2017-00222156-CU-PL

Tina L. Kalb vs. Stanley M. Batiste, M.D.

Nature of Proceeding: Motion to Quash Service of Summons

Filed By: Laddon, Tarifa B.

Defendant William Cook Europe, APS’ (“WCE”) motion to quash service of summons is GRANTED, as follows.

The notice of motion does not provide notice of the court’s tentative ruling system, as required by Local Rule 1.06, and does not provide the correct address for Dept. 53/54. Moving counsel is directed to contact opposing counsel and advise him/her of Local Rule 1.06 and the court’s tentative ruling procedure and the manner to request a hearing, along with the correct address for Dept. 53/54. If moving counsel is unable to contact opposing counsel prior to hearing, moving counsel is ordered to appear at the hearing in person or by telephone.

Factual Background

This action arises from the implantation and alleged failure of a medical device called the Celect® Vena Cava Filter, which was designed and manufactured by WCE.

Moving Papers. WCE now moves to quash plaintiff’s purported service of summons on 6/1/2018 on a “security guard” for WCE’s purported “general manager,” Cook Incorporated (“Cook Inc.”) in Indiana on the grounds that neither Cook Inc. nor its security guard is a “general manager” of WCE for purposes of California law. More specifically, WCE contends the medical device at issue was exclusively manufactured in Denmark by WCE, a foreign corporation, and was distributed by defendant Cook Medical, LLC (“CML”), while defendant Cook Inc. was not involved with the device’s manufacture, distribution or sale in California. Additionally, according to the moving papers, defendants Cook Inc. and WCE are both subsidiaries of Cook Group, Inc. (“CGI”) CGI but neither is a subsidiary of the other or owns any interest in the other.

WCE represents that plaintiff’s counsel has “informally suggested…Cook Inc. is WCE’s ‘general manager’” such that service on Cook Inc. constitutes valid service on WCE pursuant to Code of Civil Procedure Section 416.10(b) but WCE argues otherwise. In short, the moving defendant asserts that the question of whether a person constitutes

a “general manager” for purposes of service is a factual one where the inquiry is whether the purported general manager has “general direction and control of the business” as a whole as distinguished from one who manages only of a particular branch of the business, consistent with §416.10(b)’s inclusion of “general manager” among the list of other corporate officers (e.g., president, chief executive officer, vice president, secretary, treasurer). Thus, a “customer relations manager” in one division of a larger corporation is “clearly not” a “general manager” within the meaning of §416.10.

Accordingly, WCE maintains that since Cook Inc. (1) had absolutely no role in manufacturing, importing or distributing the device at issue, (2) is/was not a “regional headquarters” for WCE, (3) was not “actively engaged in promoting sales” for WCE,

(4) did not earn commissions through WCE sales and (5) did not provide WCE with “a channel for a continuous flow of business” into California, plaintiff’s purported service on Cook Inc. is insufficient to create personal jurisdiction over WCE. Moreover, a finding that Cook Inc. is WCE’s “general manager” would effectively permit a defendant corporation to be served by merely delivering the summons to another corporation which transacts some business with the defendant, even if that business is completely unrelated to the subject matter of the action.

Opposition. Plaintiff opposes, arguing that although the device was manufactured by WCE, Cook Inc. “was involved in the design, research, development, and testing of the [device]” and “acting on behalf of WCE, sought clearance from the FDA to market [the [device]],” which was thereafter “marketed, sold, and distributed” in North America by defendant CML. Plaintiff further asserts that defendant CGI is “the parent company to [sic] WCE, Cook Inc., and CML” and CGI’s principal place of business is 750 Daniels Way in Bloomington, Indiana, where Carl Cook presides as CGI’s Chief Executive Officer. Thus, on 6/1/2018, the summons & complaint in this action were served on WCE by virtue of substituted service on CGI’s CEO Cook at CGI’s principal place of business in Indiana, leaving these documents with a person at least 18 years of age and apparently in charge at CGI’s office after advising him of the nature of the documents.

Plaintiff insists that the service of summons was valid inasmuch as CGI is WCE’s “general manager.” As support, plaintiff relies primarily on Yamaha Motor Comp., Ltd. v. Superior Court (2009) 174 Cal.App.4th 264 where the Fourth District Court of Appeal found that under older but still valid California Supreme Court precedent a Japanese manufacturer could under California law be served via the California agent for process for the Japanese manufacturer’s American subsidiary where it was undisputed that the latter (1) was a wholly-owned domestic subsidiary of the Japanese manufacturer, (2) was designated as the exclusive importer and distributor of the vehicles manufactured in Japan, including the one at issue, (3) provided the warranty and owner manuals for the vehicles, (4) conducted testing on the vehicles and handled all customer complaints and accident reports for the United States involving Yamaha vehicles, (5) provided marketing for the vehicles and (6) was described by the Japanese manufacturer as the “Regional Headquarters for North America.”

The older California Supreme Court decision on which Yamaha Motor Comp., Ltd. turned was Cosper v. Smith & Wesson Arms Co. (1959) 53 Cal.2d 77, which held that the Massachusetts-based corporate defendant who had no agents, salesmen or other employees in California could pursuant to Code of Civil Procedure Section 416.10 be served via a representative who promoted on a “non-exclusive basis” the sale of Smith

& Wesson products in California inasmuch as the representative was the “general manager in this State.” (Underline added for emphasis.)

According to the opposition, the facts of the present case are “even stronger than those in Yamaha, [and] Cosper,” such that the domestic entity which was served should be considered the general manager of the foreign entity under §416.10 since CGI is the parent of WCE, CML and Cook Inc. rather than just a domestic subsidiary of WCE (like in Yamaha) or a local sales representative (like in Cosper). In short, plaintiff contends CGI is the “absolute manager of all of these entities” (i.e., WCE, CML and Cook Inc.)

Finally, plaintiff insists the substituted service on WCE via CGI was proper given that Mr. Cook is CGI’s CEO and he was served at CGI’s principal place of business in Indiana by leaving a copy of the summons & complaint during usual business hours with an adult apparently in charge thereof, with a copy being mailed to the CEO at the same address.

Analysis

Standard. When there is a challenge to the validity of service, Summers v. McClanahan (2006) 140 Cal.App.4th 403 expressly places the ultimate burden of proof on this critical issue on the plaintiff. Relying on Dill v. Berquist Construction Co., Inc.

(1994) 24 Cal.App.4th 1426, the Summers Court stated:

“When a defendant challenges the court’s personal jurisdiction on the ground of improper service of process, ‘the burden is on the plaintiff to prove the existence of jurisdiction by proving, inter alia, the facts requisite to an effective service.’” ( Summers, at 413.)

Moreover, California law requires that the plaintiff prove valid service and personal jurisdiction by a preponderance of the evidence. (Floveyer Intl., Ltd. v. Superior Court (Schick Tube-Veyor Corp. (1997) 59 Cal.App.4th 789, 793-794.)

Application. Based on the above-cited standard, the motion to quash will be granted as the court finds plaintiff’s reliance on Yamaha Motor and Cosper misplaced for at least two reasons.

First, the California Supreme Court’s decision in Cosper is inapposite because there the foreign corporation based in Massachusetts was being served in California via substituted service on its “general manager in this State” (i.e., California) (underline added for emphasis), whereas in the case at bar the purported service was not on WCE’s “general manager in this State” but rather on the purported “general manager” in Indiana.

Second, Yamaha Motor is factually distinguishable. There it was undisputed that the American subsidiary based in California which was being served on behalf of the foreign entity (1) was a wholly-owned domestic subsidiary of the Japanese manufacturer, (2) was designated as the exclusive importer and distributor of the vehicles manufactured in Japan, including the one at issue, (3) provided the warranty and owner manuals for the vehicles, (4) conducted testing on the vehicles and handled all customer complaints and accident reports for the United States involving Yamaha vehicles, (5) provided marketing for the vehicles and (6) was described by the

Japanese manufacturer as the “Regional Headquarters for North America.”

In contrast, plaintiff in the present case has provided no evidence whatsoever which establishes a similarly extensive relationship between WCE, the foreign corporation, and CGI, the entity actually served in Indiana. The evidence offered by the opposition here shows little more than that CGI is “the parent company” of WCE but this amounts to nothing approaching or even analogous to the significant relationship found between Yamaha-Japan and Yamaha-North America. In fact, plaintiff seems to concede that CGI itself played no role whatsoever in design, research, development, testing and/or marketing of the subject device in the State of California, so the present case falls far short of establishing valid service even under the liberal standards found in Cosper.

Consequently, this court is neither compelled nor persuaded by the Cosper or Yamaha decisions to conclude that the purported service on CGI’s CEO in Indiana constituted valid substituted service on the foreign corporation WCE and in light of this, there is no need for the court to resolve here the question of whether plaintiff’s substituted service on CGI’s CEO was otherwise proper under California law.

Conclusion

Since plaintiff has failed to produce evidence sufficient to establish valid service of summons on defendant WCE, the present motion to quash must be and hereby is granted. Thus, WCE need not respond to the summons and complaint unless and until they are properly served on WCE.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; CRC Rule 3.1312.)