that the ‘new’ information could
not, with reasonable diligence, have been discovered or produced
23
earlier. Additionally, it appears that [TAW] merely attaches the
entire 265 page transcript from the deposition but does not cite
any specific testimony and thus, the ‘new’ evidence has limited
value. Finally, as [Brembo] points out in its opposition, [TAW’s]
characteristics of the testimony as ‘false’ and ‘misleading’ is itself
somewhat misleading when the specific testimony is put in
context with the actual question and actual response.
“Fourth, [TAW] relies on emails between [Brembo] and [TAW’s]
West-Coast sales representative, Ms. Sterley, which purportedly
demonstrates that [Brembo] had ‘ongoing and frequent
connection and communication with Ms. Sterley here in
California.’ . . . However, as with the previously discussed
emails, [TAW’s] President, Wayne [Rogers], is copied on the
emails from Ms. Sterley and thus, [TAW] has had access to these
emails since they were sent in 2014. Therefore, they are not
‘new’ and [TAW] could have discovered these emails with
‘reasonable diligence.’ Additionally, these emails, some of which
are in Italian, do not show any meaningful connection with
California, other than the fact that Ms. Sterley’s office was
apparently located there.
“Fifth, [TAW] cites to [Brembo’s] internal emails that were
allegedly not previously available to [TAW] and which
purportedly show [Brembo] ‘organized and paid for advertising’ in
California. . . . However, these emails are incomplete,
inadmissible, and do not show any connection between [Brembo]
and California that is relevant to this case.
“Finally, [TAW] relies on ‘warranty documents’ which
purportedly demonstrate that [Brembo] ‘directly warrantied its
products that were sold by [TAW] to its customers here in
California, thus creating an affiliation between the forum and the
underlying controversy . . . .’ . . . These ‘warranties,’ which are
largely illegible, irrelevant and inadmissible, do not appear to
show any direct connection to products sold in California.”
TAW filed timely notices of appeal from (1) the March 28, 2019
order granting Brembo’s motion to quash service of summons, and (2)
the June 28, 2019 order denying both TAW’s motion for reconsideration
24
(Code Civ. Proc. § 1008, subd. (a)), and its alternative motion to vacate
the March 28, 2019 order (Code Civ. Proc. § 473, subd. (b)).
We dismiss the separate appeal from the June 28, 2019 order as
no separate appeal lies from an order denying reconsideration. (Code
Civ. Proc. § 1008, subd. (g) [the order denying reconsideration is
reviewed on appeal from the underlying order].) Further, TAW
abandoned any review of the denial of its motion for relief under Code
of Civil Procedure section 473, subdivision (b), by failing to present any
specific argument addressing the issue in its appellate briefs. (See
Golightly v. Molina (2014) 229 Cal. App. 4th 1501, 1519 [appellate
“ ‘review is limited to issues which have been adequately raised and
briefed’ ”].)
B. Analysis
TAW contends the court, on reconsideration, should have
accepted its “reasonable explanations for why the facts were not
presented earlier.” It further contends the new and different facts
demonstrated Brembo had sufficient minimum contacts for an exercise
of personal jurisdiction.
We review the denial of a motion for reconsideration under the
deferential abuse of discretion standard and must “uphold it even if we
might have ruled otherwise in the first instance.” (Garcia v. Hejmadi
(1997) 58 Cal. App. 4th 674, 686.) In other words, we will reverse only if
we can conclude TAW’s showing compelled a grant of reconsideration
as a matter of law. We cannot so conclude here.
We find the court acted well within its discretion in finding that
reconsideration was not warranted based on TAW’s production of
additional evidence (emails, invoices, product warranties, and the
25
deposition testimony of Brembo’s in-house counsel) for the reasons
stated in the court’s order. (See, e.g., In re Marriage of Burgard (1999)
72 Cal. App. 4th 74, 81 [reconsideration not warranted as appellant’s
explanation that she did not understand the import of a letter in her
possession was not a satisfactory excuse for failing to submit the letter
earlier]; Foothills Townhome Assn. v. Christiansen (1998) 65
Cal. App. 4th 688, 692-693, fn. 6 [appellant’s failure to present evidence
in its possession because it “did not think the evidence was necessary”
was “patently insufficient” to warrant reconsideration], disapproved on
other grounds in Equilon Enterprises LLC v. Consumer Cause, Inc.
(2002) 29 Cal. 4th 53, 68, fn. 5.)
Citing to Mink v. Superior Court (1992) 2 Cal. App. 4th 1338
(Mink), TAW argues that reconsideration was required because the
parties did not inform the court that Brembo continued to use a
California address for TAW on its invoices for products shipped to
North Carolina even though TAW moved its principal place of business
to North Carolina. According to TAW, Brembo’s use of the California
address was an act demonstrating “Brembo desired to maintain its
nexus with TAW as a California entity.” However, Brembo explained
that after TAW moved its principal place of business to North Carolina,
Brembo adopted an email invoice system and sent its invoices by email
to TAW’s chief financial officer (CFO) located in North Carolina. We
see nothing that demonstrates Brembo purposefully availed itself of the
benefits or the protections of the law of California by using a California
address for TAW on its invoices which were sent by email to TAW’s
CFO in North Carolina. Instead, the existence of the California
26
address on the invoices appears to be a simple holdover that is not
relevant, let alone material, to TAW’s lawsuit.
The circumstances in Mink, supra, 2 Cal. App. 4th 1338, are not
comparable. There, the trial court denied a motion for reconsideration
when all parties believed the plaintiffs’ claims were barred by the
statute of limitations, but plaintiffs discovered after the ruling that the
statute had not run because of an intervening weekend and court
holiday. (Id. at pp. 1342-1343.) The Mink court found the plaintiffs’
failure to discover the mutual mistake of fact before the ruling on
summary adjudication excusable. (Ibid.)
In contrast, in this case “there was no mistake of fact. Instead,
there was [a] decision by [TAW’s] attorney not to collect evidence he
thought unnecessary” to oppose the motion to quash service of the
summons. (New York Times Co. v. Superior Court (2005) 135
Cal. App. 4th 206, 214 (New York Times).) We are not persuaded by
TAW’s argument that the court’s decision in New York Times is
meaningless because “[t]his is clearly not a case where TAW’s attorneys
decided not to seek or submit the evidence. Had they had the evidence
they would have without doubt submitted it. Indeed, once TAW’s
attorneys became aware of the emails and invoices, they immediately
realized the importance of them and filed the motion to reconsider,”
thereby providing “a reasonable and satisfactory explanation for why it
did not submit the evidence” earlier.
However, the trial court was not required, as a matter of fact or
law, to accept TAW’s reasons for failing to submit the additional emails
and invoices submitted on the motion for reconsideration, particularly
in light of the fact that TAW had the initial burden of demonstrating
27
facts justifying the exercise of jurisdiction (Vons, supra, 14 Cal.4th at p.
449). By its arguments, TAW essentially attempts to “reargue on
appeal those factual issues decided adversely to [it] . . ., contrary to
established precepts of appellate review.” (Hasson v. Ford Motor Co.
(1982) 32 Cal. 3d 388, 398-399.)
V. DISPOSITION
The separate appeal from the June 28, 2019 order is dismissed.
The March 28, 2019 order granting the motion to quash service of
summons and the June 28, 2019 order insofar as it denied the motion
for reconsideration are affirmed. Defendant and respondent Brembo
S.p.A. is awarded costs on appeal.
28
_________________________
Petrou, J.
WE CONCUR:
_________________________
Fujisaki, Acting P.J.
_________________________
Jackson, J.
A157400/A157841
29
Trial Court: Sonoma County Superior Court
Trial Judge: Hon. Jennifer V. Dollard
Counsel: Law Offices of Merrill C. Haber, Merrill C. Haber,
Bryan W. Dillon, for Plaintiff and Appellant.
Schnader Harrison Segal & Lewis, Stephen H. Dye,
Brandy S. Ringer, for Defendant and Respondent.
30