Jurisdiction Over Nonresident Manufacturer That Used Subsidiary to Distribute Product
In Hicks v. Kawasaki Heavy Industries, 452 F. Supp. 130 (M.D. Pa. 1978), the federal district court concluded that it had jurisdiction over a nonresident manufacturer that had used a subsidiary to distribute its product. the parent company, Kawasaki Heavy Industries, argued that it never made a sale in Pennsylvania, never solicited any business in Pennsylvania, never received a certificate of authority to conduct business in the state, and did not directly ship goods to Pennsylvania.
However, the court found persuasive the fact that Kawasaki Heavy Industries owned 96 percent of the shares of stock of the distributor, Kawasaki Motors Corp, U.S.A., and that at least one person served on the boards of both companies.
The Court stated:
"Most significant is the fact that there are 55 Kawasaki retail dealers in Pennsylvania supplied by the exclusive sales agent.
Although the motorcycles are sold f.o.b. Japan to Kawasaki Motors Corp., U.S.A., it is inconceivable that Kawasaki Heavy Industries, Ltd., is not aware that a significant number of its motorcycles reach Pennsylvania and that this activity would have consequences in the state." 452 F. Supp. at 134.