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Corporate – Sister Subsidiaries – Agency – Tort/Negligence – Defamation — Civil Practice — Personal Jurisdiction

Lianyungang FirstDart Tackle Co. v. DSM Dyneema B.V. (Lawyers Weekly No. 12-02-0730, 10 pp.) (Terrence W. Boyle, J.) 4:12-cv-27; E.D.N.C.

Holding: Although plaintiff alleges that a Dutch corporation and its sister N.C. limited liability company operate a “single, unified website” and hold themselves out to the public as a single entity, the N.C. LLC is not liable for the alleged defamatory statement in a press release issued by the Dutch corporation.

Defendants’ motions to dismiss are granted.

The LLC asserts that it “did not issue the Press Release, did not make any statements, and did not engage in any tortious conduct.”

Plaintiff responds that the press release was published by both companies on their “single, unified website.” Plaintiff reaches its conclusion of joint liability through its allegation that the two defendants hold themselves out to the public as a single entity. Plaintiff claims that this ambiguous public persona demonstrates at least an apparent agency relationship between the N.C. LLC and the Dutch corporation, noting that the press release, website, and 2011 Integrated Annual Report for defendants’ parent company are attributed to “DSM Dyneema” without further specification.

Absent special circumstances allowing piercing of the corporate veil, an affiliated corporation is not liable for the alleged statutory violations of its sister corporation.

The Dutch corporation explained that, though both defendants report to the same owner, defendants are separate legal entities with separate management teams and separate geographic sales areas. Both defendants maintain corporate formalities separately from each other.

Plaintiff has not countered this explanation. Plaintiff fails to state a claim upon which relief can be granted against the N.C. LLC.

Where the Dutch corporation merely has a generally available website which is not in any way directed at N.C. residents, this court lacks specific personal jurisdiction over the Dutch corporation.

The Dutch corporation cannot be haled into this court on the sole basis of the N.C. LLC’s continuous actions in this state. Although plaintiff attributes great significance to the fact that both defendants are “part of the same Business Group,” corporate entities that are merely related, such as sister corporations, are not automatically subject to personal jurisdiction in the forum state of the related entity.

No representation is made on the DSM Dyneema website as to the relationship between the two corporate entities, and plaintiff does not allege that either defendant ever made any representation to plaintiff about either company’s ability to bind the other.

Absent any indication that the Dutch corporation targeted North Carolina with its products, the mere availability for sale of those products is insufficient to support general personal jurisdiction in this state.


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