No personal jurisdiction based on corporate agency theory, Wisconsin Supreme Court concludes

By Joe Forward, Legal Writer, State Bar of Wisconsin

July 11, 2011 – A class-action plaintiff suing numerous auto companies for conspiracy to price fix can’t include Nissan Japan, the parent company of a U.S. subsidiary with substantial contacts in Wisconsin.

In Rasmussen v. General Motors Corp., 2011 WI 52 (July 1, 2011), the Wisconsin Supreme Court majority concluded that Wisconsin did not have personal jurisdiction over Nissan Japan, despite the argument that its subsidiary, Nissan North America, was its agent.

“[E]ven assuming arguendo that Nissan North America were the agent of Nissan Japan,” wrote Justice Patience Roggensack for the majority, “absent control by Nissan Japan sufficient to cause us to disregard the separate corporate identities … the activities of the subsidiary corporation are insufficient to subject its nonresident parent corporation to general jurisdiction. …”

David Rasmussen filed a complaint against the auto companies in 2003. Ultimately, Nissan Japan moved to dismiss for lack of personal jurisdiction. Both the circuit and appeals courts granted the motion and dismissed the claims against Nissan Japan. Rasmussen appealed.

Rasmussen argued that personal jurisdiction was proper because Nissan North America (subsidiary) is the agent of Nissan Japan (parent), so Nissan North America’s activities could be imputed to Nissan Japan for purposes of personal jurisdiction. Rasmussen also argued that Nissan Japan had sufficient control over its subsidiary to warrant exercise of general personal jurisdiction under an alter-ego theory.

Agency and the long-arm statute

Under Wis. Stat. section 801.05(1)(d), a court in Wisconsin has general personal jurisdiction over a defendant if the defendant is “engaged in substantial and not isolated activities within this state, whether such activities are wholly interstate, intrastate, or otherwise.”

It was not disputed that Nissan North America’s contacts with Wisconsin were sufficient for personal jurisdiction to attach against Nissan North America.

However, the court noted that the “question presented is whether the relationship between Nissan Japan and Nissan North America is such that Nissan North America’s substantial and not isolated activities within Wisconsin should be imputed to Nissan Japan.”

The court concluded that Wisconsin courts cannot assert general personal jurisdiction over nonresident corporate defendants based on an agency relationship alone.

“[T]here also must be control by the nonresident parent corporation sufficient to cause us to disregard the separate corporate entities of the subsidiary and the parent corporations,” Justice Roggensack wrote. “[W]e decline to expand Wisconsin law attendant to specific jurisdiction such that general personal jurisdiction may rest solely on an alleged agency relationship."

The court did not find evidence in the record sufficient to disregard the separateness of Nissan Japan and Nissan North America. Thus, the court upheld the dismissal based on lack of personal jurisdiction.

Concurrence

Chief Justice Shirley Abrahamson wrote a concurring opinion, agreeing with the ultimate conclusion. But she questioned the legal analysis employed by the majority.

“The majority opinion relies on the tests developed in substantive law cases and does not acknowledge that the tests for substantive and jurisdictional law are not necessarily one and the same,” Chief Justice Abrahamson wrote. “The focus should be on the control of the parent over the subsidiary as it relates to the minimum contacts necessary to establish jurisdiction over the parent under the pertinent general personal jurisdiction principles (a long-arm statute and constitutional principles of fairness).”

Attorneys

Owen Thomas Armstrong Jr., of von Briesen & Roper S.C., Milwaukee, represented David Rasmussen and Lisa Lindsay. Daniel L. Goldberg of Bingham McCutchen LLP, Boston, represented Nissan Motor Company in the appeal.