Court Opinion

ID: 9926899
Source: CourtListenerOpinion
Date Created: 2024-01-25 21:00:52.864769+00
Date Added: 2024-06-11T09:22:14.710546
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 23-1024
B.D. a minor, by and through
his guardian ad litem, BRYAN MYER,
                                                  Plaintiff-Appellee,

                                v.

SAMSUNG SDI CO., LTD.,
                                              Defendant-Appellant.
                    ____________________

        Appeal from the United States District Court for the
        Southern District of Indiana, Terre Haute Division.
         No. 2:22-cv-00107 — James R. Sweeney II, Judge.
                    ____________________

  ARGUED NOVEMBER 15, 2023 — DECIDED JANUARY 24, 2024
               ____________________

   Before SYKES, Chief Judge, and BRENNAN and LEE, Circuit
Judges.
   PER CURIAM. B.D. suﬀered severe burns when a Samsung
SDI battery exploded in his pocket in Indiana. So, B.D. sued
Samsung SDI in Indiana state court. Samsung SDI removed
the case to federal court and moved to dismiss for lack of
personal jurisdiction. The district court found jurisdiction,
and this interlocutory appeal followed. Because there are
2                                                    No. 23-1024

insuﬃcient facts to determine whether personal jurisdiction
exists over Samsung SDI, we remand for further jurisdictional
discovery.
                                I
    We take the facts from the well-pleaded allegations in
B.D.’s complaint and the declarations submitted by both
parties. E.g., Matlin v. Spin Master Corp., 921 F.3d 701, 705 (7th
Cir. 2019). We accept those facts as true and resolve any
factual disputes in B.D.’s favor, as we must for a case in this
posture. Id.
    Samsung SDI is a corporation organized under the laws of
the Republic of Korea with its headquarters and principal
place of business there. It has no oﬃces, warehouses, other
places of business, employees, or agents in Indiana. The
corporation is not licensed or registered to do business in any
state of the United States, including Indiana.
    It sells tens of millions of batteries each year to
distributors, which incorporate them into consumer goods
and deliver them to retailers. Those distributors are located
throughout Asia, Europe, and North America, but none are in
Indiana. Some of Samsung SDI’s sales through distributors
are to manufacturers of battery packs and other components.
Battery-pack manufacturers combine certain batteries into a
single pack with an exterior case and an integrated circuit
board. The manufacturers then incorporate the pack into a
product, such as a power drill or laptop computer, later sold
to consumers. For sales through distributors to component
manufacturers, Samsung SDI also understands that its
batteries are eventually encased within a battery pack and
incorporated into consumer products.
No. 23-1024                                                    3

   One kind of battery sold and manufactured by Samsung
SDI is the 18650 lithium-ion battery, alleged to have caused
B.D.’s injuries. These batteries look like a common AA battery,
but they are rechargeable and hold more power.
    Samsung SDI maintains that it does not sell 18650 batteries
to individuals. It does not design or market 18650 batteries to
be used individually (that is, not encased in a battery pack). It
does not advertise or market 18650 batteries to consumers in
Indiana. And it has never personally or directly shipped an
18650 battery to an Indiana address. 18650 batteries are,
however, commonly found in Indiana, arriving in battery
packs within consumer goods. Indiana consumers can also
buy individual 18650 batteries online and in retail stores from
third-party retailers.
    Samsung SDI is aware of a particular danger associated
with individual consumer’s use of lithium-ion batteries in e-
cigarettes. If functioning correctly, an 18650 battery powers a
heating element inside the e-cigarette to produce vapor that
the user inhales. But as alleged in the complaint, if the device
malfunctions, the battery can be “shot out like a bullet or
rocket.” That malfunction is especially dangerous because an
e-cigarette is a consumer product often kept near a person’s
body.
   To address this danger, every potential distributor for
Samsung SDI must apply to purchase its batteries. The
corporation will not approve a sale if the application reveals
a connection between that distributor and other distributors
or vendors in the e-cigarette industry. Samsung SDI also
warns consumers on its website not to remove 18650 batteries
from a battery pack or otherwise use an individual 18650
battery. In addition, Samsung SDI includes a speciﬁc warning
4                                                  No. 23-1024

in its product-speciﬁcation documents stating that its
batteries are not designed for use in e-cigarettes.
    In 2019, Bryan Myers purchased a Samsung SDI 18650
lithium-ion battery to use in an e-cigarette. He bought the
individual battery at a retail e-cigarette store in Indiana. The
record does not reveal how the store obtained the battery, but
Samsung SDI avers it “never conducted any business with
any retail store in Indiana.” Shortly after purchase, Myers
gave the battery to his stepson, B.D. At some point while the
battery was in B.D.’s pocket, it exploded. B.D. suﬀered severe
burns.
    B.D., through Myers, brought a product liability suit
against Samsung SDI in the Circuit Court of Knox County,
Indiana. Samsung SDI removed the case to federal court
based on diversity jurisdiction. 28 U.S.C. §§ 1332(a), 1441(b).
Samsung SDI then moved to dismiss the complaint for lack of
general and speciﬁc personal jurisdiction. See FED. R. CIV. P.
12(b)(2). The district court denied Samsung SDI’s motion to
dismiss. The sole issue before the district court was whether
speciﬁc (not general) personal jurisdiction existed. The
district court found that Samsung SDI has suﬃcient contacts
with Indiana to permit the exercise of speciﬁc personal
jurisdiction over B.D.’s claims; that a suﬃcient nexus exists
between Samsung SDI’s marketing of the 18650 lithium-ion
battery in Indiana and B.D.’s alleged injuries; and that
exercise of speciﬁc personal jurisdiction over Samsung SDI
would not oﬀend traditional notions of fair play and
substantial justice. This interlocutory appeal followed. See 28
U.S.C. § 1292(b).
No. 23-1024                                                      5

                                II
    When a defendant moves to dismiss a complaint for lack
of personal jurisdiction under Rule 12(b)(2), the plaintiﬀ bears
the burden of making a prima facie case that jurisdiction
exists. See Durukan Am., LLC v. Rain Trading, Inc., 787 F.3d
1161, 1163–64 (7th Cir. 2015); Felland v. Clifton, 682 F.3d 665,
672 (7th Cir. 2012); Purdue Rsch. Found. v. Sanoﬁ-Synthelabo,
S.A., 338 F.3d 773, 782 (7th Cir. 2003).
    The district court’s jurisdictional decision is reviewed de
novo. Matlin, 921 F.3d at 704. As a diversity case, our
jurisdiction is circumscribed by Indiana law and the U.S.
Constitution. Id. at 705; see FED. R. CIV. P. 4(k)(1)(A). Indiana’s
equivalent of a long-arm statute, Indiana Trial Rule 4.4(A),
applies, see Jennings v. AC Hydraulic A/S, 383 F.3d 546, 548 (7th
Cir. 2004), and is coextensive with the U.S. Constitution’s Due
Process Clause. See Boyer v. Smith, 42 N.E.3d 505, 509 (Ind.
2015). Accordingly, we ask whether the exercise of
jurisdiction comports with federal due process.
    The sole question is whether the district court has speciﬁc
personal jurisdiction over Samsung SDI; here, there is no
general personal jurisdiction. Speciﬁc personal jurisdiction
rests on “an aﬃliation between the forum and the underlying
controversy, principally, an activity or an occurrence that
takes place in the forum State and is therefore subject to the
State’s regulation.” Bristol-Myers Squibb Co. v. Superior Ct., 582
U.S. 255, 262 (2017) (cleaned up). For speciﬁc personal
jurisdiction, there must be: (1) purposeful availment—the
defendant must have purposefully directed his activities at
the forum state or purposefully availed himself of the
privilege of conducting business in the forum; (2)
relatedness—the alleged injury must arise out of or relate to
6                                                  No. 23-1024

the defendant’s forum-related activities; and (3) fairness—the
exercise of personal jurisdiction must comport with
traditional notions of fair play and substantial justice. E.g.,
Rogers v. City of Hobart, 996 F.3d 812, 819 (7th Cir. 2021);
Tamburo v. Dworkin, 601 F.3d 693, 702 (7th Cir. 2010).
    For purposeful availment, the defendant must have
“certain minimum contacts” with the forum state. Int’l Shoe
Co. v. Wash. Oﬀ. of Unemployment Comp. & Placement, 326 U.S.
310, 316 (1945). Requiring minimum contacts protects the
defendant from the burden of litigating in a distant,
inconvenient forum, as well as to prevent states from reaching
beyond the limits of their sovereignty. See id.
    A defendant’s minimum contacts may be established
through the “stream-of-commerce” theory. The Supreme
Court ﬁrst articulated this theory in World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 297–98 (1980). There, the Court
explained jurisdiction may be appropriate over a defendant
“that delivers its products into the stream of commerce with
the expectation that they will be purchased by consumers in
the forum State.” Id. at 298. 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.” Asahi Metal Indus. Co. v. Superior Ct.,
480 U.S. 102, 112 (1987). The keys are the defendant’s actions
and expectations.
   Our circuit is among those that apply the stream-of-
commerce theory in products liability cases. Dehmlow v.
Austin Fireworks, 963 F.2d 941, 946–47 (7th Cir. 1992); see also
Jennings, 383 F.3d at 550 & n.2 (aﬃrming Dehmlow while
acknowledging that the Supreme Court left the issue
No. 23-1024                                                     7

unresolved in Asahi). We apply a “knowledge” version of the
stream-of-commerce theory, rather than a “targeting”
version. See J.S.T. Corp. v. Foxconn Interconnect Tech. Ltd., 965
F.3d 571, 575–76 (7th Cir. 2020); compare Asahi, 480 U.S. at 117
(Brennan, J., concurring) (under the stream-of-commerce
theory, personal jurisdiction over a participant is proper if the
participant is aware that the ﬁnal product is marketed in the
forum state) with J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S.
873, 882 (2011) (plurality opinion) (requiring, for personal
jurisdiction based on the stream of commerce, that the
defendant “can be said to have targeted the forum”). Under
the knowledge version, “[a]s long as a participant in [the
stream of commerce] is aware that the ﬁnal product is being
marketed in the forum State, the possibility of a lawsuit there
cannot come as a surprise.” Asahi, 480 U.S. at 117 (Brennan, J.,
concurring).
    Next, for relatedness, we must assure ourselves “that the
defendant’s minimum contacts with the forum state [are]
‘suit-related.’” Curry v. Revolution Labs., LLC, 949 F.3d 385, 400
(7th Cir. 2020) (emphasis omitted) (quoting Advanced Tactical
Ordnance Sys. v. Real Action Paintball, Inc., 751 F.3d 796, 801
(7th Cir. 2014)). Direct sales from the defendant in the forum
state involving the infringing product satisfy this
requirement. Curry, 949 F.3d at 401–02.
    As the Supreme Court recently clariﬁed, a defendant’s
contacts with the forum may “relate to” the plaintiﬀ’s claims
even in the absence of a “strict causal relationship” between
the contacts and claims. See Ford Motor Co. v. Mont. Eighth Jud.
Dist. Ct., 592 U.S. ---, 141 S. Ct. 1017, 1026 (2021). Due process
requires only that the “‘relationship among the defendant, the
forum[s], and the litigation’ [] [be] close enough to support
8                                                  No. 23-1024

speciﬁc jurisdiction.” Id. at 1032 (alteration in original)
(quoting Walden v. Fiore, 571 U.S. 277, 284 (2014)). That is to
say, we ensure that the conduct and the litigation are related.
See id. at 1031. But when there is “no such connection
[between the forum and the particular claims at issue],
speciﬁc jurisdiction is lacking regardless of the extent of a
defendant’s unconnected activities in the State.” Bristol-
Myers, 582 U.S. at 264.
   Last, for fairness, we look to several factors, including the
burden on the defendant, the interests of the plaintiﬀ and the
forum state, the interest in eﬃcient resolution of the dispute,
and the shared interest of states in furthering certain
substantive social policy. Burger King Corp. v. Rudzewicz, 471
U.S. 462, 477 (1985).
                              III
    The district court relied primarily on the stream-of-
commerce theory and Ford to ﬁnd speciﬁc personal
jurisdiction in this case. But the record does not contain
suﬃcient facts to assess whether the requirements of the
stream-of-commerce theory are met here, and Ford is
distinguishable.
    A. Purposeful availment
   Samsung SDI does not have a physical presence in
Indiana. Still, under our circuit precedent, that is not
necessary for a defendant to have suﬃcient minimum
contacts with a forum state. See Illinois v. Hemi Grp. LLC, 622
F.3d 754, 757–58 (7th Cir. 2010). For example, if a corporation
maintains “commercial websites through which customers
could purchase [the corporation’s products], calculate their
No. 23-1024                                                  9

shipping charges using their zip codes, and create accounts,”
id., this requirement can still be satisﬁed.
   So, we consider Samsung SDI’s other contacts with
Indiana. First, the parties agree that Samsung SDI sells some
batteries—but not 18650 batteries—directly to Indiana utility
companies for use in power grids. To B.D., that constitutes
suﬃcient contacts for jurisdiction in this suit. Though these
contacts satisfy purposeful availment, as discussed below,
they cannot satisfy relatedness, as B.D.’s claim does not arise
out of or relate to those batteries.
   Second, Samsung SDI sells 18650 batteries to Indiana
consumers through third-party websites and vendors. The
parties agree that the 18650 battery here was sold at an
Indiana store through a third-party vendor. But the extent of
Samsung SDI’s purposeful availment to Indiana is unclear.
   Jurisdiction under this stream-of-commerce theory turns
on Samsung SDI’s knowledge and expectations. The extent of
minimum contacts depends on whether the corporation
delivered its product into the stream of commerce in the U.S.
market with the expectation that the 18650 batteries would be
purchased in the forum state. This raises several factual
questions:
      •   Did Samsung SDI know individual 18650 batteries
          reached consumers in Indiana?
      •   Did Samsung SDI expect that its 18650 batteries
          would reach consumers in Indiana?
      •   What if any eﬀorts did Samsung SDI make to
          control distribution of its 18650 batteries?
10                                                  No. 23-1024

Evidence on these and related questions would help resolve
whether Samsung SDI delivered the 18650 batteries into the
stream of commerce in the U.S. market with the expectation
that they would be purchased in Indiana.
    Next, we consider Samsung SDI’s potential contacts with
Indiana from the sale of 18650 batteries to Indiana consumers
through third-party websites and vendors. On this topic, the
district court relied primarily on Ford. The court found, like
Ford, that Samsung SDI had sufficient contacts with Indiana.
    In Ford, two plaintiffs, both forum state residents, were
injured in vehicles manufactured by Ford. 141 S. Ct. at 1022.
The plaintiffs brought a products liability suit in the states
where they were injured. Id. Ford argued that the states
lacked personal jurisdiction because Ford did not sell the
specific vehicles involved in the accidents in the states where
they occurred and where plaintiffs sued. Id. But despite not
selling the vehicles involved in the accident in the forum state,
Ford conducted business by, “among other things,
advertising, selling, and servicing the model of vehicle the
suit claims is defective.” Id.; see id. at 1027–29.
    Ford is distinguishable. The record does not show that
Samsung SDI advertised, sold, or serviced 18650 batteries in
Indiana. While B.D. alleges Samsung SDI sells 18650 batteries
to Indiana consumers through third-party websites and
vendors, what Samsung SDI knew or expected about the
18650 batteries entering Indiana is unclear. Again, addressing
this question would help decide whether speciﬁc personal
jurisdiction exists here over Samsung SDI.
No. 23-1024                                                      11

   B. Relatedness
    Assuming Samsung SDI has suﬃcient minimum contacts
with Indiana, we consider whether those contacts are related
to the alleged injury. First, Samsung SDI’s contacts selling
batteries other than the 18650 model to utilities in Indiana are
unrelated to the alleged injury. These contacts do not arise out
of or relate to the underlying suit. Curry, 949 F.3d at 400;
Advanced Tactical, 751 F.3d at 801; see also Ford, 141 S. Ct. at
1026. So, they cannot sustain speciﬁc personal jurisdiction.
    Second, on the sale of 18650 batteries to third-party
retailers, B.D. claims that the product ultimately sold through
the stream of commerce caused his injuries. There may
necessarily be a relation between those contacts and his
injury. See JST Corp, 965 F.3d at 576–77. But we hesitate to
reach this conclusion at this point. Jurisdictional discovery
could yield facts as to whether Samsung SDI’s contacts with
Indiana are related to the injury.
   C. Fairness
    We look at the several factors discussed above to assess
fairness. E.g., Burger King, 471 U.S. at 477; Purdue Rsch., 338
F.3d at 781. To gauge the burden on Samsung SDI to defend
in Indiana, more facts are required, such as the extent of
Samsung SDI’s business in Indiana. Indiana has a strong
interest in providing a forum to its residents to seek redress
for harm suﬀered in the state by out-of-state actors. Burger
King, 471 U.S. at 473–74 (“A State generally has a ‘manifest
interest’ in providing its residents with a convenient forum
for redressing injuries inﬂicted by out-of-state actors.” (citing
McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957)); see N. Tex.
Steel Co. v. R.R. Donnelley & Sons Co., 679 N.E.2d 513, 519 (Ind.
12                                                  No. 23-1024

Ct. App. 1997). And the eﬃciency and shared state interest
factors may favor ﬁnding speciﬁc personal jurisdiction. If
Samsung SDI is correct, no court in the U.S. may have
jurisdiction over the corporation for these types of explosions.
Additional facts are necessary to answer this fairness
question.
                        *       *      *
     Given this evaluation, we consider whether jurisdictional
discovery would help. Such discovery is proper if a plaintiﬀ
establishes a colorable or prima facie showing of personal
jurisdiction. Cent. States, Se. & Sw. Areas Pension Fund v.
Phencorp Reinsurance Co., 440 F.3d 870, 876 (7th Cir. 2006). To
decide whether a plaintiﬀ has satisﬁed that minimal burden,
this court “consider[s] the record in its entirety and draw[s]
all inferences in [the plaintiﬀ’s] favor,” while bearing in mind
the fact that, without discovery, “it is not surprising that [the
plaintiﬀ] can do little more than suggest that [a defendant]
currently has minimum contacts.” Id. at 878.
    On this record, and drawing all inferences in the plaintiﬀ’s
favor, B.D. has oﬀered a colorable showing of Samsung SDI’s
minimum contacts, which warrants a limited remand for
jurisdictional discovery. B.D. has alleged that Samsung SDI
put its 18650 batteries into the stream of commerce with the
intent and knowledge that they would reach Indiana.
                               IV
    We REMAND for further jurisdictional discovery.
Speciﬁcally, the district court should permit discovery about
Samsung SDI’s contacts with Indiana concerning B.D.’s
claimed injuries. This remand is limited to the question of
personal jurisdiction and does not independently obligate the
No. 23-1024                                                 13

district court to consider or reconsider any non-jurisdictional
issues.