In Thiam v. T-Mobile U.S., Inc., Civil Action No. 4:19-CV-00633 (E.D. Tex. Apr. 20, 2021) a Texas District Court ruled that a Korean unit of LG Electronics cannot use a jurisdictional argument to escape a products liability action where the plaintiff professional basketball player claimed that his cell phone battery exploded, injuring his hand.
After the state court action was removed, Defendant LG Chem, LTD of Korea (“LGC”), filed a Motion to Dismiss under Rule 12(b)(2). Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss a claim if the court does not have personal jurisdiction over the defendant. LGC moved to dismiss the claims against it for lack of personal jurisdiction arguing the Court lacks specific jurisdiction. Specifically, LGC argues that “as a component part manufacturer, [LGC] did not target Texas as a destination for its product.” Thiam did not contest that the Court did not have general personal jurisdiction over LGC, so the analysis focused on specific personal jurisdiction only.
The Fifth Circuit applies the three-step analysis to analyze specific personal jurisdiction. In step one, the plaintiff relied upon the stream-of-commerce test, which is typically invoked in cases in which “a nonresident defendant, acting outside the forum, places in the stream of commerce a product that ultimately causes harm inside the forum.” Goodyear Dunlop Tires Operations, S.A., 564 U.S. at 926. In the Fifth Circuit, “mere foreseeability or awareness” that the accused product will reach the forum state’s market is “a constitutionally sufficient basis for personal jurisdiction if the defendant’s product made its way into the forum state while still in the stream of commerce.” Ainsworth v. Moffett Engineering, Ltd., 716 F.3d 174, 177 (5th Cir. 2013) However, “the defendant’s contacts must be more than random, fortuitous, or attenuated, or of the unilateral activity of another arty or third person.”
LGC contended that it does not directly sell any of the batteries in Texas, and therefore it does not have the requisite contacts to establish personal jurisdiction. The District Court disagreed, finding that LGC is subject to personal jurisdiction in Texas under the stream of commerce doctrine. The fact that LGC never sold this particular cell phone battery in Texas is not determinative. See Ainsworth, 716 F.3d at 177 (“[M]ere foreseeability or awareness [is] a constitutionally sufficient basis for personal jurisdiction if the defendant’s product made its way into the forum state while still in the stream of commerce.”). The Court noted that “LGC is a large and sophisticated company that does business in the consumer electronic industry. As such, LGC would recognize that the United States is one of the larger consumer electronics markets in the world … LGC should have known that the batteries-contained within the final product manufactured by the companies it sold the batteries to-would end up in the hands of consumers in Texas.