Helzer v. F Joseph Lamb Co.
429 N.W.2d 835, 171 Mich. App. 6 (1988)
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Rule of Law:
A foreign corporation that carries on a continuous and systematic part of its general business within Michigan is subject to the state's general personal jurisdiction. However, the corporate veil of a foreign subsidiary will not be pierced merely to allow a plaintiff to avoid the damages limitations of the foreign jurisdiction, as this does not constitute a 'clearly overriding public policy'.
Facts:
- Lamb Technicon Corp. is a Michigan corporation, and F. Jos. Lamb Co., Ltd. is its wholly-owned Canadian subsidiary.
- The two corporations shared several board members and officers, were connected by a computer system, and used a daily courier to transport parts and mail between their Michigan and Canadian offices.
- Approximately ten percent of the Canadian subsidiary's sales were to its U.S. parent corporation.
- David P. Gammon, an employee of the Canadian subsidiary F. Jos. Lamb Co., Ltd., lived in Canada.
- On December 18, 1984, while driving a van leased by his employer in Windsor, Ontario, Canada, Gammon struck Doris Helzer, a Michigan resident, as she was crossing a street.
Procedural Posture:
- Doris Helzer (plaintiff) filed an automobile negligence action in a Michigan trial court against David P. Gammon, F. Jos. Lamb Co., Ltd., and Lamb Technicon Corporation (defendants).
- The trial court granted summary disposition to defendants F. Jos. Lamb Co., Ltd., and David P. Gammon, dismissing them for lack of personal jurisdiction.
- The trial court subsequently granted summary disposition to defendant Lamb Technicon Corporation, ruling there was no genuine issue of fact to support piercing the corporate veil.
- Plaintiffs appealed both summary disposition orders to the Michigan Court of Appeals, an intermediate appellate court.
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Issue:
Does a Michigan court have general personal jurisdiction over a Canadian subsidiary corporation that regularly buys and sells parts in Michigan, sends a daily courier into the state, and maintains a direct computer link with its Michigan-based parent company, for a tort that occurred in Canada?
Opinions:
Majority - Kelly, J.
Yes. A Michigan court has general personal jurisdiction over the Canadian corporation because its activities in Michigan were continuous and systematic, satisfying both state statutory requirements and constitutional due process. The court found that F. Jos. Lamb Co., Ltd.'s regular buying and selling of parts in Michigan, its use of a daily courier to the state, and its direct computer link with its parent company constituted 'carrying on of a continuous and systematic part of its general business' under Michigan's long-arm statute. These contacts are sufficient to satisfy the 'minimum contacts' test from International Shoe, making jurisdiction fair and reasonable. However, the court refused to pierce the corporate veil to hold the parent company, Lamb Technicon, liable. It held that the plaintiffs' desire to avoid Canadian damage limitations was not a 'clearly overriding public policy' sufficient to disregard the separate corporate entities. The court also found no personal jurisdiction over the individual driver, David Gammon, because the tort occurred in Canada and was not connected to his business activities in Michigan.
Dissenting - Mackenzie, P.J.
Yes. While the court has general personal jurisdiction over F. Jos. Lamb Co., Ltd., it should decline to exercise it and dismiss the case under the doctrine of forum non conveniens. The dissent agrees with the majority that the Canadian company's contacts are sufficient for jurisdiction. However, it argues that the trial court reached the right result (dismissal) for the wrong reason. The case has a very slight connection to Michigan, as the tort, the defendant driver, the defendant corporation, and many witnesses are all Canadian. Citing precedent, the dissent argues that Canadian law would apply regardless of the forum under the principle of lex loci delicti, diminishing the plaintiff's interest in a Michigan forum. Therefore, the case is more appropriately heard in Canada.
Analysis:
This case clarifies the standard for establishing general personal jurisdiction over a foreign subsidiary corporation in Michigan, emphasizing the importance of 'continuous and systematic' business contacts within the state. It firmly establishes that the potential for a lower damage award in a foreign jurisdiction does not, on its own, create a public policy justification for piercing the corporate veil to reach a domestic parent company. The decision reinforces the legal fiction of corporate separateness and limits forum shopping based solely on the favorability of a state's liability laws. The dissent's focus on forum non conveniens highlights the tension between technically proper jurisdiction and the practical considerations of where a case should be litigated.
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