Original proceedings; petition for a writ of mandate to challenge an order of the Superior Court of Orange County, Thierry Patrick Colaw, Judge. Petition denied. (Super. Ct. No. 30-2008-00105389).
The opinion of the court was delivered by: Sills, P. J.
CERTIFIED FOR PUBLICATION
This court issued an OSC in response to this petition for writ of mandate because it presents an issue of some public importance that has not yet been squarely faced by a California state court, in a published opinion, in this particular context: The question of whether a Japanese manufacturer can be served under California law simply by serving the Japanese manufacturer's American subsidiary. The trial court ruled that a Japanese manufacturer could indeed be validly served that way. The method just seemed too easy a way to get around the Hague Service Convention and we scheduled an OSC on the petition to give us the chance to study the issue.
On review, however, it turns out that, yes, it really is that easy.*fn1 And not only that, there is nothing this court, as a matter of California common law, can do about it. We are a court under authority, and there is a non-overruled, non-distinguishable California Supreme Court case, Cosper v. Smith & Wesson Arms Co. (1959) 53 Cal.2d 77, that makes service on the California representative of a foreign parent valid -- that is, valid as to the foreign parent -- under California law. And not only that, but there is a 1988 federal United States Supreme Court case, Volkswagenwerk Aktiengesellschaft v. Schlunk, supra, 486 U.S. 694 (Schlunk), that says when service is valid under state law on the American subsidiary of a foreign manufacturer, there is no need to serve papers in accord with the Hague Service Convention. Accordingly, we have no choice but to deny the petition for writ of mandate.
The plaintiff was allegedly injured when he was out riding on a 2005 Yamaha Rhino on his 12th birthday. His complaint includes two defendants which we will call "Yamaha-Japan"*fn2 and "Yamaha-America."*fn3
Plaintiff served Yamaha-America and also sought to serve Yamaha-Japan by serving Yamaha-America through Yamaha-America's agent for service of process. His theory was (and is) that Yamaha-America is Yamaha-Japan's "general manager in this state."
Yamaha-Japan filed a motion to quash service, arguing that Yamaha-America is only a subsidiary of Yamaha-Japan, not Yamaha-Japan's general manager in California, and therefore service should have been made through the Hague Service Convention. (At the very least, serving Yamaha-Japan through the Hague Service Convention would have meant incurring the expense of translating the pleadings into Japanese. (See Honda Motor Co. v. Superior Court (1992) 10 Cal.App.4th 1043, 1049 ["Petitioner correctly points out that the service is also flawed by the omission of a Japanese translation. Plaintiff admits that the Central Authority for Japan requires that documents served under the convention be accompanied by a Japanese translation."].))
Here are the undisputed facts about Yamaha-America's relationship to Yamaha-Japan: Yamaha-America is Yamaha-Japan's wholly owned domestic subsidiary in the United States. Yamaha-America's principal business is to act as the exclusive importer and distributor of Yamaha vehicles, including the Rhino in this case, manufactured by Yamaha-Japan. Yamaha-America provides the warranty and owner manuals for Yamaha vehicles. Yamaha-America conducts testing, including suitability testing, for Yamaha vehicles. Yamaha-America provides marketing for Yamaha vehicles and receives all customer complaints and accident reports for the United States involving Yamaha vehicles. Finally, Yamaha-Japan's 2007 annual report describes Yamaha-America as Yamaha-Japan's "Regional Headquarters for North America."
The trial court denied the motion, reasoning that Yamaha- America is Yamaha-Japan's general manager in this state. Yamaha-Japan then filed this petition for writ of mandate, and it is supported by a brief from the Association of International Automobile Manufacturers.
A. Federal Law Makes the Validity of the Service Dependent on State Law
Rarely do lower courts have a precedent from a higher court as close on the facts as the United States Supreme Court of Schlunk to the case before us. In Schlunk, a plaintiff sued both Volkswagen-America ("Volkswagen of America" or "VWoA" as described in the opinion) and Volkswagen-Germany ("Volkswagen Aktiengesellschaft" or "VWAG" as described in the opinion) in Illinois state court for defects in the automobile that contributed to the plaintiff's parents' deaths in an accident. More specifically, the plaintiff successfully served Volkswagen-America, got back an answer denying that Volkswagen-America had designed or assembled the car in question, so he then amended his complaint to add Volkswagen-Germany as a defendant. The ...