This article originally appeared in Corporate Counsel, an affiliate of the Litigation Daily.
When can a foreign corporation be held liable for alleged harm caused by a product that was totally handled by a U.S. subsidiary?
That’s the question that the Danish company Novo Nordisk A/S is asking the U.S. Supreme Court to resolve. On September 16, the Washington Legal Foundation and the International Association of Defense Counsel joined the company’s cause in an amicus brief.
“Plaintiffs’ attorneys often sue both an American company and its foreign parent corporation [because] they realize that doing so increases settlement pressure,” said WLF chief counsel Richard Samp in a statement.
Samp, lead counsel on the brief, continued, “Suing both corporations increases both the money and the executive man-hours that the defendant must devote to the lawsuit—thereby increasing the likelihood that the defendant will feel forced to settle the lawsuit without regard to its underlying merits. Such gamesmanship is not consistent with traditional notions of fair play and substantial justice.”
The ruling will be important to general counsel because it could provide guidance on what a company can do to keep the foreign parent from being dragged into U.S. courts.
The case involves an Oregon woman who developed breast cancer after taking a Novo Nordisk hormone-therapy medicine made in Denmark. She sued both the U.S. company and its foreign parent in a state court in Oregon, which granted jurisdiction over both companies.
It shouldn’t have, the parent company argues. Novo Nordisk says it merely ships the drug to a central provider in Indiana and “that concludes [its] involvement.” The U.S.
