Opinion ID: 2814607
Heading Depth: 2
Heading Rank: 2

Heading: Celgard’s Purposeful-Direction Theory

Text: Celgard’s purposeful-direction theory of jurisdiction is based only on SKI’s involvement in the EV market. Celgard contends that SKI has purposefully directed its 8 CELGARD, LLC v. SK INNOVATION CO., LTD. activities to North Carolina residents through a joint venture, allegedly with “Kia,” to develop batteries for the 2015 Kia Soul EV. Appellant’s Br. 23. Celgard argues that the joint venture demonstrates the 2015 Kia Soul EV was actively marketed in North Carolina. This marketing activity is allegedly shown by the advertisements of the two Kia dealers that suggest that the Soul EV would be coming soon to dealerships in North Carolina. According to Celgard, these ads constitute offers for sale under 35 U.S.C. § 271(a), supporting jurisdiction in North Carolina. Celgard contends that it is irrelevant that the ads were placed by the dealers, and not by SKI, because when a defendant exploits the “typical industry medium” to reach customers, it has purposefully directed activities to the forum, establishing jurisdiction. Appellant’s Br. 25 (quoting Momenta Pharm., Inc. v. Amphastar Pharm., Inc., 841 F. Supp. 2d 514, 520–21 (D. Mass. 2012)). SKI responds that Celgard cannot show that SKI purposefully directed activity toward North Carolina because it was the dealers, not SKI or KIA, who made the statements that the Soul EVs were soon to arrive in North Carolina. SKI argues that to succeed on its purposefuldirection theory of jurisdiction, Celgard must show that the dealers were either SKI’s alter ego or its agents. SKI claims that Celgard makes no effort to show the dealers are SKI’s alter ego, and that Celgard has not provided evidence as to agency since SKI does not have any relationship with the Kia dealers or a right to control them. SKI points out that it has no joint-venture agreement with KMA; the agreement is with KMC, KMA’s parent corporation. SKI argues that Celgard has not shown a chain of imputation from the dealers to KMA to KMC to SKI, as would be necessary to show jurisdiction under an agency theory. SKI also contends that Celgard has failed to show that SKI has any relationship at all with the dealers. CELGARD, LLC v. SK INNOVATION CO., LTD. 9 We agree with SKI that personal jurisdiction cannot be established based on any SKI activity directed toward North Carolina. There is no record evidence that SKI purposefully directed its activities, related to the Kia Soul EV or otherwise, toward the forum state. Thus, we next consider whether the activities of another party, which acted on SKI’s behalf, could be imputed to SKI, and thus establish jurisdiction over SKI For purposes of specific personal jurisdiction, the contacts of a third-party may be imputed to the defendant under either an agency or alter ego theory. In order to establish jurisdiction under the agency theory, the plaintiff must show that the defendant exercises control over the activities of the third-party. See, e.g., Daimler AG v. Bauman, 134 S. Ct. 746, 759 n.13 (2014) (“[A] corporation can purposefully avail itself of a forum by directing its agents or distributors to take action there.”). In Red Wing Shoe, we rejected the notion that an agency relationship existed between the defendant and its licensees because the defendant did not exercise control over the licensees. Red Wing Shoe Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1362 (Fed. Cir. 1998). Alternatively, a plaintiff may establish personal jurisdiction under an alter ego theory. In Nuance, we found that the out-ofstate corporate defendant purposefully availed itself of the forum state through an entity acting as its alter ego. Nuance Commc’ns, Inc. v. Abbyy Software House, 626 F.3d 1222, 1232–33 (Fed. Cir. 2010). The in-state, named defendant sold the software of a sister company in the forum state. The named defendant operated as the alter ego of the sister company, as shown by both entities being commonly owned and not transacting at arms-length, and by nearly all of the named defendant’s profits flowing back to the sister company. Id. Here, Celgard does not point to any evidence on the record establishing that the dealers were operating either as SKI’s agents or alter egos. The record does not show 10 CELGARD, LLC v. SK INNOVATION CO., LTD. any attempt by SKI to purposefully direct or control the activities of the dealers in North Carolina. As such, Celgard has not shown the requisite control for jurisdiction to be premised on the acts of agents. Similarly, Celgard has not alleged facts sufficient to base jurisdiction on the acts of an alter ego. The joint venture agreement is insufficient to establish jurisdiction under an alter ego theory because the agreement is between SKI and KMC, a company that is based in Korea. While KMC is the parent company of KMA, there is no evidence that KMA or the two Kia dealers were aware of the joint venture agreement, or that the advertisements were in any way related to the joint venture. Nor is there any evidence of common control of the Kia dealers and SKI, or any flow of profits from the former to the latter. Put simply, there is no evidence of any relationship between SKI and the North Carolina Kia dealers. Absent such evidence, Celgard cannot establish personal jurisdiction by arguing that SKI was directing its activities to North Carolina through the Kia dealers there. We conclude that, the posting of the internet pages by the North Carolina dealers were unilateral actions taken by third parties unrelated to SKI. The Supreme Court has forbidden the exercise of jurisdiction over a defendant on the basis of unilateral acts of third-parties. In Hanson v. Denckla, the Supreme Court explained that the “unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State” because it is essential that the defendant take actions purposefully availing him or her of the privileges and benefits of the forum state. 357 U.S. 235, 253-54 (1958) (citing Int’l Shoe, 326 U.S. at 319). This purposeful-availment requirement is tied to the principle that a defendant should be able to reasonably foresee litigation in the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980); CELGARD, LLC v. SK INNOVATION CO., LTD. 11 Hanson, 357 U.S. at 253). Indeed, the purposeful- availment requirement ensures that a foreign defendant will not be unexpectedly “haled into a jurisdiction solely as a result of . . . the unilateral activity of . . . a third person.” Id. at 475. Thus, the unilateral advertising activities of the Kia dealers do not support the exercise of jurisdiction over SKI in North Carolina. Celgard has failed to allege facts that allow it to meet its burden under a purposeful-availment theory of jurisdiction. We hold that the district court was correct in declining to exercise jurisdiction over SKI based on any activity of SKI directed at the forum state, the joint agreement between SKI and KMC, or the unilateral actions of the two Kia dealers.