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Momentive Performance Materials Usa, Inc v. Astrocosmos Metallurgical

December 13, 2011


The opinion of the court was delivered by: Scullin, Senior Judge



Currently before the Court are two motions: Defendant Mersen f/k/a Le Carbone Lorraine, S.A.'s ("Mersen") motion to dismiss counts 11 and 12 of the second amended complaint for lack of personal jurisdiction and failure to state a claim and Defendant Carbone Lorraine Equipements Genie Chimique's ("CLEGC") motion for judgment on the pleadings with regard to count 12 of the second amended complaint.

Defendant Mersen*fn2 is a French holding company organized and existing under the laws of France. Defendant CLEGC, a French company organized and existing under the laws of France, is a subsidiary of Defendant Mersen and a sister company of Defendant AstroCosmos Metallurgical, Inc. ("AstroCosmos").*fn3

Count 11 of the second amended complaint alleges that Defendant AstroCosmos is simply the alter ego of Defendant Mersen; and the Court should, therefore, pierce Defendant AstroCosmos' corporate veil and hold Defendant Mersen liable for any liability and damages imposed against Defendant AstroCosmos. See Dkt. No. 74, Plaintiff's Second Amended Complaint,at¶ 167. Count 12, pled in the alternative to count 11, alleges that Defendants Mersen, CLEGC, and AstroCosmos are a single enterprise and that each entity is responsible for the actions and liabilities of the other. See id. at ¶ 200.


In 1997, the Silicones business unit of General Electric Company ("GE") issued a request for a proposal to various potential suppliers for the design, manufacture, and installation of a weak acid reactor (the "Reactor") at GE's Waterford, New York facility. See Plaintiff's Second Amended Complaint at ¶ 8. Defendant AstroCosmos submitted a proposal, which GE accepted. See id. at ¶ 17. GE and Defendant AstroCosmos then executed an equipment purchase agreement dated October 29, 1999 ("Purchase Agreement"). See id. at ¶ 18. Plaintiff is the assignee of all of GE's rights, title, and interest in the Purchase Agreement as well as the Silicones business unit of GE. See id. at ¶ 21.

Defendant AstroCosmos delivered and installed the Reactor in April or May 2001. See id. at ¶ 22. Since its installation in 2001, the Reactor has never functioned according to the terms of the Purchase Agreement and has been shut down on numerous occasions for repair. See id. at ¶¶ 24-27. Due to these problems, GE and Defendant AstroCosmos entered into a new agreement (the "Replacement Agreement"); and Defendant AstroCosmos agreed that it would replace the faulty Reactor. See id. at ¶¶ 28-37. Plaintiff alleges that, beginning in June 2006, Defendant AstroCosmos violated the terms of the Replacement Agreement in that it refused to fabricate a replacement Reactor and refused to continue its attempt to repair the existing Reactor. See id. at ¶¶ 44-46. Plaintiff further alleges that Defendant AstroCosmos acted at the direction and command of Defendant Mersen, Defendant CLEGC and/or other ABC Corporations. See id. at ¶ 46.

Defendant Mersen and Defendant CLEGC claim that this case involves a contract dispute between Plaintiff and Defendant AstroCosmos and that neither Mersen nor CLEGC are responsible for Defendant AstroCosmos' purported breach of that contract. See Dkt. No. 110, Defendants Mersen and CLEGC's Reply Memorandum, at 12-15.


A. Defendant Mersen's motion to dismiss counts 11 and 12 for lack of personal jurisdiction A federal court sitting in diversity, as in this case, generally applies state substantive law and federal procedural law. See, e.g., Hanna v. Plumer, 380 U.S. 460, 465, 471 (1965). As such, the Court looks to New York law to ascertain the standard for determining whether it has personal jurisdiction over Defendant Mersen. To make a "prima facie showing" of jurisdiction, either the company itself must have sufficient contacts with the forum to qualify under the longarm statute or the subsidiary must be an "agent" or a "mere department" of the foreign parent. See Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (citations omitted). If there is jurisdiction under New York law, then the Court must evaluate whether the exercise of that jurisdiction comports with the requirements of due process. See Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997) (citation omitted).

A defendant's motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction "may, in part, test plaintiff's theory of jurisdiction and, in part, test the facts supporting the jurisdictional theory." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 153 (2d Cir. 1999). The plaintiff bears the burden of showing that the court has jurisdiction. See In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003) (citation omitted). Here, since "'the parties have conducted extensive discovery regarding the defendant's contacts with the forum state, but no evidentiary hearing has been held -- "the plaintiff's prima facie showing . . . must include an averment of facts that, if credited by [the ultimate trier of fact], would suffice to establish jurisdiction over the defendant.""' Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999) (quotation omitted). Furthermore, because personal jurisdiction is "'inherently a matter requiring the resolution of factual issues outside of the pleadings . . . all pertinent documentation submitted by the parties may be considered in deciding the motion.'" St. Paul Fire & Marine Ins. Co. v. Eliahu Ins. Co., Ltd., No. 96 Civ. 7269, 1997 WL 357989, *1 (S.D.N.Y. June 26, 1997), aff'd, 152 F.3d 920 (2d Cir. 1998) (quotation omitted).

In this case, Defendant Mersen contends that it is not subject to personal jurisdiction in New York because jurisdiction cannot be found under §§ 301 or 302 of the New York Civil Practice Law and Rules ("C.P.L.R."), the court's exercise of jurisdiction over it would violate due process, and Plaintiff may not impute Defendant AstroCosmos' New York contacts to it to establish jurisdiction.

New York C.P.L.R. § 301 permits a court to exercise personal jurisdiction over a foreign corporation if it is "'engaged in such a continuous and systematic course of "doing business" here as to warrant a finding of its "presence" in this jurisdiction.'" McGowan v. Smith, 52 N.Y.2d 268, 272 (1981) (quotation and other citation omitted); see N.Y. C.P.L.R. § 301 (McKinney 2003).

Alternatively, a foreign corporation may be subject to jurisdiction in New York pursuant to its long-arm statute, C.P.L.R. § 302. See N.Y. C.P.L.R. § 302 (McKinney 2005).

a. C.P.L.R. § 302(a)(3)

Plaintiff contends that Defendant Mersen is subject to personal jurisdiction under § 302(a)(3). New York's long-arm statute provides, in part, as follows:

(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any ...

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