PATIENCE DRAKE ROGGENSACK, J.
¶ 1 We review an unpublished decision of the court of appeals
¶ 2 Rasmussen contends that Wisconsin has general personal jurisdiction over Nissan Japan
¶ 3 Because we conclude that the statutory requirements for general personal jurisdiction have not been met, we need not discuss whether exercising general personal jurisdiction over Nissan Japan comports with due process. Accordingly, we affirm the decision of the court of appeals.
¶ 4 On September 18, 2003, Rasmussen filed a class-action complaint against numerous
¶ 5 The complaint further alleges that in an effort to advance a price-fixing scheme, the defendants required their United States dealers to, among other things, refuse to honor new car warranties on cars imported from Canada and refuse to provide recall information relating to new cars imported from Canada.
¶ 6 On December 22, 2003, Nissan Japan moved to dismiss the action against it for lack of personal jurisdiction. With regard to Wis. Stat. § 801.05(1)(d),
¶ 7 On April 5, 2004, a hearing was held on Nissan Japan's motion to dismiss for lack of personal jurisdiction. Following the hearing, the circuit court
¶ 9 Nissan Japan contended that Rasmussen's Lemon Law-agency argument had no merit because Nissan Japan is not a warrantor and Nissan Japan has never been brought into any Lemon Law case "under any theory let alone a theory of agency."
¶ 10 At the conclusion of the hearing, the circuit court made findings of fact on the jurisdictional issues that relate to the conspiracy to price fix that Rasmussen alleged. The findings relevant to this review are:
¶ 11 Based on these findings of fact, the circuit court concluded that "there has clearly been a failure to demonstrate the corporate veil ought to be pierced[,] or that on any other theory, jurisdiction over Nissan Japan could be obtained because the subsidiary was simply a tool or an extension of the parent." Accordingly, the court dismissed Nissan Japan from the suit based on a lack of personal jurisdiction.
¶ 12 Rasmussen appealed and the court of appeals affirmed the dismissal. Rasmussen v. Gen. Motors Corp., No. 2007AP35, unpublished slip op., 2010 WL 1994047 (Wis.Ct.App. May 20, 2010). The court of appeals, relying on Insolia v. Philip Morris Inc., 31 F.Supp.2d 660 (W.D.Wis.1998), held that "the only provision of [Wisconsin's] personal jurisdiction statute authorizing personal jurisdiction over a parent corporation based on an agency relationship with its subsidiary is Wis. Stat. § 801.05(4)(a), which allows for specific personal jurisdiction." Rasmussen, No. 2007AP35, unpublished slip op., ¶ 23. Therefore, an agency theory provides no basis on which to ground general personal jurisdiction pursuant to § 801.05(1)(d), based on the acts of the nonresident parent's subsidiary. Id. The court noted, "the corporate structure and corresponding presumption of separateness requires more than an agency theory to assert general jurisdiction over a parent corporation."
¶ 13 We granted review and now affirm the court of appeals.
¶ 14 Whether there is personal jurisdiction under Wisconsin's long-arm statute is a question of law that we review independently. Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 10, 245 Wis.2d 396, 629 N.W.2d 662. While our review is independent, we benefit from the analyses of the circuit court and the court of appeals. State v. Aufderhaar, 2005 WI 108, ¶ 10, 283 Wis.2d 336, 700 N.W.2d 4. We will not reverse the factual findings of the circuit court unless they are clearly erroneous. Wis. Stat. § 805.17(2). Stated otherwise, findings of fact will not be disturbed on appeal unless they are contrary to the great weight and clear preponderance of the evidence. State v. Arias, 2008 WI 84, ¶ 12, 311 Wis.2d 358, 752 N.W.2d 748.
¶ 15 Under Wisconsin's long-arm statute, personal jurisdiction over nonresident defendants is of two basic types: general personal jurisdiction and specific personal jurisdiction.
¶ 16 In determining whether personal jurisdiction may be exercised over a nonresident defendant, we employ a two-step inquiry. Kopke, 245 Wis.2d 396, ¶ 8, 629 N.W.2d 662. The first step is to determine whether the defendant meets the criteria for personal jurisdiction under the Wisconsin long-arm statute. Id. If the requirements set out in the long-arm statute are satisfied, "then the court must consider whether the exercise of jurisdiction comports with due process requirements." Id. at 409, 629 N.W.2d 662.
¶ 17 The plaintiff has a "minimal burden" of showing that the statutory and constitutional requirements are met. Id. In performing this jurisdictional analysis, "we may consider documentary evidence and weigh affidavits in reaching a determination as to whether this burden has been met. Factual doubts are to be resolved in favor of the plaintiff." Id. (internal quotation marks and citation omitted). Finally, the Wisconsin long-arm statute is to be construed liberally in favor of the exercise of personal jurisdiction. Clement v. United Cerebral Palsy of S.E. Wis., Inc., 87 Wis.2d 327, 332, 274 N.W.2d 688 (1979).
¶ 18 Pursuant to Wis. Stat. § 801.05(1), Wisconsin courts may exercise general personal jurisdiction over a defendant when that defendant takes up "local presence or status" within the state.
¶ 20 Although we do not discuss due process directly in the first step of a personal jurisdiction analysis, the legislative history underlying Wis. Stat. § 801.05(1)(d) shows that the statutory criteria and due process are intertwined. This is so because § 801.05 "was intended to provide for the exercise of jurisdiction over nonresident defendants to the full extent consistent with the requisites of due process of law."
¶ 21 The five factors that we have considered in our due process analysis are: (1) the quantity of defendant's contacts; (2) the nature and quality of defendant's contacts; (3) the source and connection of the cause of action with those contacts; (4) the interests of Wisconsin in the action; and (5) the convenience to the parties of employing a Wisconsin forum. Clement, 87 Wis.2d at 334-35, 274 N.W.2d 688; Vt. Yogurt, 107 Wis.2d at 608, 321 N.W.2d 315. Because of the due process concerns that underlie the statutory criteria for personal jurisdiction, there are occasions, such as occurred in Nagel discussed above, when some of the due process factors also are employed in the statutory analysis. See also Insolia, 31 F.Supp.2d at 668; Vt. Yogurt, 107 Wis.2d at 608, 321 N.W.2d 315.
¶ 22 Occasionally, the "substantial and not isolated activities" language has been examined in light of the activities of someone other than the defendant for whom personal jurisdiction is sought, such as an agent of a corporation or the subsidiary of a nonresident parent corporation. In those circumstances, we examine the relationship between the nonresident defendant
¶ 23 In Pavalon v. Fishman, 30 Wis.2d 228, 140 N.W.2d 263 (1966), we were asked to determine whether the brokerage firm that handled Pavalon's purchase of a note and stock warrant was the agent of the defendant so that the court had specific personal jurisdiction over the defendant under Wis. Stat. § 262.05(5)(e) (1965).
¶ 24 While Pavalon could be cited as support for the premise that the acts of an agent may be sufficient to support specific personal jurisdiction over a nonresident defendant under some circumstances, no Wisconsin appellate court has held that an agency relationship, without consideration of any other factor, is sufficient to support general personal jurisdiction over a nonresident defendant.
¶ 25 Although the concept of piercing the corporate veil generally is associated with attaching liability for corporate actions to someone other than the corporation, the analysis is somewhat similar to the analysis we employ in evaluating whether there is general personal jurisdiction under Wis. Stat. § 801.05 over a nonresident defendant for the acts of another. Consider, for example, Consumer's Co-op. of Walworth County v. Olsen, 142 Wis.2d 465, 419 N.W.2d 211 (1988), where we were asked to pierce the corporate veil and impute the actions of a corporation to its shareholders so that a judgment against the corporation would become the shareholders' liability. Id. at 470, 419 N.W.2d 211. We noted that under the law, a corporation is treated as an entity separate from its shareholders and that separateness is not to be lightly disregarded. Id. at 474, 419 N.W.2d 211. However, we explained that corporate separateness could be disregarded when observing it "would accomplish some fraudulent purpose, operate as a constructive fraud, or defeat some strong equitable claim." Id. at 475, 419 N.W.2d 211 (quoting Milwaukee Toy Co. v. Indus. Comm'n of Wis., 203 Wis. 493, 496, 234 N.W. 748 (1931)). We also explained that corporate separateness could be disregarded where the shareholders "made no serious attempt to hold corporate meetings or to maintain records of
¶ 26 The relationship between corporations has generated significant discussion about the conditions under which the actions of one corporation are sufficient to impute those actions to another corporation. For example, in Kerl v. Dennis Rasmussen, Inc., 2004 WI 86, 273 Wis.2d 106, 682 N.W.2d 328, we examined the relationship between a franchisor and franchisee when plaintiffs asserted a vicarious liability claim against the franchisor based on the alleged negligence of the franchisee. We concluded that "a franchisor may be held vicariously liable for the tortious conduct of its franchisee only if the franchisor has control or a right of control over the daily operation of the specific aspect of the franchisee's business that is alleged to have caused the harm." Id., ¶ 7. We noted that a master servant relationship is a type of agency and unless the agent is also a servant, vicarious liability generally cannot flow to the master. Id., ¶ 20.
¶ 27 In Conservatorship of Prom v. Sumitomo Rubber Industries, Ltd., 224 Wis.2d 743, 592 N.W.2d 657 (Ct.App.1999), the court of appeals discussed whether a corporation that distributed its tires through a wholly owned subsidiary transacted business in Wisconsin such that the Secretary of State was a proper agent for service of process on the corporation. In its discussion, the court of appeals affirmed the long held rule that "[t]he mere existence of a parent-subsidiary relationship between two corporations is not sufficient to provide a court with jurisdiction." Id. at 760, 592 N.W.2d 657. The court of appeals explained that in order for a subsidiary to provide the necessary connections to Wisconsin, "the record must establish that the parent corporation had control over the subsidiary corporation . . . to such an extent that the separate corporate identity of the subsidiary should be disregarded." Id. The court of appeals noted that Cemetery Services, Inc. v. Wisconsin Department of Regulation & Licensing, 221 Wis.2d 817, 827, 586 N.W.2d 191 (Ct.App.1998), lists 15 factors that may be considered in determining whether the requisite control exists. Conservatorship of Prom, 224 Wis.2d at 760-61, 592 N.W.2d 657.
¶ 28 In regard to whether Wis. Stat. § 801.05(1)(d) accords general personal jurisdiction over Nissan Japan, Rasmussen argues that the "substantial and not isolated activities" of Nissan North America are imputed to Nissan Japan either through an agency theory
¶ 29 In a jurisdictional analysis under Wisconsin's long-arm statute, we generally consider the quantity of contacts; the nature and quality of the contacts; the source and connection of the cause of action with those contacts; the interests of Wisconsin in the action; and the convenience to the parties of employing a Wisconsin forum. Clement, 87 Wis.2d at 334-35, 274 N.W.2d 688; Vt. Yogurt, 107 Wis.2d at 608, 321 N.W.2d 315.
¶ 30 However, here, there is no dispute that Nissan North America has had contacts with Wisconsin that are sufficient to afford general personal jurisdiction over Nissan North America. Rather, the question presented is whether the relationship between Nissan Japan and Nissan North America is such that Nissan North America's substantial and not isolated activities within Wisconsin should be imputed to Nissan Japan. Therefore, much of our discussion is focused on the relationship between the two corporations and how that impacts on the question of general personal jurisdiction.
¶ 31 We begin by underscoring that Rasmussen is seeking general personal jurisdiction over Nissan Japan. We have never grounded general personal jurisdiction of a corporation in an alleged agency relationship with another corporation. Rasmussen provides no citation to a State of Wisconsin appellate decision that does so.
¶ 32 It is true that in Pavalon liability was grounded in an agency relationship, that of a broker and client. However, we accorded only specific personal jurisdiction, i.e., a limited jurisdiction that focuses on specific acts of an agent in a specifically delineated agency relationship. Pavalon, 30 Wis.2d at 235, 140 N.W.2d 263. Specific personal jurisdiction was also accorded in Kopke. There, we assessed whether a nonresident corporation engaged in conduct of the type described in Wis. Stat. § 801.05(4), which statute provides for specific, not general, personal jurisdiction. Kopke, 245 Wis.2d 396, ¶ 11, 629 N.W.2d 662.
¶ 33 Rasmussen asks us to extend the jurisprudence attendant to specific personal jurisdiction that applies to acts of an alleged agent to general personal jurisdiction based on the acts of an alleged agent. Agency is grounded in the "manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act." Marten Trans., Ltd. v. Hartford Specialty Co., 194 Wis.2d 1, 13-14, 533 N.W.2d 452 (1995) (internal quotation marks omitted). We agree with
¶ 34 We note that Wis. Stat. § 801.05(4) provides for specific personal jurisdiction based on the acts of an agent so that a Wisconsin forum is not denied when the facts show that a Wisconsin forum should be accorded. Pavlic v. Woodrum, 169 Wis.2d 585, 590-91, 486 N.W.2d 533 (Ct. App.1992); Insolia, 31 F.Supp.2d at 671. Specific personal jurisdiction is a limited form of personal jurisdiction well tailored to an agency relationship.
¶ 35 However, in order to accord general personal jurisdiction over a nonresident corporate defendant based on an alleged agency relationship, there must be something more than merely an agency relationship. As in other circumstances where general personal jurisdiction is sought for a nonresident defendant based on the acts of another in an alleged agency relationship with a subsidiary, there also must be control by the nonresident parent corporation sufficient to cause us to disregard the separate corporate identities of the subsidiary and the parent corporations. See Conservatorship of Prom, 224 Wis.2d at 760, 592 N.W.2d 657; Insolia, 31 F.Supp.2d at 669.
¶ 36 Furthermore, Rasmussen has provided us with no reason why we should expand the law that provides a Wisconsin forum under principles applicable to specific personal jurisdiction to also accord a forum based on general personal jurisdiction, and we perceive none. Accordingly, even if we were to assume, arguendo, that Nissan North America were the agent of Nissan Japan, we decline to expand Wisconsin law attendant to specific personal jurisdiction such that general personal jurisdiction may rest solely on an alleged agency relationship.
¶ 37 However, as Rasmussen also asserts, we have ascribed actions of another to a corporation when sufficient factors were present to cause us to disregard the corporate existence. See Clement, 87 Wis.2d at 336-37, 274 N.W.2d 688. Cemetery Services lists 15 factors, by way of example, that a court may consider in assessing control, as it relates to corporate integrity; however, all factors are not relevant in all cases. Cemetery Servs., 221 Wis.2d at 826-27, 586 N.W.2d 191.
¶ 38 As we consider the applicable law and apply it to the facts found, we note that in assessing corporate separateness, Wisconsin courts have focused most directly on the amount of control that one corporation exercises or has the right to exercise over the other; whether both corporations
¶ 39 Here, the circuit court found no factor that would weigh in favor of ignoring the separate corporate identities of Nissan Japan and Nissan North America. To the contrary, the circuit court found that: (1) Nissan Japan did not have "complete control" or "domination" of Nissan North America; (2) requisite corporate formalities were observed; (3) there was no showing that Nissan North America did not exercise independent decision-making; (4) there was no showing that corporate legal requirements were not followed; and (5) there was no showing of fraud or undercapitalization. These findings have not been challenged, and in addition, our examination of the record shows that they are not clearly erroneous.
¶ 40 Given the law, which presumes corporate separateness, and the facts found about the relationship between Nissan Japan and Nissan North America, we conclude that Nissan Japan did not have control over Nissan North America sufficient to cause us to disregard the separate corporate identities of the nonresident parent and the subsidiary such that we impute the acts of the subsidiary to the parent. The reasoning of Insolia is consistent with our conclusion.
¶ 41 The issue in Insolia was whether Wisconsin had general personal jurisdiction over a nonresident parent corporation based on the Wisconsin activities of its subsidiary. In order to make the required determination, the court examined the degree to which the two corporations actually were separate entities. In that regard, the court noted that while "[c]ourts begin with the presumption of corporate separateness":
Insolia, 31 F.Supp.2d at 669 (quoting Consumer's Co-op, 142 Wis.2d at 484, 419 N.W.2d 211) (other internal citations and quotation omitted; alterations in original). The court in Insolia concluded that while "`[p]arents of wholly owned subsidiaries necessarily control, direct and supervise the subsidiaries to some extent' . . . anything less than the degree of control necessary to pierce the parent corporation's veil of liability is insufficient to establish personal jurisdiction over the parent." Id. (quoting IDS Life Ins. Co. v. SunAmerica Life Ins. Co., 136 F.3d 537, 540 (7th Cir. 1998)). Insolia ultimately concluded that the nonresident parent was not the alter ego of the subsidiary and that there was no basis for disregarding the corporate integrity of the subsidiary; therefore, there was no basis on which to accord general personal jurisdiction over the nonresident parent corporation. Id.
¶ 42 Here too, the facts found by the circuit court demonstrate the corporate integrity of Nissan North America has not been overridden by Nissan Japan's control of its subsidiary.
¶ 44 Accordingly, based on the facts found, the law applicable and the reasoning we have held to be persuasive, we conclude that Rasmussen has not met his burden of showing a basis for disregarding the corporate integrity of Nissan North America. He has provided no evidence of control by Nissan Japan sufficient to cause us to disregard the separate corporate identities of the subsidiary and parent. There is no evidence that Nissan Japan and Nissan North America were not operated as separate and independent corporations; no evidence that Nissan North America did not independently decide how to operate; and no evidence of fraud or undercapitalization. In sum, Rasmussen has not shown that the activities of Nissan North America can be imputed to Nissan Japan. Without the attribution of Nissan North America's activities in Wisconsin to Nissan Japan, Rasmussen has provided no basis to demonstrate the "substantial and not isolated activities" within Wisconsin that Wis. Stat. § 801.05(1)(d) requires for general personal jurisdiction over Nissan Japan. Accordingly, we conclude that Nissan Japan was properly dismissed for lack of personal jurisdiction.
¶ 45 Rasmussen cites Huck v. Chicago, St. Paul, Minneapolis & Omaha Railway Co., 4 Wis.2d 132, 90 N.W.2d 154 (1958) and Lau v. Chicago & North Western Railway Co., 14 Wis.2d 329, 111 N.W.2d 158 (1961), as decisions that support his position. Neither case is helpful to Rasmussen's cause.
¶ 46 In Huck, the issue was whether Wisconsin had jurisdiction over a nonresident defendant under the "doing business" general personal jurisdiction statute in place at the time.
¶ 47 Similarly, in Lau, we concluded that under the same statute at issue in Huck, there was general personal jurisdiction over a Missouri corporation based on the solicitation activities of its employees in
¶ 48 Rasmussen also points us to Clement. In Clement, we held that Wisconsin had general personal jurisdiction over the United Cerebral Palsy Association (United Cerebral Palsy), a New York non-profit corporation. The plaintiff brought a breach of employment contract claim against United Cerebral Palsy and United Cerebral Palsy of Southeastern Wisconsin, Inc. (Wisconsin Cerebral Palsy), a Wisconsin non-profit, when Wisconsin Cerebral Palsy found itself without adequate funds to pay plaintiff's salary. Clement, 87 Wis.2d at 330, 274 N.W.2d 688. Prior to the contract dispute, United Cerebral Palsy loaned Wisconsin Cerebral Palsy $13,000 on the condition that a controlling number of United Cerebral Palsy representatives would be placed on the Wisconsin Cerebral Palsy board of directors. Id. at 329, 274 N.W.2d 688. Consequently, our conclusion that there was general personal jurisdiction over United Cerebral Palsy was based in large part on the amount of control the circuit court found that the United Cerebral Palsy had over Wisconsin Cerebral Palsy. Id. at 336, 274 N.W.2d 688. For example, the trial court found that United Cerebral Palsy used its controlling vote on the board to overrule previous decisions made by Wisconsin Cerebral Palsy. Id. at 337, 274 N.W.2d 688.
¶ 49 Control sufficient to cause a court to disregard separate corporate identities is the sine qua non of the alter-ego theory for piercing the corporate veil.
¶ 50 We are not persuaded that the decisions Rasmussen cited should lead us to the conclusion he seeks. Accordingly, we conclude that Rasmussen has provided no factual or legal predicates for disregarding the separate corporate identities of Nissan Japan and Nissan North America. Therefore, Nissan Japan is not subject to general personal jurisdiction based on the substantial and not isolated activities of Nissan North America.
¶ 51 We conclude that even assuming arguendo that Nissan North America were the agent of Nissan Japan, absent control by Nissan Japan sufficient to cause us to disregard the separate corporate identities of Nissan Japan and Nissan
¶ 52 Because we conclude that the statutory requirements for general personal jurisdiction have not been met, we need not discuss whether exercising general personal jurisdiction over Nissan Japan comports with due process. Accordingly, we affirm the decision of the court of appeals.
The decision of the court of appeals is affirmed.
SHIRLEY S. ABRAHAMSON, C.J. (concurring).
¶ 53 General personal jurisdiction over a parent corporation "is an important and controversial area that lies at the intersection of civil procedure and corporate law."
¶ 54 I write separately to put the issue of general personal jurisdiction over a parent corporation in context, to explore the complicated nature of the issue presented, and to raise concern about the majority opinion's references to "agency."
¶ 55 The issue presented is the circuit court's general personal jurisdiction over a parent corporation for the continuous and substantial acts of its wholly owned subsidiary corporation in Wisconsin.
¶ 56 The instant case raises a question of jurisdiction over the parent corporation, not the liability of the parent for the conduct of the subsidiary. In other words, the case does not concern substantive rights against the parent corporation.
¶ 57 To establish that a Wisconsin circuit court has general personal jurisdiction over a defendant, including a parent corporation, two criteria must be met: jurisdiction must be authorized by the Wisconsin long-arm statute
¶ 58 The essence of the analysis of general personal jurisdiction over a corporation is whether the corporation has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'"
¶ 59 In the present case, there is no dispute that general personal jurisdiction lies over Nissan Japan's wholly owned subsidiary corporation, Nissan North America; Nissan North America has substantial, systematic, and continuous contacts in Wisconsin. It is further undisputed that the parent corporation, Nissan Japan, does not in and of itself have minimum contacts in Wisconsin for a Wisconsin court to invoke general personal jurisdiction over it. For general personal jurisdiction over the parent, a court's focus is on the activities of the parent in relation to the subsidiary so that the actions of the subsidiary in the forum can be understood as constituting the parent's presence in the forum. A court examines whether the parent's contacts establish general personal jurisdiction over the parent under the pertinent general personal jurisdictional principles (a long-arm statute and constitutional principles of fairness).
¶ 60 The issue of a trial court's general personal jurisdiction over a parent corporation on the basis of the conduct of a subsidiary has been and continues to be the subject of numerous cases in federal and state courts at least since 1925, when the United States Supreme Court decided Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634 (1925).
¶ 61 In Cannon, a complainant attempted to establish jurisdiction in North Carolina over a Maine corporation on the basis of the activities of a wholly owned subsidiary corporation in North Carolina. Justice Brandeis, writing a brief, four-page opinion for the United States Supreme Court, took a formalistic approach, concluding that the North Carolina court could not assert jurisdiction as long as the subsidiary corporation had remained a "distinct corporate entity. . . . The corporate separation, though perhaps merely formal, was real."
¶ 62 The case law (as well as academic commentary) is not consistent in the interpretation or application of Cannon. Some cases refuse to attribute the activities of the subsidiary corporation to a parent corporation as long as the corporation has followed the formal requirements mandated by state law.
¶ 63 Still other cases have questioned the continued validity of the Cannon case after International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and view International Shoe as altering or eroding the jurisdictional test of Cannon. Some of these cases conclude that the only due process limitations on the exercise of state court jurisdiction are the minimum contacts with the state and fairness standards of International Shoe.
¶ 64 Regardless of whether a court uses the Cannon or International Shoe approach, an analysis of general personal jurisdiction over a parent corporation begins with the deeply rooted principle of law that a corporation is a separate juridical entity. A corporation is a legal entity distinct from its shareholders and employees. Corporations are legal fictions, granting limited liability to the owners of the corporation. Although a legal fiction, a corporation is also a legal fact. Thus, ordinarily a shareholder, including a parent corporation as a shareholder, is not subject to the jurisdiction of a court on the basis of the activities of the corporation. Jurisdiction over a wholly owned subsidiary does not automatically establish jurisdiction over the parent corporation in any forum in which the subsidiary has continuous and substantial contacts.
¶ 65 Courts and commentators (as well as the parties and the amici in the present case, and the majority opinion) have articulated and purport to apply numerous tests to impute jurisdiction over the parent corporation based upon the acts of the subsidiary: the subsidiary is the parent's alter ego,
¶ 66 Several of these "tests" are borrowed from substantive fields of law such as contract and tort liability. The meaning of these tests in substantive law cases might be different from the meaning of these tests in general personal jurisdiction cases.
¶ 67 Thus, the circuit court and the majority opinion tread in murky waters when they use indeterminate substantive legal tests, such as piercing the corporate veil, to determine whether general personal jurisdiction lies. Tying the jurisdictional test to a substantive legal test such as piercing the corporate veil seems "to allow consideration of a wide and freewheeling variety of veil-piercing factors for jurisdictional purposes, divorced from any meaningful appraisal of the defendant's conduct in relation to the litigation and the forum."
¶ 68 Using an analysis based upon the extent of control to determine whether the parent company has sufficient contacts with the forum state (through the control of the subsidiaries actions in the state), as opposed to determining whether the corporate entities should be merged or the corporate veil pierced, moors the jurisdictional analysis to jurisdictional principles and avoids the potentially confusing interplay of using a substantive legal test for jurisdictional analyses.
¶ 69 Although the various "tests," often borrowed from the substantive law, at base may function to determine the extent of control of the parent, what must not be lost in using these "tests" for jurisdictional purposes is that they are being applied to determine whether jurisdictional principles (minimum contacts, fair play, and substantial justice) are met, not whether substantive law principles are met. The majority opinion relies on the tests developed in substantive law cases and does not acknowledge that the tests for substantive and jurisdictional law are not necessarily one and the same.
¶ 70 Furthermore, the majority opinion relies on tests, such as "piercing the corporate veil," that are considered worn and meaningless epithets and metaphors.
Berkey v. Third Ave. Ry. Co., 84, 155 N.E. 58, 61 (1926) (a substantive tort-liability case).
¶ 71 The rationale for the exercise of jurisdiction over the parent corporation, regardless of the name given the test, is that the parent exercises "such domination and control over its subsidiary `that they do not in reality constitute separate and distinct corporate entities but are one and the same corporation for purposes of jurisdiction.'"
¶ 72 Evidence of parental control over the day-to-day operations of the subsidiary's contacts in the forum would rightly be considered a relevant fact in determining whether the parent corporation has sufficient minimum contacts with the forum. If a parent controls the acts of a subsidiary in the state, then the parent ostensibly acts in the state, and the state has an interest in exercising jurisdiction over the parent corporation.
¶ 73 In other words, when the parent corporation's control over the subsidiary in the forum state is such that the entities should be treated as one and the same for purposes of exercising general personal jurisdiction over the parent, the subsidiary's forum contacts are treated as the parent's forum contacts. The Restatement (Second) of Conflicts of Laws states the rule as follows:
Restatement (Second) of Conflicts of Laws § 52, cmt. b (1971).
¶ 74 I write to stress that no one has formulated a mechanical rule that furnishes a certain jurisdictional test. "Because every corporate relationship may differ significantly from every other corporate relationship, generalizations about the characteristics that will or will not indicate the existence of the requisite lack of separateness or the existence of sufficient control are almost impossible to draw."
¶ 75 To disregard corporate separateness and assert general personal jurisdiction over the parent corporation on the basis of the activities of the subsidiary in the forum, all that can be stated is that a court must closely examine the nature and character of the relationship between the parent and subsidiary corporations, the nature of the forum contacts of the subsidiary, and the degree of control exercised by the parent over the subsidiary in relation to those forum contacts.
¶ 76 This analysis, in contrast with the use of the various substantive legal "tests" often used by the courts, begins and ends with the appropriate question: Does the extent and continuity of what the parent corporation has done in the forum state make it reasonable to bring that parent corporation before a court in the forum?
¶ 77 The circuit court in the present case discussed numerous tests and theories, recognizing numerous approaches and expressing
¶ 78 After examining and applying various approaches, the circuit court analyzed the parent corporation's control over the subsidiary in the present case. Although using the language of "piercing the corporate veil," the circuit court concluded that the facts do not demonstrate pervasive, day-to-day, or dominating control by Nissan Japan over the subsidiary in Wisconsin. The circuit court opined that "there has clearly been a failure to demonstrate the corporate veil ought to be pierced or that on any other theory, jurisdiction over Nissan Japan could be obtained because the subsidiary was simply a tool or an extension of the parent." The record supports the circuit court's findings of fact about Nissan Japan's lack of pervasive control over the subsidiary in Wisconsin. I therefore concur in the mandate.
¶ 79 I should be able to end this concurrence at this point. I cannot do so, however, because I have not yet analyzed the point of dispute between the parties in this court and their main arguments.
¶ 80 The parties debate the significance of an agency relationship between a parent and subsidiary corporation in determining general personal jurisdiction over the parent corporation.
¶ 81 The plaintiff argues that the subsidiary in the present case is the agent of the parent corporation and that therefore the circuit court has jurisdiction over the parent corporation based on the Wisconsin contacts of the subsidiary corporation. The plaintiff's assertion, while not stated as such, at base suggests that all of the wholly owned subsidiary's contacts in Wisconsin are in furtherance of the agency relationship between the subsidiary and the parent corporation in the present case, and so all Wisconsin contacts of the subsidiary are attributable to the parent corporation.
¶ 82 The defendant parent corporation, Nissan Japan, argues that the forum contacts of a subsidiary cannot be imputed to a parent corporation based solely on the existence of a purported principal-agent relationship between a parent corporation and a wholly owned subsidiary.
¶ 83 Thus the parties debate whether an agency relationship between the two corporations will give the forum general personal jurisdiction over the parent corporation. The majority addresses the parties' dispute by "assuming arguendo that Nissan North America were the agent of Nissan Japan." Majority op., ¶ 2.
¶ 84 To address the parties' dispute, I have to begin by explaining that the word "agent" can have more than one legal meaning; the word is not self-explanatory.
¶ 85 A corporation can act only through another, either through an individual or through another corporation (which in turn acts through an individual or a corporation). Under general legal principles, a corporate subsidiary, even a wholly owned subsidiary, is not automatically an agent of a parent corporation.
¶ 86 Agency hinges on a principal's right to control the actions of the agent.
¶ 87 In sum, I write separately to highlight that the analysis for imputing the contacts of a wholly owned subsidiary to a parent corporation for purposes of general personal jurisdiction is not necessarily the same as the analysis for a corporate parent's substantive liability for the acts of its wholly owned subsidiary.
¶ 88 The majority opinion recognizes the distinction between jurisdiction and substantive liability. But in discussing jurisdictional concepts, the majority opinion references principles that are applicable to substantive analyses without making a distinction in applying those principles to the jurisdictional analysis. These references in the majority opinion are, in my opinion, potentially confusing. The analysis of general personal jurisdiction and the analysis of substantive liability in situations involving a wholly owned subsidiary and its parent should not be confused as being one and the same.
¶ 90 For the reasons set forth, I write separately.
Nissan Japan asserts there is no agency relationship and points primarily to Article 4 of the "Sole Distributor Agreement" between Nissan Japan and Nissan North America. Article 4 of that agreement explicitly states that Nissan North America is not the agent of Nissan Japan. While "[t]he label the parties attach to their relationship is informative [it is] not dispositive." Kerl, 273 Wis.2d 106, ¶ 44, 682 N.W.2d 328.
Phillip I. Blumberg, The Law of Corporate Groups: Procedural Problems in the Law of Parent and Subsidiary Corporations (1983 & Supp.2000), addresses the law of parent and subsidiary corporations in the area of procedure; concern with substantive liability and limited liability is rarely involved.
The doctrine of piercing the corporate veil has been analogized to lightning: "rare, severe, and unprincipled." Frank H. Easterbrook & Daniel R. Fischel, Limited Liability and the Corporation, 52 U. Chi. L.Rev. 89, 89 (1985).
Piercing the corporate veil "has been derisively called many things: `unprincipled,' `defy[ing] any attempt at rational explanation,' `not entirely comprehensible,' `dysfunctional,' and `freakish[].'" Hoffman, supra note 9, at 1075 (internal citations omitted).
Despite an agency relationship, a principal and agent retain separate legal personalities. Restatement (Third) of Agency § 1.01 cmt. c, at 20 (2006).
