Court Finds Personal Jurisdiction Over a Foreign Parent Regarding Controlled Group Liability for U.S. Subsidiary’s Pension Plan

The Pension Benefit Guaranty Corporation (PBGC) brought suit against Asahi Tec Corporation, a Japanese company, asserting controlled group liability against Asahi for the underfunding of the terminated pension plan maintained by its bankrupt U.S. subsidiary, Metaldyne. Asahi filed a motion to dismiss, asserting that the U.S. Federal District Court for the District of Columbia lacked personal jurisdiction over Asahi. Asahi argued that because it did not commit any acts with respect to the pension plan (with either funding or the termination), and because its sole contact with the United States was its ownership of a U.S. subsidiary, there was no basis for personal jurisdiction.  The court disagreed, noting the PBGC’s claims against Asahi were not based on the pension plan’s termination or underfunding, but were predicated solely on Asahi’s status as a member of the controlled group through its acquisition of Metaldyne. The court denied the motion to dismiss on the grounds that, notwithstanding the absence of any affirmative conduct by Asahi with respect to the U.S. subsidiary’s pension plan, personal jurisdiction for the purpose of determining liability under ERISA attached once Asahi became a member of the Metaldyne controlled group. Pension Benefit Guaranty Corporation v. Asahi Tec Corporation, No. 10-1936 (ABJ) (D.D.C. March 14, 2012).