The New Jersey state appeals court ordered a lower court to rethink its ruling that the Garden State has jurisdiction over product liability claims stemming from an exploding vape pen battery made by Korea-based LG Chem Ltd., reasoning that the record wasn’t sufficiently developed enough to reach that conclusion.
A two-judge Appellate Division panel reversed and remanded a Middlesex County Superior Court’s finding that the service of the complaint on LG Chem’s U.S. subsidiary was enough to keep the suit in New Jersey, where the pen was purchased, even though the subsidiary isn’t a party. The Middlesex court failed to conduct the fact-specific analysis for determining if an entity is a defendant corporation’s alter ego for the purposes of valid service of a complaint.
Plaintiff Ian Crespi alleged he was injured in December 2016 when a vape pen or its battery exploded in his face, a few months after he purchased the pen from Vape Zeppy. Crespi contends LG Chem “distributed the vape or manufactured and distributed the lithium-ion battery that injured him.”
Crespi filed his lawsuit against LG Chem, Vape Zeppy and others, and attempted to serve it on LGCM in Michigan by delivering a copy of the summons and complaint to LGCM’s human resources director.
LG Chem moved to dismiss the complaint for insufficient service of process and lack of personal jurisdiction. In support of the motion, an LGCM employee certified that he wouldn’t have accepted the complaint if he’d known it was intended for LG Chem.
The Middlesex County judge denied the dismissal motion, finding that LGCM was essentially LG Chem’s alter ego because it served as a conduit for the Korean company’s activities and an instrumentality for the production of its products, the appeals decision said.