Kobe Falco v. Nissan North America Inc et al

Filing 124

ORDER by Judge Dean D. Pregerson: denying 118 Motion for Certification of Interlocutory Appeal. The Court DENIES the motion for certification of interlocutory appeal. However, the Court notes that its jurisdictional rulingwas highly fact-specific and based on the facts presented after limited discovery. Should the full factual record show, at the close of discovery, that Plaintiffs jurisdictional evidence was misleading and that NML did not exert any meaningful control over the manufacturing process, NML may renew its motion to dismiss on jurisdictional grounds at that time. (shb)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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KOBE FALCO, individually,
and on behalf of a class
similarly situated
individuals,

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Plaintiff,
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v.
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NISSAN NORTH AMERICA INC.,
NISSAN MOTOR CO.LTD, a
Japanese Company,

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Defendants.
___________________________

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Case No. CV 13-00686 DDP (MANx)
ORDER DENYING CERTIFICATION OF
INTERLOCUTORY APPEAL
[Dkt. No. 118]

Presently before the Court is Defendant Nissan Motor Co.,

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Ltd.’s (“NML”) motion to certify an interlocutory appeal of the

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Court’s order of April 6, 2015.

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the Court held that it could exercise specific personal

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jurisdiction over NML, a foreign corporation, and that NML could be

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held liable under for certain California statutory causes of

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action: the Song-Beverly Consumer Warranty Act, the Consumer Legal

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Remedies Act (“CLRA”), and the Unfair Competition Law (“UCL”).

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(Dkt. No. 114.)

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phrases as follows:

(Dkt. No. 118.)

In that order,

NML seeks to certify two questions, which it

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1. Is a foreign defendant solely involved in design decisions

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about a vehicle subject to specific personal jurisdiction

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under a stream-of-commerce theory for causes of action for

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alleged violation of the Warranty Act, CLRA and UCL where the

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vehicles at issue were manufactured, sold, marketed, and

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warranted by a subsidiary U.S. corporation of the defendant?

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2. Can a person be liable under the Warranty Act, CLRA and UCL

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based on allegations of control over a product’s design where

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the defendant did not manufacture, distribute, sell, market,

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or warrant the product?

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(Defs.’ Mem. P. & A. at 1.)

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I.

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BACKGROUND
Plaintiffs in this case sue both NML and its domestic

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subsidiary, Nissan North America (“NNA”), alleging that a

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particular timing chain system was prone to failure and put

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consumers at risk.

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what it calls a “role in design decisions,” but it denies being

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involved in manufacturing, selling, marketing, or warranted the

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vehicles.

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presented evidence, which the Court found credible, that

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Defendant’s “design” responsibility extended well beyond drawing up

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plans and essentially gave NML control and authority over the

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manufacturing process.

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findings that:

(Dkt. No. 114 at 2.)

(Defs.’ Mem. P. & A. at 1.)

NML admits that it had

However, Plaintiff

Specifically, the Court made factual

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NML took almost total responsibility for the relevant

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components up through the initial production release, NML

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conducted testing of the components, NML had authority over

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the manufacturing process, because parts and vehicles could
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not be manufactured without NML’s ‘release,’ NML appears to

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have been involved in monitoring the manufacturing plant, and

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NML had the final authority to change or decline to change the

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manufacture of faulty parts, including for pricing reasons.

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(Dkt. No. 114 at 6.)

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the very least, participated in manufacturing the vehicles in

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question . . . and has therefore placed them into the stream of

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commerce.”

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II.

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The Court therefore concluded that “NML, at

(Id.)

LEGAL STANDARD
A district court must certify an otherwise non-appealable

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question of law if its order “involves a controlling question of

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law as to which there is substantial ground for difference of

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opinion” and “an immediate appeal from the order may materially

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advance the ultimate termination of the litigation.”

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1292(b).

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is to “avoid protracted and expensive litigation”; appeal is

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granted only in “extraordinary circumstances.”

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Antitrust Litig. (MDL No. 296), 673 F.2d 1020, 1026 (9th Cir.

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1981).

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not, based on his or her opinion as to whether the statutory

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requirements are met.

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F.2d 1335, 1338 (9th Cir. 1976).

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III. DISCUSSION

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28 U.S.C. §

The primary purpose of the interlocutory appeal statute

In re Cement

The district judge has discretion to certify a question or

Green v. Occidental Petroleum Corp., 541

A question of law is “controlling” if “resolution of the issue

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on appeal could materially affect the outcome of litigation in the

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district court.”

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An order determining who the parties to the action are can

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materially affect the outcome of the litigation.

In re Cement Antitrust Litig., 673 F.2d at 1026.

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E.g., United

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States v. Woodbury, 263 F.2d 784, 787 (9th Cir. 1959) (“The senate

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report . . . cites as one instance in which § 1292(b) may be

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applied a district court order granting or denying a motion to join

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a third party defendant.”).

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question of specific personal jurisdiction over NML is a

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“controlling issue of law.”

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The Court therefore finds that the

“Courts traditionally will find that a substantial ground for

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difference of opinion exists where the circuits are in dispute on

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the question and the court of appeals of the circuit has not spoken

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on the point . . . or if novel and difficult questions of first

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impression are presented.

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first to rule on a particular question or just because counsel

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contends that one precedent rather than another is controlling does

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not mean there is such a substantial difference of opinion as will

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support an interlocutory appeal.”

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F.3d 629, 633 (9th Cir. 2010) (citation and internal quotation

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marks omitted).

However, just because a court is the

Couch v. Telescope Inc., 611

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In order for a court in a particular “forum” to exercise

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jurisdiction over a non-resident defendant, it must be shown, among

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other things, that:

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The non-resident defendant . . . purposefully direct[ed] his

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activities or consummate[d] some transaction with the forum or

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resident thereof; or perform[ed] some act by which he

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purposefully avail[ed] himself of the privilege of conducting

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activities in the forum, thereby invoking the benefits and

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protections of its laws . . . .

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Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th

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Cir.2004).

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injuries caused by a manufactured product that has reached the

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forum state, the defendant must have both placed the product into

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the “stream of commerce” and taken some steps to direct its

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business to the forum state.

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131 S. Ct. 2780, 2790 (2011) (Kennedy, J., plurality opinion).

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In cases where the non-resident defendant is sued for

J. McIntyre Mach., Ltd. v. Nicastro,

Defendants’ motion focuses on the placement-into-the-stream

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prong.

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cases, Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266 (5th

(Defs.’ Mem. P. & A. at 6-7.)

Defendants cite to two

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Cir. 2006) and McCarthy v. Yamaha Motor Mfg. Co., 994 F.Supp.2d

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1318 (N.D. Ga. 2014), which they argue support the proposition that

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a company that merely designs a product, but does not otherwise

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involve itself in manufacture, marketing, and sale, has not placed

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the product in the stream of commerce.

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In Seiferth, Mark Camus “designed and patented an external

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work platform for use with a helicopter” while in Florida.

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F.3d at 270.

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“had the platform manufactured.”

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the platform broke, and a man fell to his death.

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Circuit found that Camus “did not manufacture” the platform;

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rather, “Air 2 had it manufactured.”

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that he “did not place a product into the stream, but merely

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licensed a design to Air 2.”

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472

He then licensed his design to a company, Air 2, that
Id.

While in use in Mississippi,

Id. at 275.

Id.

The Fifth

The court held

Id.

In McCarthy, Yamaha, a Japanese corporation, designed a

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personal watercraft that was “manufactured and assembled in

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Georgia” by an American Yamaha subsidiary.

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The Japanese parent company subsequently sold the watercraft to an

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Australian dealer, and it eventually ended up in the hands of an
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994 F.Supp.2d at 1320.

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Australian man who was injured while riding the craft in Australia.

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Id.

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that it could not exercise specific personal jurisdiction over the

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Japanese parent company.

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watercraft was manufactured in Georgia, “YMMC [the subsidiary]

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handled the manufacturing.”

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court’s order discusses the degree of control that the parent

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company exerted over the manufacturing process.

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The court in that case, the Northern District of Georgia, held

It specifically found that although the

Id. at 1327.

Nothing in the McCarthy

McCarthy and Seiferth therefore do little to resolve the

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question presented in this case.

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its previous order that “[t]his is not . . . a case where a wholly

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independent designer sells a product design to another company and

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is completely uninvolved in the production of the physical product

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thereafter.”

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McCarthy is a step closer to this case, because it involved a

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parent-subsidiary relationship.

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here, facts indicating that the parent exercised a high degree of

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control over the manufacturing process.

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not show that other circuits, or even another district court, faced

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this situation and ruled differently.

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The Court has already noted in

(Dkt. No. 114 at 5-6.)

Seiferth is thus irrelevant.

But it did not involve, as appear

Thus, NML’s citations do

This case does present “novel and difficult questions of first

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impression.”

Couch, 611 F.3d at 633.

But district courts must

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often resolve novel questions.

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function “merely to provide review of difficult rulings in hard

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cases."

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1966).

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of a novel and difficult question could “avoid protracted and

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expensive litigation, as in antitrust and similar protracted

Interlocutory appeal should not

U. S. Rubber Co. v. Wright, 359 F.2d 784, 785 (9th Cir.
Rather, such an appeal is appropriate only where resolution

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cases.”

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sess., 1958 U.S.Code Cong. & Ad. News, pp. 5255, 5260).1

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third prong – material advancement of the termination of the

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litigation – becomes particularly important where the court’s

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analysis is not contradicted by other authority, but is merely a

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difficult question.

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Id. at 785, n. 2 (quoting S.Rep.No.2434, 85th Cong.2nd
Thus, the

It is not clear that a successful interlocutory appeal will

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materially advance the termination of this litigation.

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that it will, because if it is removed from the case as a party,

NML argues

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there will be less discovery and a less complicated trial process.

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(Reply at 8.)

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would not be a party if the Court’s order were reversed, it might

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nonetheless have information important to the case.2

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discovery from a foreign non-party could be even more complex and

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time-consuming than obtaining it from a foreign party.

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NML might end up completing a considerable portion of at least the

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discovery process before receiving its answer from the circuit

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court.

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termination of the litigation may be somewhat limited.

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The analysis is not quite so simple; although NML

Obtaining

Moreover,

That, too, suggests that the benefit in advancing the

It is true that if the appeal is completed before trial and
the circuit court rules for NML, the company would be saved the

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The Senate report continues: “It is not thought that district
judges would grant the certificate in ordinary litigation which
could otherwise be promptly disposed of or that mere question as to
the correctness of the ruling would prompt the granting of the
certificate.” Id.
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This would seem to be especially true if NNA attempts to
shift responsibility for any flawed design to its parent company.
It may be necessary for a jury to understand NML’s role in
designing the components in order to allocate fault, even if NML is
no longer a party.
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cost of a trial and perhaps a summary judgment, and the trial might

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be made somewhat shorter absent the second defendant.

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hand, the litigation in this case will almost certainly be

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“protracted and expensive” even without NML.

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Wright, 359 F.2d 784, 785 (9th Cir. 1966).

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trial would not reduce the number of claims, nor would it reduce

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the need for long and complex testimony as to the technical

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components at issue here, their manufacture, and their alleged

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failure.

On the other

U. S. Rubber Co. v.
NML’s departure before

Moreover, the trial may involve questions of knowledge,

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or of allocation of fault, that would require testimony about NNA

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and NML’s relationship, even if NML is no longer a party.

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Thus, there is not much to suggest that the litigation will

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advance materially toward termination if the appeal is successful.

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Given that this prong is especially important in cases where the

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question is novel rather than the subject of a split of authority,

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the Court finds that the statutory requirements for an

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interlocutory appeal are not met.

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The Court also does not find it appropriate to certify the

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question of whether, if personal jurisdiction exists, NML may be

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held liable under the statutory causes of action.

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stated in the Court’s previous order, the Court concludes that NML

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can be held liable, and that this is not a question as to which

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there is substantial ground for difference of opinion.

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strong disagreement with the Court's ruling is not sufficient for

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there to be a ‘substantial ground for difference . . . .’”

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Kowalski v. Anova Food, LLC, 958 F. Supp. 2d 1147, 1165 (D. Haw.

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2013).

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than another is controlling does not mean there is such a

For the reasons

“A party's

“[J]ust because counsel contends that one precedent rather

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substantial difference of opinion as will support an interlocutory

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appeal."

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2010) (internal quotation marks omitted).

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IV.

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Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir.

CONCLUSION
The Court DENIES the motion for certification of interlocutory

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appeal.

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was highly fact-specific and based on the facts presented after

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limited discovery.

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close of discovery, that Plaintiffs’ jurisdictional evidence was

However, the Court notes that its jurisdictional ruling

Should the full factual record show, at the

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misleading and that NML did not exert any meaningful control over

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the manufacturing process, NML may renew its motion to dismiss on

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jurisdictional grounds at that time.

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IT IS SO ORDERED.

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Dated: June 3, 2015
DEAN D. PREGERSON
United States District Judge

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