## Facts

- Ralph Earl Roorda sued Volkswagenwerk, A.G. (VWAG), a German automobile manufacturer, alleging a defect in a Volkswagen caused catastrophic injuries when the car overturned.
- The Volkswagen was manufactured in West Germany and initially sold by VWAG to a dealer in West Germany, who sold it to a purchaser there.
- After several later transactions, the vehicle reached the United States; Roorda purchased it in Arizona.
- In 1970, while driving the vehicle in California, Roorda was critically injured, becoming paralyzed from the waist down and losing sight in one eye.
- Roorda later moved from California to South Carolina and remained a South Carolina citizen when he filed this diversity action in the U.S. District Court for the District of South Carolina (Charleston Division) in 1976.
- Roorda also sued Volkswagen of America, Inc. (VWOA), a New Jersey corporation wholly owned by VWAG and the sole importer of VWAG products into the United States.
- Although neither VWAG nor VWOA was registered to do business in South Carolina, VWOA acknowledged substantial South Carolina sales through Volkswagen dealerships operating in the state (millions of dollars), sufficient to establish VWOA’s own presence in South Carolina for jurisdictional purposes.
- The record showed VWOA’s operations were subject to VWAG’s direct and indirect control: the companies shared board members, VWOA operated under VWAG procedures using VWAG forms, and VWOA acted as the channel through which VWAG communicated with American dealers and consumers.
- Service of process on VWAG was made through the South Carolina Secretary of State under the state foreign-corporation service statute and by registered mail to VWAG’s chairman in Wolfsburg, West Germany.
- Roorda later agreed he had no cause of action against VWOA and another related Volkswagen entity; those entities were dismissed, leaving VWAG as the defendant.
- VWAG moved to dismiss for lack of personal jurisdiction, arguing it was not “present” in South Carolina and that Roorda had not established a basis to treat VWOA’s South Carolina activities as VWAG’s contacts.

## Issues

1. Whether VWAG’s contacts with South Carolina were sufficient to make VWAG amenable to suit there, consistent with due process and “traditional notions of fair play and substantial justice.”
2. Whether, for jurisdictional purposes, VWOA’s South Carolina activities could be considered VWAG’s contacts given the relationship and degree of VWAG’s control, despite corporate separateness and without requiring classic veil-piercing.

## Decision

- The court denied VWAG’s motion to dismiss for lack of personal jurisdiction.
- The court concluded VWAG was “present” in South Carolina for jurisdictional purposes because VWAG’s products reached South Carolina through a distribution arrangement carried out by its wholly owned importer operating under VWAG’s direction.
- The court held that asserting jurisdiction over VWAG did not offend due process under International Shoe, even though the accident occurred in California and the vehicle was purchased in Arizona.

## Legal Principles

- A court may exercise personal jurisdiction over a nonresident defendant when the defendant has minimum contacts with the forum such that jurisdiction is consistent with “traditional notions of fair play and substantial justice.” (International Shoe)
- For due process purposes, “presence” can be shown through the defendant’s deliberate, ongoing commercial connections with the forum, not only by physical entry, registration, or a local office.
- A foreign manufacturer that places products into a U.S. distribution channel aimed at serving the forum state, and benefits from substantial in-state sales, can have sufficient forum contacts for jurisdiction.
- A subsidiary-importer’s forum activities may be treated as the foreign parent’s contacts when the subsidiary functions as the parent’s agent or operating arm in the forum market, including where the parent exerts significant operational control and uses the subsidiary as the communication conduit to dealers and consumers.
- The fact that the plaintiff’s injury occurred outside the forum does not defeat jurisdiction if the defendant’s forum contacts are sufficiently continuous and substantial to satisfy due process.

## Conclusion

The district court held that VWAG’s use of its wholly owned U.S. importer—operating under VWAG’s direction—to sell Volkswagen products in South Carolina supplied the minimum contacts needed for jurisdiction, and that bringing VWAG into a South Carolina court was fair under International Shoe even though the purchase and accident occurred in other states.


Roorda v. Volkswagenwerk, A.G., 481 F. Supp. 868 (1979)