In re California Gasoline Spot Market Antitrust Litigation

Background

Plaintiffs allege that defendants entered into horizontal agreements to restrain competition in the spot market for gasoline and gasoline-blending components formulated for use in California. They bring state antitrust and unjust-enrichment claims against SK Trading International Co., Ltd. ("SK Trading"), SK Energy Americas, Inc. ("SK Energy"), Vitol Inc. ("Vitol"), and two individual defendants.

The order addressed SK Trading’s motion to dismiss for lack of personal jurisdiction. The court had previously deferred that motion and allowed jurisdictional discovery. After the discovery and supplemental briefing were completed, the court held oral argument.

Legal standard

Because the court decided the jurisdiction issue using written submissions and discovery materials without holding an evidentiary hearing, plaintiffs needed to make a prima facie showing—an initial evidentiary showing—of facts supporting personal jurisdiction. The court was required to resolve disputed facts in plaintiffs’ favor when deciding whether that showing had been made.

For specific personal jurisdiction, plaintiffs had to show both that SK Trading purposefully directed activities toward California and that their California antitrust claims arose from or related to those activities. If those requirements were met, SK Trading could still show that exercising jurisdiction would be unreasonable.

Agency theory

Plaintiffs did not contend that SK Trading itself carried out the California trades. Instead, they argued that SK Trading should be responsible for SK Energy’s California conduct because SK Trading was SK Energy’s agent. Under that theory, plaintiffs had to make an initial showing that SK Trading had the right to substantially control SK Energy’s activities.

The court found that the evidence showed ordinary oversight by a parent company over its subsidiary, rather than control over SK Energy’s day-to-day trading. The evidence showed that SK Trading closely monitored trading activity, focused on profitability and corporate policies, participated in hiring David Niemann, and exercised some oversight over personnel and business matters. But the court found no evidence that SK Trading controlled the trades or trading strategies at issue.

The court also rejected plaintiffs’ reliance on shared employees, shared email addresses, employee loans, and planning documents. It concluded that these facts were common to a parent-subsidiary relationship and did not show that SK Trading controlled SK Energy’s trading activities. The court stated that accepting plaintiffs’ theory would make ordinary parent-company supervision enough to establish jurisdiction over nearly every parent based on a subsidiary’s contacts.

Ratification theory

Plaintiffs also appeared to advance a ratification theory. The court held that ratification is not a valid theory for establishing personal jurisdiction. It distinguished authority discussing ratification as a way to establish liability through an agency relationship, explaining that such authority did not establish personal jurisdiction through ratification.

Connection to the claims

The court separately held that plaintiffs had not shown the required connection between SK Trading’s forum-related activities and their alleged injuries. Plaintiffs needed evidence that SK Trading purposefully directed the specific anticompetitive trading activity alleged in the case. The court found that they had not identified evidence supporting a plausible inference that SK Trading directed that activity or was its but-for cause.

Disposition

The court GRANTED SK Trading’s motion to dismiss for lack of personal jurisdiction. The order also required the parties to file a joint updated case-management-conference statement by October 21, 2021, and stated that the order disposed of the listed docket entries.