Wis. SC says Nissan properly dismissed from class action

By Jessica M. Karmasek | Jul 18, 2011


MADISON, Wis. (Legal Newsline) - In a review of an appeals court decision, the Wisconsin Supreme Court says Japan-based Nissan Motor Co. was "properly dismissed" as a defendant in a class-action lawsuit.

The Court had to decide whether under Wisconsin Statute 801.05(1)(d) -- the long-arm statute granting general personal jurisdiction over individuals engaged in "substantial and not isolated activities within" the state -- Nissan Japan is subject to general personal jurisdiction in the state.

The plaintiff David Rasmussen and the class contend that Wisconsin does, indeed, have general personal jurisdiction over Nissan Japan under 801.05(1)(d) based on the "substantial and not isolated activities" of Nissan North America Inc., Nissan Japan's wholly owned subsidiary.

The Court, in its July 1 opinion, disagreed. Justice Patience Drake Roggensack authored the Court's ruling.

In it, the justices said even assuming that Nissan North America were the agent of Nissan Japan -- absent control by Nissan Japan -- the activities of the subsidiary corporation are "insufficient" to subject its nonresident parent corporation to general personal jurisdiction under 801.05(1)(d).

"In order to accord general personal jurisdiction over a nonresident corporate defendant based on an alleged agency relationship, there must be something more than merely an agency relationship," the Court wrote.

"As in other circumstances where general personal jurisdiction is sought for a nonresident defendant based on the acts of another in an alleged agency relationship with a subsidiary, there also must be control by the nonresident parent corporation sufficient to cause us to disregard the separate corporate identities of the subsidiary and the parent corporations."

The circuit court found no factor that would weigh in favor of ignoring the separate corporate identities of Nissan Japan and Nissan North America, the Court said.

"To the contrary, the circuit court found that: (1) Nissan Japan did not have 'complete control' or 'domination' of Nissan North America; (2) requisite corporate formalities were observed; (3) there was no showing that Nissan North America did not exercise independent decision-making; (4) there was no showing that corporate legal requirements were not followed; and (5) there was no showing of fraud or undercapitalization," the state's high court wrote.

"Given the law, which presumes corporate separateness, and the facts found about the relationship between Nissan Japan and Nissan North America, we conclude that Nissan Japan did not have control over Nissan North America sufficient to cause us to disregard the separate corporate identities of the nonresident parent and the subsidiary such that we impute the acts of the subsidiary to the parent."

The Court also concluded that Rasmussen did not meet his burden to show that the corporate separateness of Nissan Japan and and Nissan North America should be disregarded such that the activities of Nissan North America in Wisconsin should be imputed to Nissan Japan.

"Without the attribution of Nissan North America's activities in Wisconsin to Nissan Japan, Rasmussen has provided no basis to demonstrate the 'substantial and not isolated activities' within Wisconsin that Wis. Stat. 801.05(1)(d) requires for general personal jurisdiction over Nissan Japan," it wrote.

Accordingly, the statutory prerequisites for general personal jurisdiction under 801.05(1)(d) were not met, the Court concluded.

Because the requirements were not met, the Court declined to discuss whether exercising general personal jurisdiction over Nissan Japan comports with due process.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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