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Court Finds Personal Jurisdiction Over a Foreign Parent Regarding Controlled Group Liability for U.S. Subsidiary?ÇÖs 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.?á The court disagreed, noting the PBGC?ÇÖs claims against Asahi were not based on the pension plan?ÇÖs termination or underfunding, but were predicated solely on Asahi?ÇÖs 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?ÇÖs 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).

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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May 2012