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BBA Aviation PLC v. Superior Court of Los Angeles County

November 23, 2010

BBA AVIATION PLC, PETITIONER,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY, RESPONDENT, CHARLES ENGEN, REAL PARTY IN INTEREST.



ORIGINAL PROCEEDINGS in mandate. Barbara M. Scheper, Judge. Petition granted. (Los Angeles County Super. Ct. No. PC045213).

The opinion of the court was delivered by: Epstein, P. J.

CERTIFIED FOR PUBLICATION

Charles Engen sued his former employer, Ontic Engineering and Manufacturing, Inc. (Ontic), and its parent corporation, BBA Aviation, PLC (BBA), for wrongful termination. Petitioner, BBA, moved to quash service of the summons and complaint for lack of personal jurisdiction and ineffective service of process. Respondent, the Superior Court of Los Angeles County (trial court), denied the motion and found jurisdiction over BBA proper under the representative services doctrine. BBA seeks a writ of mandate directing the trial court to vacate its order and grant BBA's motion to quash. BBA contends that the representative services doctrine does not apply because it is a holding company. BBA also claims that no alternative basis for jurisdiction exists. We agree and issue a writ of mandate.

FACTUAL AND PROCEDURAL SUMMARY

In 2005, plaintiff and real party in interest, Charles Engen, was hired by Ontic as a computer programmer analyst. He was terminated in 2008. Following his termination, Engen filed a wrongful termination suit against Ontic and its English parent company, BBA. The complaint alleged BBA was an agent of Ontic, but all the allegations were directed at Ontic.

Ontic was acquired by BBA in 2006 and is a wholly-owned subsidiary. Ontic's executive office and sole facility are located in Chatsworth, California. Ontic manufactures licensed products for the aviation industry. Ontic has its own corporate officers, human resources staff and financial personnel. Ontic's president, James Gerwien, who was president prior to 2006, is also president of BBA's component, repair and overhaul group, and a member of BBA's executive management committee.

BBA is an English company headquartered in London, England. BBA stock is traded on the London Stock Exchange but not on any stock exchange in the United States. BBA's branding appears on Ontic's signage, building front, employee uniforms, badges, and stationery. But BBA is not registered to do business in California and does not have any office, place of business, or employees in California.

BBA filed a motion to quash service of the summons and complaint for lack of personal jurisdiction and ineffective service of process. In response to the motion, Engen argued that the court has general and specific personal jurisdiction over BBA. The general jurisdiction claim was based on BBA's direct contacts with the state and the representative services doctrine, which imputes the court's jurisdiction over a subsidiary to its parent corporation when the subsidiary only operates in support of the parent's own business.*fn1

BBA contended that the trial court lacks both specific and general jurisdiction. Specifically, BBA argued the representative services doctrine does not apply because BBA is a holding company whose sole business is investing in its subsidiaries. In support of this claim, BBA produced supplemental declarations by its secretary, Zillah Stone, and Gerwien. Stone stated: "BBA itself operates exclusively as a holding company not a trading company. BBA does not itself directly produce or provide any goods or services for any consumer or business customer. Its only business is the investment in its subsidiaries." According to Stone, Ontic is a wholly-owned subsidiary of BBA US Holdings, another BBA subsidiary. Stone produced an organizational chart showing that several subsidiaries separated BBA and BBA US Holdings. Gerwien also stated Ontic was owned by BBA US Holdings, but that Ontic was the sole owner of its licenses and products.

The trial court denied the motion to quash, finding the representative services doctrine applicable. The trial court was "persuaded by the plaintiff's submission that there was involvement in Ontic's businesses... and that had Ontic not been doing it, [BBA] would have been doing it themselves." The trial court rejected BBA's claim that it was a holding company, despite Stone's affidavit. The trial court emphasized that BBA did not identify itself as a holding company in its consolidated annual reports or any other documents and publications. Instead, the annual reports described BBA as a business providing services to the aviation industry. The court stated that if BBA was truly a holding company, it would support that claim by documentation, and that Stone's "bald assertion" was unconvincing in the absence of such documentation. The trial court did not rule on specific jurisdiction or any of the alternative bases for general jurisdiction. The trial court found the service of process proper.

BBA petitioned our court for writ of mandate vacating the trial court's order and directing the court to grant the motion to quash. We denied the petition. BBA then sought review of our order by the California Supreme Court. The Supreme Court granted review and directed us to vacate our order denying the petition and to issue an order directing the trial court to show cause why the relief sought in the petition should not be granted. We issued an order to show cause pursuant to the Supreme Court's direction. Because we now grant the requested relief based on the jurisdictional issue, we do not reach BBA's claim of ineffective service of process.

DISCUSSION

I.

When a nonresident defendant challenges personal jurisdiction, the plaintiff must prove, by a preponderance of the evidence, the factual basis justifying the exercise of jurisdiction. (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 273 (Pavlovich).) Plaintiff must do more than merely allege jurisdictional facts; plaintiff must provide affidavits and other authenticated documents demonstrating competent evidence of jurisdictional facts. (In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 110.) If the plaintiff does so, the burden shifts ...


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