South Carolina Supreme Court
COLUMBIA, S.C. - Korean manufacturer LG Chem can be sued in South Carolina over batteries consumers misuse by attaching to vape pens, the state’s highest court ruled, overturning a trial court’s decision denying personal jurisdiction because the products are sold only to wholesalers.
Because LG knows people are breaking up bundles of its 18650 batteries and selling them in vape pens, the company can be held liable when they explode, the South Carolina Supreme Court ruled Nov. 12. It doesn’t matter that the batteries aren’t designed for use in vape pens or sold for individual use, the court said.
A company that “has raked in profits by exploiting a state's business market with a product may not escape jurisdiction by claiming the injury arose out of the unintended use of the product or caused damage to someone other than an intended user,” Justice D. Garrison Hill wrote in the opinion. LG “did little to deter such use, even after it knew these uses were resulting in malfunctions causing grave injury in this state.”
The decision highlights a split among courts over whether LG can be subjected to jurisdiction when its products are misused by people who didn’t buy them directly from the manufacturer. Courts in Texas and Michigan ruled for plaintiffs in exploding vape battery cases, while the Ninth Circuit Court of Appeals ruled for LG in a case out of Hawaii because the batteries were sold only to wholesalers, not end consumers. The North Carolina Supreme Court sent the issue back to a lower court to decide if the facts support jurisdiction.
The South Carolina Supreme Court rejected LG’s argument that plaintiff Reid Fleming failed to provide evidence the company sold him the 18650 battery that exploded and burned him. That was the logical fallacy known as the appeal to ignorance, the court said: Something is false if it hasn’t been proven true.
The U.S. Supreme Court in 2021 ruled that Ford could be sued in Minnesota over an accident involving a Crown Victoria that was designed in Michigan, made in Canada and initially sold in North Dakota, the court noted. Courts can assert general jurisdiction over companies in the state where they are based and specific jurisdiction in states where they engage in business and one of their products injures someone, the South Carolina Supreme Court said.
The court said it was “too formalistic” to deny jurisdiction because LG didn’t intend its products to be sold for use in vape pens in South Carolina. Doing so “would remove adjudication from the reality of economic markets,” the court said.
“Products have ways of finding markets far afield of those their creators envisioned,” the court concluded. “When a company learns of such secondary markets and continues to indirectly supply them, such activity also supplies the contacts necessary to support personal jurisdiction over the company in lawsuits that arise out of or are related to that activity.”
