2:09-md-02042-SFC Doc # 513 Filed 09/18/14 Pg 1 of 5 Pg ID 14581
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`In re: Refrigerant Compressors
`Antitrust Litigation
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`Master Docket No. 09-MD-2042
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`Individual Case No. 13-12638
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`Honorable Sean F. Cox
`United States District Court
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`___________________________/
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`ORDER
`GRANTING REQUESTS FOR JURISDICTIONAL DISCOVERY AND
`DENYING DEFENDANT DANFOSS A/S’S MOTION TO DISMISS
`WITHOUT PREJUDICE
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`Plaintiff General Electric Company (“GE”) filed its Complaint on February 15, 2013, in
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`the United States District Court for the Western District of Kentucky, Louisville Division. The
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`action was later transferred to this Court by an Order of the United States Judicial Panel on
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`Multidistrict Litigation, which transferred the action to this Court for inclusion in the
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`coordinated or consolidated pretrial proceedings in this MDL proceeding.
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`GE’s Complaint includes claims asserted against the “Danfoss Defendants,” which are
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`Danfoss A/S, Danfoss Flensburg GMBH, and Danfoss, LLC. GE’s Complaint asserts three
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`causes of action: 1) “Violation of Section 1 of the Sherman Act, 15 U.S.C. § 1,” its First Cause
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`of Action; 2) “Fraud,” its Second Cause of Action; and 3) “Conspiracy,” its Third Cause of
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`Action.
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`Currently pending before the Court is a “Motion By Defendant Danfoss A/S To Dismiss
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`The Complaint” (Docket Entry No. 469 in 09-2042 / Docket Entry No. 63 in 13-12638) that
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`challenges this Court’s exercise of personal jurisdiction over Danfoss A/S. The parties have
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`fully briefed this motion and the Court finds that oral argument would not aid the decisional
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`process. See Local Rule 7.1(f)(2), U.S. District Court, Eastern District of Michigan. The Court
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`therefore orders that the motion will be decided upon the briefs.
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`“The plaintiff bears the burden of establishing that [personal] jurisdiction exists.”
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`Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991).
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`Courts have three procedural alternatives when faced with a motion to dismiss based on
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`personal jurisdiction, brought pursuant to Fed. R. Civ. P. 12(b)(2): 1) determine the motion
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`based on the affidavits alone; 2) permit discovery, which would aid in resolution of the motion;
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`or 3) conduct an evidentiary hearing on the merits of the motion. Theunissen, 935 F.2d. at 1458;
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`Intera Corp. v. Henderson, 428 F.3d 605, 614 n.7 (2005) (citing Serras v. First Tennessee Bank
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`Nat. Ass’n, 875 F.2d 1212, 1214 (6th Cir. 1989)). The district court “has discretion to select
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`which method it will follow, and will only be reversed for abuse of that discretion.” Theunissen,
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`935 F.2d at 1458.
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`In its motion, Danfoss A/S asks the Court to rule in its favor based upon the affidavits
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`alone or, alternatively, order jurisdictional discovery.
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`Likewise, in opposing the motion GE asks the Court to rule, based on the affidavits
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`alone, that it has made out a prima facie showing of personal jurisdiction over Danfoss A/S or,
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`alternatively, allow it to conduct “jurisdictional discovery regarding Danfoss A/S’s contacts with
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`the United States (including its sales to the United States during the relevant period) and its
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`control over Danfoss US and Danfoss Flensburg.” (Docket Entry No. 475 at 25).
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`“To comply with due process, a court’s exercise of its power over [a foreign] defendant
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`must not offend traditional notions of fair play and substantial justice.” Indah v. U.S. Sec. &
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`Exchange Comm'n, 661 F.3d 914, 920 (6th Cir. 2011) (quoting Int'l Shoe Co. v. Washington, 326
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`U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)) (internal quotation marks omitted). The Sixth
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`Circuit has explained that:
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`[f]or Sherman Act claims, 15 U.S.C. § 22 authorizes service of process over an
`antitrust defendant “wherever it may be found.” When Congress has enacted such
`nationwide service of process statutes, personal jurisdiction exists whenever the
`defendant has “sufficient minimum contacts with the United States ” to satisfy the
`due process requirements under the Fifth Amendment. Med. Mut. of Ohio v.
`deSoto, 245 F.3d 561, 566–67 (6th Cir.2001) (emphasis added); cf. Chrysler
`Corp. v. Fedders Corp., 643 F.2d 1229, 1237–39 (6th Cir.1981) (indicating
`without expressly deciding that 15 U.S.C. § 22 permits nationwide process). This
`inquiry parallels the more traditional personal-jurisdiction analysis under which a
`defendant must have “ ‘minimum contacts’ ” with the forum state pursuant to the
`state’s long-arm statute. See Med. Mut. of Ohio, 245 F.3d at 566–67.
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`Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430, 449-50 (6th Cir. 2012).
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`In opposing Defendant Danfoss A/S’s motion, GE asserts that both general jurisdiction
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`and specific jurisdiction exist over Danfoss A/S based upon the alter-ego theory of personal
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`jurisdiction.
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`The Sixth “Circuit has adopted the alter-ego theory of personal jurisdiction, which
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`‘provides that a non-resident parent corporation is amenable to suit in the forum state if the
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`parent company exerts so much control over the subsidiary that the two do not exist as separate
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`entities but are one and the same for purposes of jurisdiction.’” Carrier Corp. v. Outokumpu Oyj,
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`673 F.3d at 450-51 (quoting Estate of Thompson v. Toyota Motor Corp. Worldwide, 545 F.3d
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`357, 362 (6th Cir. 2008)). The case law reflects that this is a fact-intensive inquiry. The Sixth
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`Circuit has considered the following relevant factors to determine whether the alter ego theory of
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`personal jurisdiction applies:
`(1) sharing the same employees and corporate officers; (2) engaging in the same
`business enterprise; (3) having the same address and phone lines; (4) using the
`same assets; (5) completing the same jobs; (6) not maintaining separate books, tax
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`returns and financial statements; and (7) exerting control over the daily affairs of
`another corporation.
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`Estate of Thompson, 545 F.3d at 362-63; see also In re Automotive Parts Antitrust Litig., 2013
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`WL 2456610 (E.D. Mich. 2013).
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`Having reviewed the parties’ briefs, GE’s Complaint, and the affidavits/declarations
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`submitted, the Court concludes that the best course of action is for the parties to engage in
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`limited discovery on the issue of whether this Court has personal jurisdiction over Danfoss A/S.
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`Upon completion of that limited discovery, Danfoss A/S may renew its Motion to Dismiss if it
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`chooses to do so.
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`Accordingly, the Court hereby ORDERS that the parties’ requests for limited personal
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`jurisdiction discovery are GRANTED. Counsel for the parties are to meet, in person, to confer
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`as to the discovery necessary and to submit a joint proposed scheduling order to the Court no
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`later than October 17, 2014, as to the scope and timing of agreed upon jurisdictional discovery.
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`The Court shall hold a Status Conference with the parties on October 27, 2014., at 3:00 p.m.
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`IT IS FURTHER ORDERED that Defendant Danfoss A/S’s Motion to Dismiss is
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`DENIED WITHOUT PREJUDICE.
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`IT IS SO ORDERED.
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`S/Sean F. Cox
`Sean F. Cox
`United States District Judge
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`Dated: September 18, 2014
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`I hereby certify that a copy of the foregoing document was served upon counsel of record on
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`September 18, 2014, by electronic and/or ordinary mail.
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`S/Jennifer McCoy
`Case Manager
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