This is the second time in two years that we have written the Drug and Device Law Christmas blogpost. Last year, your dedicated blogger posted on Christmas Day a nice little piece on innovator liability that we are sure you all read while listening to Andy Williams, drinking egg nog, and roasting chestnuts on an open fire (note: If you would rather not light an open fire, a gas grill is a very capable substitute for roasting chestnuts, if that is your thing.) If you did not read our post last year, we forgive you. And whether you read us regularly or just pop in from time to time to read about preemption, please accept our holiday greetings and our undying gratitude. To all our readers, Happy Holidays from the DDLB!
Our gift to you on this Friday, December 23, 2016, is a blogpost discussing a topic on which we have not written a lot—alter ego personal jurisdiction. That is when a court takes jurisdiction over a corporation based on the forum contacts of a corporate subsidiary. We wrote about a district court rejecting alter ego jurisdiction here, but there is not much else discussing the subject in detail in the archive. That could be because successful examples of alter ego jurisdiction are exceedingly rare. The most common scenario is where plaintiffs sue an alleged corporate wrongdoer and try to hale into court not only the alleged wrongdoer, but also its out-of-state corporate parent. Their motivation is not a mystery: Plaintiffs want more defendants, larger balance sheets, and deeper pockets to reach into. And if the corporate parent has a recognizable “big” name, that’s all the better.
Unfortunately for plaintiffs and fortunately for the defense, this transparent ploy rarely works, and it did not work in a recent hip replacement case, Goldthrip v. Johnson & Johnson, No. 15-00651-KD-B, 2016 U.S. Dist. LEXIS 170801 (S.D. Ala. Dec. 8, 2016). In Goldthrip, the plaintiffs sued not only the company that made and sold the hip implant, but also its corporate parent. There were, however, two problems: First, the plaintiffs sued in Alabama, but the parent corporation was a New Jersey company. Second, the parent corporation neither made nor sold products; it was a holding company, as parent companies often tend to be. Id. at **2-4.
Continue Reading Alter Ego and Agency – A Different Spin on Jurisdiction