Celgard, LLC v. SK Innovation Co., Ltd.

Filing 68

ORDER affirming Memorandum and Recommendations re 62 Memorandum and Recommendations.; denying without prejudice 18 Motion to Dismiss for Lack of Jurisdiction. Signed by District Judge Max O. Cogburn, Jr on 11/26/2013. (tmg) Modified text on 11/26/2013 (tmg).

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:13-cv-00254-MOC-DSC
CELGARD, LLC,

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Plaintiff,
Vs.
SK INNOVATION CO., LTD.,
Defendant.

ORDER

THIS MATTER is before the court on review of a Memorandum and
Recommendation issued in this matter. In the Memorandum and Recommendation, the
magistrate judge advised the parties of the right to file objections within 14 days, all in
accordance with 28, United States Code, Section 636(b)(1)(c).

Defendant has filed

objections to which plaintiff has filed a response.
The Federal Magistrates Act of 1979, as amended, provides that “a district court
shall make a de novo determination of those portions of the report or specific proposed
findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1); Camby
v. Davis, 718 F.2d 198, 200 (4th Cir.1983). However, “when objections to strictly legal
issues are raised and no factual issues are challenged, de novo review of the record may
be dispensed with.” Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982). Similarly, de
novo review is not required by the statute “when a party makes general or conclusory
objections that do not direct the court to a specific error in the magistrate judge’s
proposed findings and recommendations.” Id. Moreover, the statute does not on its face
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require any review at all of issues that are not the subject of an objection. Thomas v. Arn,
474 U.S. 140, 149 (1985); Camby v. Davis, 718 F.2d at 200. Nonetheless, a district judge
is responsible for the final determination and outcome of the case, and accordingly the
court has conducted a careful review of the magistrate judge’s recommendation.
Defendant interposes two objections: first, that the jurisdiction record is clear and
does not warrant jurisdictional discovery; and second, to the extent jurisdictional
discovery is warranted, the scope of jurisdiction is too broad. Finding no merit to either
assignment of error, the objections will be overruled.
Rule 12(b)(2), Federal Rules of Civil Procedure, provides for dismissal where the
court lacks personal jurisdiction over a particular named defendant. In the Fourth Circuit,
the standard for deciding a motion based on Rule 12(b)(2) was set forth in Combs v.
Bakker, 886 F.2d 673, 676 (4th Cir.1989), where it explained that a plaintiff has the
burden to prove personal jurisdiction by a preponderance of the evidence.

When a

factual dispute arises as to whether or not jurisdiction exists, the court may either conduct
an evidentiary hearing or defer ruling on the matter until it receives evidence on the
jurisdictional issue at trial. Id. When a court decides the issue on the record then before
it, the court may consider “the motion papers, supporting legal memoranda, affidavits,
other documents, and the relevant allegations of the complaint,” and the burden is
plaintiff’s “to make a mere prima facie showing of jurisdiction to survive the
jurisdictional challenge.” Clark v. Milam, 830 F.Supp. 316, 319 (S.D.W.Va.1993)
(citations omitted). A court must resolve factual disputes in favor of the party asserting
jurisdiction for the limited purpose of the prima facie showing. Combs, 886 F.2d at 676.
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Such resolution must include construing all relevant pleadings in a light most favorable to
the plaintiff, assume the credibility of any affiant, and drawing the most favorable
inferences for the existence of jurisdiction. Id.
Based on defendant’s Motion to Dismiss, jurisdictional discovery is clearly
warranted. Each category of discovery is warranted as defendant contends that it lacks
any “continuous and systematic” contacts with North Carolina that confer general
jurisdiction over it in this district. Further, defendant denies conducting any activity
related to the accused products in North Carolina or purposefully directing any of its
relevant activities here, while conceding that it is subject to personal jurisdiction in the
Southern District of New York. As is readily apparent, each category of jurisdictional
discovery clearly relates to defendant’s contention that it lacks continuous and systematic
contacts with this district:
(1) SKI’s sales, imports, and offers for sale into the Western District of
North Carolina, the State of North Carolina, and the U.S. of its Accused
Lithium Ion Battery Separators, including through established distribution
channels;
(2) SKI’s contacts with North Carolina;
(3) SKI’s marketing efforts, including attendance at national trade shows
held annually in the U.S., related to its Accused Lithium Ion Battery
Separators and incorporating these Battery Separators into established
channels of commerce to customers in the Western District of North
Carolina, the State of North Carolina, and the U.S.;
(4) SKI’s U.S. marketing officer physically residing in the United States
from 2005 through February 2013 and tasked with marketing, offering to
sell, and selling in the Western District of North Carolina, the State of
North Carolina, and the U.S. SKI’s Accused Lithium Ion Battery
Separators and Lithium Ion Batteries;
(5) SKI’s distribution and marketing of the Accused Lithium Ion Battery
Separators through its U.S. and non-U.S. subsidiaries, including through
SK Innovation Americas located in Troy, Michigan;
(6) SKI’s sale of the Battery including the Accused Lithium Ion Battery
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Separator to a California company for $30,000;
(7) SKI’s negotiations with the global purchasing director of Saft America,
Inc., who communicates with and purchases from SKI the Accused Lithium
Ion Battery Separator and does so from Saft America, Inc.’s offices located
in the Western District of North Carolina;
(8) SKI’s manufacture and sale of polymer base film materials that are
incorporated into infringing lithium ion battery separators for consumer
electronics products sold in the Western District of North Carolina, the
State of North Carolina, and the U.S.;
(9) Tesla Motors, Inc.’s purchase and testing of electric vehicle batteries
incorporating SKI’s Accused Lithium Ion Battery Separators, and Tesla’s
sales or offers for sale of electric vehicles in the Western District of North
Carolina, the State of North Carolina, and the U.S.;
(10) Kia Motors America, Inc.’s use, sale, and offer for sale in the U.S. of
electric drive vehicles incorporating SKI’s Accused Lithium Ion Battery
Separators;
(11) SKI’s overall revenues from sales of all products into the Western
District ofNorth Carolina, the State of North Carolina, and the U.S.;
(12) SKI’s payment of taxes to the U.S. Internal Revenue Service or
revenue service of any state or county in the U.S.; and
(13) SKI’s joint venture with Continental, announced while SKI
representatives were in the U.S. in January 2012, to make lithium-ion
batteries for electric vehicles, some of which will be sold or imported into
the U.S.
The fact that some of the discovery concerns contacts outside of North Carolina is of
little consequence as this court will be applying a stream of commerce standard in
determining whether to assert personal jurisdiction over an alien defendant. Beverly
Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564-65 (Fed. Cir. 1994)). Thus,
what products defendant placed upstream and its knowledge concerning the final
destination of such products downstream are all relevant to the court’s review.
After careful review, the court determines that the recommendation of the
magistrate judge is fully consistent with and supported by current law. Further, the brief
factual background and recitation of issues is supported by the applicable pleadings.
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Based on such determinations, the court will fully affirm the Memorandum and
Recommendation and grant relief in accordance therewith.
ORDER
IT IS, THEREFORE, ORDERED that the Memorandum and Recommendation
(#62) is AFFIRMED, and defendant’s “Motion to Dismiss or Transfer Venue (#18) is
DENIED WITHOUT PREJUDICE as to filing a new motion following jurisdictional
discovery.

Signed: November 26, 2013

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