Opinion ID: 1196138
Heading Depth: 3
Heading Rank: 1

Heading: Dismissal of TMC-Lack of Personal Jurisdiction

Text: 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 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).
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 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,  (N.D.Ohio Apr.12, 2006); Simsa v. Gehring L.P., No. 05 CV 72159, 2006 WL 467914,  (E.D.Mich. Feb.24, 2006); Bradford Co. v. Afco Mfg., No. 1:05 CV 449, 2006 WL 143343,  (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, - (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 subsidiary to the parent. Invacare Corp., 2004 WL 3403352, at . In applying the alter-ego theory of personal jurisdiction in this diversity action, we must look to Ohio law. Although Ohio law sets forth a formal test for veil-piercing, the legal conception [of alter-ego liability] has historical antecedents in both federal and state law. Such cases may provide sound analogies or insightful analyses relating to the formal test set forth in [Ohio law] without usurping its authority. Music Express Broad. Corp. v. Aloha Sports, Inc., 161 Ohio App.3d 737, 831 N.E.2d 1087, 1091 (Ohio Ct.App.2005). In determining whether a subsidiary is an alter ego of the parent corporation, Ohio courts consider factors such as whether (1) corporate formalities are observed, (2) corporate records are kept, and (3) the corporation is financially independent. See Microsys Computing, Inc. v. Dynamic Data Sys., LLC, No. 4:05 CV 2205, 2006 WL 2225821,  (N.D.Ohio Aug.2, 2006). This Court has considered additional factors such as (1) sharing the same employees and corporate officers; (2) engaging in the same business enterprise; (3) having the same address and phone lines; (4) using the same assets; (5) completing the same jobs; (6) not maintaining separate books, tax returns and financial statements; and (7) exerting control over the daily affairs of another corporation. See id. Plaintiffs argue that Toyota Motor Sales, U.S.A, Inc. (TMS) is the alter ego of TMC. TMS is a subsidiary of TMC which imports and sells Toyota vehicles in the United States, including Ohio. However, the record supports the district court's conclusion that TMS and TMC are not alter egos. As stated in the affidavits of Katsumi Ikeda and Jerry Koyanagi, employees of TMC and TMS respectively, TMC and TMS are separate legal entities. They have separate books, financial records, bank accounts, and file their own taxes. They have separate boards of directors and workforces. TMS employees report to TMS, not TMC. TMS, not TMC, controls the distribution of vehicles into the United States, including Ohio. TMS officers manage the day-to-day operations of TMS. TMC does not directly own any TMS stock nor does it have authority over TMS with regard to the distribution of vehicles. While plaintiffs say that TMC makes money from Ohio, they cite no evidence in support. Indeed, plaintiffs refer to the affidavits submitted by TMC which, as stated above, prove that TMC and TMS are separate. There is no statement in either affidavit indicating that TMC makes money from Ohio. In short, TMS is not an alter ego of TMC. Moreover, plaintiffs rely on United States v. Toyota Motor Corp., 561 F.Supp. 354 (C.D.Cal.1983), for the proposition that other courts have exercised general jurisdiction over TMC. Plaintiffs misapprehend the holding of the case. In Toyota Motor Corp., the district court considered whether to enforce an IRS summons over the Japanese company in California, the state of incorporation of TMS. The district court specifically noted that it was necessary to determine only whether the Government has satisfied its burden of making out a prima facie case for limited jurisdiction. The Court expresses no opinion on whether the more stringent test for general jurisdiction has been satisfied. Id. at 359 (emphasis added). Thus, not only did the case arise in the non-analogous context of enforcing an IRS summons, it did not address whether TMC was subject to general jurisdiction.
Plaintiffs also request a remand for additional discovery to support their argument of jurisdiction over TMC. Plaintiffs, however, did not request additional discovery in the district court. They cannot do so now. See In re Hood, 319 F.3d 755, 760 (6th Cir.2003) (arguments not raised below are waived on appeal). Overall, plaintiffs have not established that TMC had any, much less continuous and systematic, contacts with Ohio sufficient to establish general jurisdiction. That TMC has a national presence in the United States in a generic sense does not show that it is subject to general jurisdiction in Ohio. We therefore affirm the district court's dismissal of TMC for lack of personal jurisdiction. Moreover, as explained below regarding Thrifty, this case belongs in the South African courts.