Court of Appeals Affirms Dismissal of Suit Against U.S. Corporation’s Foreign Parent Company for Lack of Personal Jurisdiction

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

Cox v. Koninklijke Philips, N.V., U.S. Court of Appeals for the Sixth Circuit, May 9, 2016

The plaintiffs sued Phillips Electronics North America (“Phillips”) and its Dutch parent company Koninklijke Phillips, NV. for injuries allegedly arising from exposure to toxic compounds during the Plaintiffs’ employment. The U.S. District Court for the Eastern District of Kentucky dismissed the claims against the defendant for lack of personal jurisdiction, and the plaintiffs appealed.

The plaintiffs argued that personal jurisdiction over the defendants was proper under three independent provisions of Kentucky’s “long-arm” jurisdictional statute.  They first argued that defendant had transacted business in Kentucky by signing a corporate agreement on Phillips’ behalf. The Court of Appeals rejected this argument, noting that such showings had been found inadequate to support jurisdiction under the federal Due Process Clause, and that the Kentucky statute was even narrower.

The plaintiffs next argued that personal jurisdiction existed because the defendants derived substantial revenue from Phillips’ facility in Kentucky. The Court disagreed, noting that if it accepted Plaintiffs’ argument every company with a Kentucky subsidiary would automatically be subject to suit in Kentucky.  

The Court of Appeals concluded that the plaintiffs had failed to satisfy the requirements for jurisdiction under Kentucky law, and so it did not ask the further question whether the exercise of jurisdiction would be “reasonable” under the Due Process Clause of the U.S. Constitution.

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