Home Jurisdiction LG Chem Secures Second Look at Jurisdiction Issues in NJ Vape Battery Suit | Faegre Drinker Biddle & Reath LLP

LG Chem Secures Second Look at Jurisdiction Issues in NJ Vape Battery Suit | Faegre Drinker Biddle & Reath LLP

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The New Jersey Appeal Division ruled that Korean company LG Chem Ltd. (“LG Chem”) would have another opportunity to challenge New Jersey’s jurisdiction over it in a product liability action relating to a vaping device battery. The ruling is based, in part, on the trial court’s failure to order discovery of jurisdiction and to convene an evidentiary hearing to resolve the disputed jurisdictional allegations before deciding to dismiss the pre-response motion. by LG Chem. This case emphasizes that in New Jersey, the standard governing motions to dismiss for incompetence, unlike other grounds, requires the court to look outside the only contested pleadings.

The New Jersey plaintiff alleged he was injured when a lithium-ion battery made by LG Chem exploded in his pocket. The plaintiff attempted to serve proceedings on LG Chem through two of its US-based subsidiaries, LG Chem America, Inc. (LGCAI) and LG Chem Michigan, Inc. (LGCMI). Agents from both refused to accept the service.

LG Chem filed an advance motion in response to a dismissal for insufficient service and lack of personal competence under To reign 4: 6-2 supported by three certifications. Two of the attestations came from subsidiary agents confirming that they were not authorized to accept the service. The third was from an LG Chem representative claiming that LG Chem is not registered to do business in New Jersey, does not have an office or employees in New Jersey, State, and has no no agent for service in New Jersey. The plaintiff objected, claiming that the court had personal jurisdiction over LG Chem because LGCAI was 100% owned and controlled by LG Chem and was an alter ego of LG Chem. The plaintiff produced a web page downloaded from the “Internet Archive Wayback Machine” listing LGCAI’s address in Englewood Cliffs, New Jersey, as well as LG Chem’s annual reports indicating that LGCAI was a wholly owned subsidiary of LG Chem.

The court of first instance, under both the revocation standard under To reign 4: 6-2 and the summary judgment standard of To reign 4: 46-1, dismissed LG Chem’s motion finding that, based on the webpage document, there was sufficient contact with New Jersey to establish a specific jurisdiction. The trial court dismissed LG Chem’s petition for reconsideration, and LG Chem requested leave to appeal.

In reversing the trial court, the Appeal Division pointed out that, unlike motions to dismiss on other grounds, when “[p]resentment of a motion to dismiss for incompetence, a court of first instance must draw conclusions on the “facts of jurisdiction”, because the “contested allegations of jurisdiction cannot be accepted on their face”. court does not allow a jurisdictional issue to be resolved, the trial court “shall conduct a” preliminary hearing of evidence after giving the parties an appropriate opportunity to inquire. ” “

The Appeal Division ultimately concluded that the case was “not sufficiently developed for the judge to conclude” that LG Chem was subject to New Jersey jurisdiction. In the absence of any jurisdictional discovery or hearing of the evidence, “the judge applied the standard of summary judgment and considered the facts and reasonable inferences in the light most favorable to the plaintiff”, which was “the fault “. The case was overturned and remanded for jurisdictional discovery and the hearing of evidence.