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Brimer v. Faygo Beverages, Inc.

California Court of Appeals, First District, Fifth Division
Dec 7, 2007
No. A114983 (Cal. Ct. App. Dec. 7, 2007)

Opinion


RUSSELL BRIMER, Plaintiff and Appellant, v. FAYGO BEVERAGES, INC., Defendant and Respondent. A114983 California Court of Appeal, First District, Fifth Division December 7, 2007

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

San Francisco County Super. Ct. No. CGC-05-447595

SIMONS, J.

Plaintiff and appellant Russell Brimer (Brimer) appeals from the trial court’s order granting a motion to quash service of summons upon specially appearing defendant and respondent Faygo Beverages, Inc. (Faygo), in a case Brimer brought against Faygo pursuant to Proposition 65, California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (Health & Saf. Code, § 25249.5 et seq.). The trial court found no basis for California courts to assert general or specific jurisdiction over Faygo. On appeal, Brimer contends the trial court has specific jurisdiction to hear his case. We disagree and affirm.

“Health and Safety Code section 25249.5 et seq., which became effective January 1, 1987, codifies Proposition 65.” (As You Sow v. Crawford Laboratories, Inc. (1996) 50 Cal.App.4th 1859, 1863, fn. 1 (As You Sow).)

Background

Faygo is a manufacturer and bottler of soft drinks. It is incorporated in the State of Michigan and operates two bottling plants, one in Michigan and the other in Ohio. It sells its soft drinks through licensed distributors in several states in the Midwest.

Brimer is a citizen of California “who is dedicated to protecting the health of California citizens,” and who brought this action pursuant to Proposition 65. Brimer alleged Faygo placed certain glass soda bottles into the stream of commerce, those bottles displayed exterior artwork that contained lead, and Faygo failed to provide the requisite warnings that lead can cause birth defects and other reproductive harm.

Though Faygo sells its beverages in aluminum cans and glass and plastic bottles, only glass containers are alleged to have artwork containing lead, and only these containers are at issue in this lawsuit.

Brimer also initially named Newbevco, Inc., as a defendant in the action; however, Newbevco was dismissed from the case and is not party to this appeal.

In response, Faygo filed a motion to dismiss, or to quash service of summons, for lack of personal jurisdiction. In support of this motion, Faygo included a declaration of its executive vice president, stating: Faygo is incorporated in the State of Michigan and operates two bottling plants, located in Michigan and Ohio; Faygo has no offices in California, has never leased or owned real estate in California, has no employees in California, and has no bank accounts, mailing addresses, or telephone numbers in California; and, Faygo does not direct advertising into California through any California newspaper, publication, television station, radio station, or other media outlet. He stated that he understood that Brimer alleged Faygo soft drinks are sold in California by an entity known as Real Soda In Real Bottles, Ltd. (hereafter, Real Soda), and that Real Soda sells primarily on the Internet at . He declared that Faygo does not have any contractual association or agreement to sell Faygo products through Real Soda or ; neither Real Soda nor are licensed as distributors of any Faygo product; Faygo has no knowledge of where, on what terms, or to whom Real Soda might sell its products; and, all bottles of Faygo soft drinks purchased by Real Soda were sold “F.O.B.” in Michigan or Ohio.

The declaration elaborates on the designation “F.O.B.”: “That is to say, the transaction was completed when Real Soda . . . allegedly purchased and took delivery of Faygoâ from our bottling plants in Detroit or Columbus. Consequently, those sales were made and concluded in Michigan or Ohio, exclusively.” The fact that Faygo sold its product F.O.B. Michigan or Ohio does not automatically insulate Faygo from jurisdiction. (Carretti v. Italpast (2002) 101 Cal.App.4th 1236, 1254 (Carretti).) Instead, we look at it as one circumstance of the transaction.

A declaration from one of the operators of Real Soda stated that six attached invoices were the only written communication Real Soda had had with Faygo, and Real Soda contracted with a transportation company to pick up the Faygo products and deliver them to California.

In opposition, Brimer argued that Faygo knowingly sold its products to a California distributor and voluntarily directed its activities toward California, as demonstrated by its Web site and its inclusion of the words “CA Cash Refund” on its products. Brimer included a declaration of a product investigator supporting the assertion that Faygo soda bottles contain the writing “CA Cash Refund”; a declaration by his attorney, Laralei S. Paras, which included invoices for Faygo products sold by Real Soda to a California recipient; and, a declaration by Bozena Morawski, an employee of his attorney’s law firm, summarizing various invoices as demonstrating that Real Soda distributed 303 units of Faygo soda and an entity called Beach Cities Refreshment Service distributed 51 units of Faygo soda to various California recipients during the period between September 2004 and April 2006. Brimer also requested the trial court take judicial notice of a Web site address from the California Secretary of State’s Web site, listing Real Soda as a California corporation; Faygo’s Web site as of February 22, 2006, found at ; and excerpts from a nonpublished statement of decision filed on November 22, 2005, in an unrelated San Francisco County Superior case entitled Michael DiPirro v. J.C. Penny Company, Inc. (CGC-05-407150). Brimer further requested the trial court take judicial notice of various facts on Faygo’s Web site, including that the Web site contains links that allow a user to click on a state to find locations within that state that sell Faygo beverages, and that the link for California lists five sources of Faygo products, including Real Soda.

Faygo objected to the request for judicial notice, arguing that taking judicial notice of the truth of the contents on Faygo’s Web site was inappropriate as the contents were hearsay, and the excerpt of the unrelated statement of decision was irrelevant. It appears as though the trial court did not rule on these objections, but merely stated in its order that it “considered all admissible evidence.”

In its response to Brimer’s opposition, Faygo included a supplemental declaration from Faygo’s executive vice president stating that Faygo’s Web site does provide a link for the sale of Faygo products, but that soda pop sales over the Web site are limited to aluminum cans and plastic bottles, and Faygo has never sold or shipped glass bottles to consumers or distributors via Internet sales. Also, the declarant stated that Faygo’s bottles contain recycling notices or references for 10 states, and even though it does not have licensed distributors in all of those states, Faygo includes the recycling notices because it is aware that bottles may end up in any of those locations, and including the notices would avoid the costly redesign of its product labels if it ever chose to expand into new markets in the future.

The trial court granted Faygo’s motion to quash service of summons. In its order, the trial court stated that it found “no basis for California courts asserting either general or specific jurisdiction over Faygo Beverages, Inc.” This appeal followed.

Discussion

On November 22, 2006, Brimer filed a request for judicial notice in this court of a consent judgment in an unrelated matter, a complaint in an unrelated matter, and a modification order issued in As You Sow. On December 15, 2006, we deferred ruling on this motion pending our consideration of the merits of the case. A reviewing court has discretion to take judicial notice of court records, even if not judicially noticed in the trial court. (Evid. Code, §§ 452, subd. (d), 459.) We deny the request for judicial notice because these records are not relevant to our decision.

“ ‘California courts may exercise personal jurisdiction on any basis consistent with the Constitution[s] of California and the United States. [Citation.] The exercise of jurisdiction over a nonresident defendant comports with these Constitutions “if the defendant has such minimum contacts with the state that the assertion of jurisdiction does not violate ‘ “traditional notions of fair play and substantial justice.” ’ ” [Citations.]’ [Citation.]” (Snowney v. Harrah’s Entertainment, Inc. (2005) 35 Cal.4th 1054, 1061 (Snowney).) “[T]he minimum contacts test asks ‘whether the “quality and nature” of the defendant’s activity is such that it is “reasonable” and “fair” to require him to conduct his defense in that State.’ [Citations.] The test ‘is not susceptible of mechanical application; rather, the facts of each case must be weighed to determine whether the requisite “affiliating circumstances” are present.’ [Citation.]” (Ibid.)

“Under the minimum contacts test, ‘[p]ersonal jurisdiction may be either general or specific.’ [Citation.]” (Snowney, supra, 35 Cal.4th at p. 1062.) Here, Brimer argues that the trial court incorrectly determined there was no basis for specific jurisdiction, and we focus our review accordingly. “ ‘When determining whether specific jurisdiction exists, courts consider the “ ‘relationship among the defendant, the forum, and the litigation.’ ” [Citations.] A court may exercise specific jurisdiction over a nonresident defendant only if: (1) “the defendant has purposefully availed himself or herself of forum benefits” [citation]; (2) “the ‘controversy is related to or “arises out of” [the] defendant’s contacts with the forum’ ” [citations]; and (3) “ ‘the assertion of personal jurisdiction would comport with “fair play and substantial justice” ’ ” [citations].’ [Citation.]” (Id. at p. 1062.)

“ ‘When a defendant moves to quash service of process’ for lack of specific jurisdiction, ‘the plaintiff has the initial burden of demonstrating facts justifying the exercise of jurisdiction.’ [Citation.] ‘If the plaintiff meets this initial burden, then the defendant has the burden of demonstrating “that the exercise of jurisdiction would be unreasonable.” ’ [Citations.] Where, as here, ‘ “no conflict in the evidence exists . . . the question of jurisdiction is purely one of law and the reviewing court engages in an independent review of the record.” ’ [Citation.]” (Snowney, supra, 35 Cal.4th at p. 1062.)

We first must determine whether Brimer met his burden of demonstrating that Faygo purposefully availed itself of the privilege of doing business in California. “ ‘ “The purposeful availment inquiry . . . focuses on the defendant’s intentionality. [Citation.] This prong is only satisfied when the defendant purposefully and voluntarily directs [its] activities toward the forum so that [it] should expect, by virtue of the benefit [it] receives, to be subject to the court’s jurisdiction based on” [its] contacts with the forum.’ [Citations.] Thus, purposeful availment occurs where a nonresident defendant ‘ “purposefully direct[s]” [its] activities at residents of the forum’ [citation], ‘ “purposefully derive[s] benefit” from’ its activities in the forum [citation], ‘create[s] a “substantial connection” with the forum’ [citation], ‘ “deliberately” has engaged in significant activities within’ the forum [citation], or ‘has created “continuing obligations” between [itself] and residents of the forum’ [citation]. By limiting the scope of a forum’s jurisdiction in this manner, the ‘ “purposeful availment” requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of “random,” “fortuitous,” or “attenuated” contacts . . . .’ [Citation.]” (Snowney, supra, 35 Cal.4th at pp. 1062-1063.)

Brimer is able to show that at the time Faygo placed its glass bottled beverages into the stream of commerce, it recognized the possibility that the product would be sold in California and, accordingly, included the words “CA Cash Refund” on the bottles. The trial court correctly concluded that this is insufficient to constitute “purposeful availment.”

We begin our analysis with Asahi Metal Industry Co. v. Superior Court (1987) 480 U.S. 102 (Asahi). In Asahi, the United States Supreme Court confronted the question whether “the mere awareness on the part of a foreign defendant that the components it manufactured, sold, and delivered outside the United States would reach the forum State in the stream of commerce constitutes ‘minimum contacts’ between the defendant and the forum State such that the exercise of jurisdiction ‘does not offend “traditional notions of fair play and substantial justice.” ’ [Citations.]” (Id. at p. 105.) Although all of the justices agreed that jurisdiction could not properly be exercised, there was no majority on the stream-of-commerce issue. Justice O’Connor concluded, “a defendant’s awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State.” (Id. at p. 112, opn. of O’Connor, J., joined by Rehnquist, C.J., Powell, Scalia, J.J.) “Additional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State.” (Ibid.)

In a concurring opinion, Justice Brennan supported a different, broader test of purposeful availment. “The stream of commerce refers not to unpredictable currents or eddies, but to the regular and anticipated flow of products from manufacture to distribution to retail sale. As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is no corresponding benefit. A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State’s laws that regulate and facilitate commercial activity. These benefits accrue regardless of whether that participant directly conducts business in the forum State, or engages in additional conduct directed toward that State.” (Asahi, supra, 480 U.S. at p. 117, conc. opn. of Brennan, J., joined by White, Marshall, Blackmun, J.J.)

Even under the more relaxed standard set out in Justice Brennan’s concurrence, Brimer has failed to justify the exercise of specific jurisdiction, because Brimer has not established that, at the time of the sale of its products to Real Soda, Faygo knew or should have known those products would be sold in California. Brimer proved that Faygo sold a total of 5,400 cases of glass bottles of soda to Real Soda, a California company, on four occasions between September 2004 and October 2005. Brimer provided copies of the invoices from these four transactions, and the invoices listed Real Soda’s address in California. However, these invoices show nothing more than the fact that Faygo sold its glass-bottled product to a buyer with a California billing address. And out-of-state sales to a buyer with a California office do not suffice to establish specific jurisdiction in California. (Carretti, supra, 101 Cal.App.4th at pp. 1253-1254.) Moreover, Real Soda, not Faygo, arranged for the transportation of the product from the place of sale and had complete control over the distribution of the product following the sale. Finally, Faygo understood that Real Soda distributed its product over the internet, undermining the significance of the billing address as a predictor that the product would be resold in California or any other particular state.

Brimer argues that because Faygo’s bottles contain the language “CA Cash Refund,” Faygo designed its product for use in the California market. We disagree. As Faygo points out, its product labels contained recycling notices for 10 different states, due to its recognition that its products could potentially end up in those states, regardless of its distribution efforts. This labeling also avoided redesign costs if the company decided to expand into a new market in the future. Brimer offered no evidence to challenge these theories or to suggest that the notation was part of a targeted effort to market the bottles in California.

Brimer offered portions of Faygo’s Web site that identify specific locations in California where Faygo products are sold as evidence that Faygo knew its soda in glass bottles was being distributed in this state. Several of the locations listed were businesses supplied by Real Soda; in fact the Faygo Web site listed Real Soda’s web address. However, the Faygo Web site was offered as it existed on February 22, 2006, at least four months after the sales were made to Real Soda. Thus, this evidence does not demonstrate that Faygo knew its products would be resold in California when it made the sales to Real Soda, and Brimer offered no evidence of transactions entered into between Faygo and Real Soda after such knowledge was demonstrated. Even under the standard adopted by Justice Brennan’s concurring opinion in Asahi, the facts in this case do not justify the exercise of specific jurisdiction.

It is not uncommon for a plaintiff to assert that a defendant purposefully availed itself of a forum state by its maintenance of a Web site targeting that state. (See Snowney, supra, 35 Cal.4th at pp. 1063-1065.) Whether a party’s Web site is sufficient to establish purposeful availment depends upon the sliding scale analysis propounded in Zippo Mfg. Co. v. Zippo Dot Com, Inc. (W.D.Pa. 1997) 952 F.Supp. 1119. (Snowney, supra, 35 Cal.4th at p. 1063.) We need not engage in that exercise, however, because Brimer stated in his opening brief, “[Brimer] is not contending on appeal that Faygo’s [Web site], in itself, creates personal jurisdiction. [Brimer] merely wishes to demonstrate that [Faygo] knew that its products were being sold in California through the identification of the retailers to whom the California distributor of its products, Real Soda, sells directly or indirectly through its affiliates. As such, Faygo’s [Web site] is evidence of [its] purposeful availment.” Presumably because of the limited purpose of the evidence, Brimer never discusses the sliding scale analysis. Though Faygo has objected to the admissibility of the Web site, we assume, without deciding, that it is admissible for the limited purpose of proving Faygo’s knowledge that Faygo soda in glass bottles was sold in California.

Brimer relies on several California appellate cases to argue we should reverse. We disagree. In Bridgestone Corp. v. Superior Court (2002) 99 Cal.App.4th 767, a Japanese tire manufacturer was sued for injuries caused by a defective tire sold in California. Although Bridgestone conducted no business in California, specific jurisdiction over the company was upheld, in part, because it sold tires in Japan to Firestone, its “wholly owned subsidiary,” which received at least 25,000 tires monthly at a distribution facility in California. (Id. at p. 772.) Those tires were to be sold primarily in California by over 400 Firestone retail stores located in California. (Ibid.) These facts contrast sharply with the facts in our case.

In As You Sow, supra, 50 Cal.App.4th 1859, the court upheld the exercise of specific jurisdiction over the defendant, an Illinois paint manufacturer. (Id. at p. 1863.) Crawford Laboratories had sold its product to private California distributors 16 times in six years (id. at p. 1863), and the court concluded Crawford had “purposefully consummated business arrangements with California companies on 16 separate occasions so it could profit from the products’ use in California” (id. at p. 1871; cf. Secrest Machine Corp. v. Superior Court (1983) 33 Cal.3d 664, 670-671). The sales by Faygo to Real Soda do not meet this test, largely because there is no evidence that, at the time of the sales, Faygo controlled resales of the product or even knew the soda was being resold in California.

Finally, in Cassiar Mining Corp. v. Superior Court (1998) 66 Cal.App.4th 550, specific jurisdiction over a Canadian corporation was properly exercised. The corporation had sold thousands of tons of raw asbestos over a 38-year period directly to California plants. (Id. at pp. 553, 555.) The court concluded this history of direct sales to California users demonstrated an intention to serve the California market. (Id. at p. 556.) No such history exists here.

The Carretti case is more apt and we adopt its reasoning here. Italpast, an Italian corporation that manufactured pasta making machines, argued that a California court did not have personal jurisdiction over it in a case arising from an injury caused by one of its machines. (Carretti, supra, 101 Cal.App.4th at p. 1239.) The Court of Appeal agreed, and affirmed a motion to quash service of summons. (Id. at p. 1255.) The evidence showed that Italpast did not market or advertise its product in the United States, although it did send product information to the United States on request. Italpast had no offices or employees in the United States, and did not have a contract with any distributor in the United States. Italpast had only sold its machines to one California buyer, and this buyer was the distributor that had sold the machine that caused the injury in the case. Italpast had been doing business with this buyer for seven years: the buyer traveled to Italy twice a year to buy the machines, the buyer paid for the shipping and insurance and assumed the risk of loss during shipping, and the buyer then resold the machines in California and other states. (Id. at p. 1240.) The sales receipts reflected that the buyer’s office was located in California, and there was evidence of telephone contacts and correspondence between Italpast and the buyer in his California office. Italpast also sent replacement parts to the buyer on the buyer’s request. Additional evidence showed one instance where the buyer requested that Italpast send replacement parts directly to a consumer in California, and Italpast sent two of its representatives to California to meet with this customer at the buyer’s request. (Id. at pp. 1240-1241.)

Although it may have been foreseeable that the machines could wind up in California because the buyer’s office was in California, Carretti explained specific jurisdiction was lacking: it could not be said that Italpast had or should have had an expectation that the products would be resold in California. “Italpast sold its products in Italy to a purchaser who traveled there for the purpose of engaging in the transaction. We do not construe this as an effort on Italpast’s part to serve the California market. It was serving the purchaser who arrived to do business with it in Italy. True enough, it may have been foreseeable that the machines could wind up in California, inasmuch as the purchaser in question happened to have an office in California. But this is not the same as saying Italpast had or should have had an expectation that the products would be sold to California consumers.” (Id. at pp. 1246-1247.) Although Italpast later became aware of a specific customer located in California, it was unclear whether this happened before or after the machine that caused the injury was sold. (Id. at p. 1247.) Under such circumstances, specific jurisdiction was unwarranted. (Id. at p. 1249.)

Faygo’s contacts with California were even more limited than Italpast’s, and under the reasoning in Carretti, we cannot conclude Faygo had reason to know it was availing itself of the California market when it entered into its transactions with Real Soda.

Because Brimer failed to carry its burden to demonstrate that Faygo purposefully availed itself of forum benefits, we need not address the remaining two steps in the analysis employed to determine the propriety of exercising specific jurisdiction.

Disposition

The judgment is affirmed. Respondent shall recover its costs on appeal.

We concur: JONES, P. J., GEMELLO, J.


Summaries of

Brimer v. Faygo Beverages, Inc.

California Court of Appeals, First District, Fifth Division
Dec 7, 2007
No. A114983 (Cal. Ct. App. Dec. 7, 2007)
Case details for

Brimer v. Faygo Beverages, Inc.

Case Details

Full title:RUSSELL BRIMER, Plaintiff and Appellant, v. FAYGO BEVERAGES, INC.…

Court:California Court of Appeals, First District, Fifth Division

Date published: Dec 7, 2007

Citations

No. A114983 (Cal. Ct. App. Dec. 7, 2007)