Estate of Thomson v. Toyota Motor Corp., 07-3813.

• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)
• Citation: 545 F.3d 357
• Docket Number: No. 07-3813.,07-3813.
• Parties: ESTATE OF Dorothy THOMSON, by and through as Co-Personal Representatives of the ESTATE of Vicky RAKESTRAW and Darcy Horvat; Colleen Miller, Plaintiffs-Appellants, v. TOYOTA MOTOR CORPORATION WORLDWIDE; Thrifty Rent-A-Car Systems, Inc., Defendants-Appellees.
• Decision Date: 30 July 2008

545 F.3d 357 ESTATE OF Dorothy THOMSON, by and through as Co-Personal Representatives of the ESTATE of Vicky RAKESTRAW and Darcy Horvat; Colleen Miller, Plaintiffs-Appellants,
v.
TOYOTA MOTOR CORPORATION WORLDWIDE; Thrifty Rent-A-Car Systems, Inc., Defendants-Appellees. No. 07-3813. United States Court of Appeals, Sixth Circuit. Argued: June 5, 2008. Decided and Filed: July 30, 2008.^*

[545 F.3d 359]

ARGUED: Douglas P. Desjardins, Clapp, Desjardins & Ely, Washington, D.C., for Appellants. Robert A. Brundage, Bingham McCutchen, San Franciso, California, Hilary Sheldon Taylor II, Weston Hurd, Cleveland, Ohio, for Appellees. ON BRIEF: Douglas P. Desjardins, Clapp, Desjardins & Ely, Washington, D.C., for Appellants. Hilary Sheldon Taylor II, Weston Hurd, Cleveland, Ohio, Dennis P. Ziemba, Eckert, Seamans, Cherin & Mellott, Philadelphia, Pennsylvania, Kelly C. Scandy, Montgomery, Rennie & Jonson, Cincinnati, Ohio, for Appellees. Erika Z. Jones, Adam C., Sloane, Mayer Brown, Washington, D.C., for Amici Curiae.

Before: GILMAN and COOK, Circuit

[545 F.3d 360]

Judges; and COHN, District Judge.^**

OPINION

AVERN COHN, District Judge.

This is a tort case. Plaintiffs-Appellants, the Estate of Dorothy Thomson ("the Estate") and Colleen Miller sued Defendants-Appellees, Toyota Motor Corporation Worldwide ("TMC") and Thrifty Rent-A-Car Systems, Inc. ("Thrifty") in the Northern District of Ohio following a car accident in South Africa in which Colleen Miller and Dorothy Thomson were injured. Thomson subsequently died from her injuries. The district court granted TMC's motion to dismiss for lack of personal jurisdiction and sua sponte dismissed plaintiffs' claims against Thrifty under the doctrine of forum non conveniens. For the reasons that follow, we affirm.

I. BACKGROUND

In late September 2005, Miller and Thomson, her mother, went on vacation to South Africa. They were joined by Rita Miller, Colleen Miller's daughter-in-law. On September 28, 2005, Rita Miller rented a Toyota Condor from a "Thrifty Car Rentals" at the airport in Port Elizabeth, South Africa.

On October 3, 2005, Rita Miller's husband was driving the car. Thomson, Colleen Miller, and Rita Miller were passengers. Plaintiffs allege that the brakes "malfunctioned and seized." They further allege that the bonded brake lining of the brake shoe came unglued and then wedged between the brake shoe and the brake drum. Plaintiffs say that this caused the car to become uncontrollable and resulted in a crash. Thomson and Colleen Miller were seriously injured, and Thomson died on October 9, 2005, due to complications from her injuries.

Colleen Miller and the Estate, citizens of Ohio, sued TMC and Thrifty in the district court for the Northern District of Ohio. TMC filed a motion to dismiss under Fed. R.Civ.P. 12(b)(2) for lack of personal jurisdiction and under Fed.R.Civ.P. 12(b)(3) for improper venue, or in the alternative for forum non conveniens. Thrifty filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. The district court granted TMC's motion for lack of personal jurisdiction and sua sponte dismissed Thrifty on the grounds of forum non conveniens. Plaintiffs appeal.

II. ANALYSIS A. Dismissal of TMC-Lack of Personal Jurisdiction 1. Legal Standards

We review de novo a district court's dismissal for lack of personal jurisdiction under Rule 12(b)(2). The plaintiff bears the burden of establishing the existence of jurisdiction. Brunner v. Hampson, 441 F.3d 457, 462 (6th Cir.2006). Where, as here, the district court relies solely on written submissions and affidavits to resolve a Rule 12(b)(2) motion, rather than conducting an evidentiary hearing or limited discovery, the plaintiff's burden is "relatively slight," Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir.1988) (internal quotation marks omitted) and "the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal," Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). The pleadings and affidavits submitted must be viewed in a light most

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favorable to the plaintiff, and the district court should not weigh "the controverting assertions of the party seeking dismissal." Id. at 1459.

In a diversity case such as this, we examine the law of the forum state to determine whether personal jurisdiction exists. Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir.2000). We apply a two-step test to determine whether the district court properly determined that it lacked personal jurisdiction over TMC. First, we must determine whether Ohio law authorizes jurisdiction. Brunner, 441 F.3d at 463. If it does, we must determine whether that authorization comports with the Due Process Clause of the Fourteenth Amendment. Id.

We have recognized that Ohio's long-arm statute is not coterminous with federal constitutional limits. Calphalon Corp., 228 F.3d at 721 (noting that "the Ohio Supreme Court has ruled that the Ohio long-arm statute does not extend to the constitutional limits of the Due Process Clause")(citing Goldstein v. Christiansen, 70 Ohio St.3d 232, 638 N.E.2d 541, 545 n. 1 (Ohio 1994) (per curiam)). Accordingly, "when Ohio's long-arm statute is the basis for personal jurisdiction, the personal jurisdiction analysis requires separate discussions of whether the defendant is amenable to suit under Ohio's long-arm statute and whether due process requirements of the Constitution are met." Walker v. Concoby, 79 F.Supp.2d 827, 831 (N.D.Ohio 1999).

Two kinds of personal jurisdiction that can be exercised under Ohio law:

Jurisdiction may be found to exist either generally, in cases in which a defendant's "continuous and systematic" conduct within the forum state renders that defendant amenable to suit in any lawsuit brought against it in the forum state, or specifically, in cases in which the subject matter of the lawsuit arises out of or is related to the defendant's contacts with the forum.

Nationwide Mut. Ins. Co. v. Tryg Int'l Ins. Co., 91 F.3d 790, 793 (6th Cir.1996) (citation omitted). Here, plaintiffs contend that TMC is subject to general jurisdiction. General jurisdiction is proper only where "a defendant's contacts with the forum state are of such a continuous and systematic nature that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant's contacts with the state." Third Nat'l. Bank in Nashville v. WEDGE Group Inc., 882 F.2d 1087, 1089 (6th Cir.1989) (internal quotation marks omitted).

2. Application

The district court determined that TMC did not have sufficient contacts with Ohio to support general jurisdiction under Ohio's long-arm statute or comport with due process. We agree. TMC is a Japanese corporation headquartered in Japan. It does not conduct any business, have any employees, or own property in Ohio. It does not market or ship any vehicles into the United States, much less into Ohio.

Plaintiffs, however, say that because TMC's shares trade on the New York Stock Exchange, the company has a presence in the United States. This argument is unavailing. The focus is on any TMC contacts with Ohio, such contacts being necessary to establish jurisdiction. Whether or not TMC has shares publically traded on a stock exchange is irrelevant.

Plaintiffs also argue that TMC has numerous United States subsidiaries and a national presence. This argument, as the district court noted, "intentionally blurs the line between two separate and independent corporations: TMC, the maker of

545 F.3d 362

the Condor, incorporated in Japan, and Toyota Motor Sales, U.S.A., Inc., a separate and independent company incorporated in California that imports vehicles into the U.S., including Ohio." (J.A. 26.) This argument raises a critical point in the jurisdictional analysis: the extent to which a parent corporation is subject to general jurisdiction based on activities of a subsidiary.

As one of our sister Circuits has explained:

federal courts have consistently acknowledged that it is compatible with due process for a court to exercise personal jurisdiction over an individual or a corporation that would not ordinarily be subject to personal jurisdiction in that court when the individual or corporation is an alter ego or successor of a corporation that would be subject to personal jurisdiction in that court.

Patin v. Thoroughbred Power Boats Inc., 294 F.3d 640, 653 (5th Cir.2002) (collecting cases). Normally, courts apply the alter-ego theory of personal jurisdiction to parent-subsidiary relationships. The alter-ego theory of personal jurisdiction, in the parent-subsidiary context, provides that "a non-resident parent corporation is amenable to suit in the forum state if the parent company exerts so much control over the subsidiary that the two do not exist as separate entities but are one and the same for purposes of jurisdiction." Danton v. Innovative Gaming Corp., 246 F.Supp.2d 64, 72 (D.Me.2003).

Courts in this Circuit, in several unpublished opinions, have endorsed the use of the alter-ego theory to exercise personal jurisdiction. See Flynn v. Greg Anthony Constr. Co., 95 Fed.Appx. 726, 736-38 (6th Cir.2003); Niemi v. NHK Spring Co. Ltd., No. 3:03 CV 7512, 2006 WL 954248, *1 (N.D.Ohio Apr.12, 2006); Simsa v. Gehring L.P., No. 05 CV 72159, 2006 WL 467914, *4 (E.D.Mich. Feb.24, 2006); Bradford Co. v. Afco Mfg., No. 1:05 CV 449, 2006 WL 143343, *4 (S.D.Ohio Jan.19, 2006); Invacare Corp. v. Sunrise Med. Holdings, Inc., No. 1:04 CV 1439, 2004 WL 3403352, * 7-8 (N.D.Ohio Dec.15, 2004); Med. Distrib., Inc. v. Quest Healthcare, Inc., No. 3:00 CV 154, 2002 WL 32398447, *4-*5 (W.D.Ky. Feb.1, 2002); see also Warren v. Dynamics Health Equip. Mfg. Co., 483 F.Supp. 788, 792-93 (M.D.Tenn. 1980). These cases are in line with other federal cases permitting courts "to `pierce the corporate veil' of the subsidiary and impute personal jurisdiction from the...