United States District Court, N.D. California
LINDA ROSS, Plaintiff,
ALTRIA GROUP, INC., Defendant.
The opinion of the court was delivered by: SUSAN ILLSTON, District Judge
ORDER GRANTING MOTION BY DEFENDANTS ALTRIA GROUP, INC. AND LOUIS
C. CAMILLERI TO DISMISS FOR LACK OF PERSONAL JURISDICTION
Defendants move to dismiss the claims against them for lack of
personal jurisdiction. Plaintiff has not filed a brief in
opposition to defendants' motion.*fn1
The Court takes
defendants' motion under submission without oral argument
pursuant to Local Rule 7-1(b). Having carefully reviewed the
arguments submitted, the Court hereby GRANTS defendants' motion
Plaintiff Linda Ross ("Ross") filed a complaint on April 8,
2004 in Sonoma County Superior Court against defendants Altria
Group, Inc. ("ALG"), and Louis C. Camilleri ("Camilleri"),
alleging that defendants and their subsidiary, Kraft Foods, used
aspartame as a sugar substitute in the manufacture of "Crystal Light," and thereby knowingly and intentionally
exposed consumers to the health risks associated with aspartame
without warning them of its harmful effects. Compl. at 1:20-22,
2:10-13. Plaintiff alleges violations of the California Consumers
Legal Remedies Act, fraud, and breach of warranties under
California law, and seeks damages and injunctive relief. Id. at
¶¶ 49-89. Defendants removed the case to this Court on April 14,
2004. Subject matter jurisdiction exists on the basis of
Plaintiff alleges personal jurisdiction over ALG on grounds
that ALG, "through their subsidiary Kraft Foods[,] sells Crystal
Light in the state of California and worldwide," and "via Kraft
Foods, advertises its products extensively in California." Compl.
¶ 2. Plaintiff also states that ALG's website "is accessible to
California consumers." Id. In addition, plaintiff alleges that
ALG "manufactures," "distributes," and "market[s]" Crystal Light
through Kraft Foods, and has made false representations that
Crystal Light is safe and healthy. Id. at ¶ 41, 43, 44-45.
Plaintiff alleges personal jurisdiction over Camilleri on
grounds that "as Chairman and Chief Executive Officer" for ALG,
he "is responsible for the operation of the company and its
subsidiaries and in that capacity is directly and proximately
liable for the actions of the company in the use and sale of
Aspartame as an additive in Crystal Light," and is also
"individually liable for the actions of Defendant Altria Group,
Inc." because he has "intentionally allowed Aspartame-containing
products to be placed in the stream of commerce to the detriment
of the Plaintiff and other similarly situated consumers." Id.
at ¶¶ 3-4.
ALG, formerly the Philip Morris Companies, Inc., is a publicly
traded holding company that acquires ownership interests in
various subsidiaries for investment purposes. Lampe Decl. ¶ 2-3,
6. It is incorporated in Virginia and has its principal place of
business in New York. Id. at ¶ 2. ALG does not conduct business
in California, has never engaged in sales or service activities
in California, and does not place products into the stream of
commerce with the expectation that they will enter California.
Id. at ¶ 7. It does not file any state income tax returns or
pay state taxes in California. Id. ALG does not have an office or place of business, bank accounts or credit
facilities, real property, joint ventures, or telephone listings
in California. Id. at ¶ 7, 9, 11, 13. It has no employees or
agents in California and has no designated agent for service of
process in the state. Id. at ¶ 7, 8.
ALG owns a majority interest in Kraft Foods, Inc., a Virginia
corporation with its principal place of business in Illinois.
Id. at ¶ 4. Kraft and ALG have separate boards of directors,
are managed by separate executive officers, and engage in
different types of business activity. Id. at ¶ 4, 6. Unlike
ALG, which does not produce any products or services, Kraft is a
food and beverage company that derives its income from the sale
of these products. Id. at ¶ 6.
ALG occasionally engages in national, non-product "image"
advertising. Id. at ¶ 14. Previously, ALG aired advertisements
about the public service efforts of the people and companies that
were part of the Philip Morris family of companies, and in 2003
it conducted a national advertising campaign to introduce its new
name and communicate its identity. Id. None of ALG's placements
have included product advertisements. Id. ALG has a public
website, but it is not used to advertise the products made and
distributed by ALG's operating subsidiaries or to solicit
business. Id. at ¶ 15.
Louis Camilleri is the Chairman of the Board of Directors and
Chief Executive Officer of ALG. Camilleri Decl. ¶ 1. His only
residence is in New York, and he has never resided in California.
Id. at ¶ 2. His only office is in New York, and he has never
maintained an office in California. Id. at ¶ 3.
Camilleri has never owned, leased, or possessed any real
property in California. Id. at ¶ 4. He has never filed tax
returns in California, and he does not have bank accounts,
investment accounts, or loans with California financial
institutions. Id. at ¶ 5-6. He has never been a party to
litigation in California other than this action. Id. at ¶ 7. He
has never entered into any contracts in California. Id. at ¶ 8.
He has traveled to California only once. Id.
Camilleri has not personally directed, controlled, or had
day-to-day decision-making responsibility for the formulation,
design, manufacturing, labeling, promotion, marketing,
distribution, or sale of Crystal Light, or its placement into the
stream of commerce. Id. at ¶ 11. He has never made any
statements or representations to plaintiff Ross about Crystal
Light or aspartame. Id. at ¶ 10.
Now before the Court are ALG's and Camilleri's motions to
dismiss plaintiff's claims for lack of personal jurisdiction under Federal Rule of Civil Procedure
12(b)(2).*fn3 Plaintiff has filed no opposition to
defendants' motion. Therefore, the Court assumes that the factual
assertions made in defendants' motion are uncontroverted.
A motion to dismiss for lack of personal jurisdiction may be
brought under Federal Rule of Civil Procedure 12(b)(2). "Although
the defendant is the moving party on a motion to dismiss, the
plaintiff bears the burden of establishing that jurisdiction
exists." Rio Props., Inc. v. Rio Int'l Interlink,
284 F.3d 1007, 1019 (9th Cir. 2002) (citation omitted).
The court's exercise of personal jurisdiction must comport both
with the state long-arm statute and with the constitutional
requirements of due process. Omeluk v. Langsten Slip and
Batbyggeri A/S, 52 F.3d 267, 271 (9th Cir. 1995), citing Chan
v. Society Expeditions, Inc., 39 F.3d 1398 (9th Cir. 1994).
California's long-arm statute confers jurisdiction over
nonresident defendants to the extent permitted by the California
or United States Constitution. See California Code of Civil
Procedure § 410.10. Therefore, the jurisdictional inquiry
collapses into a single analysis of due process. Absent
traditional bases for personal jurisdiction (physical presence,
domicile or consent), due process requires that the defendant
have certain minimum contacts with the forum state such that the
maintenance of the suit does not offend traditional notions of
fair play and substantial justice. See International Shoe Co.
v. Washington, 326 U.S. 310, 316 (1945).
The court must determine whether sufficient minimum contacts
between moving defendants and the forum state exist to allow the
exercise of personal jurisdiction over them. In this regard,
courts may exercise either general or specific jurisdiction over
nonresident defendants. FDIC v. British-American Ins. Co., LTD., 828 F.2d 1439, 1442 (9th Cir. 1987).
General jurisdiction exists when the nonresident has
substantial or systematic and continuous contacts with the forum
state, and the exercise of jurisdiction satisfies traditional
notions of fair play and substantial justice. See Ziegler v.
Indian River County, 64 F.3d 470 (9th Cir. 1995). The Ninth
Circuit has established a three-step test to determine whether
the court may exercise specific jurisdiction over a nonresident
defendant. See Ziegler, 64 F.3d at 473; Data Disc, Inc. v.
Sys. Tech. Assoc., Inc., 557 F.2d 1280, 1287 (9th Cir. 1977).
First, there must be a showing that the out-of-state defendants
purposefully directed their activities toward residents of the
forum state or purposefully availed themselves of the privilege
of conducting activities in the forum state, thus invoking the
benefits and protections of its laws. Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474-475 (1985). Second, the controversy
must be related to or "arise out of" defendants' contact with the
forum. Ziegler, 64 F.3d at 473; Data Disc, Inc.,
557 F.2d at 1287. Third, the exercise of jurisdiction must comport with fair
play and substantial justice; i.e., it must be reasonable. Id.;
British-American, 828 F.2d at 1442. Generally, the relationship
among the defendants, the forum, and the litigation is the
essential foundation of personal jurisdiction. Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984),
citing Shaffer v. Heitner, 433 U.S. 186, 204 (1977).
A. General jurisdiction
General jurisdiction exists when a nonresident defendant has
"substantial" or "systematic and continuous" contacts with the
forum state, even if the cause of action is unrelated to the
defendant's forum activities. See Data Disc,
557 F.2d at 1287. The Court must evaluate each defendant's individual actions
to determine if there are sufficient contacts to support a
finding of jurisdiction. See Advantage Lift Systems, Inc. v.
OMER S.p.A, 1997 U.S. Dist. LEXIS 11355 at *19 (S.D. Cal. March
Defendant ALG argues that, as an out-of-state holding company
with no office, place of business, joint venture, bank account,
real estate, or telephone listing in California, it has
insufficient contacts for general jurisdiction. Defs.' Mot. at 5. ALG does not engage in
sales or service activities in California or pay taxes in
California. In addition, its national "image" advertising is
limited and in any event does not provide a basis for
jurisdiction. See Shute v. Carnival Cruise Lines,
897 F.2d 377, 381 (9th Cir. 1990), rev'd on other grounds, 499 U.S. 585
(1991). ALG's website does not create sufficient contacts because
it does not advertise any product or service and does not allow
customers to make purchases. Bancroft & Masters, Inc. v. Augusta
National Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). Because ALG
is a holding company that does not manufacture, sell, or promote
products in California, the Court finds that it lacks the
substantial, systematic, and continuous contacts required for
Defendant Camilleri argues that his contacts with California
are insufficient for general jurisdiction because he is an
out-of-state resident who has only traveled to California once.
He does not have offices, real property, contracts, bank
accounts, or loans in California, and he has never filed tax
returns in the state. Plaintiff has made no showing of any
additional contacts by Camilleri, and the Court finds that he is
not subject to its general jurisdiction.
B. Specific jurisdiction
For the court to exercise personal jurisdiction over ALG and
Camilleri, they must be subject to specific jurisdiction based on
a three-step analysis: (1) whether ALG and Camilleri have
"purposefully availed" themselves of the forum; (2) whether
plaintiff's claims "arise out of' the defendants' forum-related
activities; and (3) whether the exercise of jurisdiction over
each defendant would be reasonable. Data Disc, Inc.,
557 F.2d at 1287. Defendants focus on the second step of this inquiry and
argue that neither ALG nor Camilleri has engaged in any activity
in California out of which plaintiff's claims might arise.
1. ALG's forum-related activities
ALG contends that California lacks specific jurisdiction over
it because plaintiff has not established any connection between
ALG's forum activities and her claims regarding Crystal Light. Defs.' Mot. at 7. In addition, ALG argues that the activities of
its subsidiary Kraft Foods cannot form the basis for purposeful
availment or claims against ALG.
The Court finds that there is no evidence that ALG has either
(1) purposefully availed itself of the forum or (2) engaged in
any forum-related activities causally connected to plaintiff's
claims. Plaintiff's claims are based on the sale, manufacture,
distribution, marketing, and advertising of Crystal Light. Compl.
¶¶ 41-48. Because ALG is a holding company that does not
manufacture, sell, or market any product, plaintiff's claims
cannot arise out of ALG's activities.
Here, moreover, the forum-related activities of ALG's
subsidiary cannot be imputed to ALG. The existence of a
relationship between a parent company and its subsidiaries is not
sufficient to establish personal jurisdiction over the parent on
the basis of the subsidiaries' minimum contacts. Doe v. Unocal
Corp., 248 F.3d 915, 925 (9th Cir. 2001). A subsidiary's
contacts with the forum state may establish jurisdiction over its
non-resident parent if the subsidiary acts as the parent's alter
ego or if the subsidiary is the parent's "general agent" in the
forum state. American Tel. & Tel. Co. v. Compagnie Bruxelles
Lambert, 94 F.3d 586, 591 (9th Cir. 1996); Chan v. Society
Expeditions, Inc., 39 F.3d 1398, 1405-06 (9th Cir. 1994),
cert. denied, 514 U.S. 1004, 115 S.Ct. 1314 (1995). Here,
plaintiff has made no showing that Kraft's activities should be
attributed to ALG under an alter ego or agency theory.
Accordingly, the Court finds that ALG does not have sufficient
minimum contacts with California to allow for the exercise of
personal jurisdiction over it.
2. Camilleri's forum-related activities
Plaintiff has alleged that Camilleri is liable for ALG's
actions "in [his] capacity" as the company's chairman and CEO.
Compl. ¶ 3. Plaintiff also alleges that Camilleri is
"individually liable" because he has "intentionally allowed
Aspartame-containing products to be placed into the stream of
commerce." Compl. ¶ 4. Camilleri argues, first, that he cannot be
subject to personal jurisdiction based on ALG's activities
because there is no jurisdiction over ALG itself. Defs.' Mot. at
9. Camilleri also contends that, even if ALG is subject to
personal jurisdiction, its actions cannot be imputed to him, and
he has no individual contacts with California that could give
rise to jurisdiction. Defs.' Mot. at 9.
The Court agrees that only Camilleri's individual contacts may
be considered and that they are insufficient for personal jurisdiction. There is no personal
jurisdiction over an individual corporate officer on the basis of
the corporation's contacts alone. See LeDuc v. Kentucky Cent.
Life Ins. Co., 814 F. Supp. 820, 824 (N.D. Cal. 1992), citing
Davis v. Metro Productions, 885 F.2d 515, 520 (9th Cir. 1989).
Moreover, "a corporate officer who has contact with a forum only
with regard to the performance of his official duties is not
subject to personal jurisdiction." Erman v. Lox Equipment Co.,
1992 U.S. Dist. LEXIS 13640, at *4 (N.D. Cal. August 14, 1992),
quoting Forsythe v. Overmyer, 576 F.2d 779, 783-84 (9th Cir.
1978). Thus, Camilleri is not subject to this Court's
jurisdiction based on ALG's activities.
The Court finds that there are no facts showing that Camilleri
purposefully availed himself of the forum or that plaintiff's
claims arose out of his forum-related activities. Camilleri does
not reside in California and has traveled there only once. He
does not own property, maintain an office, have a bank or
investment account, or pay taxes in California. In addition, the
Court finds that Camilleri's alleged act of "intentionally
allowing" products to be placed into the stream of commerce is
not an individual action, but rather a corporate decision by one
of ALG's subsidiaries. From these facts, the Court cannot
conclude that Camilleri personally availed himself of the
privilege of conducting activities within California or invoked
the benefits and protections of its laws.
Defendant also argues that plaintiff has failed to establish
the required connection between the causes of action and his
forum-related activities. The Court agrees that Camilleri has not
personally engaged in forum-related activities that could have
given rise to plaintiff's claim. Camilleri states that he has
never personally made any statements or representations to
plaintiff regarding Crystal Light or aspartame, and that he never
personally directed or controlled any aspect of the formulation,
design, manufacturing, labeling, promotion, marketing,
distribution, sale, or placement into the stream of commerce of
Crystal Light or any other product. Camilleri Decl. ¶¶ 10, 11.
Because the Court finds that Camilleri does not have sufficient
minimum contacts with California, it lacks personal jurisdiction
The final requirement of personal jurisdiction is
reasonableness: the exercise of personal jurisdiction must comport with "fair play and substantial
justice." See Burger King Corp., 471 U.S. at 477-78. The
Court need only conduct reasonableness analysis once minimum
contacts have been established. Id. at 476. Because the Court
finds that both ALG and Camilleri's contacts with the forum are
insufficient, requiring them to defend in California would impose
an unjustifiable and unreasonable burden. Accordingly,
defendants' motion to dismiss for lack of personal jurisdiction
is hereby GRANTED.
For the foregoing reasons, the Court GRANTS defendants' motion
to dismiss for lack of personal jurisdiction. [Docket # 13]
IT IS SO ORDERED.