The Nevada Supreme Court has determined that the state could not exercise jurisdiction over German companies named as defendants in litigation arising out of allegedly faulty plumbing parts sold by a U.S. company before it was purchased and its liabilities assumed by U.S.-based subsidiaries of the German companies. Viega GmbH v. 8th Jud. Dist. Ct., No. 59976 (Nev., decided May 29, 2014). So ruling, the court issued the writ of prohibition requested by the German defendants to preclude the district court from allowing the case to proceed against them.
According to the court, the German companies were not subject to general jurisdiction because neither they nor their U.S.-based subsidiary “are incorporated in or hold their principal places of business in Nevada.” As for agency and specific jurisdiction, the court ruled that the relationship between the German and U.S. entities was insufficient to show that the U.S. companies were the German companies’ agents or that the German companies exercised control beyond that typical in a parentsubsidiary relationship. Two concurring jurists would have decided the matter on the basis of the foreign defendants’ contacts with the state, which they deemed insufficient for specific jurisdiction. They argued that the majority erred by resorting to a discredited “agency” test.