District Court Finds No Personal Jurisdiction Over Italian Manufacturer Sued for Indemnification in a Products Liability Action Because Contacts of Affiliated Companies Could Not Be Attributed to It

The World in U.S. Courts: Spring 2015 - Personal Jurisdiction | January.20.2015

Epstein v. Goodman Manufacturing Co. LP et al., United States District Court for the District of New Jersey, January 20, 2015

Plaintiffs, the Epsteins, sued Goodman Manufacturing Company and Revcor for damage sustained to their property after their furnace failed. Goodman and Revcor filed a third-party complaint for indemnification against the General Electric Company, which allegedly sold Goodman and Revcor a malfunctioning blower motor. General Electric, in turn, filed an indemnification claim against Elica, which manufactured the blower motor. Elica, finally, filed an indemnification claim against SKF-Italy, which manufactured bearings in the blower motor.

SKF-Italy, an Italian corporation, moved to dismiss for lack of personal jurisdiction, and the parties engaged in jurisdictional discovery to determine whether the court had personal jurisdiction under New Jersey's long-arm statute, which permits the exercise of personal jurisdiction to the fullest limits of the Due Process Clause of the U.S. Constitution. The District Court considered SKF-Italy not itself to be subject to personal jurisdiction, but it was part of a global group comprised of SKF-Italy and 80 other entities, all owned by a Swedish corporation.

Elica argued that the entire SKF Group could properly be considered a single entity for jurisdictional purposes as they were effectively alter-egos of each other, and together had the requisite U.S. contacts to support jurisdiction. The court found that the alter-ego test was not satisfied because the SKF entities did not exercise enough control over each other to find that they were essentially the same entity.

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