Court Opinion

ID: 9348021
Source: CourtListenerOpinion
Date Created: 2022-12-19 22:06:41.194068+00
Date Added: 2024-06-11T16:41:39.629963
License: Public Domain

IN THE SUPREME COURT OF NORTH CAROLINA

                                    2022-NCSC-110

                                      No. 436A21

                                Filed 4 November 2022

STATE OF NORTH CAROLINA ex rel. JOSHUA H. STEIN, ATTORNEY
GENERAL

               v.
E. I. DU PONT DE NEMOURS AND COMPANY; THE CHEMOURS COMPANY;
THE CHEMOURS COMPANY FC, LLC; CORTEVA, INC.; DUPONT DE
NEMOURS, INC.; and BUSINESS ENTITIES 1-10

        Appeal as of right directly to the Supreme Court pursuant to N.C.G.S. § 7A-

27(a)(2) from an order and opinion, entered on 9 September 2021 by Judge Michael

L. Robinson, Special Superior Court Judge for Complex Business Cases, in Superior

Court, Cumberland County, after being designated a mandatory complex business

case pursuant to N.C.G.S. § 7A-45(b). Heard in the Supreme Court on 19 September

2022.

        Joshua H. Stein, Attorney General, by Ryan Y. Park, Solicitor General, Daniel
        S. Hirschman, Senior Deputy Attorney General, and Marc Bernstein, Special
        Deputy Attorney General; and Kelley Drye & Warren LLP, by David Zalman,
        pro hac vice, Levi Downing, pro hac vice, Elizabeth N. Krasnow, pro hac vice,
        Julia Schuurman, pro hac vice, and Lauren H. Shah, pro hac vice, for plaintiff-
        appellee.

        Bradley Arant Boult Cummings LLP, by Robert R. Marcus, C. Bailey King, Jr.,
        and Brian M. Rowlson; and Bartlit Beck LLP, by Katherine L.I. Hacker, pro
        hac vice, and Joshua P. Ackerman, pro hac vice, for defendant-appellants.

        EARLS, Justice.
                STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                          2022-NCSC-110

                                        Opinion of the Court

¶1         Individuals and corporate entities have a “liberty interest in not being subject

     to the binding judgments of a forum with which [they] ha[ve] no meaningful contacts,

     ties, or relations” See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985)

     (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). That liberty interest

     is protected by requiring courts—both state and federal—to have personal

     jurisdiction over a party before subjecting it to legal proceedings. Where personal

     jurisdiction exists, it follows that individuals or entities had a “fair warning” they

     might be subject to legal proceedings in that forum. Id. In this sense, personal

     jurisdiction is a shield—not a sword. Though it protects against the threat of

     litigation in arbitrary jurisdictions, it is not a tool to be weaponized against claimants

     by enabling defendants to evade accountability for potentially tortious conduct. But

     according to the State, that is precisely what E.I. DuPont de Nemours and Company

     (“Old DuPont”) sought to do when, facing liability for releasing harmful chemicals

     into the environment in North Carolina over a period of decades, it underwent a

     significant corporate reorganization and transferred millions of dollars in assets to

     out-of-state companies, creating substantial losses for itself. This appeal concerns

     whether the Due Process Clause allows North Carolina courts to exercise personal

     jurisdiction over the companies that received those assets, even though they do not

     have any contacts of their own in this state. We hold that due process indeed allows

     as much.
                STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                           2022-NCSC-110

                                         Opinion of the Court

                                  I.    Factual Background

     A. Old DuPont’s Use of Per- and Polyfluoroalkyl Substances (“PFAS”)

¶2          Old DuPont is a chemical company that produces agricultural and other

     specialty products. In 2020, North Carolina (the State) brought an action against Old

     DuPont and its corporate successors, including Chemours, New DuPont, and

     Corteva,1 alleging that Old DuPont knowingly operated a plant in North Carolina

     that released harmful chemicals called per- and polyfluoroalkyl substances (“PFAS”)

     into the environment for over forty years.

¶3          PFAS are a class of manmade chemicals nicknamed “forever chemicals”

     because they are resistant to degradation and thus persist in the environment. In the

     1950s, Old DuPont began using various kinds of PFAS, such as perfluorooctanoic acid

     (“PFOA”), at chemical plants around the country.2 In 1969, Old DuPont purchased

     the Fayetteville Works plant, located in Fayetteville, North Carolina, and began

     producing PFAS at that location in the early 1970s.

¶4          PFOA, one of the most widely studied PFAS, is highly soluble, meaning it can

     be freely transported through water and soil. Thus, because it does not degrade, it

     can cause environmental damage over long distances. PFOA accumulates and

            1 The legal names of these entities are The Chemours Company, The Chemours
     Company FC, LLC, Corteva, Inc., and DuPont de Nemours, Inc.
            2 Unless otherwise indicated, throughout this opinion, we rely on the facts as stated

     in the State’s complaint and take them as true for purposes of this motion to dismiss under
     Rule 12(b)(2).
               STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                        2022-NCSC-110

                                      Opinion of the Court

     persists in people and other organisms, and it has been shown to be carcinogenic at

     very low concentrations.

¶5         The State alleges that, as early as 1961, company scientists warned Old

     DuPont of the risks associated with PFOA. The warnings were based on internal

     studies concluding that PFOA caused liver damage in rats and dogs. These early

     studies led company scientists to caution that PFOA should be handled with extreme

     care and should not come into direct contact with skin. Old DuPont continued to

     conduct studies about the health effects of PFOA on plant workers throughout the

     late 1970s and early 1980s, which similarly concluded that the chemical is toxic and

     causes adverse health effects. The State also alleges that by 1984, Old DuPont was

     aware of PFOA’s lasting environmental effects. The State alleges that, despite

     knowing of the consequences associated with PFOA, Old DuPont both concealed such

     knowledge and refused to adopt technologies that would reduce its PFOA output and

     thus its human and environmental impact. In 2002, Old DuPont’s supplier ceased

     production of PFOA, leading the company to begin producing its own, including at

     Fayetteville Works. According to the State’s brief, by 2006, Fayetteville Works was

     the only facility in the United States still producing PFOA. Publicly, the company

     maintained that PFOA did not cause adverse health or environmental consequences.
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                              2022-NCSC-110

                                            Opinion of the Court

     B. Old DuPont’s Restructuring

¶6         Since approximately 2000, Old DuPont’s liabilities arising from its PFOA use

     have been mounting around the country, including a $10.25 million fine paid to the

     EPA stemming from its failure to report the risks associated with PFOA exposure, a

     class action settlement for over $300 million arising out of its PFOA discharges at a

     facility in West Virginia, and a settlement in federal multidistrict litigation for

     approximately $670 million. The State alleges that, recognizing the scope of its

     liability for contamination caused by its PFAS and PFOA use, Old DuPont chose to

     restructure its business to limit future liability and protect its remaining assets. The

     restructuring took form over three stages.

¶7         First, Old DuPont transferred its Performance Chemicals Business, which

     included its PFOA and other PFAS-related assets, such as Fayetteville Works, to a

     wholly-owned subsidiary called Chemours.3 Old DuPont then spun off Chemours as

     a separate public company, but the State claims that Chemours was intentionally

     undercapitalized and unable to satisfy Old DuPont’s PFAS liabilities. For instance,

     aside from assuming Old DuPont’s PFAS liabilities, Chemours transferred

     approximately $3.4 billion to Old DuPont as a cash dividend and issued promissory

     notes with a principal amount totaling $507 million. Following the spinoff, Chemours

     reported that its assets totaled $6.298 billion, while its liabilities totaled $6.168

           3   Chemours is a defendant in this litigation, but it is not an appellant here.
               STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                         2022-NCSC-110

                                       Opinion of the Court

     billion. The State alleges that this figure was an underestimate, and had the estimate

     been accurate, Chemours would have been deemed insolvent at the time of the

     spinoff. In fact, in an unrelated lawsuit brought by Chemours against Old DuPont,

     Chemours made a similar argument and contended that Old DuPont intentionally

     downplayed the extent of its PFAS liability. See Chemours Co. v. DowDuPont Inc.,

     No. 2019-0351-SG, 2020 WL 1527783, at *7 (Del. Ch. Mar. 30, 2020) (unpublished),

     aff'd, 243 A.3d 441 (Del. 2020) (unpublished order). Because Old DuPont knew that

     Chemours would be unable to satisfy all of Old DuPont’s PFAS-related liabilities, the

     State argues that Old DuPont also knew that it remained responsible for them.

¶8         After the Chemours spinoff, the next step in Old DuPont’s reorganization plan

     was a merger with a company called The Dow Chemical Company (“Old Dow”). But,

     according to the State’s brief, instead of completing the merger as originally

     announced, Old DuPont and Old Dow formed a new holding company called

     DowDuPont. Old DuPont and Old Dow became subsidiaries of DowDuPont. During

     this step of the reorganization, DowDuPont executed numerous business segment

     and product line realignments and divestitures, which reallocated a substantial

     portion of Old DuPont’s assets to DowDuPont.

¶9         Finally, during the third stage in the reorganization, the State argues

     DowDuPont took additional steps to shield its remaining good assets. As part of this

     reorganization, DowDuPont formed three separate business lines: (1) the Materials
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                            2022-NCSC-110

                                          Opinion of the Court

       Science Business; (2) the Agriculture Business; and (3) the Specialty Products

       Business. It then formed two new companies called Dow, Inc. (“New Dow”), which

       holds Old Dow as a subsidiary, and Corteva, which holds Old DuPont. DowDuPont

       also renamed itself DuPont de Nemours, Inc (“New DuPont”). The Materials Science

       Business was transferred to New Dow, the Agriculture Business was transferred to

       Corteva, and New DuPont retained ownership of the Specialty Products Business.

       The Business Court found that Old DuPont transferred these business lines for less

       than their assets’ value. The court further found that, since these transfers took place,

       Old DuPont’s value has dropped continuously, at one point falling at least as low as

       negative $1.125 billion. In 2019, New DuPont spun off Corteva and New Dow as

       separate public companies. Corteva and New DuPont are the corporate successors

       that bring this appeal. New Dow is not a party in this litigation.

¶ 10         A Separation and Distribution Agreement (“the Separation Agreement”), dated

       1 April 2019, governs the separation of Corteva and New Dow from New DuPont. In

       June 2019, the parties entered into a Letter Agreement (“the Letter Agreement”),

       which amended certain provisions in the Separation Agreement.4 Based on the

       Separation Agreement, in conjunction with the Letter Agreement, the Business Court

             4  Certain terms of these agreements have been filed under seal, and we therefore do
       not disclose them here.
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                            2022-NCSC-110

                                          Opinion of the Court

       found that New DuPont agreed to assume all the Specialty Products liabilities and

       Corteva agreed to assume all the Agriculture Business liabilities.

       C. Defendant’s Motion to Dismiss and the Business Court’s Order

¶ 11         In 2020, North Carolina brought an action against Old DuPont, Corteva, New

       DuPont, and Chemours asserting claims of negligence, trespass, public nuisance,

       fraud, and fraudulent transfer related to Old DuPont’s use of PFAS at Fayetteville

       Works and its subsequent reorganization to avoid liability. New DuPont and Corteva

       moved to dismiss the State’s action, arguing that the trial court could not exercise

       personal jurisdiction over them because they are Delaware holding companies that

       do not conduct business in North Carolina. They assert that they never owned or

       operated the Fayetteville Works plant, nor have they ever made, sold, distributed, or

       discharged PFAS. Rather, Corteva and New DuPont assert that they are “just holding

       companies” that exist only in Delaware. At this stage, Corteva and New DuPont did

       not, however, contest the State’s allegations regarding Old DuPont’s fraudulent

       restructuring.

¶ 12         Relying on a significant body of case law from both state and federal courts,

       the Business Court held that the Due Process Clause permits jurisdiction to be

       exercised over a corporate successor when (1) the predecessor is subject to jurisdiction

       in the forum; and (2) state law subjects the successor to liability. Recognizing that

       the first requirement was easily established given Old DuPont’s history in North
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                            2022-NCSC-110

                                          Opinion of the Court

       Carolina, the Business Court focused on the second factor and identified the extent

       to which North Carolina law imputes the liabilities of a predecessor to its successors.

       Citing a previous Court of Appeals decision, the Business Court first explained that

       “[a] corporation which purchases all, or substantially all, of the assets of another

       corporation is generally not liable for the old corporation’s debts or liabilities.” State

       ex rel. Stein v. E.I. du Pont de Nemours & Co., No. 20 CVS 5612, 2021 WL 4127106,

       at *6, 2021 NCBC 54, ¶ 44 (N.C. Super. Ct. Cumberland County (Bus. Ct.) Sept. 9,

       2021) (unpublished) (alteration in original) (quoting Budd Tire Corp. v. Pierce Tire

       Co., 90 N.C. App. 684, 687 (1988)). But in Budd Tire, the Court of Appeals recognized

       four exceptions to this principle—two of which the Business Court found to be

       relevant here. The first exception the Business Court applied imputes the liabilities

       of a predecessor to its successor when “there is an express or implied agreement by

       the purchasing corporation to assume the debt or liability.” Budd Tire, 90 N.C. App.

       at 687. The second exception imputes liability to the successor when “the transfer of

       assets was done for the purpose of defrauding the corporation’s creditors.” Id.

¶ 13         In its opposition to the motion to dismiss, the State argued that, as an

       alternative ground for jurisdiction, defendants’ allegedly fraudulent conduct was

       aimed at North Carolina and justified exercising direct jurisdiction over Corteva and

       New DuPont under the Supreme Court’s decision in Calder v. Jones. 465 U.S. 783

       (1984). In Calder, the Court held that courts may exercise jurisdiction over
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                            2022-NCSC-110

                                          Opinion of the Court

       defendants who commit “intentional, and allegedly tortious, actions” outside the

       forum that “were expressly aimed at” the forum. Id. at 789. Exercising Calder

       jurisdiction would obviate the need to conduct the imputation analysis to determine

       whether personal jurisdiction is proper under North Carolina law. The Business

       Court declined to address this argument, however, finding it an unnecessary step

       because jurisdiction was established by imputing Old DuPont’s liabilities to Corteva

       and New DuPont.

                                         II.    Analysis

¶ 14         There are two questions on appeal. The first is whether the Due Process Clause

       permits personal jurisdiction over out-of-state corporate successors to be based on the

       contacts of their in-state predecessor company by imputing the conduct and liabilities

       of the predecessor to its successors. Second, the State asks this Court to determine

       whether Old DuPont’s allegedly fraudulent conduct was expressly aimed at North

       Carolina, justifying the exercise of direct jurisdiction pursuant to the United States

       Supreme Court’s decision in Calder v. Jones.

       A. Personal Jurisdiction

¶ 15         When the parties have submitted affidavits and other documentary evidence,

       a trial court reviewing a motion to dismiss for lack of personal jurisdiction under Rule

       12(b)(2) must determine whether the plaintiff has established that jurisdiction exists

       by a preponderance of the evidence. See Bauer v. Douglas Aquatics, Inc., 207 N.C.
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                           2022-NCSC-110

                                         Opinion of the Court

       App. 65, 68 (2010). The documentary evidence may include “any allegations in the

       complaint that are not controverted by the defendant's affidavit.” Banc of Am. Sec.

       LLC v. Evergreen Int'l Aviation, Inc., 169 N.C. App. 690, 693-94 (2005) (quoting

       Bruggeman v. Meditrust Acquisition Co., 138 N.C. App. 612, 615-16 (2000) (citations

       omitted)). As an appellate court, we consider whether the trial court’s determination

       regarding personal jurisdiction is supported by competent evidence in the record.

       Toshiba Glob. Com. Sols., Inc. v. Smart & Final Stores LLC, 2381 N.C. 692, 2022-

       NCSC-81, ¶ 8 (2022) (“[W]hether personal jurisdiction exists is a question of fact and

       . . . appellate courts . . . assess whether the determination is supported by competent

       evidence in the record”). “However, when the pertinent inquiry on appeal is based on

       a question of law[,] we conduct de novo review.” Id. (citing Da Silva v. WakeMed, 375

       N.C. 1, 5 (2020)).

¶ 16         Determining whether a nonresident defendant is subject to personal

       jurisdiction in this State’s courts involves a two-step analysis. Beem USA Ltd.-Liab.

       Ltd. P’shp v. Grax Consulting LLC, 373 N.C. 297, 302 (2020). “First, jurisdiction over

       the defendant must be authorized by N.C.G.S. § 1-75.4—North Carolina’s long-arm

       statute.” Id. Relevant here, § 1-75.4 states that personal jurisdiction exists where a

       party “[i]s engaged in substantial activity within this State, whether such activity is

       wholly interstate, intrastate, or otherwise.” N.C.G.S. § 1-75.4(1)(d) (2021). This

       statute is “intended to make available to the North Carolina courts the full
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                            2022-NCSC-110

                                          Opinion of the Court

       jurisdictional powers permissible under federal due process.” Dillon v. Numismatic

       Funding Corp., 291 N.C. 674, 676 (1977). Therefore, in this case, the statutory

       analysis merges with the due process analysis.

¶ 17         Second, “if the long-arm statute permits consideration of the action, exercise of

       jurisdiction must not violate the Due Process Clause of the Fourteenth Amendment

       to the U.S. Constitution.” Beem USA, 373 N.C. at 302 (quoting Skinner v. Preferred

       Credit, 361 N.C. 114, 119 (2006)). Exercising jurisdiction over an out-of-state

       defendant comports with the Due Process Clause when the defendant has “certain

       minimum contacts with [the forum state] such that the maintenance of the suit does

       not offend ‘traditional notions of fair play and substantial justice.’” Id. (alteration in

       original) (quoting Int’l Shoe, 326 U.S. at 316 (internal quotation marks omitted)).

       Minimum contacts, in turn, result from ‘some act by which the defendant

       purposefully avails itself of the privilege of conducting activities within the forum

       State, thus invoking the benefits and protections of its laws.” Id. at 303 (quoting

       Skinner, 361 N.C. at 133).

¶ 18         There are two types of personal jurisdiction: general jurisdiction and specific

       jurisdiction. See Daimler AG v. Bauman, 571 U.S. 117, 126–27 (2014). General

       jurisdiction exists when the defendant’s “affiliations with the State are so ‘continuous

       and systematic’ as to render them essentially at home in the forum State.” Goodyear

       Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (quoting Int’l Shoe,
                   STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

                                                2022-NCSC-110

                                              Opinion of the Court

       326 U.S. at 317). Specific jurisdiction, however, exists only when “the suit ‘arise[s]

       out of or relate[s] to the defendant’s contacts with the forum.’” Daimler, 571 U.S. at

       127 (alterations in original) (quoting Helicopteros Nacionales de Colombia, S.A. v.

       Hall, 466 U.S. 408, 414 n.8 (1984)). The parties here agree that Corteva and New

       DuPont are not subject to general jurisdiction. The question then is whether these

       out-of-state successors of Old DuPont can be subject to specific jurisdiction in North

       Carolina courts based on Old DuPont’s conduct and liabilities in the State.

¶ 19          ‘“The great weight of persuasive authority permits imputation of a

       predecessor's actions upon its successor whenever forum law would hold the successor

       liable for its predecessor's actions.’”5 City of Richmond v. Madison Mgmt. Grp., Inc.,

       918 F.2d 438, 454 (4th Cir. 1990) (quoting Simmers v. Am. Cyanamid Corp., 576 A.2d

              5 See, e.g., Hawkins v. i-TV Digitális Távközlési zrt., 935 F.3d 211, 227 (4th Cir. 2019)
       (“[W]here one corporation has succeeded to another’s liabilities, the predecessor corporation’s
       forum contacts can be imputed to the successor corporation.”); Perry Drug Stores v. CSK Auto
       Corp., 93 F. App’x 677, 681 (6th Cir. 2003) (opining that “[a] court may impute the
       jurisdictional contacts of a corporate predecessor to its successor where the successor
       expressly assumed the liability of the predecessor” and explaining that “a contrary result
       would allow corporations to ‘immunize themselves by formalistically changing their titles’”)
       (quoting Duris v. Erato Shipping, Inc., 684 F.2d 352, 356 (6th Cir. 1982), aff’d sub nom, Pallas
       Shipping Agency, Ltd. V. Duris, 461 U.S. 529 (1983)); Williams v. Bowman Livestock Equip.
       Co., 927 F.2d 1128, 1132 (10th Cir. 1991) (“A corporation’s contacts with a forum may be
       imputed to its successor if forum law would hold the successor liable for the actions of its
       predecessor.”); Jeffrey v. Rapid Am. Corp., 529 N.W.2d 644, 654-55 (Mich. 1995) (“We hold
       that the actions of a constituent corporation may be attributed to a surviving corporation
       following a merger for purposes of determining the surviving corporation's amenability to
       personal jurisdiction for liabilities allegedly incurred by the constituent corporation . . . [W]e
       find the rule equally applicable when a corporation expressly assumes the liabilities of its
       predecessors.”).
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

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                                         Opinion of the Court

       376, 385 (Pa. Super. Ct. 1990) (emphasis in original); see also Patin v. Thoroughbred

       Power Boats, Inc., 294 F.3d 640, 653 (5th Cir. 2002) (explaining that “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 an entity that is subject to jurisdiction

       there).

¶ 20         “The theory underlying these cases is that, because the two corporations . . .

       are the same entity, the jurisdictional contacts of one are the jurisdictional contacts

       of the other for the purposes of the International Shoe due process analysis.” Patin,

       294 F.3d at 653. Further, as the Business Court acknowledged, declining to impute

       contacts for jurisdictional purposes in all cases would enable corporations to “avoid

       all consequences . . . by just reforming in some other jurisdiction[.]” Madison Mgmt.

       Grp., 918 F.2d at 455; see also E.I. du Pont de Nemours, 2021 WL 4127106, at *6,

       2021 NCBC 54, ¶ 43.

¶ 21         Cases from other jurisdictions reaching the same conclusion are instructive. In

       Simmers v. American Cyanamid Corp., for example, a Pennsylvania court held that

       a company not otherwise operating in the state that purchased a product line from a

       second in-state company and expressly assumed the second company’s related

       liabilities could be subject to personal jurisdiction in Pennsylvania. See Simmers, 576
                   STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

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                                             Opinion of the Court

       A.2d at 387. In so holding, the court “recognize[d] the realities of modern corporate

       law and the ever increasing frequency of corporate reorganizations.” Id. at 389. It

       reasoned that refusing to impute a predecessor’s liabilities to its successor would

       allow the successor to “avoid the jurisdiction of the very forum where the liability

       accrued simply because it never did business within that forum.” Id. at 390. The court

       explained that this would be an “absurd” result, particularly when “the assets

       purchased by the successor, at least in part, were derived from the forum and the

       successor no doubt had knowledge of its predecessor’s presence within the forum.” Id.

       We find this reasoning persuasive and hold that due process permits courts to

       exercise successor jurisdiction whenever (1) the predecessor is subject to personal

       jurisdiction in a particular forum; and (2) that forum’s law permits courts to impute

       the liabilities of the predecessor to its successors.6 Because neither party disputes

       that Old DuPont is subject to jurisdiction in North Carolina, this appeal focuses on

       the second factor.

¶ 22          It is true that, in North Carolina, “[a] corporation which purchases all, or

       substantially all, of the assets of another corporation is generally not liable for the

       old corporation’s debts or liabilities.” Budd Tire, 90 N.C. App. at 687; see also

       McAlister v. Am. Ry. Express Co. 179 N.C. 556, 561 (1920) (“As a general rule [ ] the

              6 As explained below, forum law dictates the extent to which imputation to establish
       both liability and jurisdiction is permissible. The predecessor company’s liability alone is not
       enough to establish successor jurisdiction.
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

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                                           Opinion of the Court

       mere purchase of the assets and franchise[s] of one corporation by another will not

       imply a promise on the part of the new to pay or satisfy the debts and obligations of

       the old.”) (quoting 5 Seymour D. Thompson, Commentaries on the Law of

       Corporations § 6090 (2d Ed.)). But there are several exceptions to this principle,

       which the Court of Appeals encapsulated in Budd Tire, where:

                     (1) there is an express or implied agreement by the
                     purchasing corporation to assume the debt or liability; (2)
                     the transfer amounts to a de facto merger of the two
                     corporations; (3) the transfer of assets was done for the
                     purpose of defrauding the corporation's creditors, or; (4) the
                     purchasing corporation is a “mere continuation” of the
                     selling corporation in that the purchasing corporation has
                     some of the same shareholders, directors, and officers.

       Budd Tire Corp. v. Pierce Tire Co., 90 N.C. App. at 687 (citations omitted); see also

       McAlister, 179 N.C. at 560. If any one of these circumstances is present, North

       Carolina law permits a predecessor company’s liabilities to be imputed to its

       corporate successors, making jurisdiction over out-of-state successors proper under

       the Due Process Clause.7

¶ 23          Importantly, exercising jurisdiction over out-of-state successors in these

       circumstances does not offend “our traditional conception of fair play and substantial

       justice.” Int’l Shoe, 326 U.S. at 324. Where any of these conditions exist, it cannot be

              7 We clarify, however, that this list is not exhaustive. Additional circumstances may
       arise that warrant expanding these limitations. Such circumstances are not before us now,
       and we need not decide what they might be.
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                                           Opinion of the Court

       said that a successor’s contacts are “random, fortuitous, or attenuated.” See Burger

       King, 471 U.S. at 475 (cleaned up). Rather, in these situations, a successor likely has

       or should have notice of the liabilities of its predecessor in a given jurisdiction.

¶ 24         The court in Simmers put it well. In holding that due process permits

       jurisdiction to be established by imputing a predecessor company’s contacts to its out-

       of-state successors, the court explained, “[n]o doubt in today’s sophisticated world of

       corporate takeovers, a corporation, which assumes another's liabilities . . . seriously

       considers the possible extent of any liabilities and where those liabilities may exist.”

       Simmers, 576 A.2d at 3. Here, for instance, the Business Court found that both

       Corteva and New DuPont expressly assumed Old DuPont’s PFAS-related liabilities

       via the April 2019 Separation Agreement and the June 2019 Letter Agreement. And

       “[w]hen a successor corporation assumes the liabilities of its corporate predecessors,

       the successor in effect consents to be held liable in the same locations where its

       predecessor would have been exposed.” Id. By assuming the liabilities of Old DuPont,

       Corteva and New DuPont’s “conduct and connection with the forum State are such

       that [they] should reasonably anticipate being haled into court” in North Carolina.

       See Burger King, 471 U.S. at 474 (quoting Worldwide Volkswagon Corp. v. Woodson,

       444 U.S. 286, 297 (1980)).

¶ 25         Corteva and New DuPont argue that imputing Old DuPont’s contacts to

       establish personal jurisdiction is inappropriate because they are not the corporate
                   STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

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                                              Opinion of the Court

       continuations or embodiments of Old DuPont, which continues to exist as its own

       entity. They argue that the cases that allow personal jurisdiction to be established

       for out-of-state successors through imputation have involved actual or de facto

       mergers. See, e.g., Synergy Ins. Co. v. Unique Pers. Consultants, Inc., No. 3:16CV611,

       2017 WL 5474058, at *2 (W.D.N.C. Nov. 14, 2017) (unpublished order) (finding that

       an entity was a corporate successor when, among other things, it purchased all assets

       and took over the headquarters, satellite branches, phone numbers, and website

       content of its predecessor); Simmers, 576 A.2d at 386–88 (imputing predecessors’

       contacts to establish jurisdiction over corporate successors after de facto mergers). 8

¶ 26          We decline to recognize mergers as the sole circumstance in which successor

       jurisdiction is appropriate. Such a holding would result in the very consequence

       described above: Companies could avoid liability for tortious conduct simply by

       forming a new, out-of-state company instead of effectuating a merger. Moreover,

       where, as here, a company has explicitly assumed certain liabilities or reorganized to

              8 Instead, Corteva and New DuPont argue they should be treated as assignees and
       point out that “[t]he expectations of a corporate successor and an assignee are different.” See
       Ostrem v. Prideco Secure Loan Fund, LP, 841 N.W.2d 882, 895 (Iowa 2014). Citing the Iowa
       Supreme Court’s opinion in Ostrem, they argue that unlike a successor, “an assignee . . .
       assumes a limited bundle of rights, obligations, and expectations.” Id. Corteva and New
       DuPont contend that they assumed only limited assets and corresponding liabilities from Old
       DuPont and should thus be treated as assignees. This argument fails, however, because it
       ignores the other circumstances in which successor jurisdiction is appropriate—
       circumstances that we hold exist here. But even if we were to treat Corteva and New DuPont
       as assignees, the “limited bundle of . . . obligations,” id., they assumed include the liabilities
       that are the subject of this litigation.
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                                             Opinion of the Court

       avoid the very liability for which it is brought to court, requiring a merger or a

       corporate continuation to establish successor jurisdiction would serve no additional

       purpose.

¶ 27          Recognizing successor liability and jurisdiction in these narrow circumstances

       ensures that a company that merely receives assets from another entity does not,

       without more, become saddled with all of the transferor’s debts and liabilities. See

       Madison Mgmt. Grp., 918 F.2d at 450. But a company may take certain affirmative

       steps that justify both the imputation of those liabilities and the exercise of

       jurisdiction. Actual and de facto mergers are one such example, in part because the

       merging companies know in advance that they will become responsible for each

       other’s liabilities, and they thus weigh the associated risks.9 Assuming certain

       liabilities or intentionally reorganizing to avoid them similarly requires a party to

       weigh the risks at hand and affirmatively decide whether to become legally

       responsible for them or, as alleged here, attempt to fraudulently evade them. When

       a party has engaged in such conduct, successor jurisdiction is equally appropriate.

              9  See, e.g., McAlister v. Am. Ry. Express Co., 179 N.C. at 564 (“Where two corporations
       effect a consolidation (or merger), and one of them goes entirely out of existence, and no
       arrangements are made respecting its liabilities, the resulting consolidated (or merged),
       corporation will, as a general rule, be entitled to all the property and answerable for all the
       liabilities of the corporation thus absorbed.” (quoting Atlanta, B. & A.R. Co. v. Atl. Coast Line
       R.R. Co., 75 S.E. 468, 470 (1912) (parentheticals added))).
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                                           Opinion of the Court

       Thus, like many other courts that have decided this question, we are satisfied that

       due process permits jurisdiction to be exercised over out-of-state corporate successors

       where there is jurisdiction over the predecessor and North Carolina law would impute

       the predecessor’s liability to its successors.

¶ 28          Here, the Business Court found that North Carolina law permits liability to be

       imputed to Corteva and New DuPont, thereby creating personal jurisdiction over the

       companies, because: (1) the parties expressly agreed to assume Old DuPont’s

       liabilities in the April 2019 Separation Agreement and the June 2019 Letter

       Agreement; and (2) the State alleged sufficient facts at the motion to dismiss stage to

       support the claim that Old DuPont transferred its assets to Corteva and New DuPont

       in an attempt to defraud the State in its position as a creditor.

¶ 29          As to the first exception, the Business Court made detailed findings of fact

       regarding the meaning of the April 2019 Separation Agreement and the June 2019

       Letter Agreement. Key to this analysis, the court pointed to plain contractual

       language stating that Corteva and New DuPont expressly assumed Old DuPont’s

       PFAS-related liabilities. E.I. du Pont de Nemours, 2021 WL 4127106, at *7, 2021

       NCBC 54, ¶ 48. The Business Court found that “[i]t is clear that by execution of the

       DowDuPont Separation Agreement and the Letter Agreement, Corteva and New

       DuPont assumed certain liabilities related to Old DuPont’s manufacturing of PFAS.”

       Id. at *8, 2021 NCBC 54, ¶ 51. The court rejected Corteva and New DuPont’s
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                                          Opinion of the Court

       argument that Chemours exclusively assumed all of the PFAS liabilities when it was

       spun off as a separate company because “Chemours’ assumption of PFAS liabilities

       as a legal matter does not preclude Corteva and New DuPont from assuming those

       same PFAS liabilities and [Corteva and New DuPont] do not cite any authority

       supporting this position.” Id. at *8, 2021 NCBC 54, ¶ 53. The court also rejected the

       argument that Corteva and New DuPont agreed to indemnify each other for PFAS-

       related losses but did not assume such liabilities. Id. at *8, 2021 NCBC 54, ¶ 53. The

       court found that the relevant term within the Separation Agreement was sufficiently

       broad to permit “the interpretation that Corteva and New DuPont not only agreed to

       indemnify against certain liabilities but additionally assume the same liabilities.”10

       Id. at *8, 2021 NCBC 54, ¶ 53.

¶ 30         On appeal, Corteva and New DuPont argue that the language of these

       Agreements is merely “the starting point of the analysis,” and the Business Court

             10 Section 1.1(144) of the April 2019 Separation Agreement defines “Indemnifiable
       Loss” and “Indemnifiable Losses” as:

                    any and all Damages, losses, deficiencies, Liabilities,
                    obligations, penalties, judgments, settlements, claims,
                    payments, fines, interest, costs, and expenses (including the
                    costs and expenses of any and all Actions and demands,
                    assessments, judgments, settlements, and compromises relating
                    thereto and the reasonable costs and expenses of attorneys’,
                    accountants’, consultants’ and other professionals’ fees and
                    expenses incurred in the investigation or defense thereof or the
                    enforcement of rights hereunder).
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                                          Opinion of the Court

       should have gone on to “evaluate whether those assumptions of liability were such

       that Corteva and New DuPont reasonably could have expected to be subject to

       jurisdiction in North Carolina.” They contend that the answer to this question is no,

       in part because, through those Agreements, “Corteva, New DuPont, and Dow were

       allocating liabilities amongst themselves against the backdrop of Historic DuPont’s

       previous divestiture of its PFAS business to Chemours.” Corteva and New DuPont do

       not, however, respond to the Business Court’s decision that Chemours’ assumption of

       the PFAS liabilities did not preclude them from assuming these liabilities as well.

       Furthermore, nothing in the record suggests that Chemours validly assumed all

       PFAS-related liabilities to the exclusion of all parties that would otherwise be liable.

       Corteva and New DuPont’s assertion on this point is therefore unconvincing.

¶ 31         Corteva and New DuPont also argue that assuming liability through the

       Agreements was insufficient to put them on notice that they may be subject to

       jurisdiction in North Carolina because those liability provisions pertain to Old

       DuPont’s operations broadly, without specifying where they would be liable. This

       argument, too, is unavailing. A company cannot expressly assume liabilities from its

       predecessor, fail to limit those liabilities geographically, and then disclaim liability

       based on the notion that it did not expect to be brought to court in a particular forum.

       Such a holding would nullify the relevant provisions entirely because the lack of

       geographic specificity would mean that there is no jurisdiction in which Corteva and
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                                          Opinion of the Court

       New DuPont expected to be held liable. Moreover, to reiterate what we have already

       explained, when companies undergo complicated transactions like that between Old

       DuPont, Corteva, and New DuPont, they conduct extensive due diligence, and the

       new parties either are aware of, or should be aware of, the liabilities they might

       acquire. Old DuPont’s PFAS liabilities were no secret—before the corporate

       reorganization, it had already paid millions in well-publicized fines and settlements.

       Corteva and New DuPont had ample notice then that they might become liable in any

       venue where Old DuPont acquired PFAS liability.

¶ 32         In sum, the Business Court’s interpretation of the plain language of the

       Agreements is well supported, and we uphold its finding that Corteva and New

       DuPont expressly assumed Old DuPont’s PFAS liabilities, including those liabilities

       arising in North Carolina.

¶ 33         The Business Court also found that Old DuPont’s PFAS liabilities could be

       imputed to its successors because the State sufficiently alleged that Old DuPont

       fraudulently engaged in the reorganization transactions that created Corteva and

       New DuPont to prevent the State and other creditors from holding the company liable

       to the full extent. The State alleged that “these transactions have resulted in (1) Old

       DuPont having a negative net worth; (2) Chemours being undercapitalized and

       unable to satisfy Old DuPont’s PFAS liabilities; and (3) the transfer of valuable assets

       from Old DuPont to Corteva and New DuPont for far less consideration than those
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                                            Opinion of the Court

       assets were worth.” Id. at *9, 2021 NCBC 54, ¶ 57. Relying on the same evidence that

       was before the Business Court, this Court finds that the complaint alleged sufficient

       facts from which to conclude that Old DuPont engaged in a corporate reorganization

       to defraud its creditors. For example, the State alleges that, as part of its plan to

       insulate its assets, Old DuPont spun off Chemours, its wholly owned subsidiary. As

       part of the spinoff, Chemours agreed to accept all of Old DuPont’s PFAS liabilities,

       transferred to Old DuPont approximately $3.4 billion as a cash dividend, and issued

       promissory notes with a principal amount of $507 million. The State then alleges

       that, knowing Chemours would be unable to satisfy the full extent of its PFAS

       liabilities, Old DuPont proceeded with the series of transactions that eventually

       created New DuPont, Corteva and New Dow. After the corporate reorganization was

       complete, the value of Old DuPont’s tangible assets had decreased by $20.85 billion.

       As the State points out, this loss came at a time when Old DuPont knew it faced

       potentially billions of dollars in liability.

¶ 34          These examples support the State’s theory that Old DuPont engaged in the

       corporate reorganization to fraudulently deprive its creditors of judicial recourse. The

       State’s allegations are extensive, and we hold that they are sufficient to support the

       Business Court’s conclusion that, at this stage of the proceedings, the State has

       adequately pleaded that Corteva and New DuPont acted fraudulently. Thus, there is

       a second, independent ground upon which to hold the successors liable for Old
                   STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

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                                             Opinion of the Court

       DuPont’s debts and liabilities and therefore, to find jurisdiction over Corteva and

       New DuPont in this state.11

       B. Calder Jurisdiction

¶ 35          The State asserts an alternative ground for jurisdiction under the U.S.

       Supreme Court’s decision in Calder v. Jones. In Calder, the Court held that it may be

       appropriate for a court to exercise jurisdiction over a defendant who commits

       “intentional, and allegedly tortious, actions” outside the forum that “were expressly

       aimed at” the forum. 465 U.S. at 789. Calder involved an allegedly libelous story that

       was written and edited in Florida about events that occurred in California and

       concerned a California resident. Id. at 784–86. The story’s sources were from

       California and the alleged harm was suffered in California. Id. In holding that the

       authors of the story could be sued in California, the Supreme Court opined that it

       was foreseeable that the effects of the story would be felt in California, and that “[a]n

              11 Courts in other jurisdictions presiding over litigation related to Old DuPont’s use of
       PFAS have reached similar conclusions. See, e.g., State of New Hampshire v. 3M Company,
       No. 216-2019-CV-0045 (Sup. Ct., Merrimack Co. July 8, 2021) (unpublished) (holding that
       New Hampshire law permits imputation of a predecessor corporation’s contacts to establish
       successor jurisdiction and finding that the State made a prima facie showing that jurisdiction
       existed over Corteva and New DuPont based on (1) their express assumption of Old DuPont’s
       PFAS liabilities; and (2) their fraudulent efforts to help Old DuPont evade liability); State of
       Ohio ex rel. DeWine v. E.I. du Pont de Nemours and Co., No. 180T32 (Ct. Common Pleas,
       Wash. Co. Aug. 4, 2021) (unpublished) (denying Corteva and New DuPont’s motion to dismiss
       for lack of jurisdiction and granting the State’s cross-motion regarding their assumption of
       Old DuPont’s liabilities); Suez Water New Jersey, Inc. v. E.I. DuPont de Nemours, et al., No.
       2:20-CV-19906 (D.N.J. Oct. 14, 2021) (“If Corteva and New DuPont expressly assumed some
       PFAS-related liability from Old DuPont’s activities in New Jersey, this would provide
       minimum contacts with the forum state sufficient to support personal jurisdiction.”).
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                                          Opinion of the Court

       individual injured in California need not go to Florida to seek redress from persons

       who, though remaining in Florida, knowingly cause the injury in California. Id. at

       790.

¶ 36          The Business Court declined to decide whether jurisdiction here was proper

       under Calder because it found that personal jurisdiction could be established through

       the imputation analysis alone. Still, the State argues that this Court should

       determine whether Calder applies because, if so, the Business Court could exercise

       direct jurisdiction over the defendants for all fraud claims without needing to revisit

       the imputation analysis to determine whether personal jurisdiction exists after the

       pleadings stage. We conclude that determining whether Calder jurisdiction exists is

       unnecessary under these circumstances. Our rulings here establish that North

       Carolina courts have personal jurisdiction over Corteva and New DuPont. Even if,

       after the motion to dismiss stage, the Business Court determines that Corteva and

       New DuPont did not attempt to defraud creditors for purposes of the third Budd Tire

       exception for imputing liability, jurisdiction is conclusively established under Budd

       Tire’s other relevant exception—that Corteva and New DuPont expressly assumed

       Old Dupont’s PFAS-related liabilities. The parties do not dispute that Old DuPont is

       subject to specific jurisdiction in North Carolina based on its PFAS-related liabilities.

       Thus, the Business Court has jurisdiction over Corteva and New DuPont for all of the
                  STATE, EX REL STEIN V. E.I. DUPONT DE NEMOURS AND COMPANY

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                                          Opinion of the Court

       State’s claims arising out of and related to Old DuPont’s PFAS-related activities in

       North Carolina.

                                       III.    Conclusion

¶ 37         We follow the “great weight of persuasive authority,” Madison Mgmt. Grp., 918

       F.2d at 454, and hold that the Due Process Clause permits a predecessor’s liabilities

       to be imputed to its corporate successors to establish personal jurisdiction even where

       the successor itself has no direct contact with the forum state. Successor liability

       comports with both due process and North Carolina law at least where (1) a party

       assumes another entity’s debts or liabilities through an express or implied

       agreement; (2) the transfer constitutes an actual or de facto merger of corporations;

       (3) a transfer of assets occurred for the purpose of defrauding the corporation’s

       creditors; or (4) the purchasing corporation is a continuation of the selling corporation

       because it has the same shareholders, directors, and officers.

¶ 38         Because personal jurisdiction can be established through the imputation

       analysis for all of the State’s claims arising out of or related to Old DuPont’s PFAS-

       related activities in North Carolina, we need not determine whether Calder would

       permit the Business Court to exercise direct jurisdiction.

¶ 39         Accordingly, we affirm the decision of the Business Court denying Corteva and

       New DuPont's motion to dismiss under Rule 12(b)(2) of the North Carolina Rules of

       Civil Procedure and remand this case to that court for additional proceedings not
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                                    2022-NCSC-110

                                  Opinion of the Court

inconsistent with this opinion.

   AFFIRMED.