39) Because of the large amount of revenue DCAG earns in the United States through MBUSA, the Ninth Circuit held that MBUSA's services satisfied the sufficient-importance test--that is, even if DCAG replaced MBUSA with a contractor, that contractor would still be considered a representative for purposes of the test.
43) Highlighting the General Distributor's Agreement between DCAG and MBUSA, the court held that it was evident that DCAG reserved the right to exercise control over nearly every aspect of MBUSA's operations.
Furthermore, the Ninth Circuit properly concluded that MBUSA's services are sufficiently important to DCAG because DCAG could not afford to abandon the United States market.
Plaintiffs had previously initiated service attempts upon DCAG through German courts but service was halted to determine if it would violate Germany's sovereignty rights.
at *1 (seeking personal jurisdiction over DCAG for acts occurring outside United States).
DCAG later withdrew its challenge to service of process, but continued to assert that the court must dismiss the Plaintiffs' complaint for lack of personal jurisdiction.
Plaintiffs also alleged that DCAG itself had sufficient contacts to warrant general jurisdiction, but this claim was dismissed and not at issue in the subsequent hearing or on appeal.
The question is whether MBUSA's extensive contacts with California warrant the exercise of general jurisdiction over DCAG.
The Court states that the relevant test here is the two-pronged "agency test" and that--as evidenced by the General Distributor Agreement, which the Court says "governs" the relationship between parent and subsidiary--Plaintiffs have shown that (1) the subsidiary "performs services that are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services"  and (2) DCAG "has the right to control nearly all aspects of MBUSA's operations.
Furthermore, although DCAG
articulates some specific policies for MBUSA, the Agreement was terminable, MBUSA goals are negotiated by both parties, and title to the cars passes in Germany.
My crew in the back signaled they were ready to go, and DCAG gave me a thumbs up for takeoff.
Once we were climbing safely, I asked DCAG what he thought the call was about.