COA: State's Alter Ego Allegation Insufficient To Establish Personal Jursidiction

Today in State v. Ridgeway Brands Mfg., LLC the Court of Appeals (COA) rejected the State's effort to establish personal jurisdiction over an Arizona corporation in a suit to collect money arising from obligations under the tobacco Master Settlement Agreement.

The State argued that personal jurisdiction could extend to the defendant Arizona corporation, Trevally, Inc., on the theory that it is an alter ego of the defendant North Carolina company, Ridgeway Brands. But the only supporting allegation in the State's complaint was this: "Defendant Trevally is the alter ego of Defendant Ridgeway Manufacturing." The COA held that this "conclusory allegation in the Second Amended Complaint is insufficient to establish that Trevally is the alter ego of Ridgeway for purposes of determining whether the courts of North Carolina have jurisdiction over Trevally." The COA added that the State "cites no authority for its proposition that if an out-of-state corporation is the alter ego of a North Carolina corporation, then the courts of North Carolina have personal jurisdiction over the out-of-state corporation."