[00:00:03] Speaker 00: Morning, Your Honors. [00:00:05] Speaker 00: I'd like to reserve three minutes for rebuttal. [00:00:07] Speaker 02: Just watch the clock, please. [00:00:10] Speaker 00: May it please the Court. [00:00:11] Speaker 00: My name is David Grimes. [00:00:12] Speaker 00: I'm here representing the plaintiff appellant, Giorgio Quiñones. [00:00:17] Speaker 00: This case concerns the injuries suffered when a battery owned by Giorgio Quiñones, the plaintiff, exploded, showering him with acid flames and disfiguring his hand. [00:00:27] Speaker 00: That explosion was the result of a thermal runaway. [00:00:30] Speaker 00: Condition endemic to lithium ion cells where something sometimes environmental sometimes not causes an internal short circuit that causes the cell to overheat catastrophically Thermal runaway fires are not a Roman candle or a box of matches They're an explosion of scalding acid and unquenchable flame third degree burns skin grafts and nerve damage are common So cells have multiple internal safety features that are supposed to disable the cell before the thermal runaway becomes catastrophic [00:01:01] Speaker 00: An expert determined that LG Chem, a Korean company, manufactured the cell that hurt Mr. Quiñones. [00:01:07] Speaker 00: Mr. Quiñones sued LG Chem, and LG Chem sought to be dismissed for lack of personal jurisdiction. [00:01:14] Speaker 02: I think if we were writing on a blank slate and simply applying Ford Motor Company, I'd probably be inclined personally to find that there was error in the district court's jurisdictional analysis. [00:01:28] Speaker 02: But I think the problem is that we're not writing on a blank slate and we have our court's decision in Yamashita in particularly rejecting the consumer market theory. [00:01:38] Speaker 02: So what do we do about that? [00:01:42] Speaker 00: I appreciate the question. [00:01:45] Speaker 00: I agree, certainly, that the lower court basically applied pre-Ford standards, but for causation. [00:01:51] Speaker 00: And I think if you go back to immediately post-Ford, this court in L&S Enterprises laid out there's a three-step plan or a three-step process for establishing personal jurisdiction over a foreign defendant. [00:02:09] Speaker 00: There's three prongs, I suppose. [00:02:10] Speaker 00: The first prong. [00:02:11] Speaker 00: The non-resident defendant must purposefully avail himself of the privilege of conducting activities in the forum, purposeful availment. [00:02:17] Speaker 00: Second, the claim must be one which arises out of or relates to the defendant's forum-related activities. [00:02:23] Speaker 00: And a strong showing on one of the first two prongs will permit a lesser showing on the other. [00:02:30] Speaker 03: I mean, I think Judge Sung's question was focused more narrowly on dealing with the Yamashita precedent. [00:02:37] Speaker 03: I appreciate that, and I'm trying to- Well, we understand the background. [00:02:40] Speaker 03: We have these cases. [00:02:41] Speaker 03: We've read the briefs, read the cases. [00:02:43] Speaker 03: Right. [00:02:44] Speaker 03: Yamashita sits there, and you've argued that it's wrongly decided, bad policy, blah, blah. [00:02:51] Speaker 03: None of that helps us because we are bound by it. [00:02:54] Speaker 03: So I think you're going to need to distinguish that case if you want us to figure out a way to reach a different result. [00:03:02] Speaker 03: So I understand the background, but time's a wasting. [00:03:05] Speaker 03: We need to focus on why it is that we're not bound by Yamashita. [00:03:10] Speaker 00: Well, I think there's two ways to get around Yamashita. [00:03:13] Speaker 00: The first of which is that Yamashita never considered the fact that thermal runaways are a risk inherent to any lithium ion cell. [00:03:21] Speaker 00: And so when you go back to the second prong, the relates to analysis, right? [00:03:27] Speaker 00: The fact that it doesn't need to arise from the context, but it relates to the analysis. [00:03:30] Speaker 03: What product was involved in Yamashita? [00:03:32] Speaker 00: It was an LG Chem 8650. [00:03:33] Speaker 03: Exactly the same product. [00:03:34] Speaker 03: I agree. [00:03:35] Speaker 03: So I'm not sure how that helps us say that Yamashita doesn't apply here. [00:03:39] Speaker 00: Well, the issue is that the court looked at the LG Chem's contacts with Hawaii that were in the record in Yamashita. [00:03:48] Speaker 00: And it didn't really consider the relationship, the relate to, between those contacts, intentional contacts, and the 18650 sell-it issue. [00:03:58] Speaker 00: And the point I make, I make a couple points, one of which is LG Chem ships 18650 cells. [00:04:04] Speaker 00: In Yamashita, it was just the residential solar batteries, large batteries. [00:04:09] Speaker 00: It didn't interrogate whether those are actually just a bunch of 18650 cells together. [00:04:13] Speaker 02: Right, but in denying discovery in Yamashita, the court said even if they did ship these cells, it wouldn't matter. [00:04:21] Speaker 00: Right. [00:04:22] Speaker 00: And once again, I think the issue is you have to look at this thermal runaway issue. [00:04:27] Speaker 00: The words thermal runaway appear nowhere in the Yamashita opinion. [00:04:30] Speaker 00: They appear I think once in the lower court opinion. [00:04:33] Speaker 00: The court assumed, without there being any evidence to that point, that there was something really distinct between thermal runaway from a residential solar battery, [00:04:46] Speaker 00: battery in a consumer product and thermal runaway in a standalone loose cell. [00:04:51] Speaker 03: I think Judge Sung is focused on the particular statement in Yamashita that specifically refers to [00:04:59] Speaker 03: 18650 batteries, even if they're sold to manufacturers for incorporation in consumer products sold in Hawaii, that's not going to matter. [00:05:09] Speaker 03: Yamashita didn't hang its decision based upon the difference between the products. [00:05:13] Speaker 03: It makes a specific reference to the kind of product that's involved in your case and says it wouldn't matter, denied or affirmed the denial of jurisdictional discovery because it said it wouldn't matter. [00:05:25] Speaker 03: So the fact that [00:05:28] Speaker 03: If Yamashita doesn't get into the details of the consumer battery, it doesn't seem to me to say why Yamashita doesn't bind us. [00:05:39] Speaker 03: Are you asking whether... Well, that's the issue I'm trying to get some help on. [00:05:43] Speaker 03: I mean, I may share Judge Sung's feelings that if we're on a clean slate, if Yamashita wasn't there, maybe a different result can be justified. [00:05:52] Speaker 03: But we're bound by our own prior decisions. [00:05:55] Speaker 03: So, that's why I'm asking for help. [00:05:57] Speaker 03: What is it can distinguish it? [00:05:58] Speaker 03: And the first distinction you offer doesn't really seem to work because Yamashita talks specifically. [00:06:04] Speaker 03: It wasn't the product involved, but it declined to permit discovery into the sale of batteries of the consumer variety, the 18650, whatever the number was, because it said it wouldn't matter. [00:06:17] Speaker 03: How can that offer a distinction we can rely upon? [00:06:21] Speaker 00: Well, the idea that it wouldn't matter is a conclusion that was derived from the limited factual record before it on Yamashita. [00:06:28] Speaker 03: And it made a point of denying discovery, which would have amplified the record, because it said it wouldn't matter. [00:06:34] Speaker 03: It doesn't seem that discovery would have led to anything. [00:06:38] Speaker 00: I was not counsel in Yamashita, but I think you made a not particularly compelling case that there was something to be discovered [00:06:44] Speaker 00: jurisdictional discovery, further jurisdictional discovery. [00:06:48] Speaker 00: I think once you understand how these cells are made, how they're used, the dangers they pose, it's possible you get a new factual record and you have the opportunity to understand that this is not an injury that is specific to loose cells. [00:07:07] Speaker 00: This is, thermal runaway is a danger of any lithium ion cell, no matter how it's used, where it is. [00:07:14] Speaker 04: But if there were a claim that related to this battery used as a component in a manufactured device that was sold in California, I think we'd be in a different boat. [00:07:29] Speaker 04: The whole consumer market theory, though, is should someone be hailed into court if the product that they are intending to sell to one market gets diverted by others into an unintended use, and does that offend notions of fairness or due process, or is it sufficient to relate to the injury? [00:07:52] Speaker 04: I think those are the underpinnings in Yamashita that seem hard to avoid in this case. [00:07:59] Speaker 04: So tell me why that's so. [00:08:01] Speaker 00: So I think there's a couple things. [00:08:03] Speaker 00: And one, I apologize, I want to step back a little. [00:08:05] Speaker 00: One issue that I feel like the Ninth Circuit has a little bit stopped considering when weighing these cases is the interest of the plaintiff to the form of their choice and particularly the form in which they reside. [00:08:16] Speaker 00: That's supposed to be given weight. [00:08:18] Speaker 00: And it's not really clear where in the current jurisprudence that weight is supposed to be applied. [00:08:22] Speaker 03: That would be something you have to take up with the Supreme Court, which has injected personal jurisdiction as an issue where it didn't used to be. [00:08:29] Speaker 00: I mean, I think modern global commerce has complicated things, too, selling things on the internet. [00:08:36] Speaker 00: It feels like a very different scenario now than when a lot of the jurisprudence was made. [00:08:39] Speaker 00: And then the cases that reach the Supreme Court don't actually give them an opportunity to discuss these issues. [00:08:46] Speaker 00: But I think in the context of a resident plaintiff in a forum where this product is being sold and used all the time, there's a test. [00:08:56] Speaker 00: And I discuss it in the reply brief. [00:09:00] Speaker 00: Let's see if I can. [00:09:06] Speaker 00: The court should look at the danger posed by the product and the volume of that product that the manufacturer allows to arrive in the forum state. [00:09:13] Speaker 00: So that if a product is dangerous or there are lots of them in a state. [00:09:17] Speaker 00: It can't be an unfair surprise that someone might want to sue whoever made that product in that state. [00:09:24] Speaker 00: And I discussed that a little bit in the reply brief. [00:09:26] Speaker 00: That analysis is a synthesis or a harmonization of the ruling in Jay McIntyre, the metal shearer, and the fact that that was a closely divided court about this one industrial metal shearer that ended up in New Jersey. [00:09:37] Speaker 00: The guy hurt his hand. [00:09:39] Speaker 00: And it was almost 50-50 with the court saying whether a jurisdiction should lie on the manufacture of that metal shearer or not. [00:09:46] Speaker 00: You have the analysis in Ford v. Montana discussing the wooden duck that's purchased over the internet. [00:09:52] Speaker 00: It's obviously not a dangerous item. [00:09:54] Speaker 00: It's a one-off. [00:09:55] Speaker 00: These are the factors the court is considering. [00:09:57] Speaker 00: And then that's spelled out specifically in Justice Stevens' concurrence in Asahi. [00:10:02] Speaker 00: And that looks at what makes it fair or unfair about bringing a party within a court's jurisdiction. [00:10:09] Speaker 00: LG Chem knows there are scenarios where an 18650 battery may explode in California, and it may have to show up in answer for that performance. [00:10:17] Speaker 00: The fact that it didn't intend for this particular cell to end up in California really does not impose an unfair burden on LG Chem. [00:10:26] Speaker 00: LG Chem and the cases, and they're pretty common where a judge [00:10:30] Speaker 00: does find that LG Chem is subject to personal jurisdiction. [00:10:33] Speaker 00: They bring out the same lawyers. [00:10:34] Speaker 00: It's Louis Brisboy. [00:10:35] Speaker 00: It's Nelson Mullins. [00:10:36] Speaker 00: It's exponent who analyzes it, whether it's one of these 18650 cells, whether it's a giant residential battery like one that exploded in Arizona. [00:10:47] Speaker 00: And it's not just how the batteries are used. [00:10:51] Speaker 04: It's also- So I guess you're arguing that if a defendant manufacturer sells a product into a state, [00:10:59] Speaker 04: And it has a certain intention as to what that market is or what you should be. [00:11:03] Speaker 04: All bets are off if it gets used in a completely different way. [00:11:09] Speaker 04: it lands in the hands of people, you know, through no control of its own, that'll be enough for personal jurisdiction. [00:11:18] Speaker 00: So one, they can make that case on the third prong of the analysis, having established the plaintiff, the first two prongs. [00:11:24] Speaker 00: The third prong goes to them to show that it is not, for some reason, unreasonable or unfair for them to have to litigate. [00:11:30] Speaker 04: Agreed, but it also overlaps with the relates to analysis, arguably. [00:11:35] Speaker 04: At least Yamashita came up with that reasoning. [00:11:39] Speaker 00: I agree Yamashita really sought to I guess bring back if not but for causation basically complete identity of products and uses that the manufacturer intended with What the plaintiff was using which is really not consistent with like so I guess to circle back with my colleagues questions and [00:12:00] Speaker 04: I don't know that you were getting much traction with the thermal runway justification for distinguishing Yamashita. [00:12:06] Speaker 04: Is there anything else that would tell this panel that we're not bound to follow Yamashita in this case? [00:12:16] Speaker 00: I will say the contacts with California are far more extensive than they are with Hawaii. [00:12:22] Speaker 00: Far, far more. [00:12:23] Speaker 00: And if you look at those first two prongs, you're supposed to weigh them [00:12:27] Speaker 00: And you don't need such a strong relate to showing if the contacts are stronger. [00:12:32] Speaker 00: You're supposed to allow for a weaker showing on prong two if you have a stronger showing on prong one. [00:12:38] Speaker 00: And there's plenty. [00:12:40] Speaker 00: We have the import records. [00:12:41] Speaker 00: We have the antitrust violation on these cells. [00:12:44] Speaker 00: We have the lawsuit about the ceramic separator that's in every single lithium ion cell to prevent thermal runaway. [00:12:57] Speaker 00: I don't want to say it's more than Ford's contacts with Montana. [00:13:02] Speaker 00: Certainly they're a little different. [00:13:03] Speaker 00: LG does not directly advertise to consumer users its batteries. [00:13:08] Speaker 00: But they know how to defend themselves in court. [00:13:10] Speaker 00: And that's the question. [00:13:12] Speaker 00: Can LG fairly defend itself in court? [00:13:15] Speaker 00: Are we forum shopping trying to get one over on a foreign defendant that can't protect itself? [00:13:20] Speaker 00: We're not. [00:13:21] Speaker 00: And our plaintiff has nowhere else to go. [00:13:24] Speaker 00: This is his form of last resort. [00:13:26] Speaker 00: He didn't take this somewhere where he thought he could sneak one past algae. [00:13:30] Speaker 00: This is where he lives. [00:13:31] Speaker 00: This is where he bought the cell. [00:13:32] Speaker 00: This is where he was hurt. [00:13:33] Speaker 02: Council, I think you wanted to reserve some time. [00:13:35] Speaker 02: I'll give you your three minutes. [00:13:36] Speaker 02: We ask you a lot of questions. [00:13:38] Speaker 00: Thank you. [00:13:45] Speaker 01: Excuse me, may it please the court? [00:13:47] Speaker 01: Good morning, Your Honors. [00:13:48] Speaker 01: My name is Rachel Headley, and I am here on behalf of Appellee LG Chem Limited. [00:13:53] Speaker 01: So I want to start, of course, my opening comments would have been Yamashita controls. [00:14:00] Speaker 01: And I want to talk a little bit about Yamashita, because what I hear from the court is some concern, we have to follow this, but we don't really like it. [00:14:09] Speaker 01: And I want to assuage that concern because I think Yamashita was 100% correct and the Ninth Circuit that it is controlling it is not distinguishable But it stands in very good company and the reasoning behind that decision I think stands in very good company So I do want to mention something that council did not discuss, but it was in the reply brief So I feel like I would be remiss if I did not mention hmm [00:14:32] Speaker 01: But at one point in the reply brief, and it's on page 31, counsel or plaintiff attempted to make the very distinction that the court is asking for today and said, this is actually distinguishable from Yamashita because here there is evidence that LG Chem targeted that consumer market. [00:14:49] Speaker 01: the consumer market for standalone batteries that the Yamashita court said there's admissible evidence that that was not the case. [00:14:56] Speaker 01: So I just want to correct that statement because if the court reads that section and it's on page 31 and 32, there is no citation to the record. [00:15:04] Speaker 01: However, my citations to the record are the declarations of Mr. Hui-Jae Lee, [00:15:09] Speaker 01: which are at five excerpts of record 818 and three excerpts of record 304. [00:15:15] Speaker 01: There is a supplemental declaration. [00:15:18] Speaker 01: And just to briefly explain, as the court is reviewing the record, we filed a motion to dismiss and put in a declaration, the initial motion to dismiss. [00:15:26] Speaker 01: The plaintiff opposed it and attached maybe 40 exhibits. [00:15:30] Speaker 01: And so we put in our reply the first go-round. [00:15:32] Speaker 04: Well, so, Ms. [00:15:33] Speaker 04: Headley, as counsel points, and I think it's correct that there is more targeting of the California market here than there was in the Hawaii case with evidence of these particular batteries. [00:15:46] Speaker 04: showing up in the ports and being used as components for operating systems and other devices. [00:15:53] Speaker 04: I assume you disagree with the notion that that would change or allow us to distinguish Yamashita. [00:16:02] Speaker 04: Why would that not be the case? [00:16:03] Speaker 01: I do. [00:16:04] Speaker 01: I'm sorry. [00:16:04] Speaker 01: Excuse me. [00:16:05] Speaker 01: And first of all, in Yamashita, of course, as the court noted earlier, the question was, can we have jurisdictional discovery? [00:16:11] Speaker 01: Can we find out if LG Chem was shipping 18650s into Hawaii? [00:16:15] Speaker 01: And the district court said, you don't need that. [00:16:18] Speaker 01: And then the Ninth Circuit affirmed and specifically said, those shipments that might be going to an equipment manufacturer to pack in a battery pack and put in the back of a power drill or a laptop computer, that is not selling it as a standalone product. [00:16:30] Speaker 01: That is a component. [00:16:31] Speaker 01: It is not meant to get into the hands of a consumer as a standalone product. [00:16:35] Speaker 01: And so I believe that that was not dicta. [00:16:37] Speaker 01: It was central to the decision to affirm why there should not be jurisdictional discovery. [00:16:42] Speaker 01: Now, the California Court of Appeal, which I understand, of course, is not binding on this court, was a very well-reasoned decision in the Lajon case and its Superior Court versus LG Chem that we talk about. [00:16:53] Speaker 01: And that was decided post-Ford. [00:16:54] Speaker 01: Again, same facts, essentially. [00:16:57] Speaker 01: But in California. [00:16:59] Speaker 01: And the plaintiff made the exact argument there that we're getting here that under Ford, the sentence that begins Ford is not quite the first sentence of Ford when it says a company serves a market for its product and an injury occurs there. [00:17:12] Speaker 01: But it doesn't say a company. [00:17:13] Speaker 01: It says a company like Ford. [00:17:14] Speaker 01: And if you go to the sentence right before that, it talks about all of the extensive things that Ford did to serve a consumer market in those states [00:17:24] Speaker 01: not only having dealerships on every corner, not only radio and web and print advertisements, consumer repair and replacement products, by every means unimaginable, encouraging consumers to buy and use and drive and repair those particular cars in those states. [00:17:38] Speaker 01: Here, LG Chem is nothing like Ford. [00:17:40] Speaker 01: This is not a company like Ford. [00:17:42] Speaker 01: And toward the end of the Ford decision at Footnote 4, the Supreme Court reiterates, by this decision, we do not mean to say that any isolated or sporadic sales, there is no magic [00:17:52] Speaker 01: formula that says, if you shipped a cell or 100 cells into the state, automatically somebody over here claims an injury. [00:18:00] Speaker 01: That means there's jurisdiction. [00:18:01] Speaker 01: Ford does not say that. [00:18:03] Speaker 01: And the Lahan case has a very extensive analysis that is consistent with Yamashita, but specifically talking about California and these contexts that we're talking about today. [00:18:13] Speaker 03: Well, is there any dispute, at least at this stage of the case, that your client was the source of the battery in question? [00:18:23] Speaker 01: in terms of being the manufacturer. [00:18:24] Speaker 03: Correct. [00:18:25] Speaker 01: So this case is a little bit of, I suppose, an interesting. [00:18:29] Speaker 03: We're at a very early stage, so a lot of factual development isn't there. [00:18:32] Speaker 03: And at this point, is there any basis for us to assume that it actually wasn't manufactured by your client? [00:18:42] Speaker 01: I don't believe so, but this case's prior history is that the plaintiff actually originally filed a lawsuit in the Northern District of Georgia along with a series of other lawsuits represented by the same counsel representing the plaintiff here and in that case tried to assert jurisdiction over LG Chem in Georgia based on the fact that it had an in-state subsidiary there and argued to that court that that was the hub and the center of LG Chem's [00:19:08] Speaker 01: activities in the United States for 18650 cells. [00:19:11] Speaker 01: And when LG Chem was dismissed from those cases, plaintiff voluntarily dismissed this suit and refiled it here. [00:19:16] Speaker 01: And so there was some merits discovery conducted with respect to that subsidiary in-state entity. [00:19:23] Speaker 01: But there has not been any in this particular lawsuit to the extent that plaintiff is talking about the expert review. [00:19:29] Speaker 01: We are not at the merit stage of this case. [00:19:31] Speaker 01: And so that's not part of the record. [00:19:33] Speaker 03: I take your answer to be basically yes. [00:19:35] Speaker 03: At this stage, there's no reason for us not to accept the allegation that the manufacturer was LG Kim. [00:19:43] Speaker 01: That is alleged in the complaint, and we did not dispute that for purpose at this stage. [00:19:47] Speaker 03: That's correct, Your Honor. [00:19:47] Speaker 03: Next, is there any doubt that [00:19:53] Speaker 03: or any allegation or claim that this battery was stolen and LG Chem did not receive revenue for its sale to whomever it sold it to. [00:20:06] Speaker 01: I'm sorry, I want to make sure that I'm answering and that I understand the question. [00:20:10] Speaker 01: But if the question is, is there any doubt about how this battery cell arrived in California, whether it came via a shipment to an equipment manufacturer or it came via some other method, I don't believe there's any doubt or dispute. [00:20:21] Speaker 01: The plaintiff alleged that it was purchased at a vape store called Yo Mama's Favorite Vape Shop in Stockton, California. [00:20:27] Speaker 03: Well, none of this is really speaking to LG Chem, so let me try to be more direct. [00:20:31] Speaker 03: Any doubt that LG Chem received money for this battery? [00:20:38] Speaker 01: At some point, perhaps in Korea, so I suppose at some point LGK might have sold the product, the battery, if in fact they manufactured the cell to somebody in Korea or somewhere else, I don't know who did it, was taken out of the stream of commerce, resold and diverted into another chain of distribution and made its way into California. [00:20:56] Speaker 01: And the reason I think that's important is because even if LG Chem did not ship 18650s to equipment manufacturers in California, this entire suit would happen. [00:21:05] Speaker 01: The plaintiff put the last sentence of the brief says, it doesn't matter how the battery got here, and it doesn't matter how it was used. [00:21:11] Speaker 01: Any state in this country, it doesn't matter if LG Chem is shipping 18650 cells on a limited basis to customers. [00:21:18] Speaker 03: And what's important, too, come- Well, let me, I mean, time is going by for you, too. [00:21:26] Speaker 03: Assume for a moment that one possibility is that LG Chem sold the battery or shipped it itself even and sold the battery to somebody other than intended to be a consumer product distributor. [00:21:45] Speaker 03: I think the alternative that's been discussed to be included as a component in some other product that was going to be sold where the battery is a part of it, but it's not actually the product being sold. [00:21:58] Speaker 03: Has that possibility been ruled out? [00:22:00] Speaker 01: Well, I think it is by the admissible evidence in the record, and I quoted earlier to the pages in the record where we have the declaration's sworn testimony of Mr. Hui-Jae Lee, who says that LG Chem never sold 18650 lithium ion cells to anyone known to be engaged in the business of supplying those cells to our consumers. [00:22:19] Speaker 03: See, that's not answering my question. [00:22:20] Speaker 03: Indeed, it incorporates the part of my question that said, [00:22:25] Speaker 03: being sold to somebody who's going to incorporate it in something else. [00:22:29] Speaker 03: I mean, there are other reasons for a manufacturer to be interested in acquiring these batteries to use them for something else. [00:22:37] Speaker 03: So I'm accepting the proposition that they weren't intended to be distributed or sold as batteries. [00:22:44] Speaker 01: And there's no evidence of anything different. [00:22:47] Speaker 01: The admissible evidence in the record is that LGCAM's customers for these cells were only authorized to pack them with protective circuitry and battery packs. [00:22:55] Speaker 03: And there's no... You keep trying to divert the question. [00:23:00] Speaker 03: Because what I'm trying to get to is, and maybe I'm hypothesizing that we are not bound by Yamashita because you express concern about the [00:23:10] Speaker 03: concern that we expressed as to whether personal jurisdiction should really be a barrier that protects LG Chem for injuries that might have been caused by its products that were knowingly sold to somebody in the state of California, even if not intended for distribution for sale in the way that this plaintiff acquired it. [00:23:33] Speaker 03: And you keep trying to tell me that didn't happen, but I'm not sure how I [00:23:38] Speaker 03: how I can reach that conclusion at this point. [00:23:40] Speaker 01: Well, I think if the court is asking, could LG Chem have sold a cell to somebody in California, and then the somebody in California sent it to a vape store, that is not possible, I don't believe, and that's not even what's alleged in the complaint. [00:23:52] Speaker 01: The plaintiff alleges in the complaint that somebody on the other side of the world acquired these cells, took them out of their intended chain of distribution, and put them into a consumer vaping market. [00:24:02] Speaker 03: My question diverted too early. [00:24:07] Speaker 03: I guess I'm really aimed at the possibility of somebody else buying them either in California or in Hong Kong or Korea or someplace else. [00:24:20] Speaker 01: But if that were enough, then, for example, if LG Chem sold its battery cells only in Hong Kong or in Korea, and didn't ship any into the United States, and somebody still brought them into the United States, then under Yonar's question, I would think that it would still be the same thing, that at some point, [00:24:37] Speaker 01: LG Chem manufactured the product, someone else brought it here, but our jurisprudence says that you have to look at the context with the forum state. [00:24:45] Speaker 01: And under Yamashita, for example, which again, I have no concerns with Yamashita, but I am trying to respond to what I hear from the court. [00:24:52] Speaker 01: But in Yamashita, it was very clear in talking about what does relatedness mean. [00:24:57] Speaker 01: And one example and explanation was, it's not just that those cars in Ford [00:25:03] Speaker 01: didn't come into the state by Ford's efforts, but other cars could have. [00:25:07] Speaker 01: By contrast in Yamashita, it's not just that that cell didn't come into the state, in that case Hawaii, through the efforts of LG Chem, but any of them, any consumer that walks into a vape store and purchased one of these cells and did not come into that state, [00:25:21] Speaker 01: by LG Chem's activities and so I believe that additionally there might be more federal appellate court decisions but many federal courts district courts have granted similar motions and the plaintiff simply did not appeal them so the greater weight of authority I think the number of decisions on this issue in [00:25:39] Speaker 01: state appellate courts and in federal district courts around the country, including in the Ninth Circuit, ways in favor of LG Chem's position. [00:25:47] Speaker 01: And I think it is consistent. [00:25:49] Speaker 01: And again, this case is not like Ford. [00:25:51] Speaker 01: And I think it's important also to focus on the fact that [00:25:55] Speaker 01: In Sullivan, for example, which in the Sixth Circuit case, where the Sixth Circuit went the other way, if you read the Sixth Circuit decision in part, of course I respectfully disagree with the outcome, but particularly the Sixth Circuit noted what it construed as two shipments. [00:26:11] Speaker 01: One was 100 cells that went to a vacuum cleaner manufacturer as a sample. [00:26:15] Speaker 01: And another was a shipment, one shipment that LG Chem sold to an in-state subsidiary engaged in research and development activities. [00:26:23] Speaker 01: And it said there were 50,000 pounds of battery sales. [00:26:25] Speaker 01: But it was 50,000 pounds of battery packs. [00:26:27] Speaker 01: And it went to an in-state subsidiary. [00:26:29] Speaker 01: And that was it. [00:26:30] Speaker 01: And based on those two limited shipments, the Sixth Circuit said, that's enough. [00:26:36] Speaker 01: I don't think, if you look at these different decisions around the country, I think you'll find that there's no constant argument or reasoning running through them. [00:26:45] Speaker 01: But the cases that are finding jurisdiction lacking over LG Chem, there is a constant running through them, which is that there is no relatedness because LG Chem could not have done something differently. [00:26:55] Speaker 01: Short of pulling its business completely out of the United States, it couldn't have done something differently. [00:27:00] Speaker 01: And so, and Yamashita, the court noting that, I'm sorry, Chesung, do you have a question? [00:27:05] Speaker 01: Well, I mean, you're saying [00:27:09] Speaker 02: I mean, part of the argument here is that your client is producing defective product, and it's maybe LG Chem isn't intending it to be sold directly to consumers, but it's still selling these products into the California market. [00:27:28] Speaker 02: So I mean, I guess I'm just saying, technically, assuming all the allegations to be true, they could have a product that doesn't explode. [00:27:38] Speaker 01: Well, and I believe that we're not at the stage of the merits, but I do want the opportunity to comment very briefly on plaintiff is arguing sort of the merits and how this happened. [00:27:46] Speaker 01: But talking about an internal short in a lithium-ion battery cell is incredibly rare. [00:27:52] Speaker 01: It is one in a million. [00:27:55] Speaker 03: The airline still asks me when I check in, do I have a lithium-ion battery in my luggage? [00:28:01] Speaker 03: They don't ask about everything. [00:28:04] Speaker 03: They ask about that. [00:28:05] Speaker 03: That's true. [00:28:05] Speaker 01: And these particular lithium ion cells that are causing these incidents is not internal short. [00:28:10] Speaker 01: It's an external short. [00:28:10] Speaker 01: And it's caused by the improper handling. [00:28:13] Speaker 01: And there's a website warning on LG Chem's website. [00:28:16] Speaker 03: As you say, that's all merits. [00:28:17] Speaker 01: Right. [00:28:18] Speaker 01: It's just a question of whether they even get to bring the claim. [00:28:21] Speaker 03: I've been trying to go through what you've said. [00:28:25] Speaker 03: I've been trying to go through the declaration of Mr. Lee. [00:28:29] Speaker 03: Is there a basis to conclude that LG Chem did or did not sell batteries to purchasers in California? [00:28:41] Speaker 01: I'm sorry. [00:28:42] Speaker 01: I see that amount of time. [00:28:43] Speaker 01: I might take just an extra 20 seconds to finish answering that question. [00:28:46] Speaker 01: So there is a basis to conclude that LG Chem shipped 18650 cells to equipment manufacturers and battery packers only in the state of California. [00:28:57] Speaker 01: However, it did not advertise. [00:28:58] Speaker 01: It did not seek them out. [00:29:00] Speaker 01: It did not market to them. [00:29:01] Speaker 01: The customers come to LG Chem, say we want to buy for this purpose. [00:29:04] Speaker 01: They're sold only for that purpose. [00:29:05] Speaker 01: They're prohibited from other purposes. [00:29:07] Speaker 01: And therefore, our position would be there's [00:29:10] Speaker 01: no relationship between these claims and anything, any contacts with California formed by LG Chem, which is the constitutional standard. [00:29:18] Speaker 01: And in closing, I would just say that Yamashita, as the court has recognized, is controlling, and we ask that the court follow its own precedent and affirm the district court's decision. [00:29:27] Speaker 02: And you just want to give you one more, one opportunity to answer a question. [00:29:30] Speaker 02: Do you have a position on whether we need to wait for our ombank decision in Shopify? [00:29:39] Speaker 01: I don't think so. [00:29:40] Speaker 01: I was just looking at the Shopify decision, and I think that that's focused on internet contacts, which is a little bit different than here. [00:29:47] Speaker 01: But unless Shopify is going to overturn Yamashita, then certainly the court could wait. [00:29:52] Speaker 01: But I think that Yamashita is good law and is a different set of facts. [00:29:56] Speaker 01: And I don't anticipate that it would be overturned, but it is controlling, and we ask the court follow it. [00:30:03] Speaker 01: Thank you, Your Honors. [00:30:19] Speaker 00: My colleague mentioned how LG only intends for itself to come into California and be placed in battery packs for use in battery packs as though that somehow solves the issue of whether they could expect to be held to show up in a California court to have to deal with one of these batteries exploding. [00:30:44] Speaker 00: And I want to talk about that. [00:30:46] Speaker 00: A few months ago, [00:30:48] Speaker 00: About two or three months ago, a big rig hauling lithium ion cells overturned on Interstate 15 between Barstow and Las Vegas. [00:30:56] Speaker 00: The cells inside underwent uncontrollable thermal runaway, and the fire shut down I-15 for two days. [00:31:02] Speaker 00: As a result, last month, Congresswoman Dina Titus of Nevada introduced legislation called the Thermal Runaway Reduction Act. [00:31:09] Speaker 00: That's HR 9588 of the 2024 session. [00:31:13] Speaker 00: It asked for the Secretary of Transportation to work with the UN [00:31:16] Speaker 00: which develops the testing standards for transportation of lithium ion cells to develop an impact test for lithium ion batteries to ensure they can withstand forces experienced in transport accidents without going into thermal runaway. [00:31:29] Speaker 00: So when you look at whether LG might expect to be sued in any particular state, you shouldn't just be looking at how it intends for people to use its cells in the state. [00:31:37] Speaker 00: It's enough to see that it moves its cells through a state to find it's on notice it might get sued in that state for its cells blowing up. [00:31:44] Speaker 00: And as you mentioned, Your Honor, you can also look at the air transportation regulations in the opening brief for another example of the danger posed by just transporting these cells. [00:31:53] Speaker 00: It is inappropriately narrow focus to look only at the cell's use. [00:32:01] Speaker 00: The fact is that the cells exist in the state, algae causes the cells to exist in the state, the cells can explode at any time, and algae is on notice that it may have to respond to a lawsuit concerning these cells exploding [00:32:13] Speaker 00: at any time in California. [00:32:14] Speaker 00: That makes it not unconstitutionally unfair to bring them into court any time any one of these 186 to 50 cells explodes in the state. [00:32:26] Speaker 00: I believe Ms. [00:32:28] Speaker 00: Headley also referenced Luan, an appellate case in California. [00:32:34] Speaker 00: I'll just point out Luan was very clear. [00:32:35] Speaker 00: It was limited to the fact record before it. [00:32:38] Speaker 00: And fact records differ. [00:32:40] Speaker 00: Whatever facts were presented to the court that might suggest relatedness, purposeful availment, may and probably did differ between Lawan and the record that's before the court here. [00:32:51] Speaker 02: And do you have an opinion on whether we need to wait for our among decision in Shopify? [00:32:56] Speaker 00: I'll be honest with you, Your Honor. [00:32:57] Speaker 00: I am not familiar with the decision in Shopify. [00:33:02] Speaker 00: Thank you. [00:33:05] Speaker 02: Thank you, counsel, for your helpful arguments. [00:33:06] Speaker 02: This matter is submitted.