In a ruling that could broaden parent company exposure to suit in West Virginia, the Southern District of West Virginia found that it had personal jurisdiction over the out-of-state parent company of an in-state water company in a putative toxic tort class action arising from the January 2014 chemical release at Freedom Industries, Inc. See Good v. American Water Works Co., 2015 WL 1600761, CV No. 2:14­–01374 (S.D.W. Va. Apr. 9, 2015).  The Court found jurisdiction because Plaintiffs had sufficiently alleged that, notwithstanding any current independence from its subsidiary, the foreign parent corporation had sufficient involvement in the negligent design of a water supply system more than 45 years ago.

Plaintiffs brought state tort claims against both West-Virginia American Water Company (“WV American”) and its parent American Water Works Company Inc. (“American”), alleging damages from negligence in the design and implementation of WV American’s drinking water procurement and treatment system.  Id. at *1.  American moved to dismiss for lack of personal jurisdiction.   

The Court denied the motion.  The Court looked to Plaintiffs’ complaint, which cited a state public service commission order from 1969 and the testimony of an American director during the initial design phase of the 46-year-old water system to allege that American had a close relationship with its West Virginia subsidiary at the time the water facility was negligently designed.  This, the Court held, was sufficient involvement to support personal jurisdiction over American.