LG Chem Proves Tough to Pin Down in Battery Burn Suits Across US

LG Chem Ltd., the South Korean producer of purportedly defective, exploding e-cigarette batteries, has proven to be a challenging target for anyone wanting to sue for their injuries.

LG Chem has been hit with lawsuits alleging its batteries caused burn injuries to vape users in Missouri, Hawaii, Mississippi, Texas, California, Ohio, Georgia, Washington and Arizona, just to name a few. At least 29 such suits have been filed, according to Bloomberg Law research.

With varying degrees of success, LG Chem has fought jurisdiction in all of them.

Though millions of its batteries are imported into the US each year, the company almost always argues that it’s not present for suit, regardless of where that suit is filed. And, because some courts regard LG Chem as jurisdictionally present while others don’t, whether plaintiffs receive compensation for their injuries hinges heavily on where they file suit.

“Personal jurisdiction is a notoriously facts-specific issue, and the law is all over the place,” Patrick Woolley of the University of Texas at Austin School of Law said in a phone interview.

In many cases it can be quite difficult to establish that a defendant has the requisite purposeful contacts with the forum state and one of the reasons for that is because it can be a very fact intensive inquiry, Woolley said.

“But there’s also a really central legal problem that there are substantial disagreements among courts about the legal standard that governs jurisdiction and so you have a situation in which there really is no indisputable legal rule to apply,” he said.

Legal Standard

Despite LG Chem having comparable product liability suits and contacts from state to state, outcomes vary largely because courts construe case law regarding the minimum contacts needed for personal jurisdiction in a variety of ways, often reaching different conclusions on similar facts.

Courts generally focus on the nature and extent of the company’s contact with the forum state. Absent general jurisdiction, available only in Georgia where LG Chem’s American subsidiary is based, courts are compelled to examine specific jurisdiction: is the battery maker sufficiently present in the state where it’s being sued to be deemed amenable to being sued there? Has it voluntarily made at least that requisite minimum contact?

State courts have generally been more sympathetic to plaintiffs’ arguments than their federal counterparts, according Bloomberg Law’s analysis.

Although the US Supreme Court has held that injury in the forum state may create the required connection between the claim and that forum, in some circumstances, we have only minimal guidance from the court about what those circumstances are, Woolley said.

In most cases, a causal relationship between the defendant’s purposeful contacts with the forum state and the plaintiffs claim is required to establish jurisdiction, he added.

Arises or Relates

That’s where the phrase “arise out of or relate to” really comes into play. The Supreme Court’s 2021 decision in Ford Motor Co. v. Mont. Eighth Judicial Dist. Court has had an impact on how judges analyze personal jurisdiction, said Jaime Weida of Bradley Arant Boult Cummings LLP.

“Ford expanded the second element of the personal jurisdiction analysis. Instead of the claim having to ‘arise out of’ the defendant’s contacts with the forum, the claim can ‘relate to’ a defendant’s contacts in the forum,” she said.

In Ford, the justices ruled that a defendant is subject to personal jurisdiction if the injuries “relate to” even if they “don’t derive from” their in-state activities. The high court’s decision addressed lawsuits from Montana and Minnesota courts where plaintiffs alleged their car accident injuries were caused by a vehicle defect.

The automaker asserted the cars were sold in other states, and there wasn’t a close enough link to the plaintiffs’ claims to fulfill the requirements of due process.

But the high court ruled that Ford has a wide reach as a global auto company and it did “substantial business” in the states where the accidents took place and the lawsuits were filed, specifically advertising, selling, and servicing the model of vehicles the suits claimed defective.

“If the courts were still using “arises out of,” the contact would have needed to be more specific, Weida said. For example, Ford may have had to have manufactured and sold those particular vehicles to those plaintiffs within the states of Minnesota and Montana.”

Asked if case law is fair or unfair to people suing LG Chem, Weida said it depends on the way one looks at it. The court looks at it in terms of reasonableness, not fairness, she said.

“If a company is doing business in a forum, it really should expect to litigate there,” Weida said. “That’s really the whole point of talking about that reasonableness and purposeful availment.”

Russian Roulette

LG Chem argued in state and federal courts across the US that there’s no jurisdiction because it doesn’t have any employees or offices where it’s being sued—with that exception of Georgia—the rare place where they’ve conceded a jurisdictional point. It’s also said that it hasn’t authorized batteries used in vapes for standalone sale.

The cases, mostly filed from the end of 2017 and into 2021, share startlingly similar details. Typically, a vape or e-cigarette user uses a lithium-ion battery, which bursts in their pocket, causing serious burns.

LG Chem managed to exit 11 of those suits, with the judges ruling in its favor that their courts didn’t have jurisdiction over the South Korean company, according to Bloomberg Law’s analysis. While in 10 other cases, the judges ruled that they had jurisdiction over the company. One federal judge in Michigan allowed the battery-maker’s American subsidiary to exit, but left LG Chem in the suit for discovery on personal jurisdiction.

In contrast, a US judge in California denied LG America’s motion to dismiss, but granted the corporate parents’ motion to dismiss for lack of jurisdiction. The rest of the cases have either been settled, dismissed, or are currently ongoing.

“It will often be to the advantage of a corporate defendant in a case of this sort to argue that the court does not have jurisdiction over the defendant if the argument is a colorable one,” Woolley of the University of Texas said.

If the defendant prevails, the plaintiff might not be able to refile in a forum where jurisdiction wouldn’t be contested due to financial issues, Woolley said. And, if the lawsuit is re-filed in a different jurisdiction, the new jurisdiction may use a law that is more favorable to the defendant. That uncertainty about how a court will resolve a personal jurisdiction challenge may reduce the settlement value of a case.

For Weida, LG Chem’s actions are better understood through the lens of an attorney.

“When you defend your client, you want to make sure that you give the best argument to support your client’s position. For LG Chem’s legal team, I believe they want to ensure that their client is being treated fairly by the court. If LG Chem truly does not have contacts in a forum it has been sued in, it would be unfair to make them litigate there,” she said.

Bloomberg Law reached out to LG Chem for comment, but a company spokesperson said that they don’t comment on ongoing litigation.

It did however, state that its third quarter earnings statements touting its plans for expansion in the North American market doesn’t include selling batteries used on vapes.