California Has Specific Jurisdiction & Defendant Must Defend Itself Here.

In an attempt to collect a judgment, a bank sued a New Zealand company for fraudulently transferring and sequestering the debtor’s assets. The trial court granted the New Zealand company’s motion to quash service of summons for lack of personal jurisdiction. On appeal, the appellate court framed the issue as follows: “The primary issue presented is whether the test for specific jurisdiction in tort cases requires the defendant to have expressly aimed its intentional conduct at the plaintiff.” The appellate court discussed that when general jurisdiction is not established, a nonresident defendant may still be subject to California’s specific jurisdiction if a three-prong test is met.  First, the defendant must have purposefully availed itself to the state’s benefits. Second, the controversy must be related to or arise out of the defendant’s contacts with the state. Third, considering the defendant’s contacts with the state and other factors, California’s exercise of jurisdiction over the defendant must comport with fair play and substantial justice. The appellate court stated that a plaintiff bears the burden of establishing the first two requirements, and, if plaintiff does, the burden shifts to the defendant to show that California’s exercise of jurisdiction would be unreasonable. In the present case, the appellate court decided plaintiff established the first two requirements, and concluded the defendant “failed to make a compelling case that California’s exercise of specific jurisdiction would be unfair and unreasonable.”  (Gilmore Bank v. Asiatrust New Zealand Limited (Cal. App. Fourth Dist., Div. 3; February 21, 2014) 223 Cal.App.4th 1558, [168 Cal.Rptr.3d 525].)