U.S. District Court for the Southern District of New York, August 9, 2021
The plaintiff alleged that the decedent, Eugene Paroni was exposed to asbestos while working at various jobsites from the 1960s through the 1980s. Paroni specifically alleged that one of the sources of his alleged exposure was from a “Ruston TA-1500” turbine that he encountered in the early 1970s at a plant in California. Paroni alleged that outside workers took apart and worked on the turbine equipment, which included asbestos blankets. The turbine was manufactured and sold by Ruston Gas Turbines, Limited (Ruston), an English company that had contracted with customers in California.
The plaintiff filed suit in California state court against Alstom SA, which she alleged was a successor in interest to Ruston. Alstom SA moved to dismiss the California case for lack of personal jurisdiction, which was granted. The California court also denied the plaintiff’s request for jurisdictional discovery. Following dismissal of the California action, the plaintiff filed suit against Alstom SA in the United States District Court for the Southern District of New York, asserting the same claims as in the California action. Alstom SA again moved to dismiss the case for lack of personal jurisdiction. The court denied the motion, and granted the plaintiff’s request for jurisdictional discovery, as previously reported by Asbestos Case Tracker here.
Jurisdictional discovery subsequently revealed that General Electric UK Holdings Ltd (GEUKH) was the correct successor in interest to Ruston. The parties jointly requested that the Court permit the plaintiff to substitute GEUKH for Alstom SA, who would be represented by the same counsel. GEUKH further agreed to accept service and waive a statute of limitations defense, though it did contest personal jurisdiction. The parties also jointly requested additional time for jurisdictional discovery on GEUKH to evaluate whether the plaintiff could establish personal jurisdiction in the Southern District Court. Both requests were granted. Following the conclusion of jurisdictional discovery, and after the court denied requests for extensions of same, GEUKH filed a motion to dismiss for lack of personal jurisdiction.
As to general jurisdiction, the plaintiff attempted to pierce the corporate veil, arguing that GEUKH had no employees, no revenue, and that General Electric (GE) owned 100% of GEUKH’s share capital. As such, the plaintiff argued that GE and GEUKH were one corporate entity. The court noted that the standard for piercing the corporate veil in the context of personal jurisdiction is lower than in the context of establishing liability. However, there must be a finding of extraordinary control. In considering the standards set forth by the Second Circuit in GEM Advisors, Inc. v. Corporacion Sidenor, the court found that the plaintiff had not shown facts sufficient to pierce the corporate veil. That is, the plaintiff had not demonstrated that GEUKH was anything other than an indirect subsidiary of GE—she had not adduced evidence that GE enjoyed extraordinary control over GEUKH. The court further found that GEUKH was not subject to general personal jurisdiction in New York, because the plaintiff could not point to any contacts that the company had with New York.
As to specific jurisdiction, the plaintiff argued that GE first purchased the liabilities of Alstom SA’s power and grid business and then later engaged in a separate transaction with GEUKH, wherein GE transferred the liabilities from same to GEUKH. The plaintiff argued that her claims arose out of this transaction, which she alleged must have occurred in New York, where GE maintains its headquarters. However, the court found that she had not demonstrated by a preponderance of the evidence “that there was ever a transaction (let alone one in New York) between GE and GEUKH in which GEUKH acquired the asbestos liabilities of Alstom” that GE had previously acquired. A such, the plaintiff had not established any transaction in New York involving GEUKH, and no specific jurisdiction existed.
Notwithstanding, the court noted that the only transaction of relevance in the case was indeed GE’s acquisition of Alstom SA’s power and grid business. The parties did not contest this, so the court assumed, arguendo, that it occurred in New York. However, the court found that the plaintiff’s claims, arising out of an alleged tort committed in the ’60s and ’80s, decades before the corporate acquisition (in 2015), clearly did not arise from that acquisition. The court further found that exercising personal jurisdiction over GEUKH would not comport with due process.
In conclusion, the court noted its power to transfer the case, in the interest of justice, to cure a lack of personal jurisdiction. The court noted that the plaintiff, having now successfully identified the successor-in-interest for the Ruston asbestos liabilities, should make a motion to transfer the case to a federal district court in California where specific jurisdiction lies, and invited such motion within two weeks from the date of its order. In the event that the court does not receive the motion, it will dismiss the case with prejudice.