This opinions will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).






Colie Gorton, Individually and as the Parent

and Natural Guardian of Jayson Gorton, a Minor,


Kristen Karen Nordlund, an Individual,


Dorel Industries, Inc., et al.,
Appellants and Third-Party Plaintiffs,



Ridgeview Medical Center, et al.,

Respondents and Third-Party Defendants.


Filed December 6, 2005


Peterson, Judge


Carver County District Court

File No. CV03730


Daniel A. Rottier (pro hac vice), Habush Habush & Rottier S.C., 150 East Gilman Street, Suite 2000, Madison, WI  53703; and


J. Michael Dady, Erika N. Donner, Dady & Garner, P.A., 4000 IDS Center, 80 South Eighth Street, Minneapolis, MN  55402 (for respondent Colie Gorton)


Steven R. Schwegman, Quinlivan & Hughes, P.A., 400 South First Street, P.O. Box 1008, St. Cloud, MN  56302 (for respondent Kristen Karen Nordlund)

Mark A. Solheim, John M. Bjorkman, Charles A. Gross, Larson King, L.L.P., 2800 Wells Fargo Place, 30 East Seventh Street, St. Paul, MN  55101; and


Robert H. Riley (pro hac vice), Schiff Hardin L.L.P., 6600 Sears Tower, Chicago, IL  60606-6473 (for appellants)


Barry G. Vermeer, Gislason & Hunter, L.L.P., 9900 Bren Road East, Suite 215E, Minnetonka, MN  55343 (for respondent Ridgeview Medical Center)


            Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Wright, Judge.

U N P U B L I S H E D    O P I N I O N


            In this appeal from an order denying their motions to dismiss for lack of personal jurisdiction, appellants Dorel Industries, Inc.[1] and Dorel U.S.A., Inc. assert that when personal jurisdiction is based on imputation of contacts, an actual agency relationship or manifest corporate wrongdoing must be demonstrated and that respondent did not make this showing.  We affirm.


            Jayson Gorton, who weighed less than 40 pounds, was restrained by a Grand Explorer low-shield booster seat when he was injured in a two-vehicle accident while riding in the rear seat of a car being driven by his father.  The booster seat was purchased at a Target store in St. Louis Park, Minnesota

Respondent Colie Gorton (Gorton), individually and as Jayson’s parent and natural guardian, brought this products-liability action against appellant Dorel Industries, Inc. (Dorel), appellant Dorel U.S.A., Inc. (Dorel U.S.A.), Dorel Juvenile Group, Inc. (DJG), and Cosco, Inc.[2], alleging that the Grand Explorer provided inadequate upper-torso and head restraint for children weighing less than 40 pounds, 

Dorel is a Canadian corporation with its principal office in Montreal, Quebec.  In 1988, Dorel acquired Cosco, a company involved in the production of children’s furniture and accessories, and in 2000, Dorel acquired Safety 1st, a company involved in the child-safety segment of the juvenile industry.  In 2001, Cosco and Safety 1st were merged to create DJG, a Massachusetts corporation.  Dorel U.S.A. is a holding company incorporated in Delaware.  Dorel owns 100% of Dorel U.S.A., and Dorel U.S.A. owns 100% of DJG.  The principal offices of both Dorel U.S.A. and DJG are located at 2525 State Street, Columbus, Indiana

            Three brothers, Martin, Jeffrey, and Alan Schwartz, and their relative by marriage, Jeff Segal, have served as Dorel directors since 1987.  Martin Schwartz is Dorel’s president and chief executive officer, Jeffrey Schwartz is Dorel’s chief financial officer, and Alan Schwartz and Jeff Segal are executive vice presidents of Dorel.  Martin and Jeffrey Schwartz are also Dorel U.S.A. officers and the only directors of DJG.  In DJG organizational charts for 2000 and 2001, Martin Schwartz and Pierre Dupuis, the chief operating officer for Dorel, are identified as DJG executive staff.

            Dorel’s 2002 annual report states:

            DOREL INDUSTRIES INC. is a global manufacturer of consumer products.  It specializes in two market segments:  juvenile products and home furnishings.  Dorel’s extensive product offering includes juvenile products such as infant car seats, strollers, high chairs, toddler beds, cribs, infant health and safety aids, play-yards and juvenile accessories . . . .


            Dorel employs approximately 4,500 people in fourteen countries.  Major North American facilities are located in Montreal, Quebec; Cornwall, Ontario; Columbus, Indiana; Wright City, Missouri; Tiffin, Ohio; Dowagiac, Michigan; and Canton, Massachusetts.  The Company’s major divisions in the United States include . . . the Dorel Juvenile Group (DJG USA), which incorporates the Cosco and Safety 1st brand names. 


Dorel’s 2002 annual report also states, “We made a number of key moves this past year.  During the second quarter a new president was named to head our largest division, the Dorel Juvenile Group USA.” 

            Dorel Industries’ goal is to be one of the premier consumer products companies in North America and Europe.  The Company carries out its business in three distinct product areas; Juvenile Products, Ready-to-Assemble (RTA) Furniture and Home Furnishings.  These segments consist of several operating divisions or subsidiaries.  Each is managed independently by a separate group of managers.  Management of the Company coordinates the businesses of each segment and maximizes cross-selling, cross-marketing, procurement and other complementary business opportunities.


            The Juvenile segment operates as the Dorel Juvenile Group (DJG) and comprises DJG USA, DJG Canada and DJG Europe.  The principal brand names of DJG are Cosco and Safety 1st in North America . . . . 


The annual report lists among Dorel’s major operations DJG located at 2525 State Street, Columbus, Indiana

Dorel’s 2002 renewal annual information form states:

            The Juvenile Products Segment manufactures and imports products such as infant car seats, strollers, high chairs, toddler beds, playpens, swings and infant health and safety aids.  These products are marketed under the brand names Cosco and Safety 1st in North America . . . .

            . . . .

            The Juvenile Products Segment accounted for 53% of Dorel’s sales in 2002.  Sales of the Juvenile Products Segment were $528.4 million in 2002, compared to $503.9 million in 2001, representing an increase of 4.9%.  The Juvenile Products Segment operating profit, before restructuring and other one-time charges, was $43.0 million in 2002 compared to $38.3 million in 2001, representing an increase of 12.1%.  The Juvenile Products Segment’s success hinges on successful new product development and Dorel’s commitment to customer service.

            . . . .

            In 2002, Dorel had three major customers (Wal-Mart, K-Mart Corporation (“K-Mart”) and Toys “R” Us) each representing more then 10% of sales.  These three major customers represented an aggregate of 68.5% of total sales in 2002 compared to 66.3% in 2001.

            . . . .

            Dorel’s relationships with Wal-Mart, K-Mart and Toys “R” Us has the additional benefit of providing Dorel with important feedback which it uses to improve its product offerings and to respond rapidly to changing market trends.

            . . . .

            Dorel is the sole owner of all patents and manufacturing licenses for its products. 


Documents filed with the Bartholomew County, Indiana, Recorder’s Office show that in 1990, a mortgage on Cosco property at 2525 State Street in Columbus, Indiana was recorded in favor of an Indianapolis bank and the Royal Bank of Canada, securing an $8 million line of credit in favor of Charleswood Corporation, a Dorel subsidiary.  The mortgage security agreement provides for notices to be sent to both Cosco in Indiana and Dorel Industries in Montreal, to the attention of Martin Schwartz.  An acknowledgement and extension of that mortgage and line of credit was recorded in 1991 and was signed by the President of Charleswood Corporation and by Martin Schwartz of Dorel Industries, as guarantor of the loan secured by the Cosco property.  Another mortgage was recorded against the Columbus, Indiana property securing an $18 million line of credit to Cosco.  The original mortgage and acknowledgements list Dorel as a party to obtain notice and as a guarantor and are signed by either Martin or Jeffery Schwarz. 

Cosco’s former CEO, Nick Costides, who was named CEO of DJG in North America and was responsible for overseeing the integration of Cosco and Safety 1st, testified in a deposition that he left DJG in 2002 due to a disagreement with Martin Schwartz and Pierre Dupuis.  Costides testified that all of the Dorel divisional presidents reported to Dupuis, so Dupuis was Costides’s boss.  Dupuis approved Costides’s budgets, capital spending, and operating plans.  Costides testified that decisions regarding product-liability insurance were made at Dorel’s corporate headquarters in Montreal and that when hiring for high-level positions at DJG, he consulted with Schwartz and Dupuis, explaining that “in any organization, at any level, if an individual is hiring another individual, he is going to have to get the approval of his supervisor to do that.” 

When Costides left DJG, Dupuis assumed the role of interim president of DJG.  Dorel announced the appointment of Bruce Cazenave as president and CEO of DJG effective May 1, 2002.  Terry Emerson, DJG’s products-standards manager, testified in a deposition that Cazenave reported directly to Dupuis. 

A September 2000 Dorel communiqué states:

Dorel Industries, Inc. . . .  today announced it has signed a licensing agreement with Hasbro, Inc. to produce, market and distribute the popular Playskool brand of products, for the juvenile market in the U.S. and Canada.


Dorel’s wholly owned unit, Safety 1st will produce a Playskool product line consisting of feeding, teething, rattles, pacifiers, peg toys, bath accessories, bouncers as well as booster seats. . . . 

. . . .

Dorel Industries, Inc. acquired Safety 1st in June 2000.  Along with its other juvenile entity, Cosco, Inc., Safety 1st is now part of the newly formed Dorel Juvenile group. 


The record contains evidence that Dorel has been involved with issues relating to car-seat warnings and government investigations:  a 1995 letter from D.M. Dance, Occupant Protection Specialist, Road Safety and Motor Vehicle Regulation Directorate, Transport Canada, to David Hall of Dorel regarding Transport Canada’s investigation of the ejection of children in abdominal-shield booster cushions in motor-vehicle accidents, one of which was a Cosco booster cushion; a 1997 letter from Dance to Hall advising Hall that labeling on Cosco booster seats was not in compliance with safety regulations; a fax from Hall to Emerson stating that Hall would fill out forms required by Transport Canada regarding the noncompliance of the Cosco Adventurer booster cushion with safety regulations; a fax from Emerson to Hall about a labeling change on the Canadian units of the Grand Explorer booster seat; and a fax from Emerson to Liz Klaus of Dorel regarding suggested labeling changes for the Grand Explorer and Adventurer car seats.

On April 3, 2001, Dorel announced that it had “agreed to a US $1.75 million settlement with the U.S. Consumer Product Safety Commission (CPSC) to resolve issues relating to delayed reporting of consumers’ complaints involving some of the products manufactured by subsidiaries Cosco Inc. and recently acquired Safety 1st.”  The settlement agreement identifies the parties as the CPSC, Cosco, and Safety 1st and identifies Cosco and Safety 1st as subsidiaries of Dorel U.S.A. and identifies Dorel U.S.A. as a subsidiary of Dorel. 

Dupuis stated in an affidavit:  Dorel maintains a separate corporate existence from both Dorel U.S.A. and DJG, including separate corporate records and the observation of all corporate formalities required by law; Dorel does not control DJG’s day-to-day operational activities, including its designing, manufacturing, marketing, and distributing of child restraints; Dorel does not exercise day-to-day control over DJG’s personnel, accounting, or management operations; Dorel does not manufacture, design, advertise, market, package, sell, or distribute child restraints in Minnesota; Dorel does not operate any facilities that manufacture child restraints and does not employ engineers or designers who design or manufacture child restraints; and Dorel does not employ marketing or sales personnel for the purpose of marketing or distributing child restraints to retailers or the public in the United States. 

Cazenave stated in an affidavit that Dorel U.S.A. maintains separate corporate records from DJG and observes all corporate formalities independent from DJG. 

Dorel and Dorel U.S.A. filed separate motions to dismiss for lack of personal jurisdiction.  Following a hearing, the district court denied the motions.  This appeal followed.


            Whether personal jurisdiction exists is a question of law which we review de novo.  Once jurisdiction has been challenged by the defendant, the burden is on the plaintiff to prove that sufficient contacts exist with the forum state.  At the pretrial stage, however, the plaintiff’s allegations and supporting evidence are to be taken as true.


Juelich v. Yamazaki Mazak Optonics Corp., 682 N.W.2d 565, 569-70 (Minn. 2004) (citations omitted).  Although the plaintiff bears the ultimate burden of proof, it is not necessary to prove jurisdiction by a preponderance of the evidence until trial or until the court holds an evidentiary hearing.  Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003).  “To defeat a motion to dismiss for lack of personal jurisdiction, the nonmoving party need only make a prima facie showing of jurisdiction.”  Id.  In doubtful cases, the court should resolve the jurisdictional question in favor of retaining jurisdiction.  Hardrives, Inc. v. City of LaCrosse, 307 Minn. 290, 296, 240 N.W.2d 814, 818 (1976).

Under Minnesota’s long-arm statute, a Minnesota court may exercise personal jurisdiction over a foreign corporation as if it were a domestic corporation if, in person or through an agent, the foreign corporation transacts any business within Minnesota.  Minn. Stat. § 543.19, subd. 1(b) (2004).  The supreme court “has repeatedly held that the legislature designed the long-arm statute to extend the personal jurisdiction of Minnesota courts as far as the Due Process Clause of the federal constitution allows.”  Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 410 (Minn. 1992).  Consequently, “[i]f the personal jurisdiction requirements of the federal constitution are met, the requirements of the long-arm statute will necessarily be met also.  Thus, when analyzing most personal jurisdiction questions, Minnesota courts may simply apply the federal case law.”  Id. at 411. 

With respect to personal jurisdiction over a nonresident parent corporation, the United States District Court for the District of Minnesota has explained that a Minnesota “court may exercise personal jurisdiction over a nonresident defendant if there exist ‘minimum contacts’ between the defendant and the state of Minnesota.”  Scott v. Mego Int’l, Inc., 519 F. Supp. 1118, 1125 (D. Minn. 1981) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S. Ct. 559, 561 (1980)).  “The nonresident defendant’s contacts with the state must be such that maintenance of the suit in this [state] does not offend ‘traditional notions of fair play and substantial justice.’”  Id. (quoting Int’l Shoe Co. v. Wash., 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)).

A nonresident parent corporation may subject itself to jurisdiction in a state by virtue of the activities of its subsidiary company in that state.  In order for the parent company to subject itself to jurisdiction by virtue of its subsidiary’s activities, the companies must be organized and operated so that the one corporation is an instrumentality or adjunct of the other corporation.


Id. at 1125-26 (citations omitted).

            Citing Scott, the Minnesota District Court concluded that it has personal jurisdiction over Dorel and Dorel U.S.A. because both corporations exercise substantial control over the activities of DJG.  The circumstances in Scott were as follows:

            Defendant Mego International, Inc. [the parent corporation] conducts business through its wholly-owned subsidiaries which are closely interrelated.  Mego International maintains offices at the same location as defendant Mego [the subsidiary corporation].  Both of the directors of Mego are also directors of Mego International.  A number of the same people are officers of both corporations.  Mego International and its subsidiaries issue consolidated summaries of operations, financial statements, statements of income, statements of changes in financial position, and statements of shareholders’ equity.  Mego International and the domestic subsidiaries file consolidated federal income tax returns, and Mego International guarantees the credit facility of its domestic subsidiaries and funds their pension plans.


            Mego International holds itself out to the public as having substantial control over its subsidiaries, including Mego, and its annual report and other financial documents reveal that it does, in fact, have such control.  The parent-subsidiary relationship appears to be a convenient means for Mego International to organize its domestic and international business.  The Mego International prospectus indicates that Mego International was incorporated “for the purpose of continuing in one venture the business and management of Mego Corp., a New York corporation, and Lion Rock Trading Co., Limited, a Hong Kong corporation [and also a wholly owned subsidiary of Mego International].


Id. at 1126.

            Scott is consistent with the policy of asserting personal jurisdiction to the full extent of federal due process and is also consistent with the analysis applied by this court in Wicken v. Morris, 510 N.W.2d 246, 249 (Minn. App. 1994), rev’d on other grounds, 527 N.W.2d 95 (Minn. 1995).  In Wicken, this court stated:

In International Shoe, the United States Supreme Court dispensed with the notion of presence within a state as a test for personal jurisdiction; instead, the Court adopted a flexible “doing business” standard to determine whether a party’s contacts with a state satisfy due process requirements.  Before International Shoe, the Supreme Court had indicated in Cannon Mfg. v. Cudahy Packing Co. that jurisdiction could not be exercised over a nonresident parent corporation with a forum state subsidiary when the parent and subsidiary had separate existences. 

            The Cannon rule had validity when the focus was on the presence of a business in a state.  With the advent of International Shoe and a focus on minimum contacts, however, the justification for the Cannon rule lost support.  Under International Shoe, it makes sense to go beyond corporate form to consider the nonresident parent corporation’s contacts to determine whether due process requirements are satisfied.


510 N.W.2d at 249 (citations omitted).

            Appellants argue that Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S. Ct. 1473 (1984), casts doubt on Scott.  In Keeton, a libel suit brought in New Hampshire against Hustler Magazine, the publisher, editor, and owner of the magazine, and the magazine’s holding company, the Supreme Court noted that jurisdiction over a parent corporation does not automatically establish jurisdiction over a wholly owned subsidiary and that each defendant’s contacts with the forum state must be assessed individually.  465 U.S. at 781 n.13, 104 S. Ct. at 1482 n.13.  But the Supreme Court further noted in Keeton that “[b]ecause the Court of Appeals concluded that jurisdiction could not be had even against Hustler Magazine, Inc., it did not inquire into the propriety of jurisdiction over the other defendants.  Such inquiry is, of course, open upon remand.”  Id.  This comment, in its entirety, simply recognizes that finding jurisdiction against a subsidiary corporation does not automatically result in jurisdiction over the parent corporation and that each corporation’s contacts with the forum state must be assessed to determine personal jurisdiction, which is what occurred in Scott

            Furthermore, in Keeton, the Supreme Court explicitly recognized that New Hampshire, like Minnesota, “has adopted a ‘long-arm’ statute authorizing service of process on nonresident corporations whenever permitted by the Due Process Clause” 465 U.S. at 774, 104 S. Ct. 1478, and in analyzing personal jurisdiction, the Supreme Court applied due-process principles, rather than rules of corporate law.

            We agree with the district court that respondent has made a prima facie showing that Dorel and Dorel U.S.A. have sufficient minimum contacts with Minnesota so that exercising personal jurisdiction over them in a Minnesota court does not offend traditional notions of fair play and substantial justice.  There is no dispute that DJG transacts business in Minnesota.  The record indicates that DJG’s directors are also Dorel directors and officers of Dorel U.S.A. and that the principal offices of Dorel U.S.A. and DJG are located at the same address.  More significantly, Dorel describes DJG as one of its major divisions in the United States and acknowledges that it coordinates the businesses of each of its business segments, which each include several operating divisions.  Dorel also is the sole owner of the patents and manufacturing licenses for its products, and it has been directly involved in regulatory matters that involve child booster seats and in decisions regarding products-liability insurance.  Also, DJG’s former CEO testified that he reported to Dorel’s chief operating officer, who approved budgets, capital spending, and operating plans, and that when hiring for high-level positions at DJG, he consulted with both Dorel’s chief executive officer and its chief operating officer.  Finally, Dorel mortgaged Cosco property to secure a line of credit for a separate Dorel subsidiary.

            When viewed in their entirety, these activities, like the activities of the corporations in Scott, indicate that although Dorel, Dorel U.S.A., and DJG are separate corporations, their business operations are interrelated, and the actual production and distribution of child booster seats is accomplished through these interrelated business operations.  In light of the relationships among the corporations, it does not offend traditional notions of fair play and substantial justice for a Minnesota court to exercise personal jurisdiction over Dorel and Dorel U.S.A. in an action arising out of the sale of a booster seat in Minnesota.


[1] Appellants note in their brief that in the district court, Dorel Industries Inc. was erroneously identified as Dorel Industries, Inc.  Appellants have not sought leave of the appellate court to have this error corrected.  See Minn. R. Civ. P. 60.01  (during pendency of appeal, errors in record arising from oversight or omission may be corrected with leave of appellate court).

[2] Gorton also sued the driver of the other car, Kristen Karen Nordlund, for negligence.  Appellants and DJG filed a third-party complaint against Ridgeview Medical Center, Dr. Laurie Drill-Mellum, and Don Pohl, P.A., alleging that they committed medical malpractice in treating Jayson.