New Jersey is home to numerous subsidiaries of foreign corporations, especially in the pharmaceutical and technology industries. In a decision, which will be welcomed by those corporations, the New Jersey Appellate Division recently reaffirmed that the foreign parent company of a wholly-owned New Jersey subsidiary is not subject to the general jurisdiction of New Jersey courts unless the plaintiff can meet the elements of piercing the corporate veil. FDASmart, Inc. v. Dishman Pharm. & Chems. Ltd., No. A-2800-15T3 (Dec. 29, 2016).
In FDASmart, the defendant Dishman Pharm. & Chems. Ltd (“DCPL”) was an Indian corporation with a principal place of business in India. In 2013, PKM, an Indian company, set up a meeting between FDASmart and DCPL to discuss the sale of a facility owned by a Chinese subsidiary of DCPL. A memorandum of understanding was entered into between PKM, FDASmart, and “Dishman Group” regarding the development of a sales strategy and ultimate sale of the facility. The name “Dishman Group” is a marketing term for DCPL and its subsidiaries. Eventually, the sale fell apart and FDASmart sued DCPL and DCPL’s wholly-owned New Jersey subsidiary, Dishman USA, in New Jersey state court. DCPL challenged that the court lacked personal jurisdiction over it but FDASmart asserted that DCPL had sufficient contacts with New Jersey because Dishman USA was a New Jersey corporation. Continue reading “Appellate Division Denies Jurisdiction over Indian Corporation with New Jersey Subsidiary”