NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2800-15T3

FDASMART, INC.,

Plaintiff-Respondent,

v.

DISHMAN PHARMACEUTICALS AND

CHEMICALS LIMITED and DISHMAN

USA, INC., 

Defendants-Appellants.

_______________________________

Argued November 28, 2016 – Decided

Before Judges Nugent, Haas, and Currier.

On appeal from the Superior Court of New 

Jersey, Law Division, Middlesex County, 

Docket No. L-7832-13.

Kim M. Watterson (Reed Smith LLP) of the 

Pennsylvania bar, admitted pro hac vice, 

argued the cause for appellants (Reed Smith 

LLP, attorneys; Daniel Mateo and Amy 

McVeigh, on the briefs).

James D. Young argued the cause for 

respondent (Fox Rothschild LLP, attorneys; 

Mr. Young and Steven J. Daroci, on the 

brief).

The opinion of the court was delivered by

CURRIER, J.A.D.

APPROVED FOR PUBLICATION

December 29, 2016

APPELLATE DIVISION

December 29, 2016
2 A-2800-15T3

In this contract action, we must determine whether personal 

jurisdiction was properly found, thus permitting the suit 

against defendants to proceed in New Jersey. Because we find 

that New Jersey does not have either specific or general 

jurisdiction over defendant Dishman Pharmaceuticals and 

Chemicals, LTD (DPCL), we reverse the grant of summary judgment. 

We affirm the trial judge's finding that plaintiff FDASmart, 

Inc. has stated a viable claim against defendant Dishman USA, 

Inc., and therefore, remand for further proceedings. 

DPCL, an Indian corporation with its principal place of 

business in Ahmedabad, Gujarat State, India, manufactures active 

ingredients used to make pharmaceutical products. Dishman USA, 

a New Jersey corporation, is a wholly owned subsidiary of DPCL 

and has its principal place of business in Middlesex, New 

Jersey. Jason Bertola is the head of Dishman USA and is

responsible for its day-to-day operations. Plaintiff is a 

Delaware corporation with its principal place of business in 

Amawalk, New York. 

In 2013, PKM, an Indian company in the business of advising 

clients on mergers and acquisitions, contacted plaintiff about 

discussing with DPCL the potential sale of a pharmaceutical 

manufacturing facility owned by DPCL's Chinese subsidiary in 

China. The three companies met in India and subsequently 
3 A-2800-15T3

entered into a Memorandum of Understanding (MOU). Plaintiff and 

PKM were identified in the MOU as the "consulting party"; DPCL 

would pay fees to the consulting party for the development of a 

sales strategy, for any prospective buyers who visited the 

plant, and ultimately, a success fee for the completed purchase.

Although the first two drafts of the MOU named DPCL as the 

contracting party, the final draft listed Dishman Group1 as the 

signatory, with DPCL's address. Janmejay Vyas, managing 

director of DPCL, signed the document. The MOU was to be 

"governed by and construed in accordance with laws of India." A 

non-disclosure agreement was to be signed in India; fees were to 

be paid "with applicable Indian taxes." The invoices that were 

subsequently submitted under the MOU were sent to DPCL in India; 

payments on the invoices were made by DPCL.

After a dispute arose concerning sales efforts, DPCL 

decided not to sell its Chinese facility. Plaintiff presented a 

final invoice to DPCL at its Indian address and declared its 

intent to bring legal action in India. Thereafter, plaintiff 

 

1 Dishman Group is a marketing term that refers to DPCL and its 

subsidiaries; it is not a legal entity.

 
4 A-2800-15T3

filed suit against DPCL and Dishman USA in New Jersey, alleging 

breach of contract and related claims.

2 

In lieu of filing an answer, defendants moved for a 

dismissal of the action, asserting a lack of personal 

jurisdiction, forum non conveniens, a failure to state a claim 

against Dishman USA, and a failure to join PKM as a necessary 

party. The trial judge denied the motion without prejudice, and 

permitted the parties to engage in limited jurisdictional 

discovery. 

After the completion of discovery, plaintiff moved for 

partial summary judgment on the jurisdictional issue; defendants 

opposed the motion and renewed their application for dismissal. 

Following oral argument, the judge granted plaintiff's partial 

summary judgment motion, finding that (1) New Jersey had general 

jurisdiction over defendant and was an appropriate forum; (2) 

plaintiff had stated a claim against Dishman USA; and (3) PKM 

was not an indispensable party.

On appeal, defendants argue that (1) DPCL is not subject to 

personal jurisdiction in New Jersey because general jurisdiction 

does not exist under an alter ego theory; (2) Dishman USA should 

be dismissed because a claim upon which relief can be granted 

 

2 PKM has filed a similar suit for breach of contract against 

plaintiff and defendant in India.
5 A-2800-15T3

has not been stated; (3) the case should be dismissed under 

forum non conveniens because the relevant dealings leading up to 

the creation of the contract occurred in India; and (4) the case 

should be dismissed because an indispensable party to the 

original contract – PKM - is not present in the instant 

litigation. 

We review a grant of summary judgment under the same 

standard as the motion judge. Rowe v. Mazel Thirty, LLC, 209 

N.J. 35, 41 (2012). We must determine whether there are any 

genuine issues of material fact when the evidence is viewed in 

the light most favorable to the non-moving party. Id. at 38, 

41. "[T]he legal conclusions undergirding the summary judgment 

motion itself [are reviewed] on a plenary de novo basis." 

Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 

385 (2010).

After reviewing the record in light of the contentions 

advanced on appeal, and the applicable legal principles, we are 

constrained to reverse the trial judge's jurisdictional ruling.

To establish personal jurisdiction over a non-resident 

defendant in conformance with due process, our courts follow the 

two-part test developed in Int'l Shoe Co. v. Washington, 326 

U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95, 102 (1945). 

Under this test: 
6 A-2800-15T3

[d]ue process requires only that in order to 

subject a defendant to a judgment in 

personam, if he be not present within the 

territory of the forum, he have certain 

minimum contacts with it such that the 

maintenance of the suit does not offend 

"traditional notions of fair play and 

substantial justice."

 

[Lebel v. Everglades Marina, Inc., 115 N.J.

317, 322 (1989) (quoting Int'l Shoe, supra, 

326 U.S. at 316, 66 S. Ct. at 158, 90 L. Ed.

at 102).]

Applying this test in a particular case requires a two-step 

analysis. 

The first part of the test, "minimum contacts," focuses on 

"'the relationship among the defendant, the forum, and the 

litigation,'" id. at 323 (quoting Shaffer v. Heitner, 433 U.S.

186, 204, 97 S. Ct. 2569, 2579, 53 L. Ed. 2d 683, 698 (1977)), 

requiring "'some act by which the defendant purposefully avails 

itself of the privilege of conducting activities within the 

forum state, thus invoking the benefit and protection of its 

laws.'" Waste Mgmt. Inc. v. Admiral Ins. Co., 138 N.J. 106, 120 

(1994) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct.

1228, 1240, 2 L. Ed. 2d 1283, 1298 (1958)), cert. denied, 513 

U.S. 1183, 115 S. Ct. 1175, 130 L. Ed. 2d 1128 (1995). 

Under this step a court must distinguish between specific 

and general jurisdiction. The trial judge found that "the 

nature and extent of [the] business relationship [between 
7 A-2800-15T3

plaintiff and DPCL was] insufficient to establish specific 

jurisdiction." We agree and therefore only address the issue of 

general jurisdiction. 

General jurisdiction is based on the defendant's continuous 

and systematic activities in the forum. Lebel, supra, 115 N.J.

at 323. Defendant's activities must be "so 'continuous and 

systematic' as to render [it] essentially at home in the forum 

State." Daimler AG v. Bauman, ___ U.S. ___, ___, 134 S. Ct.

746, 754, 187 L. Ed. 2d 624, 633 (2014) (quoting Goodyear Dunlop 

Tires Operations, S. A. v. Brown, 564 U.S. 915, 919, 131 S. Ct.

2846, 2851, 180 L. Ed. 2d 796, 803 (2011)). Typically, a 

corporation's principal place of business and place of 

incorporation establishes where the corporation is "at home" and 

subject to general jurisdiction. See Goodyear, 564 U.S. at 924,

131 S. Ct. at 2853-54, 180 L. Ed. 2d at 806. The standard for 

establishing general jurisdiction "is a difficult one to meet, 

requiring extensive contacts between a defendant and a forum." 

Mische v. Bracey's Supermarket, 420 N.J. Super. 487, 492 (App. 

Div. 2011). 

Once a court determines that a defendant's activities 

establish minimum contacts with the forum, the court must then 

inquire whether "fair play and substantial justice" support an 

exercise of jurisdiction. This determination requires 
8 A-2800-15T3

evaluation of factors such as "the burden on the defendant, the 

interests of the forum State, and the plaintiff's interest in 

obtaining relief." Lebel, supra, 115 N.J. at 328 (quoting Asahi 

Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 113, 

107 S. Ct. 1026, 1034, 94 L. Ed. 2d 92, 105 (1987)). In 

addition, the court must consider "the interstate judicial 

system's interest in obtaining the most efficient resolution of 

controversies; and the shared interest of the several States in 

furthering fundamental substantive social policies." Asahi, 

supra, 480 U.S. at 113, 107 S. Ct. at 1033, 94 L. Ed. 2d at 105 

(quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 

292, 100 S. Ct. 559, 564, 62 L. Ed. 2d 490, 498 (1980)).

In beginning our review, it is undisputed that DPCL is not 

"at home" in New Jersey; it is not incorporated in this state 

nor is New Jersey its principal place of business. See Daimler, 

supra, ___ U.S. at ___, 134 S. Ct. at 754, 187 L. Ed. at 633. 

Therefore, plaintiff must show that defendant had continuous and 

systematic contacts with New Jersey so as to justify it being 

haled into New Jersey's courts.

Plaintiff persuaded the motion judge that the activities of 

Dishman USA in New Jersey should be attributed to its parent 

DPCL for jurisdictional purposes under an alter ego theory. We 

disagree.
9 A-2800-15T3

We have held that the "forum contacts of a subsidiary 

corporation will not be imputed to a parent corporation for 

jurisdictional purposes without a showing of something more than 

mere ownership." Pfundstein v. Omnicom Grp. Inc., 285 N.J. 

Super. 245, 252 (App. Div. 1995). The alter ego theory is based 

on the doctrine of piercing the corporate veil. To pierce the 

corporate veil of a parent corporation, a party must establish 

two elements: (1) the subsidiary was dominated by the parent 

corporation, and (2) adherence to the fiction of separate 

corporate existence would perpetrate a fraud or injustice, or 

otherwise circumvent the law. State, Dept. of Envtl. Prot. v. 

Ventron Corp., 94 N.J. 473, 500-01 (1983). To determine whether 

the first element has been satisfied, courts consider whether 

"the parent so dominated the subsidiary that it had no separate 

existence but was merely a conduit for the parent." Ibid.

In considering the level of dominance exercised by the 

parent over the subsidiary, the court will consider factors such 

as "common ownership, financial dependency, interference with a 

subsidiary's selection of personnel, disregard of corporate 

formalities, and control over a subsidiary's marketing and 

operational policies." Pfundstein, supra, 285 N.J. Super. at 

253-54.
10 A-2800-15T3

In analyzing the Pfundstein factors, we are satisfied that 

there is insufficient evidence presented to pierce the corporate 

veil and impute Dishman USA's New Jersey contacts to DPCL. In 

addressing the first factor, although there may be commonality 

of ownership between the parent and subsidiary, we have held 

that dominance "cannot be established by overlapping boards of 

directors." Verni ex rel. Burstein v. Harry M. Stevens, Inc., 

387 N.J. Super. 160, 201 (App. Div. 2006). 

Plaintiff argues that Dishman USA is "totally dependent" on 

DPCL and therefore meets the second criteria. Although a

Dishman representative testified that the company barely meets 

its expenses, the statement was made as an explanation as to why 

it does not pay out dividends. Its ability to meet its expenses 

confirms that Dishman USA is not financially dependent on its 

parent and does not rely on DPCL to pay its salaries and 

expenses.

The record does not contain any facts to satisfy the third 

factor under which plaintiff must show that DPCL directly 

interfered with Dishman USA's selection of its personnel. As to 

the fourth factor, it is undisputed that the parent and 

subsidiary are distinct equal entities that engage in armslength transactions in accordance with applicable tax laws. 
11 A-2800-15T3

Finally, there are no proofs presented that DPCL controls its 

subsidiary's marketing and operational policies.

We are satisfied that plaintiff is unable to meet its 

burden of proving DPCL's dominance of its subsidiary in order to 

pierce the corporate veil. As a result, we need not reach the 

second requirement for satisfying the doctrine of piercing the 

corporate veil, which requires proofs of fraud concerning the 

creation of the subsidiary. As we have stated, "[w]here 

individuals set up 'legitimate business structures to further 

their personal and business plans' and 'do not use their 

partnerships to commit fraud or defeat the ends of justice,' the 

veil-piercing doctrine will not apply." Canter v. Lakewood of 

Voorhees, 420 N.J. Super. 508, 522 (App. Div. 2011) (quoting 

Shotmeyer v. N.J. Realty Title Ins. Co., 195 N.J. 72, 87 

(2008)). Plaintiff has failed to present any such proofs.

We conclude that the trial judge erred in finding that 

Dishman USA was essentially the same or the alter ego of DPCL in 

order to assert general jurisdiction in New Jersey.

We also are unpersuaded by plaintiff's argument and 

disagree with the trial judge's ruling that in personam 

jurisdiction exists as a result of personal service of process 

upon an employee of DPCL when he came to New Jersey for the 

purpose of attending his deposition for this litigation. The 
12 A-2800-15T3

judge erred in relying upon Rule 4:4-4(a)(6) as equating 

personal service of process with securing long-arm jurisdiction 

over DPCL. As noted in the comments to the Rule, Pressler & 

Verniero, Current N.J. Court Rules, comment 1 on Rule 4:4-

4(a)(6), the various modes of service (a) "cannot be read as 

mechanisms for obtaining long-arm jurisdiction unless the 

underlying predicate of long-arm jurisdiction, adequate contact 

with the State, exists." See Citibank v. Estate of Simpson, 290 

N.J. Super. 519, 529-30 (App. Div. 1996) (stating "a foreign 

corporation . . . would not be subject to this State's in

personam jurisdiction merely because a person authorized to 

receive service on its behalf happened to be present in this 

State and was personally served here"). The service on DPCL's 

employee was insufficient to create personal jurisdiction.3

In addressing Dishman USA's contention on appeal that the 

complaint against it should have been dismissed for a failure to 

state a claim, we are satisfied that the trial judge provided 

sufficient reasoning in his denial of the Rule 4:6-2 motion. 

The judge properly viewed all inferences in plaintiff's favor 

and found that DPCL's managing director's signature on the MOU 

for the contracting party Dishman Group was sufficient to glean 

 

3 In light of our conclusions, we need not discuss the issues of 

forum non conveniens, nor whether PKM is an indispensable party. 
13 A-2800-15T3

an intent to bind all of DPCL's subsidiaries including Dishman 

USA.

We therefore reverse the grant of summary judgment to 

plaintiff and the denial of summary judgment to DPCL. We affirm 

the denial of Dishman USA's motion for dismissal and remand for 

further proceedings.

Reversed and remanded. We do not retain jurisdiction.