Reported / Citable
Background
Abraham Bernal, a maintenance technician at Niagara Bottling Company, was severely injured in June 2020 when a depalletizer gripper head fell on him while he was troubleshooting a robot manufactured by Fanuc Corporation (Fanuc Japan), a Japanese corporation, and a depalletizer manufactured by Krones, Inc. Bernal sued Fanuc Japan, its wholly owned subsidiary Fanuc America Corporation (a Delaware corporation headquartered in Michigan), and Krones. Fanuc Japan moved to quash service for lack of personal jurisdiction, submitting evidence that it is incorporated in Japan, has its principal place of business there, is not registered to do business in California, and has no California office, property, or bank accounts.
It averred the robot was distributed to Fanuc Europe. Bernal opposed, arguing Fanuc America was Fanuc Japan's agent and alter ego, citing interlocking boards, 'FANUC Group' branding, Fanuc Japan executives visiting Fanuc America, three Fanuc America service centers in California, Fanuc Japan's website referencing research ties to UC Berkeley and Stanford, and Fanuc America servicing Fanuc Japan's products in the U.S. The trial court denied the motion, finding general jurisdiction based on an agency theory and noting consistency with its prior ruling that Fanuc America and Fanuc Japan operated as a 'single enterprise' (alter ego) in ruling on Fanuc America's summary judgment motion. Fanuc Japan petitioned for a writ of mandate.
The Court’s Holding
The Court of Appeal granted the writ, reversing the trial court's denial of the motion to quash. It held that neither general nor specific personal jurisdiction exists over Fanuc Japan in California. Regarding general jurisdiction, the court applied Daimler AG v. Bauman (2014) 571 U.S. 117, which requires a foreign corporation to be 'essentially at home' in the forum. Fanuc Japan is incorporated and headquartered in Japan with no direct California presence. The court rejected imputing Fanuc America's contacts to Fanuc Japan under an agency theory, noting Daimler rejected the Ninth Circuit's 'representative services' agency test and that Fanuc America itself is not 'at home' in California (incorporated in Delaware, headquartered in Michigan). The alter ego theory also failed because even if Fanuc America were Fanuc Japan's alter ego, Fanuc America is not 'at home' in California. Regarding specific jurisdiction, the court applied Ford Motor Co. v.
Montana Eighth Judicial Dist. Court (2021) 592 U.S. 351, requiring the suit to 'arise out of or relate to' the defendant's forum contacts. Assuming arguendo that Fanuc America's contacts (selling/servicing robots in California) were imputable to Fanuc Japan, Bernal failed to show relatedness. The robot at issue (model M-410iB/700) was sold to Krones by Fanuc Europe/Germany, not in California. Bernal showed only that Fanuc America sold *other* robots to his employer Niagara Bottling, not the specific model at issue, and cited no marketing or sales of the M-410iB/700 in California. Post-accident servicing by a California service center (if any) was a single data point insufficient under Ford and LNS Enterprises LLC v. Continental Motors, Inc. (9th Cir. 2022) 22 F.4th 852. The matter was remanded with directions to grant the motion to quash.
Key Takeaways
- Daimler's 'essentially at home' standard for general jurisdiction is paramount; a foreign parent cannot be subject to general jurisdiction in a forum merely because its subsidiary conducts substantial business there, especially when the subsidiary itself is not 'at home' in that forum.
- The Ninth Circuit's 'representative services' agency test for general jurisdiction is no longer good law after Daimler; California cases relying on it (e.g., Paneno, Sonora Diamond, Dorel, Hoffman-La Roche) are presumably invalid for general jurisdiction purposes.
- For specific jurisdiction under Ford, the plaintiff must show the claim 'arises out of or relates to' the defendant's specific forum contacts—systematic marketing, sales, and service of the *very product* alleged to be defective in the forum state. Sales of other products by a subsidiary to the plaintiff's employer are insufficient.
- A single post-accident repair in the forum (if proven) does not establish relatedness for specific jurisdiction without evidence the defendant systematically served the forum market for that specific product type.
- The alter ego doctrine for imputing general jurisdiction survives Daimler but requires the subsidiary to be 'at home' in the forum; here, Fanuc America's Delaware incorporation and Michigan headquarters precluded that finding for California.
Why It Matters
This decision reinforces the strict limits Daimler and Ford place on personal jurisdiction over foreign manufacturers in California. It clarifies that neither agency nor alter ego theories can bootstrap general jurisdiction over a foreign parent via a subsidiary that is not itself 'at home' in California.
For specific jurisdiction, it applies Ford's 'relate to' standard rigorously: the plaintiff must connect the specific product model causing injury to the defendant's deliberate exploitation of the California market for that model. The ruling protects foreign corporations from all-purpose jurisdiction based on subsidiary operations and ensures specific jurisdiction requires a tight nexus between the forum contacts and the litigation, not merely the defendant's general presence or sales of unrelated products in the state.