Edwards v. Thermigen LLC

Background

Fernando Anthony Edwards sued Thermigen LLC and SpineSmith Holdings, LLC, doing business as Celling Biosciences. Edwards alleged that Thermigen marketed and sold a medical device called “ThermiVa” as approved for several purposes involving vaginal conditions, but that the device did not work as advertised and had not received federal approval for those purposes. He alleged that he paid $100,579.92 for the device and asserted six California-law claims: unlawful business practices, unfair business practices, fraudulent business practices, false advertising, deceit, and negligent infliction of emotional distress.

Edwards alleged that Celling Biosciences was Thermigen’s successor and was responsible for the alleged false advertising and resulting damages. SpineSmith disputed that allegation. Through a declaration, SpineSmith’s chief executive officer stated that SpineSmith was a Delaware limited liability corporation doing business in Texas; that a subsidiary acquired Thermigen through an equity purchase after the alleged sale to Edwards; that SpineSmith was not involved in the sale; and that neither SpineSmith nor its subsidiary had a California office or continuous and systematic business contacts in the district.

Motion and jurisdiction analysis

SpineSmith moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), which allows dismissal for lack of personal jurisdiction, and Rule 12(b)(6), which allows dismissal for failure to state a legally sufficient claim. The court treated personal jurisdiction as dispositive and therefore did not reach the Rule 12(b)(6) argument.

The court explained that personal jurisdiction requires sufficient contacts between the defendant and the forum state. It considered both general jurisdiction, which can cover any claim when a company’s connections are extensive enough, and specific jurisdiction, which requires a connection between the defendant’s forum-related conduct and the claims.

The court held that SpineSmith was not subject to general jurisdiction because Edwards did not dispute that SpineSmith had no California offices, made only occasional and minimal sales of its own products in California, and lacked continuous and systematic business contacts in the district. The court also held that SpineSmith was not subject to specific jurisdiction because it was not involved in the alleged sale, had not entered into a business transaction with Edwards, and therefore had not purposefully engaged in conduct connected to Edwards’s claims in California.

The court rejected Edwards’s argument that the alleged California contacts of Thermigen established jurisdiction over SpineSmith. It explained that separate corporate entities are generally treated separately for jurisdictional purposes and that Edwards had not shown an agency or alter-ego relationship supporting attribution of Thermigen’s contacts to SpineSmith.

The court also rejected Edwards’s argument that SpineSmith lacked standing to file the motion. Because Celling Biosciences was SpineSmith’s fictitious business name, the court concluded that SpineSmith was the proper defendant and had standing to seek dismissal.

Ruling

Judge Corley’s order granted SpineSmith’s motion to dismiss on the ground that the court lacked personal jurisdiction over SpineSmith, doing business as Celling Biosciences. The court did not reach SpineSmith’s alternative Rule 12(b)(6) argument. The court also denied as moot SpineSmith’s motion to strike part of a declaration because the court did not rely on that declaration. The opinion does not state that the dismissal was with or without prejudice.