District Court Dismisses Case against Foreign Holding Company with No Direct Activities in the State

The World in U.S. Courts: Summer and Fall 2016 - Personal Jurisdiction/Forum Non Conveniens/ Foreign Sovereign Immunity Act (FSIA)

Barone v. InterContinental Hotels Group PLC, U.S. District Court for the Northern District of California, May 20, 2016

Defendant Barone brought a personal injury case in District Court in California against British holding company InterContinental Hotels Group (“IHG”) for burns sustained during a spa treatment at a Dublin InterContinental hotel.  The Court dismissed the case for lack of personal jurisdiction, finding that although IHG subsidiaries may have operated hotels in California, the holding company itself was not registered with the California Secretary of State, was not qualified to do business in California, and had no contracts or other presence in the State. 

In considering whether IHG’s contacts with the State of California were sufficient to warrant an exercise of personal jurisdiction, the Court found that it lacked both “specific” and “general” personal jurisdiction.  The Court first considered whether it could assert “specific personal jurisdiction” over IHG, which would have required a substantial connection between the defendant’s contacts with the State and the claims at issue.  Since plaintiff’s injury occurred in Ireland, the Court found that that injury lacked the significant relationship to the defendant’s forum-related activities required for such an exercise of jurisdiction. 

The Court then considered whether it could exercise “general personal jurisdiction” over IHG, which permits any and all claims against a defendant when their affiliations with a foreign State are so “continuous and systematic” as to render them essentially at home in the State.  The Court noted that this standard is “fairly high” and requires a corporate defendant’s contacts with the forum to “approximate physical presence.”  Accordingly, the Court declined to exercise general personal jurisdiction over IHG since IHG was not incorporated in California and did not maintain a principal place of business in the State. 

As an alternative to dismissal, plaintiff filed a motion for discovery arguing that the Court should permit jurisdictional discovery to determine the relationship between IHG’s Dublin hotel, where the injury occurred, and the California hotels allegedly owned by IHG subsidiaries.  Among the facts plaintiff cited in support of her request for jurisdictional discovery was a passage in IHG’s annual report “discussing the possibility of liability in the United States.”  However, the Court did not find this fact sufficient to warrant further discovery and dismissed it as too tenuous to establish personal jurisdiction even if true.  The Court therefore dismissed the case and denied plaintiff’s request for further discovery.

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