District Court Permits Discovery to Determine Whether Personal Jurisdiction Over Japanese Corporation and its US Subsidiary Exists

The World in U.S. Courts: Spring 2017 - Personal Jurisdiction/Forum Non Conveniens

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Albino v. Global Equipment USA, Ltd., US District Court for the Western District of New York, January 26, 2017

Plaintiff Alexander Albino sued Global Equipment USA, Ltd. for personal injuries suffered while he was working and operating a machine at H.P. Neun Company, Inc. in New York.  The machine was sold to Nuen by Global but manufactured by a Japanese corporation, ISOWA. Global in turn brought claims against a number of companies, including ISOWA and its wholly-owned US subsidiary, ISOWA America, Inc., a US corporation based in Arizona which was responsible for new machine and parts sales for ISOWA. Global claimed that the Court could exercise specific personal jurisdiction over ISOWA and ISOWA-US; both companies denied that they were subject to jurisdiction.

As a federal court sitting in New York, and given the State-law claims presented, the Court stated that the exercise of specific personal jurisdiction first required that the New York “long-arm” statute applied to the conduct at issue; satisfaction of the requirements of the Due Process Clause of the US Constitution would then have to be established. That statute permits personal jurisdiction where two requirements are met: 1) the defendant transacted any business in New York and 2) the cause of action arose from such a business transaction.

The Court found that Global alleged sufficient facts to satisfy the statute. As to the first prong of the test, Global proffered evidence in the form of purchase orders and invoices that ISOWA-US sold and shipped parts to Neun yearly during the relevant time period. Moreover, an ISOWA-US employee visited Neun for a three-day service call regarding the machine at issue. The Court observed that the New York statute has been interpreted as capable of supporting jurisdiction where even one transaction in New York has occurred. The Court also rejected ISOWA-US’s argument that Global failed to meet the second prong of the test because none of the parts it shipped were related to or involved in Albino’s accident. Characterizing the test as “relatively permissive” the Court found that the question of the specific cause of the accident went to the merits of the case rather than whether personal jurisdiction existed.

Global did not allege that ISOWA itself transacted business in New York, but argued that the actions of ISOWA-US could be imputed to its parent under an agency theory. The Court characterized Global’s allegations of facts as making a “sufficient start” toward establishing the agency theory, and noted that many of the key facts were exclusively within ISOWA and ISOWA-US’s knowledge. It thus granted Global’s request to conduct jurisdictional discovery.

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