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Bombardier Recreational Products, Inc. v. Dow Chemical Canada ULC

California Court of Appeals, Third District, Shasta

May 21, 2013

BOMBARDIER RECREATIONAL PRODUCTS, INC., Cross-complainant and Appellant,
v.
DOW CHEMICAL CANADA ULC, Cross-defendant and Respondent.

APPEAL from a judgment of the Superior Court of Shasta County No. 165714, Monica Marlowe, Judge.

Haight Brown & Bonesteel, William O. Martin, Jr., Jules S. Zeman, and R. Bryan Martin for Cross-complainant and Appellant.

King & Spalding, Gennaro A. Felice III, and Paul R. Johnson for Cross-defendant and Respondent.

NICHOLSON, Acting P. J.

This appeal challenges the trial court’s quashing service of summons for lack of personal jurisdiction. We review the issue as a matter of law (Hall v. LaRonde (1997) 56 Cal.App.4th 1342, 1346), and we affirm the trial court’s determination.

FACTS

The underlying plaintiff sued appellant Bombardier Recreational Products, Inc. (Bombardier), for personal injuries. He claimed that in 2007, while trying to start a Sea-Doo personal watercraft manufactured by Bombardier, the watercraft caught fire, causing him serious injuries. He alleged Bombardier was negligent for failing to inform him of a recall for the watercraft’s allegedly defective fuel tank.

Bombardier filed a cross-complaint against respondent Dow Chemical Canada ULC (Dow Canada). Dow Canada is a successor to Union Carbide Canada, Inc. (Union Carbide Canada), whose Wedco Moulded Products division (Wedco), for a time, manufactured fuel tanks Bombardier installed in its personal watercraft.

Appearing specially, Dow Canada filed a motion to quash service of summons for lack of personal jurisdiction. It contended it and its predecessors lacked sufficient contacts with California to be subject to suit here. Prior to 1998, Wedco manufactured fuel tanks and fuel tank filler necks used by Bombardier in its personal watercraft. The fuel tanks were manufactured exclusively in Canada. Wedco sold the fuel tanks to Bombardier exclusively in Canada pursuant to purchase orders made in Canada. Bombardier manufactured its personal watercraft in Canada. Union Carbide Canada sold Wedco to an unrelated third party in 1998.

Union Carbide Canada, including Wedco, never had a registered agent in California, never qualified to do business in California, never manufactured any products in California, never had any employees, offices, or facilities in California, and never advertised or sold any personal watercraft fuel tanks or fuel tank filler necks in California.

In 2001, Union Carbide Canada merged with Dow Chemical Canada, Inc., and the company was later renamed Dow Chemical Canada ULC.

Dow Canada is a Canadian corporation with its principal place of business in Calgary, Alberta, Canada. It has never had an agent for service of process in California, never qualified to do business in California, never manufactured any products in California, never had any employees, officers or other facilities in California, and never advertised or sold products in California or to customers in California.

In its opposition to the motion to quash service, Bombardier did not contest Dow Canada’s factual assertions. Rather, it argued Dow Canada had sufficient contacts with California because Union Carbide Canada had known Bombardier would incorporate its fuel tanks and fuel tank filler necks in personal watercraft it intended to sell in the United States, including California. Bombardier submitted a declaration from one of its component part buyers, Pierre Biron, stating he had informed Union Carbide Canada its fuel tanks and fuel tank filler necks would be used in watercraft sold across the United States, including California. Bombardier also submitted a declaration from its director of intellectual property, Jean Daunais, stating Union Carbide Canada, as part of its contract to supply Bombardier with fuel tanks, had agreed to produce tanks that complied with regulatory standards promulgated by the United States Coast Guard.

Dow Canada objected to Bombardier’s evidence in part because the declarations were signed under penalty of perjury under the laws of the United States of America, not the laws of the State of California as required by Code of Civil Procedure section 2015.5.

The trial court granted the motion to quash, and it sustained the objections against Bombardier’s evidence. It determined California lacked personal jurisdiction because Dow Canada lacked minimum contacts with the state. Dow Canada had not purposefully engaged in activities in the state or availed itself of the benefits of conducting business here. The court sustained Dow Canada’s objections to Bombardier’s evidence, but it stated that even if Dow Canada had known Bombardier would sell the watercraft in the United States or had agreed to design the fuel tanks in compliance with United States regulations, Dow Canada’s contacts with California would be attenuated at best and insufficient to establish personal jurisdiction.

DISCUSSION

Bombardier contends the trial court erred. It claims Dow Canada’s knowledge that its products would eventually enter the stream of commerce in California was sufficient to establish jurisdiction. It also claims the trial court erred in sustaining the ...


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