Case Name: Mark Moorberg v. Watts Water Technologies, Inc., et al.
Case No.: 1-14-CV-269849
Date: January 27, 2015
Time: 9:00 a.m.
Dept: 8

Currently before the Court is defendant Watts Water Technologies, Inc.’s (“Watts Water”) motion to quash the service of summons and complaint of plaintiff Mark Moorberg (“Moorberg”) on the ground that the Court lacks both specific and general personal jurisdiction over Watts Water.

I. Request for Judicial Notice

In support of its motion to quash, Watts Water requests that the Court take judicial notice of an order granting Watts Water’s motion to quash service of summons for lack of personal jurisdiction dated May 9, 2011 in case number 30-2010-00419580-CU-MC-CJC filed in the Orange County Superior Court. A court may take judicial notice of court records that are relevant to a pending issue. (Evid. Code, § 452, subd. (d); People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters subject to judicial notice].) While the order is a court record, it is not readily apparent how a more than three-year old order involving different parties and presumably different facts is relevant to the pending motion. Accordingly, the request for judicial notice is DENIED.

II. Evidentiary Objections

In its reply, Watts Water objects to the following portions of the declaration of Caroline Pak: (1) paragraphs 3-6 and 8-13 on the grounds of hearsay, personal knowledge, and improper conclusion; (2) paragraphs 3-6, 8-9, and 11-13 on the ground of lack of foundation; (3) paragraphs 3, 10 and 13 on the ground of improper opinion; (4) paragraphs 3-5, 8-9, and 12 on the ground of lack of authenticity; (5) paragraphs 4-6 and 8-10 on the ground of relevance; (6) paragraphs 4, 6, and 8-13 on the ground of misstatement of facts; and (7) paragraph 11 on the ground of speculation and conjecture.

Watts Water’s objections to the declaration of Caroline Pak are SUSTAINED IN PART and OVERRULED IN PART. The objections to paragraphs 3-6, 8-9, 11 and 13 on the ground of hearsay and paragraphs 5 and 12 on the ground of lack of authenticity are SUSTAINED. The objections to paragraph 10 on the ground of hearsay, paragraphs 3-6 and 8-13 on the grounds of personal knowledge and improper conclusion, paragraphs 3-6, 8-9 and 11-13 on the ground of lack of foundation, paragraphs 3, 10, and 13 on the ground of improper opinion, paragraphs 3-4 and 8-9 on the ground of lack of authenticity, paragraphs 4-6 and 8-10 on the ground of relevance, paragraphs 4, 6, and 8-13 on the ground of misstatement of facts, and paragraph 11 on the ground of speculation and conjecture are OVERRULED.

III. Analysis

Watts Water contends that it is not subject to either specific personal jurisdiction or general personal jurisdiction because it has no contacts with the state of California other than the ownership of its subsidiary, Watts Regulator Co. (“Watts Regulator”). In opposition, Moorberg argues that Watts Water is subject to both specific and general jurisdiction in California based on its own actions and as the principal and/or alter ego of Watts Regulator.

A. Jurisdiction Based on Activities of Watts Regulator

Moorberg first claims that Watts Water is subject to personal jurisdiction because it exercises day-to-day control and management over Watts Regulator. In this regard, he submits evidence indicating that the two entities share many of the same corporate officers and the same website and telephone numbers. This argument lacks merit. A parent-subsidiary relationship contemplates such common characteristics as “interlocking directors and officers, consolidated reporting, and shared professional services.” (See Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 541.) Thus, the presence of interlocking directors and officers, the same phone number, and a website does not establish that Watts Water exercises the kind of pervasive control necessary for the Court to acquire jurisdiction over a foreign parent company based on agency. (See F. Hoffman-La Roche, Ltd. v. Superior Court (2005) 130 Cal.App.4th 782, 798.)

Moorberg next argues that Watts Water is an alter ego of Watts Regulator because Watts Water reserved a hearing date for a motion on behalf of Watts Regulator. This argument lacks merit. As an initial matter, Watts Water did not reserve the motion hearing date on Watts Regulator’s behalf. Roger A. Cerda, counsel for Watts Water and Watts Regulator, declares that he drafted the proposed sanctions motion and reserved the hearing date while acting as counsel for Watts Regulator. (Cerda Decl., ¶¶ 7-8.) In any case, Moorberg fails to articulate how the mere reservation of a hearing date establishes a unity of interest and ownership between the two corporations or a corresponding inequitable result. Thus, Moorberg fails to establish that Watts Water is the alter ego of Watts Regulator. Accordingly, Moorberg does not establish that the Court has personal jurisdiction over Watts Water based on the alter ego doctrine. (See Sonora Diamond Corp., supra, 83 Cal.App.4th at p. 540 [unsupported alter ego allegations insufficient to establish personal jurisdiction].)

In light of the foregoing, the Court does not have personal jurisdiction over Watts Water based on the activities of its subsidiary.

B. General Jurisdiction

Watts Water contends that it is not subject to general jurisdiction because it is a foreign corporation and does not have systematic or continuous contacts with California. In opposition, Moorberg contends that Watts Water is subject to general jurisdiction because it directs advertising at the residents of California. This argument is not persuasive. Advertising in a state or making a sizable number of sales in a particular state is insufficient to establish general jurisdiction. (See Daimler AG v. Bauman (2014) 134 S.Ct. 746, 761 [sale of 2.4% of total corporate sales in California insufficient to establish general jurisdiction].) Accordingly, the Court does not have general personal jurisdiction over Watts Water.

C. Specific Jurisdiction

Watts Water asserts that it is not subject to specific personal jurisdiction because it has not purposefully availed itself of the privilege of conducting activities in California. In particular, it argues that it did not enter into a contract with Moorberg or any other party with respect to the vinyl/PVC tubing at issue. In this regard, Watts Water relies on the declaration of its Treasurer and Vice President of Investor Relations, Timothy M. MacPhee (“MacPhee”). MacPhee declares that: “Watts Water Technologies did not design, manufacture, sell, ship, or market the products at issue in this action, described as ‘vinyl/PVC tubing.’ [¶] … Watts Water Technologies never contracted with plaintiff Mark Moorberg or its subsidiary Watts Regulator with respect to the products at issue in the instant lawsuit.” (MacPhee Decl., ¶¶ 10-11.) In its reply, Watts Water further argues that Watts Regulator distributed the vinyl/PVC tubing at issue through an exclusive sales agreement with Home Depot. (See O’Neil Decl., ¶ 3, Ex. A.)

In opposition, Moorberg claims that Watts Water is subject to specific jurisdiction because it intentionally directs its activities to the residents of California through its sales of vinyl tubing products in the state. In support of this contention, Moorberg relies on the declaration of Caroline Pak (“Pak”), an investigations manager for the Chanler Group, the law firm representing Moorberg. Pak states that a field investigator purchased vinyl/PVC tubing known as the Watts Clear Vinyl Tubing SVEB10 at a Home Depot Store in Oakland, CA. (Pak Decl., ¶ 3.) To determine the manufacturer of the product, Ms. Pak ran the Global Trade Item Number (“GTIN”) and UPC Number through the online Global Electronic Party Information Registry (“GEPIR”). (Pak Decl., ¶ 4.) The GEPIR search matched the GTIN found on the tubing with “Watts Water Technologies, Inc. MA 815 Chestnut Street, North Andover, MA 01845 US.” (Pak Decl., ¶ 4, Ex. B.)

In its reply, Watts Water argues that the above evidence is inadmissible. Of particular relevance to the present argument, it objects to paragraphs 3 and 4 of the declaration of Caroline Pak on the grounds of hearsay. These objections are justified. Any information conveyed by the field investigator to Pak concerning the purchase of the vinyl/PVC tubing is a statement made outside the present hearing offered to prove that the investigator purchased the item at the Home Depot in Oakland, CA. (See Evid. Code, § 1200, subd. (a).). Similarly, the GEPIR search results, matching the GTIN found on the vinyl/PVC tubing with Watts Water also constitutes a statement made outside the present hearing offered to prove that Watts Water manufactured the vinyl/PVC tubing. (See Evid. Code, § 1200, subd. (a).) As this evidence constitutes hearsay, it is inadmissible unless a hearsay exception applies. (See Evid. Code, § 1200, subd. (b).) In this case, no hearsay exception appears to apply to the field investigator’s statements or the GEPIR search results.

In light of the foregoing, Moorberg fails to present competent evidence establishing that Watts Water placed the vinyl/PVC tubing in the stream of commerce with the expectation that it would be purchased by California consumers. Therefore, Moorberg does not meet his burden to demonstrate that Watts Water purposefully availed itself of the privilege of conducting activities in California. Accordingly, Watts Water’s motion to quash service of the summons and complaint for lack of personal jurisdiction is GRANTED.