Opinion ID: 216921
Heading Depth: 1
Heading Rank: 24

Heading: Overall Evaluation of the Factors

Text: The question before us is ultimately whether exercising personal jurisdiction over DCAG comports with fair play and substantial justice. We find that it does. As the Second Circuit held in evaluating the exercise of personal jurisdiction over the Royal Dutch/Shell Group: While it is true that certain factors normally used to assess the reasonableness of subjection to jurisdiction do favor the defendants (they are foreign corporations that face something of a burden if they litigate here, and the events in question did not occur in New York), litigation in New York City would not represent any great inconvenience to the defendants. The defendants control a vast, wealthy, and far-flung business empire which operates in most parts of the globe. They have a physical presence in the forum state [through their agent], have access to enormous resources, face little or no language barrier, have litigated in this country on previous occasions, have a four-decade long relationship with one of the nation's leading law firms, and are the parent companies of one of America's largest corporations, which has a very significant presence in New York. New York City, furthermore, where the trial would be held, is a major world capital which offers central location, easy access, and extensive facilities of all kinds. We conclude that the inconvenience to the defendants involved in litigating in New York City would not be great and that nothing in the Due Process Clause precludes New York from exercising jurisdiction over the defendants. Wiwa, 226 F.3d at 99. Many or all of those considerations apply with equal force in this case. For much the same reasons, we conclude that it is reasonable to exercise jurisdiction over DCAG in California, a state that has itself become a major hub for world commerce and attracts business not only from all over Europe, but from all over Asia as well. In Harris Rutsky, we found that jurisdiction was reasonable even though there was an obvious alternative forum and the balance of the seven factors was essentially a wash, since some of the reasonableness factors weigh in favor of [the defendant], but others weigh against it. 328 F.3d at 1134; see also Roth v. Garcia, 942 F.2d 617, 625 (9th Cir.1991) (holding that jurisdiction was reasonable even though only two reasonableness factors favored plaintiff, while three favored defendant). Here, the defendants present a far less compelling case than did the defendants in Harris Rutsky. Most important, DCAG's contacts with California and with the U.S. are far more extensive than the defendant's contacts in Harris Rutsky. In that case, the defendant had several California-based relationships, including a contractual one with ASR [the purported agent]. After purposefully seeking out a financially lucrative relationship with ASR, [the defendant] communicated with ASR on a regular basis over a four-year period. Harris Rutsky, 328 F.3d at 1134. That was the extent of the contacts in Harris Rutsky, and yet we ultimately held that [g]iven the quantity and quality of the contacts with the forum state, it is not unreasonable for a court in California to exercise personal jurisdiction over the defendant. Id. In light of DCAG's pervasive contacts with the forum state through MBUSA, including the extensive business operations of that subsidiary, the interest of California in adjudicating important questions of human rights, our substantial doubt as to the adequacy of Argentina as an alternative forum, and the various issues discussed above with respect to Germany, we hold that DCAG has not met its burden of presenting a compelling case that the exercise of jurisdiction would not comport with fair play and substantial justice. See id. (emphasis added).
At the time this suit was filed, MBUSA's business was sufficiently important to DCAG that without MBUSA or another representative, DCAG would have performed those services itself. Moreover, DCAG had the right to control to one extent or another nearly every aspect of MBUSA's business. Therefore, we conclude that, at least for the limited purpose of determining general jurisdiction, MBUSA was DCAG's agent. The Supreme Court long ago rejected the notion that personal jurisdiction might turn on `mechanical' tests that fail to take account of reality. Burger King, 471 U.S. at 478-79, 105 S.Ct. 2174 (quoting Int'l Shoe, 326 U.S. at 319, 66 S.Ct. 154). The reality is that in an increasingly complex and globalized economy, international corporations such as DCAG reap enormous profits from the sale of their goods in the United States. The sales are achieved through the use of major distributors, frequently in the form of subsidiaries. Many international companies organize their corporate structure and establish subsidiaries for the sole purpose of obtaining the maximum benefit from the American market. To the ordinary American, and certainly to us, it would seem odd, indeed, if the manufacturer of Mercedes-Benz vehicles, which are sold in California in vast numbers by its American subsidiary, for use on the state's streets and highways, could not be required to appear in the federal courts of that state. Mercedes-Benz cars are ubiquitous in California, and Mercedes-Benz dealerships, required to display the signage mandated by DCAG, have a highly visible presence. The numbers bear out our perception. At the time that this suit was filed, MBUSA's sales in California alone accounted for 2.4% of DCAG's total worldwide sales. Moreover, when considering burdens on the defendant and the issue of state sovereignty, we cannot overlook the fact that when this suit was filed, nearly 50% of DCAG's overall revenue came from the United States, and that in order to make this income, DCAG created a wholly-owned subsidiary, MBUSA, to sell Mercedes-Benz vehicles in the United States. Our test for personal jurisdiction must take these realities into account in determining whether it is reasonable to subject a parent company to the jurisdiction of the courts of this nation on the basis of the acts of its agent. After applying this test, we have no doubt that DCAG is subject to personal jurisdiction in California, and that the exercise of such jurisdiction is not only reasonable, but fair and just. Therefore we reverse and remand for further proceedings consistent with this opinion. [20] REVERSED and REMANDED. [21]