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United States District Court, S.D. New York

October 8, 2004.

IN RE SKI TRAIN FIRE IN KAPRUN, Austria on November 11, 2000. This Document Relates To: Defendants Waagner-Biro Binder AG, Waagner-Biro Binder Beteiligungs AG, WB Holding AG, Binder Co AG.

The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge


Plaintiffs, the relatives of Americans who died in a ski train fire on November 11, 2000, in Kaprun, Austria, brought several individual actions against numerous individual and corporate defendants for damages and declaratory and injunctive relief. The Judicial Panel on Multidistrict Litigation ("MDL Panel") consolidated these suits for pretrial purposes before this Court.*fn1 Defendants Binder AG in Abwicklung (as successor in interest to Waagner-Biro Binder Aktiengesellschaft and Waagner-Biro AG) (collectively, "WBB"), Waagner-Biro Binder Beteiligungs AG ("WBBB"), WB Holding AG ("WBH") and Binder Co AG ("Binder") (collectively, "the Waagner defendants") now move to dismiss for lack of personal jurisdiction and forum non conveniens. For the reasons set forth below, the Waagner defendants' motion to dismiss for lack of personal jurisdiction is granted.*fn2


  A. The Moving Defendants

  WBB is an Austrian corporation located in Linz, Austria with administrative headquarters in Vienna, Austria.*fn3 Plaintiffs allege that WBB designed, engineered, and manufactured major parts of the ski train at issue in this litigation.*fn4

  WBBB is an Austrian corporation located in Vienna, Austria.*fn5 Founded on June 30, 2001, WBBB is a holding company that acquires majority interests in other companies; it conducts no active operations of any kind.*fn6

  WBH is also an Austrian holding company located in Vienna, Austria.*fn7 Although WBH's primary business is the ownership of majority interests in other companies, it also provides consulting services to its subsidiary companies.*fn8

  Binder is an Austrian corporation located in Gleisdorf, Austria.*fn9 Binder was founded on September 28, 1999, and is in the business of developing and manufacturing environmental, reprocessing, and packaging technology.*fn10 Binder is a 99.997% owned subsidiary of WBH.*fn11

  B. Procedural History

  On or about June 27, 2001, plaintiffs filed a complaint against WBB in the United States District Court for the Central District of California.*fn12 The action was subsequently transferred to this Court by the MDL Panel on November 19, 2001.*fn13 On or about December 21, 2001, plaintiffs filed a Consolidated and Amended Complaint ("Amended Complaint") against WBB and other defendants.*fn14 With this Court's permission, plaintiffs further amended the Amended Complaint to name three additional Waagner entities as defendants.*fn15 Subsequently, the Waagner defendants moved to dismiss on a number of grounds, including lack of personal jurisdiction.*fn16 This Court granted that motion to dismiss for lack of personal jurisdiction in California, transferred the case to the District of Colorado, and ordered jurisdictional discovery concerning the Waagner defendants' Colorado-based contacts.*fn17 The MDL then transferred this action back to this Court.*fn18


  Plaintiffs argue that the Waagner defendants' contacts with Colorado are sufficient to confer jurisdiction over defendants. Plaintiffs admit, however, that "the principal basis for establishing jurisdiction over the Waagner defendants is through agency/alter ego."*fn19 Thus, plaintiffs contend that this Court may exercise jurisdiction over the Waagner defendants through Binder subsidiary Packaging Systems International ("PSI"), a Colorado-based manufacturer of industrial packaging equipment, because PSI is the agent of defendants. Finally, plaintiffs argue that the Waagner defendants operate as alter egos of each other, and that this Court should ignore the corporate form and find jurisdiction over defendants through PSI.


  In an MDL proceeding, "the forum state is the district court where the action was originally filed, and therefore that state's law must be applied."*fn20 Although this action was originally filed in the Central District of California, it was transferred to the District of Colorado due to lack of personal jurisdiction in California.*fn21 When a suit is transferred for lack of personal jurisdiction in the forum state of the transferor, the law of the transferee jurisdiction applies.*fn22 Thus, this Court must apply Colorado law to determine whether a Colorado court would have personal jurisdiction over defendants.*fn23

  Plaintiffs bear the burden of establishing personal jurisdiction over the defendants.*fn24 "Prior to trial, however, when a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing."*fn25 Any conflicts that exist in the pleadings, affidavits, and other materials must be resolved in favor of plaintiffs in determining whether a prima facie showing of personal jurisdiction has been made.*fn26

  In transferring this action from the Central District of California to the District of Colorado, this Court stated that plaintiffs made an "initial showing that there may be personal jurisdiction over at least some of the Waagner defendants in Colorado," and ordered jurisdictional discovery concerning defendants' Colorado contacts.*fn27 Plaintiffs argue that they are entitled to additional jurisdictional discovery in order to establish a prima facie case of jurisdiction.*fn28 However, Second Circuit precedent is clear that plaintiffs, having failed to demonstrate a prima facie case of jurisdiction, are not entitled to further jurisdictional discovery.*fn29 B. Colorado Law on Personal Jurisdiction

  To establish jurisdiction in a diversity action in federal court, plaintiffs must show both that jurisdiction is proper under the long-arm statute of the forum state and that the exercise of personal jurisdiction over defendants comports with due process principles of the United States Constitution.*fn30

  Colorado courts have determined that the state's long-arm statute authorizes jurisdiction "to the fullest extent permitted by the due process clause of the United States Constitution."*fn31 Thus, the sole inquiry for this Court is whether personal jurisdiction over the defendants accords with constitutional principles of due process.

  Under the Due Process Clause of the Fourteenth Amendment, for a court to exercise personal jurisdiction over a nonresident corporate defendant, that defendant must have "certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."*fn32 A court may exercise "specific jurisdiction" over a defendant who has "purposefully directed his activities at residents of the forum" when "the alleged injuries arise out of or relate to those activities."*fn33 "Even a single act can sometimes support specific jurisdiction."*fn34

  When the alleged injuries do not arise out of or relate to defendants' contacts with the forum, a court may exercise "general jurisdiction" over a defendant provided that "continuous and systematic general business contacts" exist between the defendant and the forum state.*fn35 "Generally speaking, the more tenuous the connection between the cause of action sued upon and the defendant's activities in the forum state, the more substantial the defendant's contacts with the forum state must be to render the assertion of jurisdiction reasonable."*fn36 Thus, while "`a minimum of contacts'" is usually sufficient to support specific jurisdiction, an exercise of general jurisdiction requires "`substantial contacts with the state.'"*fn37 In evaluating the sufficiency of a corporation's contacts with the forum state, courts consider such factors as whether the corporation maintains a local office or agents through which it solicits business, the extent to which it holds itself out as doing business in the forum state through advertising, listings, or bank accounts, and the volume of business the corporation conducts in the forum state.*fn38

  C. Discussion

  1. Defendants' Direct Contacts with Colorado

  Plaintiffs argue that the Waagner defendants' own contacts with Colorado, independent of the presence of Binder subsidiary PSI, are sufficient to demonstrate that defendants purposefully availed themselves of the privilege of conducting business in the state of Colorado.*fn39 In support of this contention, plaintiffs offer the following jurisdictional allegations with respect to defendant Binder. Two officials serving on "the Executive Board of Binder and PSI" took twenty-seven trips to Colorado between October 2000 and October 2003.*fn40 Binder's website lists at least forty-eight deliveries of Binder products to the United States between 1998 and 2003.*fn41 Binder sells packaging machines under the PSI name in the United States.*fn42 With respect to defendant WBB, plaintiffs' sole allegation of direct contact between the defendant and the forum state is that WBB sold over $52,000 worth of goods to PSI between June and September 2001.*fn43

  The direct contacts plaintiff enumerates between defendants and the forum state are clearly insufficient to establish the "continuous and systematic general business contacts" necessary to exercise general jurisdiction consistent with the principles of due process.*fn44 Plaintiffs make no allegation that the trips to Colorado by Mr. Jörg Rosegger and Mr. Karl Grabner, who served on the boards of both PSI and Binder, were made to conduct the business of Binder rather than of PSI.*fn45 Furthermore, occasional and apparently random visits to a forum state by officers of a foreign corporation are insufficient to establish general jurisdiction.*fn46 Plaintiffs do not allege that any of the Binder products were delivered to Colorado.*fn47 Vague allegations of United States deliveries are plainly insufficient to confer jurisdiction on Colorado courts.*fn48 Even if these products were all delivered to Colorado customers, these contacts would not constitute the "continuous and systematic" activities necessary to subject a foreign corporation to general jurisdiction in the forum state.*fn49 Similarly, the single contact alleged between defendant WBB and the forum state, the sale of $52,000 worth of goods to a Colorado corporation over a four-month period, hardly rises to the level of "continuous and systematic" activities.*fn50

  2. Jurisdiction Based on Subsidiary's Presence in Colorado

  Having found that defendants' direct contacts with Colorado are insufficient to establish personal jurisdiction, I now consider whether this Court may exercise jurisdiction over defendants based on the activities of Binder subsidiary PSI. PSI is undisputedly "present" in Colorado and is subject to the personal jurisdiction of Colorado courts.*fn51 Plaintiffs argue that PSI is defendants' agent and that defendants exercised sufficient control over PSI such that the Court may base jurisdiction over defendants on PSI's presence in Colorado.

  In assessing whether a foreign parent corporation is subject to personal jurisdiction in Colorado, "[t]he acts of a subsidiary may be imputed to the parent" where the subsidiary is "so organized and controlled, and its business conducted in such a manner, as to make it merely an agency, instrumentality, adjunct, or alter ego of [the parent]."*fn52 Thus, "[j]urisdiction may be found in Colorado where a foreign parent maintains a subsidiary in a forum state and the subsidiary either 1) acts as an agent for the parent . . . or 2) exists as an alter ego of the parent."*fn53

  A court may exercise personal jurisdiction under an agency theory "when [the subsidiary's] activities as an agent are of such a character as to amount to doing business of the parent."*fn54 In making this inquiry, courts have considered whether defendants "exert some control over the day to day activities" of the subsidiary and the extent to which defendants and the subsidiary are "otherwise entangled."*fn55 Under an alter ego theory, a court may disregard the corporate entity and impute the acts of the subsidiary to the parent if "the parent used the corporate entity to perpetuate a fraud or wrong on another."*fn56 Nevertheless, even a wholly owned subsidiary is presumed to be a separate entity in the absence of "clear evidence" that it is controlled by the parent.*fn57

  "Because both agency and alter ego theories often depend on the same type of evidence regarding day to day control or entanglement,"*fn58 the question is whether plaintiffs offer evidence of sufficient control over PSI by any of the Waagner defendants such that PSI's forum activities should be imputed to defendants for purposes of establishing jurisdiction. Because I conclude that they do not, I need not consider whether the alleged contacts among the Waagner defendants are sufficient to establish that they operate as alter egos of each other.*fn59

  In support of their claim that defendants controlled PSI, plaintiffs assert that the WBH Executive Board converted PSI into a distribution base for Binder and eliminated most of PSI's employees.*fn60 Although a decision by the parent to change the type of business in which the subsidiary engages may be an example of the degree of control sufficient to subject the parent to jurisdiction, plaintiffs do not allege that any part of this restructuring occurred during the relevant time period for establishing jurisdiction.*fn61 The relevant time period for assessing whether the subsidiary is defendants' agent or alter ego is the time the complaint is filed — in this case, June 27, 2001.*fn62 Furthermore, plaintiffs offer no evidence that the decision to restructure was made by the WBH board or caused by defendants' alleged dominance and control over PSI rather than an independent decision in PSI's own interest.*fn63

  As further evidence of defendants' control over PSI, plaintiffs offer the following assertions. Information on Binder's website and in defendants' annual reports states that Binder's acquisition of PSI has improved Binder's long-term market position in the United States and that the PSI line of products "perfectly completes the Binder Co product range."*fn64 Brochures and product information for both PSI and Binder can be obtained from both websites.*fn65 WBH management refers to PSI in a 1998 annual report as "the packaging equipment unit."*fn66 Plaintiffs argue that this evidence indicates that the subsidiary is "a mere department" and is doing the business of defendants. Additionally, plaintiffs point to defendants' overlapping corporate directors,*fn67 consolidated financial statements,*fn68 and Binder's controlling ownership of PSI*fn69 as evidence of the defendants' control. Lastly, plaintiffs assert that a "pooling agreement," under which WBH guarantees the bank liabilities of its subsidiaries,*fn70 establishes that the parent has "assumed the risk" of PSI's business ventures.

  Courts have held, however, that factors such as sole ownership, overlapping directors, consolidated financial statements, and reference to the subsidiary as a department are insufficient to establish the type of day-to-day control necessary to disregard corporate separateness.


[Defendants'] ownership of all the stock of [subsidiary], its control over policy and large capital expenditures, the overlap of directors and the use of consolidated financial statements cannot be considered in any way inconsistent with the normal stockholder-corporation relationship. The fact that [defendant] considered its subsidiaries . . . to be units or divisions . . . cannot destroy the fact that each corporation, for the most part, operated separately, and each enjoyed a separate corporate identity.*fn71
Furthermore, "parent financing of the subsidiary will not make the subsidiary a mere instrumentality."*fn72 Plaintiffs have provided no evidence that PSI failed to comply with corporate formalities, make its own day-to-day operational decisions, or remain sufficiently capitalized. Thus, although plaintiffs have demonstrated some of the factors relevant to a determination that the corporate form should be disregarded,*fn73 plaintiffs have failed to establish the level of corporate control or entanglement necessary to subject the parent to personal jurisdiction. As in Quarles, defendants "probably had the opportunity to control [the subsidiary], [but] the exercise, not the opportunity to exercise, control is determinative."*fn74 III. CONCLUSION

  For the foregoing reasons, the Waagner defendants' motion to dismiss for lack of personal jurisdiction is granted. The Clerk of the Court is directed to close the motion [docket # 8] and this case [No. 03 Civ. 6351].


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