U.S. Court of Appeals for the Ninth Circuit, Lang Van, Inc. v. VNG Corp., Docket No. 19-56452

Foreign Defendants

 

Personal Jurisdiction

 

Long-Arm Jurisdiction Under Rule 4(k)(2) of the Federal Rules of Civil Procedure

 

Purposeful Availment

 

Google Play Store and Microsoft App Store

 

Geoblocking

 

Forum Non Conveniens

 

 

 

In assessing whether Lang Van established a prima facie case of jurisdiction, the panel analyzed jurisdiction under Federal Rule of Civil Procedure 4(k)(2), which provides for jurisdiction over foreign defendants that have ample contacts with the United States as a whole, but whose contacts are so scattered among states that none of them would have jurisdiction. Under Rule 4(k)(2), the plaintiff must prove: (1) the claim at issue arises from federal law; (2) the defendant is not subject to any state’s courts of general jurisdiction; and (3) invoking jurisdiction upholds due process. The plaintiff has the burden to show the first two prongs, and the burden then shifts to the defendant to show that application of jurisdiction would be unreasonable.

 

 

In 2014, Lang Van, Inc. (“Lang Van”) filed a copyright infringement suit against VNG Corporation (“VNG”). VNG, prior to discovery or answer, moved to dismiss for lack of personal jurisdiction.

 

 

Lang Van contends that personal jurisdiction exists over VNG, either under minimum contacts specifically directed at the State of California and/or under long-arm jurisdiction pursuant to Fed. R. Civ. P. 4(k)(2).

 

 

VNG contends that it is not subject to personal jurisdiction in any state’s courts of general jurisdiction. Accordingly, when assessing whether Lang Van has established a prima facie case of jurisdiction, the Court will analyze jurisdiction under Fed. R. Civ. P. 4(k)(2). See Holland Am. Line, Inc., 485 F.3d at 461 (“If  . . . the defendant contends that he cannot be sued in the forum state and refuses to identify any other where suit is possible, then the federal court is entitled to use Rule 4(k)(2).” (quoting ISI Int’l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 551 (7th Cir.), as amended (July 2, 2001))).

 

 

A.   Jurisdiction under Rule 4(k)(2)

 

Rule 4(k)(2) was established in “response to the Supreme Court’s suggestion that the rules be extended to cover persons who do not reside in the United States, and have ample contacts with the nation as a whole, but whose contacts are so scattered among states that none of them would have jurisdiction.” ISI Int’l, Inc., 256 F.3d at 551 (citing Omni Cap. Int’l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 111 (1987)); see also Fed. R. Civ. P. 4(k)(2) advisory committee’s note to 1993 amendment.

 

 

Accordingly, Rule 4(k)(2) uses virtually the same analysis as the Calder effects test for traditional state court personal jurisdiction, see 465 U.S. at 788–90, but the Court looks at the nation as a whole when reviewing contacts. Under Rule 4(k)(2), the plaintiff must prove: (1) the claim at issue arises from federal law; (2) the defendants are not subject to any state’s courts of general jurisdiction; and (3) invoking jurisdiction upholds due process (namely, that jurisdiction is not unreasonable). Pebble Beach Co., 453 F.3d at 1159. The plaintiff has the burden to show the first two prongs; the burden then shifts to the defendant to show application of jurisdiction would be unreasonable.

 

 

Prong 3: 

 

Due process

 

“The due process analysis under Rule 4(k)(2) is nearly identical to the traditional personal jurisdiction analysis with one significant difference: rather than considering contacts between the . . . defendants and the forum state, we consider contacts with the nation as a whole.” Holland Am. Line Inc., 485 F.3d at 462 (citing Pebble Beach Co., 453 F.3d at 1159). First, there must be purposeful activities or transactions with the United States, with an act that shows defendant purposefully availing itself of the privileges of doing business in the United States, and thereby invoking the benefits and protections of its laws; second, the claim must arise out of activities that are related to the United States; and third, the exercise of jurisdiction must comport with notions of fair play and substantial justice. Washington Shoe Co., 704 F.3d at 672; Int’l Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945). There must also be “intentional conduct by the defendant that creates the necessary contacts with the forum.” Walden, 571 U.S. at 286. Walden requires the defendant to have ties to the forum “in a meaningful way,” apart from simply knowing the plaintiff has ties to the forum. Id. at 290.

 

 

(…) VNG chose not to geoblock access to Lang Van’s content on Zing MP3 which would have restricted the use of Zing MP3 in the United States or elsewhere outside of Vietnam. The First Circuit has stated that “if a defendant tries to limit U.S. users’ ability to access its website . . . that is surely relevant to its intent not to serve the United States” and that the “converse is also true,” such that the defendant’s “failure to implement such restrictions, coupled with its substantial U.S. business, provides an objective measure of its intent to serve customers in the U.S. market.” Plixer Int’l, Inc. v. Scrutinizer GmbH, 905 F.3d 1, 9 (1st Cir. 2018). VNG clearly did not attempt to limit U.S. users’ ability to access its website, even though deposition testimony indicates that it had the ability to geoblock users as of 2013, if not earlier.

 

 

Two courts have determined that a defendant “purposefully availed itself of the privilege of conducting business in the United States by distributing the Infringing content on platforms such as the Google Play store and Microsoft App store.” Blizzard Ent., Inc. v. Joyfun Inc Co., Ltd., No. SACV191582JVSDFMX, 2020 WL 1972284, at *6 (C.D. Cal. Feb. 7, 2020); Goes Int’l, AB v. Dodur Ltd., No. 3:14-CV-05666-LB, 2015 WL 5043296, at *9 (N.D. Cal. Aug. 26, 2015). VNG failed to geoblock users in the United States from the Zing MP3 app but did geoblock U.S. users’ access to certain U.S. studios, such as Universal Music. This selective geoblocking indicates purposeful conduct. Further, in 2012, VNG and Lang Van had been involved in negotiations and communications regarding the licensing of Lang Van’s content on Zing MP3.

 

 

B. Venue

 

The Court rejects defendant’s argument regarding forum non conveniens in Vietnam. VNG argues that the more appropriate venue is Vietnam and is an alternative to dismissal of this case. While the district court acknowledged this argument, it did not specifically address it on the merits. This Court has “discretion to reach forum non conveniens even if the district court declined to consider it.” Ranza v. Nike, Inc., 793 F.3d 1059, 1076 (9th Cir. 2015). VNG contends that the majority of witnesses and evidence are in Vietnam, and issues of Vietnamese contracts and copyright law would be better decided in Vietnam.

 

 

The Court finds that venue in this case is not proper in Vietnam. Copyright cases concerning alleged unlawful activities purposely directed toward the United States are more amenable to suit in the United States for the reasons set forth herein. We reverse and remand for further proceedings consistent with this opinion.

 

 

 

 

(U.S. Court of Appeals for the Ninth Circuit, July 21, 2022, Lang Van, Inc. v. VNG Corp., Docket No. 19-56452, for Publication)

 

U.S. Court of Appeals for the Seventh Circuit, Charles Curry v. Revolution Laboratories, LLC, Docket No. 17-2900

Trademark Infringement

First Use in Commerce

Advertisement and Sale

Unfair Competition

E-Commerce

E-Mail

Online Contacts with a Forum

Subject Matter Jurisdiction

Personal Jurisdiction

Purposefully directed activities at a forum even in the “absence of physical contacts” with a forum

Supplemental Jurisdiction (State and Federal Claims)

Venue

Illinois Law

Illinois Long-Arm Statute

Contract Drafting

The district court had subject matter jurisdiction over Mr. Curry’s four claims “arising under” federal statutes related to trademarks and unfair competition. See 28 U.S.C. §§ 1331, 1338(a)–(b). With regard to Mr. Curry’s remaining three claims for fraud, unfair competition, and trademark infringement arising under state law, amicus counsel for Mr. Curry submits that subject matter jurisdiction exists over those claims as well because the state and federal claims share a “common nucleus of operative fact.” United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966), and they are part of the “same case or controversy.” 28 U.S.C. § 1367(a). We agree. Thus, the district court had supplemental jurisdiction over the state claims. See Ammerman v. Sween, 54 F.3d 423, 424 (7th Cir. 1995) (“A loose factual connection between the claims is generally sufficient.”).

Charles Curry is the founder and Chief Executive Officer (“CEO”) of a company named “Get Diesel Nutrition” that sells dietary supplements to fitness enthusiasts and athletes. Mr. Curry contends that the “essence” of his brand is “Diesel.” Indeed, he has adopted the alter ego “Chuck Diesel,” and his company name, website address, and the product at issue, Diesel Test, all contain the word “Diesel.” He has paid for advertising for his products, including Diesel Test, in nationally distributed fitness magazines since 2002. He first manufactured Diesel Test in March 2005 and has advertised the product since June 2005. Diesel Test received awards from Planet Muscle magazine in 2015 and 2016.

In October 2016, the defendants began to sell the product that is at the heart of Mr. Curry’s complaint; the defendants’ product is a sports nutritional supplement branded Diesel Test Red Series, All Natural Testosterone Booster. Like Mr. Curry’s Diesel Test product, the defendants’ product comes in red and white packaging with right-slanted all-caps typeface bearing the words “Diesel Test.”

The defendants admittedly sold their product exclusively online through the following websites: (1) www.revlabs.com; (2) www.boostedtestforyou.com; (3) www.amazon.com; and (4) www.ebay.com. Although the defendants did not sell their product until 2016, they claimed in advertisements that their product was ranked “Best Product and Number 1” in 2015. The defendants have not denied that they concocted a fake ESPN news webpage and created a fake ESPN article touting their product. The defendants conducted all their marketing and advertising for their product through the Internet. In just over seven months, they received more than $1.6 million in gross sales from their product. At least 767 of the sales were to consumers in Illinois.

Mr. Curry promptly demanded that the defendants cease and desist selling their product. The defendants responded and said that they wished to find an “amicable resolution.” On November 15, Mr. Curry sent a second email to Revolution in which he renewed his claims and instructed them to contact his attorney. Two weeks later, however, Joshua Nussbaum, President of Revolution, filed a trademark appli- cation for the Diesel Test mark to be used in connection with dietary and nutritional supplements. In the trademark application, Mr. Nussbaum, as signatory, declared that “he believes that to the best of his knowledge and belief, no other persons ... have the right to use the mark in commerce.” He further indicated on the application that the “filing base” was “Intent to Use.” At the time he filed this application, however, the defendants already were selling their product in commerce bearing the Diesel Test mark.

On December 9, 2016, Mr. Curry filed a federal trademark application for the Diesel Test mark for dietary and nutritional supplements indicating that he had first used the mark in commerce in April 2005. The United States Patent and Trademark Office (“USPTO”) suspended the processing of both applications, citing a likelihood of confusion between the defendants’ and Mr. Curry’s marks.

(…) Federal law protects trademarks even if the owner has not yet sought federal registration.

(…) According to these affidavits, “Revolution does not hold itself out to do business in Illinois” on its website. Although Revolution lists on its website several companies where its products can be purchased, none of the listed companies are located in Illinois. It is not disputed that the defendants (1) are not registered to do business and do not have a registered agent in Illinois; (2) do not have a place of business in Illinois, a telephone, or a mailing address in Illinois; (3) do not have any employees located in Illinois or any who have traveled to Illinois for business; (4) do not have any real or personal property in Illinois; and (5) have never attended any trade shows or participated in any business- related meetings in Illinois.

(…) Specifically, the defendants contended that jurisdiction was not proper over Revolution because, “while Revolution does have some minimal sales to Illinois, those sales represent only 1.8% of Revolution’s total gross sales nationwide.”

(…) Because this case involves claims under both federal law and state law, the district court’s jurisdiction rested on a federal question, 28 U.S.C. § 1331, and supplemental jurisdiction, 28 U.S.C. § 1367. In a case involving federal question jurisdiction, “a federal court has personal jurisdiction over the defendant if either federal law or the law of the state in which the court sits authorizes service of process to that defendant.” Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010). The only federal statute under which Mr. Curry brings his claims is the Lanham Act, which does not authorize nationwide service of process. See be2 LLC v. Ivanov, 642 F.3d 555, 558 (7th Cir. 2011). Thus, “a federal court sitting in Illinois may exercise jurisdiction over the defendants in this case only if authorized both by Illinois law and by the United States Constitution.” Id. (citing Fed. R. Civ. P. 4(k)(1)(A)). The Illinois long-arm statute provides that “a court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States.” 735 ILCS 5/2-209(c). We have held that “the Illinois long-arm statute permits the exercise of jurisdiction to the full extent permitted by the Fourteenth Amendment’s Due Process Clause.” Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). Thus, the question we must answer is whether the exercise of personal jurisdiction over the defendants “comports with the limits imposed by federal due process.” Walden v. Fiore, 571 U.S. 277, 283 (2014); Mobile Anesthesiologists, 623 F.3d at 443 (noting that “there is no operative difference between” the constitutional limits of the Illinois Constitution and the United States Constitution in terms of subjecting a defendant to personal jurisdiction).

(…) For the exercise of specific jurisdiction over an out-of-state defendant: First, the defendant’s contacts with the forum state must show that it “purposefully availed itself of the privilege of conducting business in the forum state or purposefully directed its activities at the state. Second, the plaintiff’s alleged injury must have arisen out of the defendant’s forum-related activities. And finally, any exercise of personal jurisdiction must comport with traditional notions of fair play and substantial justice.

(…) We also note that, although Revolution’s sales of the allegedly infringing product to Illinois consumers all took place through either its interactive website or a third party’s website, we consistently have declined “to fashion a special jurisdictional test for Internet-based cases.” Tamburo, 601 F.3d at 703 n.7. “We think that the traditional due process inquiry ... is not so difficult to apply to cases involving Internet contacts that courts need some sort of easier-to-apply categorical test.” Illinois v. Hemi Grp. LLC, 622 F.3d 754, 759 (7th Cir. 2010).

We first examine whether Revolution’s activity can be characterized as purposefully directed at Illinois, the forum state. Revolution has no physical presence in Illinois. Our cases make clear, however, that physical presence is not necessary for a defendant to have sufficient minimum contacts with a forum state. Indeed, we have noted that the “purposeful-direction inquiry ‘can appear in different guises.’” Tamburo, 601 F.3d at 702 (quoting Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1071 (10th Cir. 2008)). The essential point of the inquiry is to “ensure that an out-of-state defendant is not bound to appear to account for merely ‘random, fortuitous, or attenuated contacts’ with the forum state.” Dudnikov, 514 F.3d at 1071 (quoting Burger King, 471 U.S. at 475).

The principal approach employed to ensure that a defendant’s contacts with a state are not random, fortuitous, or attenuated is to inquire whether the record demonstrates that the defendant has “‘purposefully directed’” his activities at a forum even in the “absence of physical contacts” with a forum. Burger King, 471 U.S. at 476 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774–75 (1984)). Such “purposeful direction” may be shown by evidence that the defendant’s actions, even if initiated outside of the forum state, nevertheless were directed at the forum state. For example, a defendant may cause its product to be distributed in the forum state. See, e.g., Keeton, 465 U.S. at 774–75 (finding purposeful direction where defendant published magazines outside the forum state and circulated them in the forum state). Among our recent cases, Hemi is particularly instructive. There, the State of Illinois sued Hemi Group LLC (“Hemi”) for selling cigarettes to Illinois residents in violation of state law and for failing to report the sales in violation of federal law. Hemi was based in New Mexico; it “was not incorporated or organized under Illinois law, it was not registered to do business in Illinois, it did not have any offices or employees in Illinois, it did not bank in Illinois, and it had not advertised in print media in Illinois.” Hemi, 622 F.3d at 755–56. Hemi sold its cigarettes through its websites, and the complaint identified only one Illinois resident, a special senior agent of the Illinois Department of Revenue, who had purchased cigarettes from Hemi through its websites. This agent had purchased over three hundred packs of cigarettes from Hemi over the course of two years. Id. at 755.

We held that Hemi’s contacts with Illinois were sufficient to support personal jurisdiction in that state. We based our decision in part on Hemi’s maintenance of “commercial websites through which customers could purchase cigarettes, calculate their shipping charges using their zip codes, and create accounts.” Id. at 757–58. Because Hemi “knowingly did do business with Illinois residents ... , Hemi’s argument that it did not purposefully avail itself of doing business in Illinois rang particularly hollow.” Id. at 758.

(…) The Supreme Court has held that an out-of-state insurer who sold only a single policy within the state is subject to personal jurisdiction within the state at least with respect to a cause of action related to that policy. See McGee v. Int’l Life Ins. Co., 355 U.S. 220, 222 (1957).

We are satisfied that Revolution has formed sufficient minimum contacts with Illinois. Like Hemi, Revolution sells its products only online through its website and third-party websites. Revolution’s interactive website for the sale of its products requires the customer to select a shipping address. Illinois is among the “ship-to” options from which the customer must choose. Illinois residents purchasing Revolution’s products also receive an email from Revolution thanking them for their business, confirming their order, and listing the Illinois shipping address. Revolution admittedly sold its Diesel Test product to 767 Illinois residents between October 14, 2016, and June 1, 2017.

(…) See Hemi, 622 F.3d at 758; uBid, 623 F.3d at 428 (stating that defendant’s argument that its sales to Illinois residents were merely “automated transactions unilaterally initiated by those residents” was not persuasive because those “customers ... are not simply typing their credit card numbers into a web form and hoping they get something in return”; the defendant “itself set the system up this way”).

In the face of this sales arrangement, it is not persuasive to say that Revolution did not exploit the Illinois market simply because its advertising was not especially aimed at that state. See uBid, 623 F.3d at 428–29. There is no per se requirement that the defendant especially target the forum in its business activity; it is sufficient that the defendant reasonably could foresee that its product would be sold in the forum. See Keeton, 465 U.S. at 781. In Keeton, the Supreme Court upheld the exercise of personal jurisdiction even though the defendant magazine publisher had not targeted specifically the forum. The Court determined that, with a nationwide market, the publisher reasonably should have anticipated that it could be held accountable in the forum state for activities arising from the “substantial number” of sales in the forum state. Id. In Hemi, we concluded that personal jurisdiction was proper irrespective of the fact that Hemi “had not advertised in print media in Illinois.” Hemi, 622 F.3d at 756. Revolution’s nationwide advertisements were accessible in Illinois.

Significant caution is certainly appropriate when assessing a defendant’s online contacts with a forum “to ensure that a defendant is not haled into court simply because the defendant owns or operates a website that is accessible in the forum state.” Hemi, 622 F.3d at 760. Here, however, Revolution’s 767 sales of Diesel Test to Illinois residents provides solid evidence that Revolution has “purposely exploited the Illinois market.” be2, 642 F.3d at 558 (collecting cases). These sales certainly distinguish Revolution from “the defendant that merely operates a website, even a ‘highly interactive’ website, that is accessible from, but does not target, the forum state.” Id. at 559 (collecting cases).

The proper exercise of specific jurisdiction also requires that the defendant’s minimum contacts with the forum state be “suit-related.” Advanced Tactical, 751 F.3d at 801 (quoting Walden, 571 U.S. at 284). There must be a “connection between the forum and the specific claims at issue.” Bristol-Myers Squibb, 137 S. Ct. at 1781. “Even regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales.” Goodyear, 564 U.S. at 931 n.6.

We held that Advanced Tactical failed to establish personal jurisdiction. Real Action’s email to its customer list, which included customers in Indiana, could not support jurisdiction because, we explained, any connection between the lawsuit and where the email was opened would be “entirely fortuitous.” Although Real Action made at least one sale to an Indiana resident, Advanced Tactical did not provide evidence that the sale had any connection to the underlying claims of trademark infringement. No evidence, for example, suggested that Indiana residents saw Real Action’s email or website before purchasing products from Real Action. “The only sales that would be relevant,” we explained, “are those that were related to Real Action’s alleged unlawful activity,” and Advanced Tactical did “not provide evidence of any such sales.” We emphasized in Advanced Tactical that the defendant’s contacts with the forum state must be related to the plaintiff’s claims to support specific personal jurisdiction. Advanced Tactical, 751 F.3d at 801.

Mr. Curry, on the other hand, certainly has met his burden. Unlike the sales in Advanced Tactical, which were made by the defendant in the forum state but were not related to the claims underlying the suit, Mr. Curry has shown that the direct sales that Revolution made in Illinois involved Diesel Test, a product that bears the allegedly infringing trademark that forms the very basis of this action. Mr. Curry submits that Revolution participated in the Illinois market by selling its product in a manner that would lead the consumer to confuse Revolution’s product with his. The gravamen of his case is that Revolution’s advertisement and sale of its product in the national market caused confusion and consequently deprived Mr. Curry of the value of his trademark in those states, including Illinois, where the product was sold.

(…) Advanced Tactical cannot be read as requiring, at this stage of the litigation, anything more. As we have just noted, Revolution’s sales are inextricably linked to the alleged tortious activity underlying Mr. Curry’s claims. By contrast, the allegations of trademark infringement in Advanced Tactical appear to be based solely on statements made on the defendant’s website about its affiliations. The sales in the forum state therefore did not have, as the court noted, any relevance to the allegations of the complaint. Notably, Advanced Tactical made no attempt to limit our earlier decision in Hemi, which had upheld an assertion of personal jurisdiction based on sales of cigarettes to one individual in the forum state.

(U.S. Court of Appeals for the Seventh Circuit, February 10, 2020, Charles Curry v. Revolution Laboratories, LLC, Docket No. 17-2900)

Court of Appeal of the State of California, Second Appellate District, Halyard Health, Inc., v. Kimberly-Clark Corp., B294567, Order Modifying Opinion and Certifying Opinion for Publication

Jurisdiction

Personal Jurisdiction

Specific Jurisdiction

California’s Long-Arm Statute

Due Process Clause of the Fourteenth Amendment

Motion to Quash Service of Summons

California Law

Kimberly-Clark is a Delaware corporation with its principal place of business in Texas. Approximately 350 of its 42,000 employees work in California, and approximately six percent of its global net sales in 2017 were in California. Its consumer brands include Kleenex, Scott, and Huggies diapers. Until October 2014, Kimberly-Clark also had a healthcare division that produced, among other things, surgical gowns.

In October 2014, Kimberly-Clark’s healthcare division was spun off into Halyard, “a newly created, standalone, publicly traded entity.” Halyard is a Delaware corporation with its principal place of business in Georgia. The terms of the spinoff transaction were memorialized in a “Distribution Agreement” negotiated and executed in Texas. The Distribution Agreement contains a Delaware choice of law provision and further provides that both parties agreed to submit to the non-exclusive jurisdiction of state and federal courts in Delaware.

The Distribution Agreement requires Halyard to indemnify Kimberly-Clark for specified liabilities related to its former healthcare division. Section 6.11(a) of the Distribution Agreement provides, with certain exceptions we need not describe, that “[Halyard] shall assume and pay all Liabilities that may result from the Assumed Actions and all fees and costs relating to the defense of the Assumed Actions.” An accompanying schedule of “Assumed Actions” lists 27 litigation matters, including a complaint filed by Dr. Hrayr Hrayr Shahinian against Kimberly-Clark in the Central District of California two days before Halyard and Kimberly-Clark executed the Distribution Agreement.

(…) The trial court in this case heard argument on a motion Kimberly-Clark filed to quash service of summons for lack of personal jurisdiction. Halyard conceded California courts do not have general jurisdiction over Kimberly-Clark, but the parties disagreed over whether there is a proper basis for specific jurisdiction.

(…) The United States Supreme Court recently set the ground rules for our resolution of the key issue presented in this appeal: “In order for a state court to exercise specific jurisdiction, ‘the suit’ must ‘arise out of or relate to the defendant’s contacts with the forum’”; in other words, there must be “a connection between the forum and the specific claims at issue.” (Bristol- Myers Squibb Co. v. Superior Court (2017) ___ U.S. ___, ___ [137 S.Ct. 1773, 1780-1781] (Bristol-Myers).) That is easier said than applied because personal jurisdiction does not turn on “‘mechanical’ tests” (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 478 (Burger King)) and there is room for reasonable disagreement about what it means for one thing to arise out of or relate to another.

Ultimately, we are convinced Kimberly-Clark has the better view of the limits of due process as most recently described by the high court. Halyard identifies two respects in which, it says, Kimberly-Clark purposefully availed itself of California as a forum: first, by selling surgical gowns in this state, and second, by executing the Distribution Agreement, which Halyard characterizes as a “California-directed contract.” These theories of purposeful availment define the universe of relevant contacts with California, which are insufficient to confer jurisdiction here. As to the former, Kimberly-Clark’s gown sales are not sufficiently connected to the gist of this declaratory relief action, namely, the meaning and enforceability of the Distribution Agreement. The connection is too attenuated because we cannot presume, when undertaking our jurisdictional analysis, that California substantive law (e.g., the asserted rule against indemnification of punitive damages) will apply when resolving the merits of the dispute. (Keeton v. Hustler Magazine, Inc. (1984) 465 U.S. 770, 778 (Keeton).) Second, listing the California action in the Distribution Agreement as one among a number of others to be indemnified does not suffice to make the agreement “California- directed” in any meaningful sense.

California’s long-arm statute (Code Civ. Proc., § 410.10) authorizes California courts to exercise jurisdiction on any basis not inconsistent with the Constitution of the United States or the Constitution of California. “The Due Process Clause of the Fourteenth Amendment constrains a State’s authority to bind a nonresident defendant to a judgment of its courts. [Citation.] Although a nonresident’s physical presence within the territorial jurisdiction of the court is not required, the nonresident generally must have ‘certain minimum contacts . . . such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”’ International Shoe Co. v. Washington (1945) 326 U.S. 310, 316 (International Shoe) (quoting Milliken v. Meyer (1940) 311 U.S. 457, 463).” (Walden v. Fiore (2014) 571 U.S. 277, 283.).

Personal jurisdiction may be had on either a general (all-purpose) or specific (case-linked) basis. (Bristol-Myers, supra, ___ U.S. at p. ___ [137 S.Ct. at pp. 1779-1780].) A nonresident defendant is subject to the general jurisdiction of the forum if the defendant is “‘essentially at home in the forum State,’” which, for corporations, is commonly the place of incorporation or where the corporation maintains its principal place of business. (Daimler AG v. Bauman (2014) 571 U.S. 117, 137-139.) It is obvious California courts do not have general jurisdiction over Kimberly- Clark under this standard and Halyard does not contend otherwise.

“Specific jurisdiction is very different. In order for a state court to exercise specific jurisdiction, ‘the suit’ must ‘arise out of or relate to the defendant’s contacts with the forum.’ [Citations.] In other words, there must be ‘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.’ [Citation.] For this reason, ‘specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.’ [Citation.]” (Bristol-Myers, supra, ___ U.S. at p. ___ [137 S.Ct. at p. 1780].)

When determining whether specific jurisdiction exists, courts consider the ‘“relationship among the defendant, the forum, and the litigation.”’ [Citations.] A court may exercise specific jurisdiction over a nonresident defendant only if: (1) ‘the defendant has purposefully availed himself or herself of forum benefits’ [citation]; (2) ‘the “controversy is related to or ‘arises out of’ the defendant’s contacts with the forum”’ [citations]; and (3) ‘“the assertion of personal jurisdiction would comport with ‘fair play and substantial justice’”’ [citations].” (Pavlovich v. Superior Court (2002) 29 Cal.4th 262, 269; see also Gilmore Bank v. AsiaTrust New Zealand Ltd. (2014) 223 Cal.App.4th 1558, 1568; Greenwell v. Auto-Owners Ins. Co. (2015) 233 Cal.App.4th 783, 792.)

(…) This Litigation Does Not Arise Out of or Relate to Kimberly-Clark’s Medical Gown Sales and Marketing in California.

(…) Here (…) Kimberly-Clark’s sales of surgical gowns in California did not create the indemnification relationship between it and Halyard. A separate act—the two non-California companies’ execution of the Distribution Agreement in Texas—created that relationship.

The bottom line is that Kimberly-Clark’s gown sales in California are insufficiently connected to the specific claim in this lawsuit, namely whether the Distribution Agreement’s indemnity obligation is enforceable. Personal jurisdiction therefore may not be had insofar as Halyard relies on the gown sales as the relevant purposeful availment.

(…)  Whether enforceability is governed by California law has nothing to do with whether enforceability may be determined by a California court. The required relationship among Kimberly-Clark, California, and this litigation cannot be based on what Halyard’s argument assumes, i.e., that California substantive law applies. (…) We do not make choice of law assumptions (…).

(…) Kimberly-Clark did not “purposefully avail itself” of the benefits of California law by defending a lawsuit here. (Burger King, supra, 471 U.S. at p. 475 [“the ‘purposeful availment’ requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of . . . the ‘unilateral activity of another party or a third person’”].)

(…) (See, e.g., Asahi Metal Industry Co., Ltd. v. Superior Court of California (1987) 480 U.S. 102, 114-115 [personal jurisdiction lacking in part because California had only a slight interest in a dispute that was “primarily about indemnification rather than safety standards”].)

(…) Identify a relationship between forum contacts and the specific claims at issue, which is what the high court’s most recent personal jurisdiction cases require.

(…) A defendant need not ever “physically enter the forum state” to be subject to personal jurisdiction. (Burger King, supra, 471 U.S. at p. 476.) “So long as a commercial actor’s efforts are ‘purposefully directed’ toward residents of another State, [the Supreme Court] has consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there. [Citations.]” (Ibid.)

(Court of Appeal of the State of California, Second Appellate District, Division Five, January 2, 2020, Halyard Health, Inc., v. Kimberly-Clark Corp., B294567, Order Modifying Opinion and Certifying Opinion for Publication (No Change in Judgment))