2. Indirect Contacts
Under some circumstances, the contacts of a resident subsidiary may be
imputed to a nonresident defendant for purposes of establishing personal
jurisdiction. Such contacts will only be attributed to the nonresident
corporation where the subsidiary is (1) its alter ego, (2) a mere
department of it, or (3) its agent. See Brooks v. Baccardi Rum Corp.,
943 F. Supp. 559, 562-63 (E.D. Pa. 1996) (reciting the three tests under
which a subsidiary's contacts can be imputed to the parent); see also
Arch, 984 F. Supp. at 837 (suggesting comprehensive approach whereby "all
relevant factors" contained in the three tests are considered at once)
Jurisdiction based on agency is proper where "the subsidiary is
necessarily performing activities that the parent would otherwise have to
perform in the absence of the subsidiary[.]" In re Latex Gloves Prods.
Liab. Litig., MDL No. 1148, 2001 WL 964105, at *3 n. 10 (E.D. Pa. Aug.
22, 2001) (quoting Arch, 984 F. Supp. at 837). See also Gallagher v.
Mazda Motor of Am., 781 F. Supp. 1079, 1084-86 (E.D. Pa. 1992) (holding
that a subsidiary's contacts can be imputed for purposes of service of
process where "a parent uses [the] subsidiary to do what it otherwise
would have done itself. . . ."). This is in contrast to a nonresident
holding company — in such a case, "the subsidiary is not performing
a function that the parent would otherwise have had to perform itself
(the holding company could simply hold another type of subsidiary)."
Arch, 984 F. Supp. at 837 (citing Savin Corp. v. Heritage Copy Prods.
Inc., 661 F. Supp. 463, 471 (M.D. Pa. 1987), and Akzona Inc. v. E.I. Du
Pont Nemours & Co., 607 F. Supp. 227, 237 (D. Del. 1984)).
Where a parent's control over its subsidiary is so complete that it is
a "mere department" of the parent, the subsidiary's presence in
Pennsylvania will give rise to jurisdiction over the nonresident parent.
See Schulman v. Walt Disney World Co., No. 91 Civ. 5259, 1992 WL 38390,
at *3 (S.D. Pa. Feb. 25, 1992) (citations omitted). "`The degree of
control exercised by the parent must be greater than normally associated
with common ownership and directorship.'" Arch, 984 F. Supp. at 837-38
(quoting Savin, 661 F. Supp. at 469). Specifically, "[a]ppropriate
parental involvement includes: monitoring of the subsidiary's
performance, supervision of the subsidiary's finance and capital budget
decisions, and articulation of general policies and procedures." Latex
Gloves, 2001 WL 964105, at *3 (quoting Doe v. Unocal Corp., 248 F.3d 915,
926 (9th Cir. 2001)) (quotation marks, citations omitted). Such
involvement by the parent does not render the subsidiary a mere
department of it. For the subsidiary to be a mere department, plaintiffs
must prove that the parent controls the day-to-day operations of the
subsidiary. See Arch, 984 F. Supp. at 838 n. 10.
Here, plaintiffs appear to argue that BRC is both an agent as well as a
mere department of Bosch Rexroth AG. They assert that Bosch Rexroth AG
sells its products to BRC for distribution to customers in Pennsylvania.
See Pl. Opp. at 24. They also contend that there is significant overlap
in the management and Boards of Directors of the two companies, that the
two corporations share a logo, have almost identical websites, and have
the same name. See id. at 23-24.
Defendants argue, in turn, that the various tests for imputing contacts
cannot and do not apply because both companies are wholly-owned
subsidiaries of Robert Bosch GmbH, the parent holding company, and are
therefore independent sister corporations. It is in fact unclear whether
plaintiffs even allege that Bosch Rexroth AG is the parent of BRC. They
allege in their
Complaint that BRC is an "instrumentality" of Bosch
Rexroth AG, Consol. Compl. ¶ 18, and also appear to contend in their
motion papers that BRC is a subsidiary of Bosch Rexroth AG.*fn7 See Pl.
Opp. at 24 (asserting that Bosch Rexroth AG's use of BRC as a distributor
"flatly contradicts defendant's contention that it does [not] utilize the
United States subsidiaries") (emphasis added). In any event, plaintiffs
have failed to show that Bosch Rexroth AG asserts day-to-day control over
the activities of BRC. Nor have plaintiffs shown that, were it not for
the presence of BRC, Bosch Rexroth AG would be conducting its own
activities in Pennsylvania. Rather, it appears from the evidence
presented that Bosch Rexroth AG would simply hire another distributor for
Plaintiffs argue, finally, that "Bosch [Rexroth] AG's targeted sales to
this jurisdiction through its interactive website and its [purported]
agency relationship with Bosch [Rexroth] Corporation" at least provide
this Court with a basis on which to allow for limited jurisdictional
discovery under Pennsylvania law. I agree. "Where [plaintiffs'] claim is
not clearly frivolous, the district court should ordinarily allow
discovery on jurisdiction in order to aid [plaintiffs] in discharging
[the burden of proving personal jurisdiction]." Compagnie des Bauxites de
Guinee v. L'Union Atlantigue S.A., 723 F.2d 357, 362 (3d Cir. 1983)
(citation omitted) (applying Pennsylvania law). In particular, "further
inquiry and discovery is warranted in assessing a claim of lack of
personal jurisdiction [over foreign corporations where the evidence]
suggests the existence of a significant interrelationship between the
parties. . . ." Frank Sexton Enter., Inc. v. Societe de Diffusion Int'l
Agro-Alimentaire, No. 97 Civ. 7104, 1998 WL 632022, at *2 (E.D. Pa. Aug.
28, 1998) (citations omitted). Thus, the motion is denied at this stage.
Plaintiffs are entitled to jurisdictional discovery of Bosch Rexroth
IV. FORUM NON CONVENIENS
A. Legal Standard
In considering a motion to dismiss on forum non conveniens grounds,
"`the ultimate inquiry is where trial will best serve the convenience of
the parties and the ends of justice."' Massaguoi v. Virgin Atlantic
Airways, 945 F. Supp. 58, 60 (S.D.N.Y. 1996) (quoting Koster v.
Lumbermens Mut. Cas. Co., 330 U.S. 518, 527 (1947)). The Supreme Court
established the modern doctrine of forum non conveniens in Gulf Oil
Corp. v. Gilbert, 330 U.S. 501 (1947). To succeed on such a motion,
defendants must satisfy a two-prong test: it must show that (1) an
adequate alternate forum exists; and (2) private and public interest
factors weigh in favor of dismissal. See id. at 508-09; Peregrine
Myanmar, Ltd. v. Segal, 89 F.3d 41, 46 (2d Cir. 1996). Defendants must
demonstrate that these public and private interest factors "weigh so
heavily in favor of the foreign forum that they overcome the presumption
[s'] choice of forum," which will "rarely be disturbed."
Dorfman v. Marriott Int'l Hotels, No. 99 Civ. 10496, 2001 WL 69423, at *7
(S.D.N.Y. Jan. 29, 2001) (citation omitted). This presumption "may be
overcome only when the private and public interest factors clearly point
towards trial in the alternative forum." Piper Aircraft Co. v. Reyno,
454 U.S. 235, 255 (1981).
The defendants' motion to dismiss in favor of trial in Austria is
denied for the reasons set forth in In re Ski Train Fire in Kaprun,
Austria on November 11, 2000 ("Kaprun I"), MDL No. 1428, 2002 WL
1822741, at *7-*12 (S.D.N.Y. Aug. 8, 2002). Defendants also suggest that
this action be dismissed in favor of trial in Germany. See B.R. AG Mem.
at 13; BRC Mem. at 21. Bosch Rexroth AG's headquarters are in Germany,
and the evidence related to its involvement in the manufacture of the ski
train is in Germany. In addition, BRC has consented to service in
Germany. See BRC Mem. at 21. However, given that (1) the named plaintiffs
reside in New York, Florida, Pennsylvania, and California; (2) Austria
was the location of the accident; (3) the vast majority of the evidence
is located in either Austria or New York; and (4) the severe
inconvenience to the named plaintiffs if required to litigate abroad,
this suggestion is unavailing. The motion is denied.
For the reasons stated above, BRC's motion to dismiss is denied in its
entirety. Bosch Rexroth AG's motion to dismiss must also be denied at
this stage, but may be renewed at a later date with respect to
jurisdiction once discovery on the jurisdictional issue has been