Opinion ID: 2675191
Heading Depth: 3
Heading Rank: 4

Heading: TG and TTP

Text: To find that TTP was acting as TG’s agent in order to impute its contacts to TG, we must examine their corporate relationship. The district court based its factual findings on the entities’ relationship on almost two years of jurisdictional discovery, multiple rounds of briefing, and a hearing. The district judge also personally attended depositions taken in Hong Kong. With the benefit of these efforts, we describe the entities’ relationship.
759 (noting that several Courts of Appeals impute jurisdictional contacts when “when the former is so dominated by the latter as to be its alter ego.”). Accordingly, the Eleventh Circuit (and the Fifth Circuit) recognize that imputation of jurisdictional contacts between an agent and its principal can comport with Due Process. See, e.g., Dickson Marine, 179 F.3d at 339 (“Therefore we are convinced that Dickson failed to carry the burden of establishing a prima facie showing of sufficient control to establish an alter-ego or agency relationship between Air Sea and Panalpina Gabon.”). 11 Case: 12-31213 Document: 00512636188 Page: 12 Date Filed: 05/20/2014 No. 12-31213 TG is a Chinese corporation with its principal place of business in Ta’in City, Shandong Province, China. TG began manufacturing drywall in 1992 and has become one of the largest drywall manufacturers in China. TG’s former names include Shandong Taihe Taishan Plasterboard Main Factory (Group) and Shandong Taihe Dongxin Co., Ltd. (“Taihe”). Because TG uses recycled materials, it was exempt from the value added tax (“VAT”), but in 2006 the Chinese tax bureau informed TG that if it “wants to continue to enjoy the exemption for VAT tax, [it] cannot issue VAT invoices to these customers.” Some of TG’s customers, however, still required VAT invoices. Accordingly, in 2006, TG formed a wholly owned subsidiary, TTP, to execute its sales accompanied with VAT invoices.
TTP appointed Peng Shiliang (“Peng”), Fu Tinghuan (“Fu”), and Wang Fengquin (“Wang”) to its Board of Directors. All three directors of TTP “came from TG.” Peng had offices at both TG and TTP. Fu did not receive compensation for his position on TTP’s board, and was “only compensated by TG” for his position as TG’s Deputy General Manager and Director of Sales. TTP held board meetings “irregularly, [but] usually once a year.” TTP submitted written monthly reports to TG, and at times TTP’s directors— specifically Peng—would report directly to TG. These reports would tell TG “the specifics of the production and also the volume of sales.”
TG provided TTP with a capital contribution, sold it equipment, and rented it a factory. TG’s initial capital contribution was RMB 15,000,000, and TG provided a subsequent capital contribution of RMB 7,234,900. TTP purchased manufacturing equipment from TG, but TTP’s financial records do not show how much TTP paid for the equipment. When TTP ceased operation, TG purchased back the equipment, offices, and factory it had sold or rented to 12 Case: 12-31213 Document: 00512636188 Page: 13 Date Filed: 05/20/2014 No. 12-31213 TTP. TG’s financial reports do not account for the amounts of the buy-back purchases. TG’s headquarters was located about 1,000 meters west of TTP’s office, and TG and TTP maintained separate offices and factories. But TTP conducted “all of the export sales” previously executed by TG. TG also authorized TTP to “use the Taishan name,” i.e. the “brand name.” TTP did not pay TG for the use of the Taishan brand, which is TG’s trademark. Many of TTP’s employees had previously worked for TG, and when TTP ceased operation, they “went back to work at TG.” To staff TTP, TG instructed its employees to simply “volunteer.” TTP’s employees continued to use TG email addresses, and phone numbers; sign emails “Taihe Group”; and use TG business cards when dealing with customers. TTP employees also directed their customers and potential customers to TG’s website at “www.taihegroup.com.” When TTP salespeople gave an introduction to their company they would introduce their company as TG, would not mention TTP at all, and would include “Taihe Dongxin Co., Ltd.” (TG) under their signature.
TTP consistently held itself out as being synonymous with TG in its dealings with two American companies. In particular, it referred to itself as “Taihe.” Guardian Building Supplies (“Guardian”), a South Carolina company, entered into dealings with an entity it knew only as “Taihe.” When Guardian’s representative, John Gunn, visited China, Taihe’s representatives did not discuss TG or TTP. Gunn met with Taihe representative Apollo Yang, who told Gunn that he worked for Taihe and gave Gunn a business card that represented he worked for Taihe Dongxin. Taihe, however, was the “only name [Gunn] knew.” Guardian purchased drywall from Taihe, and Gunn “understood it was buying Taihe drywall.” 13 Case: 12-31213 Document: 00512636188 Page: 14 Date Filed: 05/20/2014 No. 12-31213 While Gunn’s purchase order went to Taihe, Taian Taigo Trading Corporation (“TTT”) served as the broker. At the time of the transaction, however, Gunn “had no idea of [TTT’s] existence.” When homeowners began to complain about the drywall, Guardian alerted Taihe and went to China to meet with them. When Gunn traveled to China in October 2006, he met with TTT, and “[t]his was the first time [he] realized there’s someone else involved.” Gunn testified that TTT “was a front set up by Taihe to distance . . . Guardian[] from Taihe.” Gunn traveled to China again in 2008 to work out a settlement with Taihe. In these discussions, however, Gunn was dealing with Taihe. Specifically, Gunn thought he was meeting with the General Manager of Taihe. Nevertheless, Guardian eventually settled with TTP. Oriental Trading Company (“OTC”), a Florida company, had a similar experience. TTP’s representatives never differentiated between TG and TTP, but instead consistently represented themselves to be “Taihe.” TTP and OTC entered into an agreement in which TTP agreed to sell OTC “DUN” brand drywall, and make OTC the sole sales agent of “DUN” drywall in the United States. Importantly, TG exclusively produced DUN drywall, and TG never formally authorized TTP to produce DUN brand drywall. But authorization was obvious: TTP sold OTC 60,000 pieces of DUN drywall. Moreover, OTC made a $100,000 deposit to TTP, but it was TG that worked to return that deposit to TTP at the end of their business relationship.
In 2008, the boards of directors of TG and TTP decided to have TTP discontinue producing drywall. TTP remains incorporated, though it has no income and TG or one of its subsidiaries pays TTP’s remaining employees.