A California company buys equipment from a U.S. distributor affiliated with an overseas manufacturer. A dispute arises, and the California plaintiff wants to sue the foreign parent, perhaps because it designed the product, controlled the subsidiary, or has the resources to satisfy a judgment. Can the plaintiff bring the parent into a California lawsuit simply because its American subsidiary sells and services products here?
In Fanuc Corp. v. Superior Court (Oct. 9, 2026, E086688), the Fourth District Court of Appeal, Division Two, held that the answer was no on the record before it. The published decision is important for international business disputes because it addresses two theories often invoked to establish jurisdiction over a foreign parent: attribution of a subsidiary’s contacts and specific jurisdiction based on the company’s activities in California.
The underlying case involved an industrial injury, but the jurisdictional analysis is relevant to commercial disputes involving overseas manufacturers, corporate groups, and American affiliates.
The California lawsuit and the Japanese parent company’s challenge
Abraham Bernal was injured while working as a maintenance technician at a Niagara Bottling facility in June 2020. He was troubleshooting a depalletizer and an industrial robot when the depalletizer released a gripper head that struck him. Krones, Inc. manufactured the depalletizer. Fanuc Corporation, a Japanese company referred to in the opinion as Fanuc Japan, manufactured the robot.
Bernal sued several defendants, including Fanuc Japan and its wholly owned U.S. subsidiary, Fanuc America Corporation. Fanuc America was incorporated in Delaware and had its principal place of business in Michigan. It did not contest personal jurisdiction in California. Fanuc Japan did.
Fanuc Japan moved to quash service of summons under Code of Civil Procedure section 418.10(a)(1). Its evidence showed that it was incorporated and headquartered in Japan, was not registered to do business in California, and had no California office, bank account, or owned or leased property. The robot had initially been distributed through a European affiliate.
Bernal pointed to the companies’ extensive relationship. The evidence included overlapping directors, visits by Japanese personnel to the American subsidiary, corporate approval requirements, an importer-distributor relationship, warranty and servicing arrangements, and three Fanuc America service locations in California. The trial court concluded that the subsidiary’s California contacts could support general jurisdiction over the parent on an agency theory. It also referred to evidence suggesting the companies operated as a single enterprise.
The Court of Appeal reversed and directed the trial court to grant Fanuc Japan’s motion to quash.
Why a subsidiary’s California operations did not establish general jurisdiction
California’s long-arm statute, Code of Civil Procedure section 410.10, permits jurisdiction to the constitutional limit. The constitutional inquiry distinguishes general jurisdiction from specific jurisdiction.
General jurisdiction ordinarily permits suit against a corporation on claims unrelated to the forum. Under Daimler AG v. Bauman (2014) 571 U.S. 117, a corporation is generally subject to that broad authority where it is incorporated or has its principal place of business. An exceptional case may justify a different result, but substantial sales and ongoing operations alone do not make every state a corporate home.
Fanuc Japan was incorporated and headquartered in Japan. Its own contacts did not make it at home in California. The plaintiff therefore relied on the American subsidiary’s operations.
The appellate court explained why the agency approach used by the trial court could not overcome Daimler. Even assuming the subsidiary’s contacts were attributable to the parent, Fanuc America itself was incorporated in Delaware and headquartered in Michigan. Its California business did not make it at home here. Attribution of those contacts would not establish general jurisdiction over Fanuc Japan.
The opinion also discussed alter ego. A subsidiary’s contacts may in appropriate circumstances be attributed to its parent under an alter-ego theory. But that possibility did not change the result: even if Fanuc America were treated as Fanuc Japan’s alter ego, Fanuc America’s California contacts were insufficient to establish general jurisdiction. The court did not decide that the companies were, or were not, alter egos for purposes of substantive liability.
This is a distinction worth preserving in litigation. Allegations that a parent controls its subsidiary may matter to liability, discovery, or attribution of contacts. They do not dispense with the separate constitutional requirement that the defendant be subject to personal jurisdiction in the chosen forum.
Specific jurisdiction required a connection to the particular claim
Specific jurisdiction is narrower. A foreign company may be sued in California on a claim that arises out of or relates to its purposeful contacts with the state, provided the exercise of jurisdiction is reasonable.
The plaintiff relied in part on Ford Motor Co. v. Montana Eighth Judicial District Court (2021) 592 U.S. 351. Ford rejected the proposition that specific jurisdiction always requires proof that the defendant’s forum conduct directly caused the particular product’s sale. Ford had systematically marketed, sold, and serviced the very vehicle models involved in the accidents in the forum states.
The record in Fanuc was different. The robot involved was an M-410iB/700. Bernal did not identify California sales, installation, or marketing of that model by Fanuc Japan or Fanuc America. The fact that the employer had purchased other Fanuc robots did not establish a connection between California market activity and the alleged defect in this model.
Nor did the existence of three California service centers fill the gap. Although there was evidence of post-accident servicing, the record did not establish a meaningful pattern of California servicing for that model. The court concluded that the necessary relationship between the claim and California contacts had not been shown.
The appellate court assumed for purposes of analysis, without deciding, that the American subsidiary’s actions could count as purposeful availment by the Japanese parent. It resolved specific jurisdiction on the separate requirement that the claim arise out of or relate to those contacts. The court did not reach whether exercising jurisdiction would otherwise be reasonable.
What Fanuc means for international business litigation
For a California plaintiff, the practical question is often which entity actually contracted, manufactured, marketed, supplied, or serviced the product or service at issue, and where those activities occurred. The parent-subsidiary relationship alone may not establish jurisdiction. Before naming an overseas parent, counsel should investigate the relevant agreements, distribution chain, communications, California-directed marketing, and the activities connected to the specific dispute.
Consider a California importer that contracts with a U.S. subsidiary to purchase industrial machinery. The overseas parent designed the machinery, but the contract and invoices name only the subsidiary. If the importer later sues for breach of contract or defective equipment, the parent may challenge jurisdiction. The answer will depend on the parent’s own California contacts, any properly attributable subsidiary contacts, and the relationship between those contacts and the particular claims. The fact that the parent owns the subsidiary is not enough by itself.
For a foreign company, maintaining separate corporate records and clearly documenting the roles of the parent and subsidiary may help explain the relevant jurisdictional facts. Corporate formalities, however, do not immunize a parent that purposefully conducts claim-related activities in California. A different record could support specific jurisdiction.
The Fanuc court expressly declined to say that Fanuc Japan could never be sued in California in a products-liability action. Its holding was limited to the evidence and claims presented. Nor did the court decide whether the robot was defective, whether any defendant was negligent, or whether alter-ego liability could ultimately be proved.
Where the defendant is based overseas, service under applicable international procedures, forum-selection clauses, contractual consent to jurisdiction, and the possibility of litigating in another jurisdiction may also affect the litigation plan. Those issues were not resolved by Fanuc.
A California lawsuit involving an overseas corporate group requires an early, entity-by-entity jurisdiction analysis. Identifying the right defendant and developing evidence connecting that defendant to California can be as consequential as proving the underlying claim.
Legal Authorities
- Fanuc Corp. v. Superior Court (Oct. 9, 2026, E086688), Cal. Ct. App., 4th Dist., Div. 2, published — official opinion
- Daimler AG v. Bauman (2014) 571 U.S. 117
- Ford Motor Co. v. Montana Eighth Judicial District Court (2021) 592 U.S. 351
- Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523
- Williams v. Yamaha Motor Co. (9th Cir. 2017) 851 F.3d 1015
- L.W. v. Audi AG (2025) 108 Cal.App.5th 95, cert. denied Jan. 20, 2026, No. 25-349 — opinion
- Code of Civil Procedure § 410.10 — official text
- Code of Civil Procedure § 418.10(a)(1) — official text
Related practice areas: Cross-Border Litigation and Foreign Judgment Enforcement · Business and Commercial Litigation