Court Opinion

ID: 9913888
Source: CourtListenerOpinion
Date Created: 2023-12-28 22:02:12.307233+00
Date Added: 2024-06-11T13:09:28.493683
License: Public Domain

Filed 12/28/23 Yang v. Shanying Internat. Holdings Corp. CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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has not been certified for publication or ordered published for purposes of rule 8.1115.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

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

JEFFREY QIUHONG YANG,                                                B317227

         Plaintiff and Appellant,                                    Los Angeles County
                                                                     Super. Ct. No. 20STCV45192
         v.

SHANYING INTERNATIONAL
HOLDINGS CORPORATION LTD.,

         Defendant and Respondent.

     APPEAL from an order of the Superior Court of Los
Angeles County, Curtis A. Kin, Judge. Affirmed.

     Workplace Justice Advocates, Tamara S. Freeze and
Sharon Perez for Plaintiff and Appellant.

     DLA Piper, Melanie E. Walker and Akhil Sheth for
Defendant and Respondent.
                                    _________________________
                         INTRODUCTION
      Appellant Jeffrey Qiuhong Yang (Yang) filed a complaint
alleging breach of contract, wrongful termination, and
whistleblower retaliation against his former employer, Global
Win Capital Corporation (Global Win). Yang also named Global
Win’s China-based twice-removed parent corporation, Shanying
International Holdings Corporation Limited (Shanying), as a
defendant in the lawsuit.
      Shanying specially appeared and moved to quash service of
the summons and the complaint based on lack of personal
jurisdiction. The trial court granted the motion. We exercise an
independent review of the record and find no general or specific
jurisdiction over Shanying. We affirm.

      FACTUAL AND PROCEDURAL BACKGROUND
A.    Relevant Factual Background
      Global Win, formed on October 2, 2017, is a Delaware
corporation and a subsidiary of Shanying. Global Win holds
ownership interests in entities that own or operate pulp, paper,
packaging, and wastepaper recycling businesses in the United
States.
      Shanying is a Chinese corporation formed on October 20,
1999 that trades on the Shanghai Stock Exchange. Shanying is
the parent company of Global Win.
B.    Yang’s Civil Complaint
      On November 24, 2020, Yang filed a civil complaint against
Global Win, Shanying, and Kevin Yulin Jiang (Jiang) for
whistleblower retaliation, breach of contract, breach of the
covenant of good faith and fair dealing, violation of Business and

                                2
Professions Code section 17200 et seq., wrongful termination, and
defamation.
       The complaint alleged Yang entered into the Executive
Employment Agreement (employment agreement) with Global
Win for the position of Chief Financial Officer (CFO) on
September 10, 2017. Yang performed his work at 1520
Bridgegate Drive, Suite 206, in Diamond Bar, California. Yang
alleged that both Global Win’s and Shanying’s principal business
offices are located at that address.
       In his capacity as CFO, Yang “reported multiple serious
fraudulent activities” by Global Win, its headquarters, and
affiliated company management to “manipulate the parent
company financial profit . . . and [Global Win’s] receipt of
approximate $80 million financing from China without following
proper government regulation . . . of international money transfer
from China to the United States.” Yang refused to participate in
such “illegal activities and raised his concerns to the upper
management.” This ultimately led to termination of Yang’s
employment.
       On October 22, 2019, Yang received “a surprise
Termination Notice . . . stating that he would be terminated on
October 25, 2019 for alleged ‘serious misconduct.’ ” The
termination notice “falsely accused” Yang of committing multiple
incidents of fraud, theft, embezzlement, breach of fiduciary
duties, and material breach of obligations under the employment
agreement.
       Yang included a copy of the employment agreement as an
exhibit to the complaint. The employment agreement provides it
is “made and entered . . . by and between [Global Win], a
Delaware corporation and a subsidiary of [Shanying].” It

                                3
specifies that Global Win “hereby employs [Yang] as its Chief
Financial Officer.” The last page of the employment agreement
includes two signatures. Underneath “Jeffrey Qiuhong Yang” is
Yang’s signature, and underneath “Global Win Capital
Corporation” is Jiang’s signature. Jiang’s position is specified as
“VP Human Resources”; the line beneath Jiang’s position states
“Shanying International Holdings Corporation Limited.”
C.    Shanying’s Motion to Quash Service of Summons and
      Complaint
      On January 27, 2021, Shanying filed a motion to quash the
summons and complaint for lack of personal jurisdiction under
Code of Civil Procedure section 418.10, subdivision (a). Shanying
argued the California court lacked both general and specific
jurisdiction over it.
      At the hearing on March 23, 2021, the trial court denied
the motion without prejudice to give Yang more “time to do
jurisdictional discovery.” The trial court invited specially
appearing Shanying to file a new motion to quash thereafter.
      Months of discovery followed, including production of over
2,000 documents totaling over 16,000 pages.
D.    First Amended Complaint
      On July 27, 2021, Yang filed his first amended complaint
(FAC) with the same causes of action and factual allegations as
in the original complaint. We recite new or different allegations:
      Yang now alleged he entered into the employment
agreement with Global Win and Shanying. The employment
agreement was signed by Yang and Jiang—as the “VP Human
Resources of Shanying.” In his capacity as CFO, Yang
“discovered and reported multiple serious fraudulent activities”

                                 4
by Global Win and Shanying, its headquarters, and affiliated
company management in order to “manipulate the parent
company financial profit . . . and [Global Win’s] receipt of
approximate $80 million financing from China without following
proper government regulation.”
E.   Shanying’s Second Motion to Quash Service of
     Summons and Complaint
      On September 24, 2021, Shanying renewed his motion to
quash the summons and service of the FAC. Shanying again
argued the California court lacked both general and specific
jurisdiction over Shanying.
      Shanying identified itself as the “indirect foreign parent
corporation” of Global Win. Shanying argued it is a passive
holding company organized under the laws of and headquartered
in China. Shanying “does not conduct any business and, instead,
passively holds investments in its subsidiaries.” It has never
been licensed to conduct business in California or anywhere in
the United States in general; it has not had meaningful contacts
with California. Shanying neither employed Yang nor has an
employment relationship with him.
      In support of its motion, Shanying submitted the
declarations of Jintang Pan (Pan) and Jiang.
      Pan’s declaration provides:
      Pan is the “Director and Vice President of [Shanying].”
Shanying was formed in China in 1999; its principal place of
business, offices, and mailing address are in China. Shanying
has never been incorporated in, licensed to conduct business in,
or had its principal place of business in California. Shanying
trades on the Shanghai Stock Exchange but not on any stock
exchange in the United States. Shanying “operates . . . as a

                               5
passive holding company—i.e., it held the ownership interest in
other entities, but it did not operate any business.” Global Win,
formed in Delaware in 2017, is a “passive holding company that
holds ownership interest in entities that own or operate pulp,
paper, packaging, and wastepaper recycling businesses in the
United States.” Shanying and Global Win are “separate
corporate entities.” Shanying was the “indirect parent company
of Global Win.” Shanying has not controlled or supervised the
day-to-day operations of Global Win, including its management,
its business functions, and decisions related to the hiring or
termination of Global Win’s employees. Shanying never
employed Yang nor had any employment relationship with him.
Shanying is not in possession, custody, or control of the
employment agreement or any other records relating to Yang’s
employment with Global Win.
       Pan attached as exhibits to his declaration a Certificate of
Incorporation of Global Win filed in Delaware; a Certificate of No
Record Corporation for Shanying issued by the California
Secretary of State; and Global Win’s Statement and Designation
by Foreign Corporation, also issued by the California Secretary of
State.
       Jiang’s declaration provides:
       Jiang is the Vice President at Shanying and previously
served as Vice President of Human Resources. Jiang is also the
Director and President of Global Win since late October 2019 and
previously served as its Vice President from November 2018 to
August 2020 and Chief Executive Officer from August 2020 to
January 2021.

                                 6
       Jiang attached as exhibits to his declaration a copy of
Global Win’s termination notice to Yang, dated October 22, 2019,
and an organization chart for Phoenix Paper Wickliffe LLC
(Phoenix Paper). The organization chart shows the structure of
the parent and subsidiary companies. Shanying owns
100 percent of Zhejiang Shanying Paper (Zhejiang) and
100 percent of Cycle Link International Holdings (Cycle Link
Int’l). Zhejiang owns 100 percent of two subsidiaries—Global
Win Company, Ltd. (GW Company) and Cycle Link USA. GW
Company owns 100 percent of Global Win and 100 percent of
Sutriv. Global Win owns 60 percent and Hyde Pacific Holding
Company Ltd. (Hyde Pacific) owns 40 percent of Global Win
Wickliffe LLC (GW Wickliffe), and GW Wickliffe owns
100 percent of Phoenix Paper.

                                     Shanying

          Zhejiang                                    Cycle Link Int’l

                                                       Cycle Link        other Cycle Link
GW Company      Cycle Link USA        Cycle Link UK
                                                       Netherlands           entities

             Sutriv

          Global Win            Hyde Pacific
                                Co.

                      GW Wickliffe

                               Phoenix Paper

                                         7
     Shanying also submitted as exhibits Shanying’s discovery
responses to special interrogatories and requests for admissions.
F.    Yang’s Opposition to the Motion to Quash
       On November 5, 2021, Yang filed his opposition to the
motion to quash. He argued California has general jurisdiction
over Shanying under the representative services doctrine and
traditional agency principles; he also argued specific jurisdiction
over Shanying. He argued that evidence demonstrates Shanying
was “a highly controlling ‘helicopter parent’ ” of Global Win,
controlled Global Win’s day-to-day operations, finances, and had
substantial, continuous, and systematic contacts with California.
Yang further argued Global Win’s “sole purpose” is to act “as a
straw man” to assist the parent Shanying to advance its business
of expanding its paper production in the United States. To that
end, Global Win “obtained $9.6 million from its parent, [GW
Company] (which is [a subsidiary] fully owned by Shanying) . . .
to contribute to the acquisition of the paper mill [Phoenix
Paper].”
       In support of his opposition, Yang submitted his
declaration and the declaration of Ellis X. Liu—the Director of
Human Resources at Global Win.
       Yang’s declaration provides:
       On August 9, 2017, he received an offer of employment
from Jingsi Cao of Shanying’s Human Resources Department.
The letter provides: “[W]e are very honored to engage you as a
member of Shanying Paper’s Family. [¶] You will be holding the
position of Chief Financial Officer of North America Division.”
(Underscore omitted.) He attached as an exhibit a copy of the
offer letter.

                                 8
      On September 10, 2017, Yang entered into the employment
agreement with Global Win. Yang believed “Shanying’s further
direct control and involvement over [his] hiring at [Global Win]”
was evidenced by Jiang’s (the Vice President of Human Resources
at Shanying) signature on the employment agreement.
      Shanying had “direct control” over Global Win and “owns
internal documents and communications by company
management.” Shanying’s executives “consistently refer to
[Global Win] as [Shanying]’s ‘North America Division’ and not a
separate entity.” Yang included as an exhibit a copy of an email
he received from Jiang, with the “General Rules of Human
Resource Management” (HR Rules) attached; the email stated
these “rules [are] applicable to all employees of NA Division.”
Yang also attached as an exhibit a copy of “Shanying
International–North American Business Division ([Global Win])
Management [R]ules” (Management Rules) dated April 16, 2019
which provide: “The North American Business Division ([Global
Win]), as one of [Shanying] headquarters’ functional
departments, is responsible for the Shanying group’s investment
M&A, industrial management and system building functions in
USA.” The Management Rules specify Global Win is “a
subsidiary of Shanying International.”
      Yang was one of five employees of Global Win, all of whom
were “fully engaged in expanding Shanying’s ownership of USA
‘targets’ (researching and acquiring U.S. based paper mills).”
Global Win “merely performed a function that was compatible
with [assisting] parent-[Shanying] in the pursuit of parent’s own
business.” Shanying “control[led] and monitored” Global Win’s
acquisition on September 6, 2018 of Kentucky paper mill Phoenix
Paper, “for the sole benefit of [Shanying].” Global Win “was

                               9
merely acting as a straw buyer to meet the sole business needs of
[Shanying].” Global Win used “capital it obtained from
Shanying’s fully owned subsidiary [Cycle Link USA] to contribute
to the acquisition” of Phoenix Paper.
         Global Win “had no authority in selecting its own
management team, staffing, or cost control. Shanying tightly
regulated its approval of the staffing and labor cost budgets of its
subsidiaries.”
         Ellis X. Liu’s (Liu) declaration provides:
         Liu signed an employment agreement for the position of
Human Resources Director on September 10, 2017. The
employment agreement was signed by Jiang “on behalf of [Global
Win] and [Shanying].” Liu included as an exhibit a copy of the
agreement, which provides it is between Liu and “Global Win
. . . , a Delaware corporation and a subsidiary of Shanying.” Just
like Yang’s employment agreement, the last page of Liu’s
agreement includes two signatures. Underneath “Ellis X[.] Liu”
is Liu’s signature, and underneath “Global Win Capital
Corporation” is Jiang’s signature. (Some capitalization omitted.)
Jiang’s position is specified as “VP Human Resources”; the line
beneath Jiang’s position states “Shanying International Holdings
Corporation Limited.” In addition to his Human Resources
duties, Liu was “charged with identifying potential acquisition
targets in the paper manufacturing industry for [Shanying].”
Shanying “exercised highly pervasive degree of control of [Global
Win] and Cycle Link USA, from finances to highly regulated
employee management.”
         Yang included additional exhibits in support of his
opposition to the motion to quash, including Global Win’s
discovery responses and subpoenaed bank records, Shanying’s

                                10
discovery responses, Jiang’s discovery responses, and excerpts
from Jiang’s October 25, 2021 deposition. One such exhibit is
Shanying’s 2019 Interim Report. The business overview section
of the interim report provides: “Shanying is an international
enterprise integrating recycled fiber utilization, industrial and
special paper production, packaging and printing, energy and
environmental protection, industrial interconnection platform
and other businesses.” It further provides that at the end of its
2019 reporting period, Shanying “had 9 paper-making enterprises
in China and abroad [and] 23 enterprises who provide service of
packaging and printing design.”
       According to Jiang’s October 25, 2021 deposition, Jiang
studied English for “more than two years, almost three years.”
He has been in the United States since 2019. He communicates
in “[p]redominantly Chinese” and does “not understand the
majority of [English].” When he reads in English, he “ha[s] to use
a translation software” such as “Google Translate, or . . . a
dictionary called Youdao.” During the deposition, Jiang was
shown a copy of his declaration which was submitted in support
of Shanying’s motion to quash. When asked to discuss the
content of the declaration, he stated his “English is not great. If
you want me to read [an] English document, I need to rely on a
translation software.” He confirmed his attorney had provided
him with the certified translation of this English document before
he signed it and he had also used translation software to review
his declaration. Jiang was next shown a copy of the employment
contract he and Yang had signed. Jiang said it was “a [Global
Win] contract” that Liu gave him to sign. Liu kept the copy of the
employment agreement, not Jiang.

                                11
      The memorandum of points and authorities filed in support
of Yang’s opposition to the motion to quash included one
paragraph under the heading: “This Court Should Ignore the
Declaration of Jintang Pan . . . and Kevin Jiang.” (Boldface
omitted.) Yang argued the declarations are “invalid” and should
be “give[n] zero value.” Yang further argued Jiang’s declaration
was submitted “in English” and “without a certified translation.”
G.    Shanying’s Reply in Support of its Motion to Quash
       On November 12, 2021, Shanying filed its reply. Referring
to and relying on its discovery responses, the reply provides: The
employment offer letter was “issued by Shanying because Global
Win had not yet been formed, and states the offer was for the
position of CFO of a new U.S. company.” Jiang signed the
employment agreement on behalf of Global Win pursuant to a
Special Power of Attorney. While Yang asserts that Shanying
used Global Win as a strawman to acquire Phoenix Paper, “this
statement is unsupported, and contradicted by the active role
Yang himself played in the acquisition—including signing the
acquisition agreement on behalf of Global Win—and in
overseeing the operations of the paper mill after the acquisition.”
       Shanying argued the court should not strike the
declarations of Pan and Jiang because 1) Yang himself relied on
their declarations throughout his opposition; 2) Yang does not
provide any explanation as to why Pan’s declaration is “invalid”;
and 3) Jiang had the declaration translated by his attorney Jia
Li, a native Mandarin speaker, before signing it.
       Shanying submitted declarations of Jiang and Jia Li in
support of its reply.
       Jiang’s declaration provides:

                                12
       Jiang’s attorney reviewed Jiang’s declaration with Jiang on
a videocall before it was filed on September 24, 2021. During the
videocall, Jiang’s attorney “translated the contents” of the
declaration from English to Mandarin Chinese. Jiang “fully
understood the contents and purpose” of his declaration before it
was filed.
       Jiang stated the “intercompany loans between Global Win
and its direct parent, [GW Company], and between Global Win
and Cycle Link USA, [and] were properly documented.” He
attached as exhibits employment offer letters to individuals for
positions at newly acquired Phoenix Paper, which state the new
hiree “will report directly to Jeffrey Yang, CFO” of Global Win.
       Jia Li’s declaration provides:
       Jia Li is Shanying’s and Jiang’s attorney. She is a “native
Mandarin Chinese speaker and can read, write, and speak the
language at a native/bilingual proficiency level” who can
“translate between English and Mandarin Chinese.” She
reviewed and translated the contents of Jiang’s declaration with
him on a videocall before it was filed.
       Shanying submitted an excerpt from Jiang’s deposition
transcript which was not provided by Yang. Jiang was asked
about the HR Rules emailed to Yang. When asked if Global Win
was “expect[ed] . . . to follow these . . . general rules of human
resource management,” he stated he “expected Global Win to
reference [Shanying’s] human resources rules and provision and
draft its own human resources rules and provisions in
conjunction with the local policy and rules.” When asked about
the Management Rules, he believed they were sent to Global Win
from an “internal management perspective. Because Shanying is
a publicly traded company, it often gets . . . audited from a third

                                13
party. So previously [Yang] was the one who approved his own
invoices and paid, so it was not separated. They just wanted to
be able to control it internally in order to avoid risks for a
publicly traded company.”
H.    The Trial Court’s Ruling1
      On December 2, 2021, the trial court held a hearing and
granted the motion to quash. The court overruled Yang’s
objection to Jiang’s declaration because it “wasn’t framed as a
separately filed objection.”
      Yang timely appealed.

                         DISCUSSION
A.    The Trial Court Did Not Abuse Its Discretion When It
      Overruled Yang’s Challenge to the Pan and Jiang
      Declarations.
       We apply the abuse of discretion standard when reviewing
a trial court’s rulings on evidentiary objections. (Geragos v.
Abelyan (2023) 88 Cal.App.5th 1005, 1021.)
       Yang argues the trial court “should have stricken the
declarations” of Pan and Jiang. He provides no argument or
support in his opening brief as to why Pan’s declaration should be
stricken, as the entirety of his argument is about Jiang’s
declaration. Although Yang identified his challenge to Pan’s
declaration in an “argument heading” (Roe v. McDonald’s Corp.
(2005) 129 Cal.App.4th 1107, 1114), “[t]he absence of cogent legal
argument or citation to authority allows this court to treat the
contentions as waived.” (In re Marriage of Falcone & Fyke (2008)

1      Yang filed an objection to evidence the day of the hearing,
on December 2, 2021. Shanying filed an objection to Yang’s late-
filed objections to evidence.

                                14
164 Cal.App.4th 814, 830; see also Cal. Rules of Court, rule
8.204(a)(1)(B) [“support each point [in a brief] by argument and,
if possible, by citation of authority”].) An issue that is merely
raised by the party without any argument or authority is deemed
to be “ ‘without foundation and requires no discussion.’ ” (Roe v.
McDonald’s Corp., at p. 1114; see Golden Day Schools, Inc. v.
Department of Education (1999) 69 Cal.App.4th 681, 695, fn. 9.)
We treat this argument as waived.
       As to Jiang’s declaration, Yang contends Shanying’s
submission of Jiang’s declaration “in English without certified
translations” renders it inadmissible. Yang argues “there is no
evidence showing that [Jiang] actually read his declaration or
understood its implications.”
       Yang’s argument is not well taken. First, evidentiary
objections are properly set forth in a separate document.
(Schoendorf v. U.D. Registry, Inc. (2002) 97 Cal.App.4th 227, 240,
fn. 2.) Here, Yang’s objection to Jiang’s declaration was not
framed as a separately filed objection and is included as part of
one paragraph at the end of the memorandum of points and
authorities he submitted in support of his opposition to the
motion to quash.
       Second, Yang filed evidentiary objections on the day of the
hearing—December 2, 2021, after which Shanying filed an
objection to its late filing. We agree with Shanying that Yang’s
evidentiary objection was untimely. Code of Civil Procedure
section 1005, subdivisions (a)(4) and (b) set forth filing deadlines
on a motion to quash service of summons. Section 1005,
subdivision (b) states all opposing papers shall be filed at least
nine court days before the hearing. Yang’s failure to file his
objection to Jiang’s declaration until the date of the hearing

                                15
renders it untimely. Moreover, Yang makes no showing of good
cause as to why he waited so late to file his evidentiary objection.
        Third, contrary to Yang’s argument that there was “no
evidence showing that [Jiang] actually read his declaration or
understood its implications,” Jiang stated during his October 25,
2021 deposition that he used a translation software to review his
declaration and his attorney provided him with a certified
translation of his declaration before he signed it. Jiang’s
declaration provided in support of Shanying’s reply states his
counsel “translated the contents of the Jiang [d]eclaration . . .
from English to Mandarin Chinese” during a September 24, 2021
videocall and that he “fully understood the contents and purpose”
of his declaration prior to its filing. Additionally, Jiang’s attorney
Jia Li personally verified in her declaration that she is a native
Mandarin Chinese speaker and faithfully and accurately
translated her client’s written declaration via videocall prior to
its filing. The foregoing constitutes evidence showing Jiang
understood the content of his declaration prior to signing and
filing it.
        On this record, the trial court did not abuse its discretion in
overruling Yang’s objection.
B.    Shanying’s Motion to Quash Was Properly Granted
      1.    General Legal Principles and Standard of
            Review
      California courts “may exercise jurisdiction on any basis
not inconsistent with the Constitution of this state or of the
United States.” (Code Civ. Proc., § 410.10.) The exercise of
jurisdiction over a nonresident defendant “comports with the
requirements of the due process clause of the federal Constitution

                                  16
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.” ’ ” (Vons Companies, Inc. v.
Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444 (Vons), quoting
Internat. Shoe Co. v. Washington (1945) 326 U.S. 310, 316.)
       Where a nonresident defendant challenges jurisdiction by
way of a motion to quash, plaintiff bears the burden of
establishing by a preponderance of the evidence that minimum
contacts exist between the defendant and forum state to justify
imposition of personal jurisdiction. Plaintiff must present facts
demonstrating the conduct of defendants related to the pleaded
causes of action is such as to constitute constitutionally
cognizable minimum contacts. (Elkman v. National States Ins.
Co. (2009) 173 Cal.App.4th 1305, 1312–1313 (Elkman).)
       We review the trial court’s order granting a motion to
quash service for lack of personal jurisdiction “de novo,
considering all the evidence set forth in the moving and
opposition papers except that to which objections were made and
sustained.” (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61,
65–66.) Evidence in support of jurisdictional facts or their
absence may be in the form of declarations. (Evangelize China
Fellowship, Inc. v. Evangelize China Fellowship (1983)
146 Cal.App.3d 440, 444.) “[W]here the evidence of jurisdictional
facts is not conflicting, the question of whether a defendant is
subject to personal jurisdiction is one of law.” (Elkman, supra,
173 Cal.App.4th at p. 1313.) However, where there is a conflict
in the evidence and/or declarations, resolution of the conflict by
the trial court will not be disturbed on appeal if the
determination is supported by substantial evidence. (Evangelize

                                 17
China Fellowship, at p. 444; Edmunds v. Superior Court (1994)
24 Cal.App.4th 221, 228, 232.)
      Personal jurisdiction may be general or specific. (Vons,
supra, 14 Cal.4th at p. 445.) General jurisdiction is sometimes
called “all-purpose” and specific jurisdiction is sometimes called
“case-linked.” (Bristol-Myers Squibb Co. v. Superior Court of
Cal., San Francisco Cty. (2017) 582 U.S. 255, 262 (Bristol-
Myers).) The standard for general jurisdiction is considerably
more stringent than that for specific jurisdiction. (Paneno v.
Centres for Academic Programmes Abroad Ltd. (2004)
118 Cal.App.4th 1447, 1455.) In this case, Yang contends both
general and specific jurisdiction exist; we consider each
separately.
      2.    The Trial Court Correctly Determined It
            Cannot Exercise General Jurisdiction Over
            Shanying.
      Yang argues sufficient contacts exist between Shanying
and California to establish general jurisdiction under agency
principles and the representative services doctrine.
            a.    General Jurisdiction
       A defendant is subject to general jurisdiction when it has
substantial, continuous, and systematic contacts in the forum
state, i.e., its contacts with the forum are so wide-ranging that
they take the place of a physical presence in the state. (Vons,
supra, 14 Cal.4th at pp. 445–446; Daimler AG v. Bauman (2014)
571 U.S. 117, 127 [a nonresident corporation’s contacts with the
state must be so continuous and systematic that it can be
considered “at home” there].) In assessing a defendant’s contacts
with the forum, we look at the contacts as they existed from the

                                18
time the alleged conduct occurred to the time of service of
summons. (DVI, Inc. v. Superior Court (2002) 104 Cal.App.4th
1080, 1100–1101 (DVI).) For a corporation, its domicile, place of
incorporation, and/or principal place of business within a state
constitute the paradigm bases for establishing general
jurisdiction. (Goodyear Dunlop Tires Operations, S.A. v. Brown
(2011) 564 U.S. 915, 924.) A defendant corporation’s substantial
sales in a state are insufficient to establish general jurisdiction,
as the general jurisdiction analysis turns on the nature of the
defendant’s continuous corporate operations within a state.
(Daimler, at pp. 138–139.)
       Here, the evidence shows Shanying is a Chinese
corporation. Shanying trades on the Shanghai Stock Exchange,
but not any stock exchange in the United States. Its undisputed
principal place of business, offices, and mailing address are in
China. Shanying has never been incorporated in or had its
principal place of business in California or the United States. It
has never been licensed to conduct business in California or the
United States. Shanying provided a Certificate of No Record
Corporation from the California Secretary of State in support.
Pan’s declaration also attested to the foregoing. These facts are
not sufficient to support general jurisdiction.
            b.    Agency
      Under agency principles, the analysis for general
jurisdiction bypasses the foreign corporation’s direct minimum
contacts and the contacts are instead imputed through the
presence of the local agent through whom the foreign corporation
acts. (F. Hoffman–La Roche, Ltd. v. Superior Court (2005)
130 Cal.App.4th 782, 796 (Hoffman–La Roche).)

                                 19
       In the case of agency, the corporate identity is preserved,
but the principal is held for the acts of the agent. (Hoffman–La
Roche, supra, 130 Cal.App.4th at p. 797.) Agency is established
where the entity for whom the work is performed has the right to
control the activities of the alleged agent. Agency in the context
of general jurisdictional analysis requires more than mere
ownership or control. Normally, control is shown where there is
a close financial connection between the parent and its
subsidiary, and there is a degree of direction and management
exercised by the parent over the subsidiary. However, “[i]t must
veer into management by the exercise of control over the internal
affairs of the subsidiary and the determination of how the
company will be operated on a day-to-day basis.” (Ibid.) The
degree of control exercised by the parent over the subsidiary
must reflect the parent’s purposeful disregard of the subsidiary’s
independent corporate existence. (Sonora Diamond Corp. v.
Superior Court (2000) 83 Cal.App.4th 523, 542 (Sonora).)
Further, in the absence of fraud or injustice, courts will treat the
parent and subsidiary as separate entities for purposes of
jurisdictional analysis. (Hoffman–La Roche, at p. 797.)
       Under agency, we find Yang failed to present evidence of
Shanying’s day-to-day control of Global Win. Yang provided
evidence that he received an email from Jiang with Shanying’s
HR Rules “applicable to all employees of NA Division” as well as
the Management Rules. Yang maintains Shanying set human
resource policies for Global Win and designed its organizational
structure. Yang provided evidence that he was hired via an
employment agreement signed by Jiang, who was then the Vice
President of HR for Shanying. He also provided evidence that he
had to submit for approval some financial expenses to Shanying.

                                20
These facts do not rise to the level of a parent company’s
purposeful disregard of the subsidiary’s independent corporate
existence. (Sonora, supra, 83 Cal.App.4th at p. 542 [“The nature
of the control exercised by the parent over the subsidiary
necessary to put the subsidiary in an agency relationship with
the parent must be over and above that to be expected as an
incident of the parent’s ownership of the subsidiary and must
reflect the parent’s purposeful disregard of the subsidiary’s
independent corporate existence.”]; see Rollins Burdick Hunter of
So. Cal., Inc. v. Alexander & Alexander Services, Inc. (1988) 206
Cal.App.3d 1, 9 (Rollins).)
       Neither ownership nor control of a subsidiary corporation
by a foreign parent corporation, without more, subjects the
parent to the jurisdiction of the state where the subsidiary does
business. (Cannon Mfg. Co. v. Cudahy Co. (1925) 267 U.S. 333,
336–337.) “Control” in this context means “the degree of direction
and oversight normal and expected from the status of ownership;
it comprehends such common characteristics as interlocking
directors and officers, consolidated reporting, and shared
professional services.” (Sonora, supra, 83 Cal.App.4th at
pp. 540–541.) “As a practical matter, the parent must be shown
to have moved beyond the establishment of general policy and
direction for the subsidiary and in effect taken over performance
of the subsidiary’s day-to-day operations in carrying out that
policy.” (Id. at p. 542.) The evidence presented by Yang does not
demonstrate Shanying’s control of day-to-day operations; rather,
it shows “normal involvement by a parent corporation with its
subsidiary.” (Id. at p. 551.)
       The relationship of owner to owned contemplates a close
financial connection between parent and subsidiary and a certain

                               21
degree of direction and management exercised by the former over
the latter. (Id. at p. 541; see Rollins, supra, 206 Cal.App.3d at
p. 9.) When Jiang was asked at deposition about the HR Rules
sent to Yang and whether Global Win was “expect[ed] . . . to
follow these Shanying . . . general rules of human resource
management,” he stated that he “expected Global Win to
reference [Shanying’s] human resources rules and provision and
draft its own human resources rules and provisions in
conjunction with the local policy and rules.” Moreover, when
asked about the Management Rules being sent to Global Win,
Jiang believed it was from an “internal management perspective.
Because Shanying is a publicly traded company, it often gets . . .
audited from a third party. So previously [Yang] was the one
who approved his own invoices and paid, so it was not separated.
They just wanted to be able to control it internally in order to
avoid risks for a publicly traded company.” This is a satisfactory
explanation. In addition, the fact that Global Win maintained its
own corporate identity is further solidified via Global Win’s
employment offer letters to individuals for positions at the newly
acquired Phoenix Paper, which expressly provide the new hiree
“will report directly to Jeffrey Yang, CFO” of Global Win.
       These events can hardly be viewed as so pervasive or
systematic as to justify assertion of jurisdiction over Shanying for
all purposes under an agency theory. They appear to be the kind
of transactions routinely entered into between foreign
corporations and their domestic affiliates.
            c.    Representative Services Doctrine
      Finally, the representative services doctrine confers general
jurisdiction where the “local subsidiary performs a function that
is compatible with, and assists the parent in the pursuit of, the

                                22
parent’s own business, but the doctrine does not support
jurisdiction where the parent is merely a holding company whose
only business pursuit is the investment in the subsidiary.”
Where the parent uses the subsidiary to do what it otherwise
could do itself, it has purposefully availed itself of the forum
state, and jurisdiction is proper. (Sonora, supra, 83 Cal.App.4th
at p. 543.)
       Yang argues Shanying “is not a passive holding company
because its primary business is manufacturing and distributing
paper products.” Yang cites to the business overview section of
Shanying’s 2019 interim report, including an excerpt that defined
Shanying as “an international enterprise integrating recycled
fiber utilization, industrial and special paper production,
packaging and printing, energy and environmental protection,
industrial interconnection platform and other businesses.”
       The burden is on Yang to prove Shanying is not a holding
company. A holding company is a company formed to control
other companies, usually confining its role to owning stock and
supervising management; it does not participate in making day-
to-day business decisions in those companies. (BBA Aviation
PLC v. Superior Court (2010) 190 Cal.App.4th 421, 431 (BBA).)
A true holding company does not engage in operational control of
the businesses that it owns. (Ibid.) A holding company performs
no function outside of investing in its subsidiaries and, thus,
imputing jurisdictional contacts would be improper. (Id. at
p. 430.) For purposes of appellate review, we consider whether
there is substantial evidence to support the court’s finding to that
effect. (Dorel Industries, Inc. v. Superior Court (2005)
134 Cal.App.4th 1267, 1273 (Dorel).)

                                23
        Pan’s declaration in support of Shanying’s motion to quash
states Shanying “operates . . . as a passive holding company—i.e.,
it held the ownership interest in other entities, but it did not
operate any business.” (See BBA, supra, 190 Cal.App.4th at
p. 432 [“Given [wrongful termination plaintiff’s] limited evidence,
greater weight should be placed on the sworn declarations of
[foreign parent corporation’s officers] explicitly stat[ing] that [the
foreign parent corporation] is a holding company.”].) The
evidence shows Shanying invested in its subsidiaries which, in
turn, invested in Global Win. Yang has not presented any
evidence that demonstrates Shanying conducted business activity
other than investing in subsidiaries and in maintaining some
oversight in the acquisition of Phoenix Paper in the context of its
role as investor.
        We have already found Shanying does not engage in
operational control of Global Win. The excerpt from Shanying’s
2019 interim report that it is “an international enterprise” that
integrates businesses involved in various recycled fiber and paper
production, is not evidence that Shanying would have undertaken
the same business activities if it had not had a representative
(i.e., Global Win) to perform them for it. (Dorel, supra,
134 Cal.App.4th at p. 1277.) It only confirms that Shanying
invests in companies in multiple countries involved in the paper
production business, including its investment in Global Win,
which enabled Global Win to purchase Phoenix Paper. (See BBA,
supra, 190 Cal.App.4th at p. 430 [the representative doctrine
does not support jurisdiction where the parent is merely a
holding company whose only business pursuit is the investment
in the subsidiary]; see also Hoffman–La Roche, supra,
130 Cal.App.4th at p. 802 [“there was no evidence that this entity

                                 24
is, or conducts itself as, anything other than a true passive
holding company that globally invests in pharmaceutical
subsidiaries, including the two [defendants] here, with no
exercise of operational control whatsoever over these
subsidiaries”].) Yang has provided no evidence to demonstrate
that “but for the local agent’s [(i.e., Global Win’s)] existence, the
parent would be performing those functions in the forum itself.”
(BBA, at p. 430)
        Here, substantial evidence supports the trial court’s finding
that Shanying is a holding company. The representative services
doctrine does not support exercising general jurisdiction over
Shanying.
      3.    The Trial Court Correctly Determined It
            Cannot Exercise Specific Jurisdiction over
            Shanying.
       When determining whether specific jurisdiction exists,
courts consider the “relationship among the defendant, the
forum, and the litigation.” (Shaffer v. Heitner (1977) 433 U.S.
186, 204.) A court may exercise specific jurisdiction over a
nonresident defendant if a three-prong test is met: (1) “the
defendant has purposefully availed himself or herself of forum
benefits” (Vons, supra, 14 Cal.4th at p. 446); (2) “the ‘controversy
is related to or “arises out of” [the] defendant’s contacts with the
forum’ ” (ibid., quoting Helicopteros Nacionales de Colombia v.
Hall (1984) 466 U.S. 408, 414); and (3) “the assertion of personal
jurisdiction would comport with ‘fair play and substantial
justice.’ ” (Burger King Corp. v. Rudzewicz (1985) 471 U.S.
462, 476.)
       To exercise specific jurisdiction over a claim, “there must be
an ‘affiliation between the forum and the underlying controversy,

                                 25
principally, [an] activity or an occurrence that takes place in the
forum State.’ [Citation.] When there is no such connection,
specific jurisdiction is lacking regardless of the extent of a
defendant’s unconnected activities in the State.” (Bristol-Myers,
supra, 582 U.S. at p. 264.) In other words, specific jurisdiction
depends on “the quality and nature of the defendant’s forum
contacts in relation to the particular cause of action alleged.”
(Anglo Irish Bank Corp., PLC v. Superior Court (2008)
165 Cal.App.4th 969, 978.)
      Applying these standards to the facts of this case, we
conclude California may not exercise specific jurisdiction over
Shanying.
            a.     Did Shanying purposefully avail itself of forum
                   benefits?
       We begin with the purposeful availment prong of the test.
“ ‘The purposeful availment inquiry . . . focuses on 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.” (Pavlovich v. Superior Court
(2002) 29 Cal.4th 262, 269.) “[T]he underlying rationale of all the
purposeful availment tests is that ‘it is fair to subject defendants
to specific jurisdiction, because their forum activities should put
them on notice that they will be subject to litigation in the
forum.’ ” (Gilmore Bank v. AsiaTrust New Zealand Ltd. (2014)
223 Cal.App.4th 1558, 1573 (Gilmore Bank).)
       Here Yang argues Shanying purposefully availed itself of
the California forum and its benefits by forming Global Win in
California. This contention is contrary to law. “Mere ownership

                                 26
of a subsidiary in the forum state does not constitute purposeful
availment.” (BBA, supra, 190 Cal.App.4th at p. 436;
HealthMarkets, Inc. v. Superior Court (2009) 171 Cal.App.4th
1160, 1168.)
       Yang next argues Shanying purposefully availed itself of
the California forum by deliberately directing Global Win’s day-
to-day operations in California. We have already concluded and
found in the preceding section that Yang failed to present
evidence of Shanying’s day-to-day control of Global Win. Yang
refers to Shanying’s HR Rules and Management Rules which
were sent to Global Win, but transmission of those rules does not
rise to the level of a parent company’s deliberate control of a
subsidiary. (See Sonora, supra, 83 Cal.App.4th at p. 542, first
italics added [“the parent must be shown to have moved beyond
the establishment of general policy and direction for the
subsidiary and in effect taken over performance of the
subsidiary’s day-to-day operations in carrying out that policy”].)
       Yang also argues Shanying purposefully availed itself of
the California forum by “overseeing Global Win’s budgeting,” but
the law does not support Yang on that front either. Shanying’s
general overseeing of one of its subsidiaries’ finances shows
“normal involvement by a parent corporation with its subsidiary.”
(Sonora, supra, 83 Cal.App.4th at p. 551.) The relationship of
owner to owned contemplates a close financial connection
between parent and subsidiary and a certain degree of direction
and management exercised by the former over the latter. (Id. at
p. 541; see Rollins, supra, 206 Cal.App.3d at p. 9.) Yang has not
shown or referred us to evidence that demonstrates otherwise.
       The record provides that Shanying had no connection with
California other than its ownership, twice removed, of Global

                               27
Win. The record does not support the conclusion that Shanying
has “purposefully availed” itself of the California forum.
            b.    Does the controversy relate to or arise out of
                  Shanying’s contacts with the forum?
       The second prong of the test for specific jurisdiction is
whether the current controversy is “related to or arise[s] out of
the defendant’s contacts with the state.” (Gilmore Bank, supra,
223 Cal.App.4th at p. 1568, italics omitted.) In Vons, our
Supreme Court explained that this second prong is satisfied if
“there is a substantial nexus or connection between the
defendant’s forum activities and the plaintiff’s claim.” (Vons,
supra, 14 Cal.4th at p. 456, italics added.) “A claim need not
arise directly from the defendant’s forum contacts in order to be
sufficiently related to the contact to warrant the exercise of
specific jurisdiction. Rather, as long as the claim bears a
substantial connection to the nonresident’s forum contacts, the
exercise of specific jurisdiction is appropriate.” (Id. at p. 452.)
       We find that the underlying controversy, namely, Yang’s
wrongful termination claims, do not arise from any forum
contacts by Shanying. Yang’s employment claims arise out of his
termination as the CFO of Global Win and the alleged breach of
his employment agreement with Global Win. The employment
agreement provides it was “made and entered . . . by and between
[Global Win]” and Yang. Yang was terminated not by Shanying,
but by Global Win. Yang’s complaint and declaration provide
that after he “discovered and reported multiple serious
fraudulent activities,” he “raised his concerns to the upper
management,” leading to termination of his employment. Yang’s
reporting of his concerns to Global Win’s management/CEO,
would mean any retaliation would have similarly been from

                                28
Global Win, not Shanying. Further, there is no evidence showing
that Global Win was required to or did obtain approval from
Shanying before firing personnel.
      Given Yang’s failure to satisfy the first two prongs, we need
not address the third prong. (See Integral Development Corp. v.
Weissenbach (2002) 99 Cal.App.4th 576, 591 [only after “a
plaintiff has shown the requisite minimum contacts to support
jurisdiction, the burden shifts to defendant to show jurisdiction is
not reasonable.”].)
            c.     Alter Ego Theory
       Yang’s final contention is that a California court has
specific jurisdiction over Shanying under the “alter ego” theory.
To that end, he argues the evidence demonstrates that Global
Win “was not adequately capitalized” and incorporates
arguments already made for the exercise of general jurisdiction
under the alter ego theory.
       Alter ego is a method by which the corporate form will be
disregarded where (1) there is such a unity of interest and
ownership between the corporation and its equitable owner such
that the separate personalities of the corporation and the
equitable owner in reality do not exist; and (2) there is an
equitable result in treating the acts of the corporation as those of
the corporation alone. (Sonora, supra, 83 Cal.App.4th at p. 538.)
Factors to consider in applying the doctrine include commingling
of funds and other assets of the two entities; ostensible liability of
one entity for the debt of another; identical ownership of the two
entities; use of the same offices and employees; inadequate
capitalization; disregard of corporate formalities; and identical
directors and officers. (Id. at pp. 538–539.)

                                 29
       We are directed to no evidence that Global Win was in fact
a sham, shell, or alter ego for Shanying. The most we can extract
from this record in support of such a contention is that Jiang was
the Vice President and previously the Vice President of Human
Resources at Shanying, as well as Global Win’s Vice President
from November 2018 to August 2020, CEO from August 2020 to
January 2021, and Director and President since October 2019.
That Jiang was an officer or director of Global Win and the Vice
President of Human Resources at Shanying does not establish
the requisite jurisdictional contacts. (Sonora, supra,
83 Cal.App.4th at pp. 548–549 [“that the directors and officers
were interlocking is insufficient to rebut the presumption that
each common officer or director wore the appropriate ‘hat’ when
making corporate and operational decisions for the respective
entities”]; see Ziller Electronics Lab GmbH v. Superior Court
(1988) 206 Cal.App.3d 1222, 1233 [despite similarity in corporate
names and existence of common directors, it was a matter of “pure
speculation to conclude that the companies are identical, alter
egos, or have such a control relationship as to subject [foreign
corporate] defendant to personal jurisdiction here”]; United States
v. Bestfoods (1998) 524 U.S. 51, 69 [parent is not exposed to
liability for acts of subsidiary merely because directors of one are
also directors of other].) Thus, the mere existence of a common
director, here Jiang, is insufficient to establish alter ego, as
overlapping corporate officers and directors are normal attributes
of a parent-subsidiary relationship. (DVI, supra, 104 Cal.App.4th
at pp. 1095–1097.)
       As to Yang’s contentions about Global Win’s inadequate
capitalization and receipt of investments from Shanying, Yang’s
own declaration in support of his opposition to the motion to

                                30
quash admits Shanying did not acquire Phoenix Paper, the paper
mill company in Kentucky. Yang also admits Global Win did not
directly receive funds from Shanying. Yang declares Global Win
used “capital it obtained from Shanying’s fully owned subsidiary
[Cycle Link USA] to contribute to the acquisition” of Phoenix
Paper. He also notes that Global Win obtained $9.6 million from
its direct parent GW Company, another subsidiary owned by
Shanying, to contribute to the acquisition of Phoenix Paper. To
view Global Win’s acquisition of a paper mill in Kentucky as a
jurisdictional contact between Shanying and California is
farfetched. Yang also asks us to, in effect, disregard the
intermediate loans by Cycle Link USA and Global Win’s parent
GW Company to Global Win, which—per ‘s Jiang’s declaration in
support of the reply—were “properly documented, dealt with as
legitimate financial obligations, and fully repaid (principal and
interest) by Global Win.”
       This is not a situation where the alter ego doctrine should
be invoked and a corporate entity disregarded because “an abuse
of the corporate privilege justifies holding the equitable
ownership of a corporation liable for the actions of the
corporation.” (Sonora, supra, 83 Cal.App.4th at p. 538.) “The
parent is not ‘exposed to liability for the obligations of [the
subsidiary] when [the parent] contributes funds to [the
subsidiary] for the purpose of assisting [the subsidiary] in
meeting its financial obligations and not for the purpose of
perpetrating a fraud.’ ” (Id. at p. 539.)

                               31
                          DISPOSITION
       The trial court’s order granting Shanying’s motion to quash
is affirmed. Appellant Yang to bear costs on appeal. (Cal. Rules
of Court, rule 8.278(a)(1).)

      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                          STRATTON, P. J.

We concur:

             GRIMES, J.

             WILEY, J.

                               32