Narrowing Personal Jurisdiction and Corporate Veil Piercing: Keane v. Expeditors

Introduction

In Keane v. Expeditors International of Washington, Inc., the First Circuit addressed two intertwined issues: (1) whether a Massachusetts federal court could exercise personal jurisdiction over a Hong Kong subsidiary, and (2) whether a parent company could be held liable for wrongful termination carried out by its subsidiary. David Keane, a long‐time employee of Expeditors US who relocated to Hong Kong, sued both Expeditors Hong Kong Limited (“Expeditors HK”) and its parent, Expeditors International of Washington, Inc. (“Expeditors US”), after his employment was terminated abroad. Defendants challenged jurisdiction and venue, and the district court dismissed on personal jurisdiction and forum non conveniens grounds. Keane appealed, and the First Circuit affirmed, adopting somewhat different reasoning.

Summary of the Judgment

The First Circuit held:

No Personal Jurisdiction over Expeditors HK: Keane’s allegations—even if taken as true—failed to show that Expeditors HK’s contacts with Massachusetts were an “important or material element” in proving his claims. Expeditors HK administered employment, benefits, payroll and disciplinary procedures in Hong Kong; it maintained its own books, offices, and corporate formalities.
No Veil‐Piercing to Reach Expeditors US: Keane could not hold Expeditors US liable for actions of its subsidiary without alleging facts to pierce the corporate veil: no evidence of thin capitalization, nonobservance of corporate formalities, or pervasive control by the parent. Common officers and adherence to company‐wide policies were insufficient.
Forum Non Conveniens Unnecessary: Although the district court dismissed some contract claims against Expeditors US on forum non conveniens grounds, the First Circuit affirmed dismissal on independent grounds and declined to reach the forum non conveniens analysis.

Analysis

1. Precedents Cited

Ward v. AlphaCore Pharma LLC (89 F.4th 203): Established the “prima facie” approach for jurisdictional facts and the need to credit only non‐conclusory allegations.
Baskin‐Robbins Franchising LLC v. Alpenrose Dairy (825 F.3d 28): Quoted for drawing facts from pleadings and affidavits.
Ticketmaster‐N.Y., Inc. v. Alioto (26 F.3d 201): Warned against crediting farfetched inferences or conclusory allegations.
Platten v. HG Bermuda Exempted Ltd. (437 F.3d 118): Held that due process requires that forum contacts be an important element in the plaintiff’s claims.
Harlow v. Children’s Hosp. (432 F.3d 50): Defined the materiality standard for jurisdictional contacts.
Bluetarp Fin., Inc. v. Matrix Const. Co. (709 F.3d 72): Reaffirmed de novo review of jurisdictional challenges under prima facie standard.
Scott v. NG U.S. 1, Inc. (881 N.E.2d 1125): Clarified Massachusetts law on piercing the corporate veil—requiring improper use of the subsidiary.
Lipsitt v. Plaud (994 N.E.2d 777) and M.C.K., Inc. (736 N.E.2d 373): Enumerated factors for veil piercing (e.g., capitalization, formalities, control).
Baez v. Baymark Detoxification Servs., Inc. (123 F.4th 62) and DeLia v. Verizon Commc’ns Inc. (656 F.3d 1): Denied parent liability absent control over employment decisions.

2. Legal Reasoning

Personal Jurisdiction: Under the Due Process Clause, a court must find that a defendant’s contacts are “important or material” to the plaintiff’s cause of action. Keane alleged only that Expeditors HK conducted certain disciplinary steps relating to a Hong Kong‐tenured employee. Even if those steps touched Massachusetts (through Keane’s earlier employment), they were not central to proving breach or tortious conduct under his complaint. Accordingly, the asserted contacts were too attenuated.

Veil Piercing / Alter Ego: To hold a parent liable for a subsidiary’s wrongful act, Massachusetts law requires proof that the parent exercised such pervasive control that the subsidiary was its alter ego, and that veil piercing is necessary to prevent fraud or injustice. Keane’s allegations of shared officers and corporate codes applied group‐wide did not meet the multi‐factor test (thin capitalization, formalities, commingling, undue control) laid out in Scott, Lipsitt, and M.C.K., Inc. Without factual allegations on those elements, corporate separateness remains intact.

3. Impact on Future Cases

This decision reinforces a high bar for claiming jurisdiction over foreign subsidiaries in U.S. courts: incidental contacts will not suffice if they are not material to the claims.
It underscores that veil piercing demands specific factual allegations on capitalization, formalities, and direct control—generalized assertions of group policy or shared leadership will fail.
Counsel suing parent corporations for subsidiary employment actions must plead detailed facts demonstrating misuse of the corporate form or prepare to litigate in the subsidiary’s home jurisdiction.

Complex Concepts Simplified

Personal Jurisdiction: The power of a court to hear a case against a defendant based on the defendant’s connections to the place where the court sits.
Prima Facie Standard: A method where courts accept a plaintiff’s non-conclusory allegations as true for purposes of challenging jurisdiction, but do not credit speculation.
Forum Non Conveniens: A doctrine allowing courts to dismiss or transfer cases if another forum is more appropriate for litigation.
Veil Piercing / Alter Ego: A legal doctrine allowing a court to disregard separate corporate entities when one is so controlled by the other that the corporate form is abused.

Conclusion

Keane v. Expeditors clarifies two core principles under First Circuit and Massachusetts law:

A foreign subsidiary’s minimal or indirect contacts with a forum will not establish personal jurisdiction unless those contacts are material to the plaintiff’s claim.
Piercing the corporate veil to reach a parent company requires detailed factual allegations of pervasive control and misuse of corporate form; shared leadership and group policies are insufficient.

This decision will guide litigants in structuring jurisdictional arguments and shaping pleadings when confronting multinational corporate structures.