District Court Dismisses Employment Discrimination Claim Against Foreign Company Owned by U.S. Corporation For Lack of Personal Jurisdiction

The World in U.S. Courts: Fall 2015 - Personal Jurisdiction/Forum Non Conveniens | September.22.2015

Carroll v. Vinnell Arabia, LLC, U.S. District Court for the Eastern District of Virginia, September 22, 2015

Daniel B. Carroll sued Vinnell Arabia, LLC for employment discrimination. Carroll claimed he was interviewed by Vinnell employees in Saudi Arabia for an accounting job there, but was denied the job because of his race and religion. Vinnell moved to dismiss the case for lack of personal jurisdiction.

The District Court began by examining whether Vinnell was subject to general personal jurisdiction. The Court noted that foreign defendants must exhibit "continuous and systematic" contact with the forum in order for general personal jurisdiction to be proper, significant enough that they would be considered to be "at home" in the forum. Here, Vinnell was domiciled in Saudi Arabia, its principal place of business was in Riyadh, and it was not registered to do business in Virginia. Plaintiff argued that jurisdiction was appropriate because Vinnell was 51%-owned by Northrop Gunman, a U.S. company. The Court disagreed, citing precedent to the effect that the existence of a U.S. parent was not alone sufficient to support a finding of general personal jurisdiction.

The Court next considered specific personal jurisdiction, examining whether (1) Vinnell purposefully availed itself of the privilege of doing business in Virginia, (2) Carroll's claims arose out Vinnell's actions directed toward Virginia, and (3) exercising personal jurisdiction would be reasonable so as to satisfy the requirements of the Due Process Clause of the U.S. Constitution. As to the first step of the analysis, the Court concluded that Vinnell did not purposefully avail itself of the privilege of doing business in Virginia. The Court noted that Vinnell's only contact with Virginia was its initiation of business and a long-term contract with Northrop Gunman. By contrast, all of Carroll's interactions with Vinnell occurred in Saudi Arabia and concerned services to be rendered in Saudi Arabia. Thus, the Court concluded that Carroll could not satisfy the first step of the analysis and, as a consequence, it could not exercise specific personal jurisdiction over Vinnell.

The Court additionally explained that Carroll's claims did not arise out of Vinell's conduct directed toward Virginia—they arose out of actions that occurred in Saudi Arabia—and that exercising personal jurisdiction would not be constitutionally reasonable.

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