Court Opinion

ID: 9297676
Source: CourtListenerOpinion
Date Created: 2022-11-30 23:01:30.289996+00
Date Added: 2024-06-11T17:13:29.185519
License: Public Domain

Filed 11/30/22 Cooper v. Technogym CA1/5

                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                  DIVISION FIVE

 JOHN COOPER,
                                                                        A160941
           Plaintiff and Appellant,
 v.                                                                     (Alameda County
                                                                        Super. Ct. No. RG17882459)
 TECHNOGYM, S.p.A.,
           Defendant and Respondent.

         Plaintiff John Cooper (Plaintiff) appeals from the trial court’s order
granting the motion to quash service of process filed by Technogym, S.p.A.,
an Italian company (hereafter, Technogym SpA) for lack of personal
jurisdiction. We affirm.
                                                   BACKGROUND
         In December 2015, Plaintiff was injured on an exercise machine at a
24 Hour Fitness gym in California. The machine was manufactured by
Technogym SpA and was sold to 24 Hour Fitness by Technogym USA Corp.
(hereafter, Technogym USA), a Washington corporation and a subsidiary of
Technogym SpA. In June 2019, Plaintiff filed the operative first amended

                                                               1
complaint alleging claims against 24 Hour Fitness, Technogym USA, and
Technogym SpA.
      Technogym SpA, appearing specially, moved to quash service of process
for lack of personal jurisdiction. It submitted a declaration from Technogym
SpA’s “Industrial Director” averring Technogym SpA had no place of
business, officers, employees, property, bank accounts, or agent for service of
process in California; had never paid taxes or signed a contract in California;
did not advertise, market, solicit business, or conduct business in California;
did not design products for the California market; and did not ship products
to California for use by California consumers. The Industrial Director
further averred that the allegedly defective machine was designed and
assembled in Italy, and that Technogym SpA “is a completely independent,
distinct entity from” Technogym USA.
      Technogym SpA also submitted a declaration from Technogym USA’s
“Service Director” averring Technogym USA’s principal place of business is in
New Jersey; it “acquires equipment in bulk from Technogym, S.p.A. based on
the existing and anticipated needs” of customers; pays third party companies
to transport the purchased equipment to the United States; maintains its
inventory in the United States; and negotiates sales, arranges delivery and
installation, and receives payment for its equipment. The Service Director
further averred that Technogym SpA “is not involved in the day-to-day
operations of Technogym[] USA.”
      With his opposition, Plaintiff submitted excerpts of Technogym SpA’s
annual reports from 2015, 2016, 2017, and 2018 (a complete report for 2017
was submitted with Technogym SpA’s reply papers), pointing to certain
statements about “Technogym”: identifying California customers such as
“Facebook and Google in Silicon Valley,” Stanford University, and a Los

                                       2
Angeles hotel; describing participation in two California trade shows; and
discussing United States customers and expansion. Plaintiff also submitted
two 2019 internet job postings for California sales developers with the
employer “Technogym.” Plaintiff submitted excerpts from the deposition of
24 Hour Fitness’s equipment standards manager since March 2018 who
testified his “Technogym” account representative was located in Southern
California. Finally, Plaintiff submitted printouts from the website
 stating the website was “operated by” Technogym
SpA with “[p]roducts and services supplied in USA and Canada by”
Technogym USA.
      In the alternative, Plaintiff requested leave to seek jurisdictional
discovery. Plaintiff acknowledged he could have sought to continue the
hearing on the motion to quash to seek such discovery before filing his
opposition, but “believed the evidence he already [had] clearly demonstrated
that personal jurisdiction exists, and therefore did not want to delay the
resolution of this matter.”
      The trial court granted the motion to quash. The court denied
Plaintiff’s request for jurisdictional discovery finding, in part, Plaintiff “has
not demonstrated that discovery is likely to lead to the production of evidence
of facts establishing jurisdiction.”
                                  DISCUSSION
I.    Personal Jurisdiction
      Plaintiff argues the trial court erred in finding Technogym SpA was not
subject to personal jurisdiction. We disagree.
      A.    Legal Background
      “A California court may exercise personal jurisdiction over a
nonresident defendant to the extent allowed under the state and federal

                                         3
Constitutions. (Code Civ. Proc., § 410.10.) The exercise of personal
jurisdiction is constitutionally permissible only if the defendant has sufficient
‘minimum contacts’ with the forum state so that the exercise of jurisdiction
‘does not offend “traditional notions of fair play and substantial justice.”
[Citations.]’ [Citations.] ... [¶] A defendant that has substantial, continuous,
and systematic contacts with the forum state is subject to general jurisdiction
in the state, meaning jurisdiction on any cause of action. [Citations.] Absent
such extensive contacts, a defendant may be subject to specific jurisdiction,
meaning jurisdiction in an action arising out of or related to the defendant’s
contacts with the forum state.” (HealthMarkets, Inc. v. Superior Court (2009)
171 Cal.App.4th 1160, 1166–1167 (HealthMarkets).)
      “A nonresident defendant is subject to specific personal jurisdiction
only if (1) the defendant purposefully availed itself of the benefits of
conducting activities in the forum state; (2) the controversy arises out of or is
related to the defendant’s forum contacts; and (3) the exercise of jurisdiction
would be fair and reasonable. [Citations.] ‘These guidelines are not
susceptible of mechanical application, and the jurisdictional rules are not
clear-cut. Rather, a court must weigh the facts in each case to determine
whether the defendant’s contacts with the forum state are sufficient.”
(HealthMarkets, supra, 171 Cal.App.4th at p. 1167.) “[W]e apply
jurisdictional principles with an abundance of caution where the defendant is
a foreign corporation.... ‘ “Great care and reserve should be exercised when
extending our notions of personal jurisdiction into the international field.” ’ ”
(F. Hoffman-La Roche, Ltd. v. Superior Court (2005) 130 Cal.App.4th 782,
795 (Hoffman-La Roche).)
      “A plaintiff opposing a motion to quash service of process for lack of
personal jurisdiction has the initial burden to demonstrate facts establishing

                                        4
a basis for personal jurisdiction. [Citation.] If the plaintiff satisfies that
burden, the burden shifts to the defendant to show that the exercise of
jurisdiction would be unreasonable. [Citation.] If there is no conflict in the
evidence, the question whether a defendant’s contacts with California are
sufficient to justify the exercise of personal jurisdiction in this state is a
question of law that we review de novo. [Citation.] If there is a conflict in the
evidence underlying that determination, we review the trial court’s express or
implied factual findings under the substantial evidence standard.”
(HealthMarkets, supra, 171 Cal.App.4th at pp. 1167–1168.)
      B.     Analysis
      Plaintiff does not contend Technogym SpA is subject to general
jurisdiction. We therefore consider whether it is subject to specific
jurisdiction.
      Plaintiff must first demonstrate Technogym SpA purposefully availed
itself of the benefits of conducting activities 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. [Citation.]’ [Citation.] [¶] ‘[P]urposeful 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

                                         5
that a defendant will not be haled into a jurisdiction solely as a result of
‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts....” [Citation.] Instead, the
defendant will be subject to personal jurisdiction only if “ ‘it has clear notice
that it is subject to suit there, and can act to alleviate the risk of burdensome
litigation by procuring insurance, passing the expected costs on to customers,
or, if the risks are too great, severing its connection with the state.’ ” ’ ”
(HealthMarkets, supra, 171 Cal.App.4th at p. 1168.)
      Plaintiff argues Technogym SpA has contracts with California
businesses, pointing to the statements in the annual reports about Facebook,
Google, and other California customers.1 Plaintiff challenges the trial court’s
finding that “Technogym” was used in the annual reports to refer to the
brand rather than to Technogym SpA. Plaintiff argues the reports indicate
they are for Technogym SpA, but the record cite provided in fact states, “this
report covers both the consolidated financial statements of the Technogym
Group and the financial statements of the parent company Technogym SpA.”
Technogym Group is identified elsewhere in the reports as Technogym SpA
and numerous subsidiaries and affiliated companies. Plaintiff points to
instances in the annual reports where “Technogym” refers to Technogym
SpA, but this is not inconsistent with the reports’ use of “Technogym” to refer
to Technogym SpA and its subsidiaries and affiliated companies.2

      1 Technogym SpA argues the post-2015 annual reports and other
evidence from after the alleged injury are not relevant to the jurisdictional
analysis. We need not decide the issue because we find the evidence
insufficient in any event.
      2 Plaintiff also claims the reports define “Technogym” as Technogym
SpA, but the record citation provided is to objections to evidence filed by
Plaintiff in the trial court. “Citing points and authorities filed in the trial
court is not appropriate support for factual assertions in a brief.” (Alki
Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 590.)

                                          6
Accordingly, we agree with the trial court that references to “Technogym” in
the annual reports are to both Technogym SpA and its subsidiaries and
affiliates. The reports therefore do not provide evidence that Technogym SpA
has signed contracts with California customers and do not contradict the
evidence in Technogym SpA’s declaration that it has not.3
      Moreover, the issuance of consolidated annual reports and the use of a
single term to refer to both Technogym SpA and its subsidiaries and affiliates
does not impact our jurisdictional analysis. “The cases are unanimous that
consolidated reporting is standard business practice and will not support
jurisdiction in the absence of evidence establishing an agency relationship.
[Citations.] ... ‘Consolidating the activities of a subsidiary into the parent’s
annual reports is a common business practice.” (Sonora Diamond Corp. v.
Superior Court (2000) 83 Cal.App.4th 523, 549–550 (Sonora Diamond);
accord, BBA Aviation PLC v. Superior Court (2010) 190 Cal.App.4th 421, 432
(BBA Aviation).) “[C]onsolidated media releases . . . , consolidated reporting,
joint employment of professional services, and the use of ‘we’ or ‘the company’
are typical and actually expected of affiliated or wholly owned companies,
and such facts do not establish agency for purposes of jurisdiction.”
(Hoffman-La Roche, supra, 130 Cal.App.4th at p. 801.)
      Similarly, there is no evidence that the internet job postings for
California sales developers with “Technogym” were for employment with
Technogym SpA rather than Technogym USA, and Technogym SpA’s

      3 Plaintiff complains the averments in the Technogym SpA and
Technogym USA declarations are vague and general, but he fails to
demonstrate they are invalid or have been contradicted. (Cf. Swenberg v.
dmarcian, Inc. (2021) 68 Cal.App.5th 280, 297 (Swenberg) [“this [declarant’s]
general statement does not suffice to refute [another declarant’s] specific
one”].)

                                         7
declarations provide evidence to the contrary. In claiming otherwise,
Plaintiff cites to a website link, a practice repeated elsewhere in his brief.
Plaintiff did not file a request that this court take judicial notice of the
existence of these websites, nor does he provide any record citation
demonstrating he made such a request to the trial court. We therefore
disregard Plaintiff’s citations to these websites. (Ross v. Creel Printing &
Publishing Co. (2002) 100 Cal.App.4th 736, 744 [“[D]efendants have not
complied with the applicable rules for seeking judicial notice on either the
trial court or the appellate level as to these materials. We do not consider the
material.”].)
      Plaintiff next contends purposeful availment is shown by evidence that
Technogym SpA sold its products to Technogym USA knowing that
Technogym USA was reselling them in California. “[M]ere knowledge” that
the purchaser of a product will sell that product in California, “without
something more, is insufficient to establish jurisdiction in a forum state.”
(Bombardier Recreational Products, Inc. v. Dow Chemical Canada ULC
(2013) 216 Cal.App.4th 591, 604 (Bombardier); see ibid. [manufacturer’s
knowledge that purchaser of fuel tanks would use them “in personal
watercraft that would be sold in California ... would still not provide
sufficient minimum contacts with California”].)4 Jayone Foods, Inc. v.

      4 Although Plaintiff argues the “stream of commerce” theory applies, a
majority of the United States Supreme Court has agreed that entering a
product into the stream of commerce with knowledge the product will enter
the forum state is, without more, insufficient to establish jurisdiction.
(Bombardier, supra, 216 Cal.App.4th at pp. 600–604 [discussing plurality and
concurring opinions in J. McIntyre Machinery, Ltd. v. Nicastro (2011)
564 U.S. 873 (J. McIntyre)].) We agree with Bombardier’s analysis of
J. McIntyre and Bombardier’s reliance, in areas left unresolved by
J. McIntyre, on the California Supreme Court’s description of the purposeful

                                         8
Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543, relied on by Plaintiff,
is distinguishable. In that case, the foreign manufacturer sold its product
directly to multiple distributors located in California and, on a visit to one of
these distributors, went to a California retail store so that the foreign
manufacturer’s representatives “could observe the placement of the products
inside the store as well as the store’s clientele.” (Id. at p. 557.) The Court of
Appeal concluded the manufacturer “made direct efforts to serve a California
market by repeatedly selling and shipping its consumer products to multiple
distributors in California.” (Ibid.) In contrast, Technogym SpA sold its
product to a Washington company with a principal place of business in New
Jersey, and there is no evidence a Technogym SpA representative ever visited
California distributors or California stores selling its products.
      Plaintiff points to the website operated by Technogym SpA listing
support teams and a retail store in California, suggesting this shows
Technogym SpA has California employees and a California store. Again,
although the website is operated by Technogym SpA, the United States
version of the website states that products and services are provided by
Technogym USA. The declarations from Technogym SpA and Technogym
USA are evidence that Technogym SpA does not have California employees
or a California store. Moreover, the operation of the website itself does not
constitute purposeful availment. “ ‘ “Creating a site, like placing a product
into the stream of commerce, may be felt nationwide—or even worldwide—
but, without more, it is not an act purposefully directed toward the forum
state.’ ” [Citation.] Otherwise, ‘personal jurisdiction in Internet-related

availment requirement as set forth in that case. (Bombardier, at pp. 600–
603.)

                                        9
cases would almost always be found in any forum in the country.’ ”
(Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 274.)
      Swenberg v. dmarcian, Inc., supra, 68 Cal.App.5th 280, relied on by
Plaintiff, is distinguishable. In Swenberg, the plaintiff sued his former
employer, a California company, and a resident of the Netherlands who was
the general manager of a European affiliate. (Id. at pp. 284, 296.) There was
uncontradicted evidence that the Netherlands resident “publicly present[ed]
himself as a leader of” the California company, the European affiliate’s
website “automatically route[d]” to the California company’s website, and
prospective customers who contacted the website were directed to the
European affiliate by a California-based employee of the California company.
(Id. at pp. 297–298.) The Court of Appeal concluded, “Having established and
made economic use of a relationship with a California company and its
employees, [the Netherlands resident] could reasonably expect to be subject
to the jurisdiction of California courts in litigation connected to this
relationship.” (Id. at p. 298.) Technogym USA is not a California company;
the United States version of the website clearly states it is operated by
Technogym SpA but products and services are provided by Technogym USA;
and there is no evidence that Technogym SpA receives customer leads from
Technogym USA, much less from a California-based employee of a California
company. Plaintiff has not demonstrated that Technogym SpA “established
and made economic use of a relationship with a California company and its
employees.”
      Plaintiff separately argues Technogym SpA is subject to jurisdiction
because of its subsidiary Technogym USA. Plaintiff relies on “the
representative services doctrine,” pursuant to which jurisdiction is conferred
over a foreign parent corporation “because the foreign parent corporation

                                        10
permitted the subsidiary to perform acts in the forum state that the parent
would otherwise have had to perform itself as a part of the parent’s expected
business operations.” (Sonora Diamond, supra, 83 Cal.App.4th at pp. 542–
543.) We reject the contention. First, “representative services supports
general jurisdiction” (id. at p. 543, fn. 13), which Plaintiff has disavowed.
(See also Hoffman-La Roche, supra, 130 Cal.App.4th at p. 798 [“Under the
representative services doctrine, ... general jurisdiction may be exercised over
a related foreign defendant principal....” (italics added)]; accord, BBA
Aviation, supra, 190 Cal.App.4th at p. 430.) Second, the United States
Supreme Court has criticized a lower court’s jurisdictional finding based on
the lower court’s “observation that [a subsidiary’s] services were ‘important’
to [the parent company], as gauged by [the parent’s] hypothetical readiness to
perform those services itself if [the subsidiary] did not exist. Formulated this
way, the inquiry into importance stacks the deck, for it will always yield a
pro-jurisdiction answer: ‘Anything a corporation does through an
independent contractor, subsidiary, or distributor is presumably something
that the corporation would do “by other means” if the independent contractor,
subsidiary, or distributor did not exist.’ ” (Daimler AG v. Bauman (2014)
571 U.S. 117, 135–136.) Daimler appears to reject the representative services
doctrine or, at the least, directs courts to apply it narrowly. Even assuming
the doctrine remains viable, it does not apply where, as here, the parent
company did not control the day-to-day operations of the subsidiary and the
two functioned as fully independent entities. (See Hoffman-La Roche, supra,
130 Cal.App.4th at pp. 800, 802 [where Swiss company did not exert control
over “day-to-day operations” of affiliated U.S. companies and U.S. companies
“function[ed] as independent entities,” U.S. companies did not “act[] as mere

                                       11
instrumentalities of [Swiss company] in the furtherance of its business” and
representative services doctrine did not apply].)
      Technogym USA’s status as Technogym SpA’s subsidiary also does not
constitute purposeful availment. “The mere ownership of a subsidiary does
not subject a nonresident parent company to specific personal jurisdiction
based on the subsidiary’s forum contacts. Ownership of a subsidiary alone
does not constitute purposeful availment. Rather, purposeful availment
requires some manner of deliberately directing the subsidiary’s activities in,
or having a substantial connection with, the forum state.” (HealthMarkets,
supra, 171 Cal.App.4th at p. 1169.) Accordingly, “A parent company
purposefully avails itself of forum benefits through the activities of its
subsidiary, as required to justify the exercise of specific personal jurisdiction,
if and only if the parent deliberately directs the subsidiary’s activities in, or
having a substantial connection with, the forum state. Only in those
circumstances should the parent company ‘reasonably anticipate being haled
into court’ [citation] in the forum state based on the activities of its
subsidiary.” (Ibid.) Plaintiff’s evidence establishes that Technogym SpA is
aware of Technogym USA’s California activities, but it does not demonstrate
Technogym SpA deliberately directed them.
      We therefore conclude Plaintiff failed to establish that Technogym SpA
purposefully availed itself of the benefits of conducting activities in
California.5 Because of this conclusion, we need not consider the remaining
two prongs of the specific jurisdiction inquiry.

      5 At oral argument, Plaintiff’s counsel relied heavily on the facts of
J. McIntyre, supra, 564 U.S. 873. In J. McIntyre, a foreign manufacturer sold
its machines in the United States through an independent distributor; the
manufacturer attended annual trade shows in the United States, but not in
the forum state of New Jersey; and no more than four machines ended up in

                                        12
II.   Discovery
      Plaintiff argues the trial court erred in denying Plaintiff’s alternative
request for discovery.
      “A plaintiff attempting to assert jurisdiction over a nonresident
defendant is entitled to an opportunity to conduct discovery of the
jurisdictional facts necessary to sustain its burden of proof. [Citation.] In
order to prevail on a motion for a continuance for jurisdictional discovery, the
plaintiff should demonstrate that discovery is likely to lead to the production
of evidence of facts establishing jurisdiction.” (In re Automobile Antitrust
Cases I & II (2005) 135 Cal.App.4th 100, 127 (Automobile Antitrust).) “A
ruling on a motion to continue in order to allow additional time to discover
jurisdictional facts lies in the trial court’s discretion. On appeal, we will not
reverse the trial court’s ruling unless we find a manifest abuse of that
discretion.” (Ibid.)
      Plaintiff contends discovery “could uncover further direction by
Technogym of its good[s] and services toward the State of California,” “could
also reveal Technogym’s overt acts aimed at selling its products in

New Jersey. (Id. at p. 876 (plur. opn. of Kennedy, J.).) Plaintiff’s counsel
argued that, although a majority of the United States Supreme Court found
no purposeful availment, the case was an extremely close one, and asserted
that had one fact been different—had the distributor been a subsidiary, had
the manufacturer attended trade shows in New Jersey, or had more than four
machines ended up in New Jersey—the outcome would have been different.
We do not so read the case, which left uncertain what additional facts would
have changed the outcome. (See id. at p. 886 (plur. opn. of Kennedy, J.); id.
at p. 889 (conc. opn. of Breyer, J.); see also Bombardier, supra,
216 Cal.App.4th at p. 602 [“J. McIntyre ... cleared the air only slightly....
[T]he high court has not agreed on exactly what more besides [placing a
product in the stream of commerce knowing the product may or will end up in
the forum state] must be shown....”].)

                                        13
California,” and/or “could also show an alter ego relationship (for example,
perhaps by showing commingling of assets, officers, etc.).” The standard is
not whether discovery “could” lead to the production of evidence establishing
jurisdiction, it is whether discovery is likely to do so. Plaintiff’s speculation
does not meet this standard and therefore is not sufficient to establish the
trial court abused its discretion. (See Automobile Antitrust, supra,
135 Cal.App.4th at p. 127 [where the plaintiffs “failed to show that further
discovery was likely to lead to the production of evidence establishing
jurisdiction, ... the trial court did not abuse its discretion by rejecting
plaintiffs’ request for a continuance to conduct further jurisdictional
discovery”].)
                                  DISPOSITION
      The order is affirmed. Respondent is awarded its costs on appeal.

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                      SIMONS, J.

We concur.

JACKSON, P. J.

BURNS, J.

(A160941)

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