By Jeffrey May, J.D.
Japanese capacitor manufacturer Nissei Electric Co., Ltd. was not entitled to dismissal of a price fixing action on jurisdictional grounds. For purposes of its motion to dismiss, the company unsuccessfully contended that the complaining capacitor purchasers based their claims on the activities of "Dissolved Nissei"—an entity that the defendant had acquired—and could not impose successor liability on defendant Nissei for "Dissolved Nissei" such that the court could exercise specific jurisdiction over Nissei. The plaintiffs adequately alleged that successor liability existed under the "mere continuation" exception to the general rule of California law that a purchasing corporation does not assume the debts and liabilities of the selling corporation (In re Capacitors Antitrust Litigation, March 7, 2017, Donato, J.).
The federal district court in San Francisco denied Nissei’s motion to dismiss for lack of personal jurisdiction, without prejudice to renewal at a later time if warranted by the facts and the law. Ultimately, the complaining purchasers would still be required to prove the jurisdictional facts by a preponderance of the evidence.
"Mere continuation" exception. The plaintiffs only needed to make a prima facie showing of jurisdictional facts in order to avoid the defendant’s motion to dismiss, the court explained. The plaintiffs alleged that the "mere continuation" exception applied because: "(1) no adequate consideration was given for the predecessor corporation’s assets and made available for meeting the claims of its unsecured creditors; [and] (2) one or more persons were officers, directors, or stockholder of both corporations." According to the court, the plaintiffs made an adequate prima facie showing on the first prong. The dispute between the parties over the value of consideration paid by Nissei for "Dissolved Nissei" warranted denial of the motion to dismiss.
The case is No. 3:14-cv-03264-JD.
Attorneys: C. Andrew Dirksen (Cera LLP) for Chip-Tech, Ltd. and Dependable Component Supply Corp. Adam R. Fox (Squire, Sanders & Dempsey, LLP) for Nissei Electronic Co Ltd.
Companies: Nissei Electric Co. Ltd.
MainStory: TopStory Antitrust ArizonaNews
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