German Manufacturer’s Alleged Participation In Conspiracy To Undermine Effectiveness Of Us Pollution Control Regulations Supports Assertion Of Personal Jurisdiction Under Rule 4(K)(2)

The World in U.S. Courts: Winter 2018 - Personal Jurisdiction/Forum Non Conveniens | October.30.2017

RETURN TO Winter 2018 Edition

In re: Volkswagen “Clean Diesel” Marketing, Sales Practices, And Products Liability Litigation, US District Court for the Northern District of California, October 30, 2017

Extensive litigation arose following disclosure of the Volkswagen “Dieselgate” fraud, and many cases were consolidated in California. One issue addressed in this opinion is whether personal jurisdiction exists over the German defendant, Bosch GmbH, which is alleged to have worked with Volkswagen to design an electronic control unit that would defeat the application of anti-pollution standards.

Jurisdiction over Bosch was premised on Federal Rule of Civil procedure 4(k)(2), which generally applies where the claim arises under federal law and the defendant has insufficient contacts with any one State to support the exercise of jurisdiction, but its contacts with the US as a whole are extensive enough to satisfy the Due Process Clause of the US Constitution. The case involved federal claims (RICO) and Bosch did not assert that it could be sued elsewhere, so the focus of the Court’s opinion was whether Bosch had sufficient contacts with the US as a whole to support jurisdiction. In finding that the contacts were adequate, the Court noted that the defendants were alleged to have violated the law specifically to defeat US pollution requirements, that “hundreds of thousands” of allegedly defective products had been shipped to the US, that Bosch employees lobbied US regulators and legislators, and that the claims arose out of or related to these contacts. The Court also rejected Bosch’s argument that requiring the company to defend itself would violate Due Process principles of fundamental fairness, dismissing general concerns over inconvenience and concluding that Germany’s acknowledged interest in “regulating” the behavior of a German company in Germany was not controlling because the alleged scheme targeted the US.

RETURN TO Winter 2018 Edition

RETURN TO The World in US Courts Home Page

US Laws Discussed

Editorial Board