In a recent decision, California’s Third Appellate Division held that a foreign automobile manufacturer could be haled into a state court in California through the indirect actions of its distributor without offending constitutional due process. In L.W., a Minor v. Audi AG, CV 98701 (Super. Ct. No. S-CV-0048888), the court stated unequivocally that it was following the very language of the United States Supreme Court in its decisions in Ford, Daimler, and Worldwide Volkswagen:

As plaintiffs pointed out in their trial court briefing, this case presents a nearly identical fact pattern to that which the United States Supreme Court has used as the “paradigm example” of how specific jurisdiction works — a resident plaintiff sues a global car company, extensively serving the state market in a vehicle, for an in-state accident. (See Ford, supra, 592 U.S. at p. 366; see id. at p. 364 [explaining that the high court “used the Audi/Volkswagen scenario” from World-Wide Volkswagen “as a paradigm case of specific jurisdiction”].) The admitted evidence from Audi itself, in the form of the Stadler declaration, showed an indirect relationship among the foreign manufacturer (Audi), the forum (California), and the litigation — the essential foundation of specific jurisdiction. (Id., at p. 365.) The record supports the conclusion that Audi intentionally and purposefully engaged a national distributor (VWGoA) to target and exploit the automobile market in California for Audi’s economic benefit. Indeed, the record reflects that Audi deliberately and systematically (albeit indirectly) served the market for automobiles in Foreign California for the very vehicle that plaintiffs alleged was defective and caused injuries in California. The record makes clear that there is a “regular flow” of vehicles from Audi to VWGoA to Audi-authorized dealerships across the United States, including California. To the extent Audi concedes there is evidence of sales throughout the United States but then disavows an intent to sell in California, this position appears uninformed if not disingenuous. (See In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 106 [observing that California was one of the top motor vehicle markets in the world and the largest market for motor vehicles in the United States].)

Product manufacturers and many courts have long required direct proof of “purposeful availment” in order to establish specific personal jurisdiction. In L.W. v Audi, AG, the majority reviewed the relevant U.S. Supreme Court decisions and reaffirmed that the Supreme Court meant what it said in Ford, World-wide Volkswagen and a footnote in Daimler:

Our conclusion in World-Wide Volkswagen — though … technically ‘dicta,’ … has appeared and reappeared in many cases since. So, for example, the Court in Keeton [v. Hustler Magazine, Inc. (1984) 465 U.S. 770] invoked that part of World-Wide Volkswagen to show that when a corporation has ‘continuously and deliberately exploited [a State’s] market, it must reasonably anticipate being haled into [that State’s] court[s]’ to defend actions ‘based on’ products causing injury there. [Citations.] On two other occasions, we reaffirmed that rule by reciting the above block-quoted language verbatim. [Citations.] And in Daimler, we used the Audi/Volkswagen scenario as a paradigm case of specific jurisdiction. … Said the Court, to ‘illustrate[ ]’ specific jurisdiction’s ‘province[ ]’: A California court would exercise specific jurisdiction ‘if a California plaintiff, injured in a California accident involving a Daimler-manufactured vehicle, 2 sued Daimler [in that court] alleging that the vehicle was defectively designed.’ [Citation.] As in World-Wide Volkswagen, the Court did not limit jurisdiction to where the car was designed, manufactured, or first sold. (Ford, supra, 592 U.S. at pp. 363-364.)

The court essentially held that under any of the analyses articulated by the Supreme Court for establishing specific personal jurisdiction, the evidence presented by plaintiff had established minimum contacts sufficient under the 14th Amendment and that Audi had not demonstrated hardship or prejudice by defending the action in California.

The opinion can be accessed here.