The case concerns an allegedly defective baby car seat, whose belt caused asphyxiation and brain damage. There are a number of defendants, who are largely divisible into two groups: a Swedish manufacturer and its affiliates ("Gnotec") and a Chinese manufacturer and its affiliates ("Lerado"). Both groups moved to dismiss based on lack of personal jurisdiction.
After jurisdictional discovery, the court dismissed against Gnotec, but sustained the case against Lerado. The court found jurisdiction over Lerado on multiple grounds. First, Lerado failed to raise the personal jurisdiction defense in the earlier stage of the case, thereby waiving the defense. The court found that all Lerado entities were alter egos of one another, which means the waiver is binding on every entity. Second, the court found that Lerado has sufficient minimum contacts with the forum, as it directed the sale of its car seats to Nebraska. In contrast, because Gnotec is a parts manufacturer that dealt with Lerado rather than directly with the forum, the court found it had no jurisdiction over Gnotec.
This is a surprising case. In most circumstances, the case against Lerado would be dismissed. The waiver part may be chalked up to poor lawyering, but finding alter ego over all the Chinese defendants--without much discussion about the facts that led to that conclusion--is highly unusual. Even more unusual is finding jurisdiction on the basis of "directing sales"--a conclusion that flies in the face of Asahi Metal, which the court brushes off by stating that Asahi Metal has no precedential value because it only had a plurality opinion rather than a majority opinion.
Post a Comment