364 F. Supp. 3d 1061
N.D. Cal.2019Background
- Plaintiffs (Successor Agency and City of Emeryville) seek cleanup costs for contamination at 5679 Horton St., Emeryville, allegedly from historical operations by Marchant (later SCM) and later occupants Swagelok/Whitney.
- HBML (a UK corporation, formerly Hanson Trust PLC/Hanson PLC) acquired control of SCM via a hostile tender offer and a series of post-acquisition corporate restructurings in the mid-1980s; plaintiffs allege SCM’s liabilities were funneled into fan companies (notably HSCM-20/HM Holdings) ultimately controlled by HBML.
- Plaintiffs assert HBML is subject to specific personal jurisdiction in California based on HBML’s nationwide and California-targeted communications (tender offer press, California ads), participation in the acquisition, and as successor to SCM’s liabilities; cross-claimants advance an alternative alter-ego theory tying HBML to its U.S. affiliates.
- Jurisdictional discovery produced documents, depositions, SEC filings, board minutes, and advertisements indicating HBML’s involvement in the takeover and post-acquisition restructuring; HBML contends U.S. subsidiaries (Hanson Industries, Millennium) controlled the relevant transactions and that jurisdiction would be unreasonable.
- The court ruled plaintiffs and cross-claimants made a prima facie showing of specific jurisdiction under both successor-liability and alter-ego theories, denied HBML’s Rule 12(b)(2) motion, and overruled related evidentiary objections for jurisdictional purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether specific personal jurisdiction exists over HBML based on HBML's direct contacts with California | HBML ran nationwide and California-targeted press/ads, its principals worked in California, and HBML purposefully directed acquisition activity that affected California | HBML contends it did not cause contamination, did not own/operate the property, and U.S. subsidiaries conducted the relevant activities | Court: Prima facie showing satisfied; HBML’s press, ads, board actions, and personnel contacts suffice for purposeful availment/direction |
| Whether plaintiffs' CERCLA claims "arise out of" HBML's forum contacts via successor liability | HBML’s acquisition and restructuring of SCM is the but-for cause of HBML assuming SCM/Marchant liabilities, connecting HBML's contacts to the CERCLA claims | HBML says it was not SCM’s legal successor and that U.S. affiliates (Hanson Industries, Millennium) assumed liabilities | Court: Plaintiffs plausibly plead successor liability for jurisdictional purposes; nexus established |
| Whether exercising jurisdiction would be reasonable (fair play and substantial justice) | Forum is appropriate; plaintiff relief efficient in California; burden on HBML not dispositive | HBML argues undue burden litigating in California and minimal purposeful interjection | Court: HBML did not present a compelling case against reasonableness; jurisdiction reasonable |
| Whether an alter-ego theory justifies jurisdiction by imputing U.S. affiliates' contacts to HBML | Evidence of common officers, shared management, undercapitalized fan companies, shared governance, and post-acquisition scheme justify piercing the veil | HBML emphasizes corporate separateness, compliance with listing rules, and use of subsidiaries | Court: Prima facie alter-ego showing exists as an alternative basis for jurisdiction |
Key Cases Cited
- Int'l Shoe Co. v. State of Wash., 326 U.S. 310 (minimum contacts due process standard for personal jurisdiction)
- Daimler AG v. Bauman, 571 U.S. 117 (limits on general jurisdiction)
- Boschetto v. Hansing, 539 F.3d 1011 (specific jurisdiction test in the Ninth Circuit)
- Pakootas v. Teck Cominco Metals, Ltd., 905 F.3d 565 (applying purposeful-direction/Calder test to environmental claims)
- Atchison, Topeka & Santa Fe Ry. Co. v. Brown & Bryant, Inc., 159 F.3d 358 (successor liability exceptions)
- Sinatra v. National Enquirer, 854 F.2d 1191 (modern burdens of foreign litigation and purposeful availment)
- Slottow v. Am. Cas. Co. of Reading, Pa., 10 F.3d 1355 (undercapitalization as factor for alter ego)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (plaintiff's burden in personal jurisdiction showing)