We've all seen lists of so-called hellhole jurisdictions — court systems that treat corporate defendants brutally. What about a list of the places where corporations get a fair shake? Indiana would be on that list. Jurors in the Hoosier State don't casually toss around multimillion dollar verdicts. Further, both federal and state judges in Indiana tend to be conservative in the good sense – careful gatekeepers disinclined to invent goodies for plaintiffs. (There are exceptions, of course. After all, the author of the execrable Seventh Circuit Bausch decision hails from Indiana.)
We have a lot of reasons to like Indiana. We have wonderful relatives who live in Noblesville, Indiana. Their Halloween costumes were welcome images of joy amidst the political hot mess that littered our fall Facebook feed. One of our favorite clients is in Indianapolis. It's also been a great year so far for college football in Indiana. We expect Notre Dame to be very good, but this year there is also first class football being played in Bloomington. Good times. And looking through Indiana cases more often than not warms our flinty, defense-hack heart.
And so, for the second consecutive week, we find ourselves writing about an Indiana case. We were delighted to find the year-old opinion in Evans v. Wright Medical Technology, Inc., 2019 WL 5390548 (N.D. Indiana Oct. 21, 2019), which demonstrated a solid application of SCOTUS teachings on personal jurisdiction. In Evans, the plaintiffs alleged injuries from implantion of artificial hip devices. They sued not only the device manufacturer, but also the manufacturer's corporate parent and a foreign affiliate. The issue was whether the court could exercise personal jurisdiction over the parent and foreign affiliate. (Dear Reader: Surely you already know that we have written a lot on personal jurisdiction.)
The court went through the specific and general jurisdiction analyses. And it did so in that order: specific before general. We've seen it that way in some other cases and don't get it. Shouldn't general come first? That's how we'll proceed.
General jurisdiction in this case was, as it usually is, quite easy and quite bad for the plaintiffs. The SCOTUS Bauman case makes the analysis straightforward. Neither the parent company nor the foreign affiliate were incorporated in Indiana. Neither had a principal place of business in Indiana. So much for general jurisdiction. (Yes, SCOTUS did allow for exceptional circumstances but, aside from temporary relocation of operations due to a world war, good luck finding such an exception.)
Specific jurisdiction was, as it often is, where the real action was in Evans. But there wasn't much action with respect to the foreign affiliate, which did not exist when the devices were implanted. Adios, foreign affiliate. Or, perhaps more appropriately in light of the affiliate's Dutch home, vaarwel.
Most of the Evans opinion was about whether specific jurisdiction extended to the corporate parent. Did the corporate parent purposely avail itself of the privilege of conducting activities within Indiana, thus invoking the benefits and protections of Indiana laws? Did the lawsuit arise out of the parent's Indiana-related activities?
The plaintiffs bore the burden of showing such personal jurisdiction, though the court would construe all facts in the nonmovant' s favor. (We're not agreeing that makes sense, but there it is.) The corporate parent was a holding company and it produced affidavits to the effect that it had nothing to do with the design, manufacture, marketing, etc., of the devices at issue.
The plaintiffs countered by pointing to SEC filings and press releases in which the parent company either took credit for the devices or alluded to litigation involving the devices. Evans is not the first case where plaintiffs seized upon corporate puffery to rope in corporate parents. But the 10-Ks, 10-Qs, and press releases were clearly using "we," "us," and "our" formulations in the context of talking about the corporate family. Merely being a corporate parent or affiliate does not create specific jurisdiction. The bloviatory corporate statements simply did not establish the requisite control over the implants by the parent. (That being said, we implore the lawyers who write 10-Qs and 10-Ks to devote at least a moment to thinking about how their words could conceivably affect a personal jurisdiction analysis.)
The plaintiffs were also unable to adduce any evidence showing that the parent utterly dominated the manufacturer or ignored corporate formalities. The court had before it no record that might justify piercing the corporate veil.
Most fundamentally, the plaintiffs never showed how the corporate parent's Indiana-related conduct led to the alleged injuries. Nor did the plaintiffs provide any basis to believe that jurisdictional discovery would alter the facts on the (Indiana) ground. Thus, the corporate parent won its motion on personal jurisdiction and got out of the case.
Indiana is a splendid place with beautiful locations (amazing covered bridges) and friendly people. (Somewhat unexpectedly, many James Bond fans make the pilgrimage to Bloomington to visit the Ian Fleming Library.) All the same, we suspect that the corporate parent in Evans was pleased to exit the jurisdiction.
This article is presented for informational purposes only and is not intended to constitute legal advice.