Anwar v. Dow Chemical Company et al

Filing 30

ORDER Dismissing Defendant Ramachandran for Lack of Personal Jurisdiction, Directing the Parties to Conduct Limited Jurisdictional Discovery, Directing Supplemental Briefing, and Providing the Parties Notice that Defendant Dow's 19 MOTION to Dismiss Will be Converted into a Motion for Summary Judgment. (Limited Discovery due by 04/25/2016 and Supplemental Briefing due by 5/10/2016) Signed by District Judge Thomas L. Ludington. (Sian, M)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
ROSE ANWAR,
Plaintiff,
v

Case No. 15-cv-12708
Honorable Thomas L. Ludington

THE DOW CHEMICAL COMPANY,
a foreign corporation, et al.,
Defendants.
__________________________________________/
ORDER DISMISSING DEFENDANT RAMACHANDRAN FOR LACK OF PERSONAL
JURISDICTION, DIRECTING THE PARTIES TO CONDUCT LIMITED
JURISDICTIONAL DISCOVERY, DIRECTING SUPPLEMENTAL BRIEFING, AND
PROVIDING THE PARTIES NOTICE THAT DEFENDANT DOW’S MOTION TO
DISMISS WILL BE CONVERTED INTO A MOTION FOR SUMMARY JUDGMENT
Plaintiff Rose Anwar initiated the present suit in this Court on August 3, 2015 against
Defendant The Dow Chemical Company (“Dow”), Defendant MEGlobal International (“MEG
International”) and Defendant Ramesh Ramachandran (“Ramachandran”), alleging that MEG
International and Ramachandran impermissibly terminated her employment because of her
gender, religion, national origin, and marital status. Compl. ECF No. 1. Anwar raises six claims
in her complaint: (1) Sex discrimination in violation of Title VII; (2) Sex discrimination in
violation of the Michigan Elliott-Larsen Civil Rights Act (“ELCRA”); (3) Marital status
discrimination in violation of ELCRA; (4) Breach of an express written agreement; (5) Breach of
an implied contract; and (6) Promissory Estoppel. Id.
On September 21, 2015, Defendants MEG International and Ramachandran filed a
motion to dismiss, arguing that this Court lacked personal jurisdiction over them, that they had
not been properly served, and that the Court should dismiss Anwar’s claims on grounds of forum

non conveniens. ECF No. 16. That same day Defendant Dow filed a motion to dismiss, arguing
that Anwar had failed to state a claim against it and, alternatively, that Anwar’s claims should be
dismissed on grounds of forum non conveniens. For the reasons stated below the claims against
Defendant Ramachandran will be dismissed for lack of personal jurisdiction. The remaining
parties will then be directed to conduct limited discovery regarding the alleged interrelatedness
of the MEGlobal subsidiaries and the identity of the MEG International managers’ employer.
I.
A.
Defendant Dow is a foreign profit corporation with its principal place of business in
Midland, Michigan. Compl. ¶ 2.
Defendant MEG International is a legal entity established under and registered with the
Dubai Airport Freeport regulations in Dubai, United Arab Emirates. Mot. to Dismiss I Ex. A ¶
5. In her complaint, Anwar alleges that Defendant MEG International is a joint venture between
Defendant Dow and Petrochemical Industries Company. Compl.

¶¶ 3-4.

However this

allegation is contradicted by the declaration of Dr. Linda Freisler, chief legal counsel and Board
of Directors member for MEG International. Mot. to Dismiss I Ex. A, Friesler Dec. Dr. Friesler
declares that MEG International is a wholly owned subsidiary of MEGlobal Europe GMBH, a
Swiss entity, which is in turn a wholly owned subsidiary of MEGlobal BV, a Dutch legal entity
located in the Netherlands that has seven other wholly owned subsidiaries. Id. at ¶ 6. Dr.
Friesler further declares that MEGlobal BV is a joint venture that is 50% owned by
Petrochemical Industries Company, a Kuwaiti legal entity, and 50% owned by Dow Europe
Holdings, B.V., a company organized and registered under Dutch law. Id. at ¶ 7.

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Defendant Ramesh Ramachandran is the acting Chief Executive Officer and president of
MEG, and was Anwar’s supervisor at MEG. Id. at ¶ 6. Anwar alleges that Ramachandran was
also employed by Dow, and that Dow controlled MEG through Ramachandran and other
managers, as well as “an interrelation of operations, common management and control of
management, centralized control of human resources and labor relations, and a common
ownership of financial control of Defendant ME Global, Plaintiff’s direct employer.” Id. at ¶¶ 811. Mr. Jared Bierlein, a human resources manager at Defendant Dow, states in his declaration
that Defendant Ramachandran is not in fact an employee of Defendant Dow, but is employed by
DCOMCO, Inc., a subsidiary of Defendant Dow. See Mot. to Dismiss I Ex. D, Bierlein
Dec.Bierlin’s declaration does not explain DCOMCO’s legal or business relationship to Dow or
to MEG International.
B.
Plaintiff Rose Anwar, a United States citizen residing in Dubai, began working as an
Information Technology (“IT”) manager with Defendant MEG International in Dubai on or
around November, 2007. Id. at ¶ 28. In June 2011, Anwar was promoted to Global IT and
Services Leader and Communications Manager. Id. at ¶ 30. Anwar alleges that, following this
promotion, Defendant Ramachandran repeatedly harassed Anwar in an attempt to make her feel
guilty for leaving her young twins at home while she worked. Id. at ¶ 30. Specifically Anwar
alleges that Ramachandran, a Hindu of Indian descent, indicated that Indian females such as
Anwar, a Muslim of Indian descent, should not leave children at home in order to work. Id. at ¶¶
32-33.
Anwar alleges that she received warnings from other Board members that Ramachandran
was “attempting to get rid of her” and that he believed MEG International did not need “highly

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paid female employees.” Id. at ¶¶ 35-39.

Anwar further alleges that Ramachandran had

terminated highly paid female employees in the past and had replaced them with former contacts
from India. Id. at ¶¶ 40-41.
Anwar claims that she was fired after initiating divorce proceedings against her former
husband. According to Anwar, Ramachandran met with Anwar’s former husband prior to the
divorce to discuss the divorce and Anwar’s personal and marital problems. Id. at ¶¶ 43-44. On
June 8, 2014 Anwar attended a divorce proceeding in Dubai, in which she requested a divorce
and her husband verbally threatened to destroy her. Id. at ¶¶ 47-48.

The next day,

Ramachandran terminated Anwar’s employment, claiming that she had breached the company
business code of conduct. Id. at ¶ 49.
Following her termination Anwar brought an action against MEG in Dubai’s courts,
alleging the following: (1) MEG International failed to provide her notice of termination in
violation of the law; (2) MEG International terminated her employment for an arbitrary reason;
and (3) MEG International failed to provide severance pay in violation of the law. See Pl.’s
Resp. to Mot. to Dismiss II 3, ECF No. 25. Anwar does not dispute Defendants’ claim that the
Dubai court awarded Anwar severance compensation after finding that MEG International did
not provide Anwar with sufficient notice of termination. Id. at 7. Anwar claims, however, that
Dubai’s courts provide an insufficient remedy because they can only provide up to two years of
back pay and there are no civil protections against sexual or marital status discrimination. Id. at
3-4. Anwar accordingly filed the present action, which Defendants now move to dismiss.
II.
In their motions to dismiss, Defendants have raised numerous jurisdictional issues,
including personal jurisdiction, service of process, and forum non conveniens.

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While the

Supreme Court’s decision in Steel Co. v. Citizens for Better Environment, 523 U.S. 83 (1998)
“clarified that a federal court generally may not rule on the merits of a case without first
determining that it has jurisdiction over the category of claim in suit” the Court explained in
Ruhrgas AG v. Marathon Oil Co. 526 U.S. 574 (1999) that there is no mandatory sequencing of
jurisdictional issues. Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp. 549 U.S. 422,
431 (2007). “A district court therefore may dispose of an action by a forum non conveniens
dismissal, bypassing questions of subject-matter and personal jurisdiction, when considerations
of convenience, fairness, and judicial economy so warrant.” Id. at 432.

Defendant

Ramachandran’s claims that this Court lacks personal jurisdiction over him will be addressed
first. The court will then direct the parties to conduct discovery on two narrow jurisdictional
issues.
III.
Defendant MEG and Defendant Ramachandran argue that Anwar’s claims against them
should be dismissed because this Court does not have personal jurisdiction over them. A
plaintiff bears the burden of establishing personal jurisdiction. See Brunner v. Hampson, 441
F.3d 457, 462 (6th Cir. 2006). “[I]n the face of a properly supported motion for dismissal, the
plaintiff may not stand on his pleading but must, by affidavit or otherwise, set forth specific facts
showing that the court has jurisdiction.” Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430, 449
(6th Cir. 2012) (quoting Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)).
“Presented with a properly supported 12(b)(2) motion and opposition, the court has three
procedural alternatives: it may decide the motion upon the affidavits alone; it may permit
discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to resolve any
apparent factual questions.” Theunissen, 935 F.2d at 1458.

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When a district court does not

conduct an evidentiary hearing, but instead rules solely on written submissions, the plaintiff’s
burden is relatively slight: the plaintiff “must make only a prima facie showing that personal
jurisdiction exists in order to defeat dismissal.” Estate of Thomson ex rel. Estate of Rakestraw v.
Toyota Motor Corp. Worldwide, 545 F.3d 367, 360 (6th Cir. 2008) (quoting Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). In such a case, a court “will not consider facts
proffered by the defendant that conflict with those offered by the plaintiff, and will construe the
facts in a light most favorable to the nonmoving party.” Indah v. U.S. S.E.C., 661 F.3d 914, 920
(6th Cir. 2011) (internal quotations and citation omitted). “Because weighing any controverted
facts is inappropriate at this stage, dismissal is proper only if [the plaintiff’s] alleged facts
collectively fail to state a prima facie case for jurisdiction.” Carrier Corp. 673 F.3d at 449
(internal quotations and citation omitted).
A.
Defendant Ramachandran also argues that this Court does not have personal jurisdiction
over him. In her complaint, Plaintiff Anwar alleges only that Defendant Ramachandran “is an
employee of Defendant Dow and is the acting Chief Executive Officer and President of
Defendant ME Global.” Compl. ¶ 6. Anwar has presented no evidence to establish that this
Court has personal jurisdiction over Ramachandran, and she has not rebutted Defendants’
arguments that this Court does not have personal jurisdiction over Ramachandran, who lives in
Dubai where all of the events alleged by Anwar took place. See Mot. for Summ. J. I 12-13.
Because Anwar has not carried her burden of establishing personal jurisdiction over Defendant
Ramachandran, her claims against him will be dismissed.
B.

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In her response to Defendants’ motion, Anwar asserts only a single theory of personal
jurisdiction over MEG International: that this Court has general jurisdiction over MEG
International under the doctrine of alter-ego personal jurisdiction. In her complaint Anwar
alleges that MEG International does business as MEG Americas, which is a foreign profit
corporation authorized to conduct business in the State of Michigan and operating in the County
of Midland, Michigan. Compl. ¶ 3. The parties do not dispute that MEG Americas is subject to
personal jurisdiction in the Eastern District of Michigan.
i.
In the present action, this Court has federal jurisdiction over Anwar’s federal claims and
supplemental jurisdiction over her state law claims. See 28 U.S.C. §§ 1361, 1367. Accordingly,
this Court must look both to federal law and Michigan law to supply the law on alter-ego
personal jurisdiction.
In Daimler AG v. Bauman, 134 S.Ct. 746 (2014), the Supreme Court recognized a theory
of alter ego personal jurisdiction in which “a subsidiary’s jurisdictional contacts can be imputed
to its parent only when the former is so dominated by the latter as to be its alter ego.” Id. at 759.
The Court expressly rejected the Ninth Circuit’s holding that the finding of an “agency”
relationship between a foreign parent entity and a local subsidiary was sufficient to impute
personal jurisdiction to the parent. Id.
To satisfy the alter ego test under federal law, “a plaintiff must make out a prima facie
case (1) that there is such unity of interest and ownership that the separate personalities [of the
two entities] no longer exist and (2) that failure to disregard [their separate identities] would
result in fraud or injustice.” Ranza v. Nike, 793 F.3d 1059, 1073 (9th Cir. 2015).
The “unity of interest and ownership” prong of this test requires a showing that
the parent controls the subsidiary to such a degree as to render the latter the mere
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instrumentality of the former. This test envisions pervasive control over the
subsidiary, such as when a parent corporation dictates every facet of the
subsidiary’s business—from broad policy decisions to routine matters of day-today operation. Total ownership and shared management personnel are alone
insufficient to establish the requisite level of control.
Id. (internal citations and quotations omitted).
In the Sixth Circuit, “[t]he alter-ego theory provides for personal jurisdiction if the parent
company exerts so much control over the subsidiary that the two do not exist as separate entities
but are one and the same for purposes of jurisdiction.” Indah, 661 F.3d at 921. The Sixth Circuit
considers the following factors: 1) sharing the same employees and corporate officers; 2)
engaging in the same business enterprise; 3) having the same address and phone lines; 4) using
the same assets; 5) completing the same jobs; 6) not maintaining separate books, tax returns and
financial statements; and 7) exerting control over the daily affairs of another corporation. Estate
of Thompson, 545 F.3d at 362-63.
Under Michigan law, there is a presumption that, “absent some abuse of the corporate
form, parent and subsidiary corporations are separate and distinct entities.” Seasword v. Hilti,
Inc., 449 Mich. 542, 547 (Mich. 1995). Like under federal law, to rebut this presumption a party
must show that a subsidiary is a “mere instrumentality” of the parent. Id. As explained by the
Michigan Court of Appeals:
Facts tending to show the existence of an alter ego relationship include if the
parent and subsidiary share principal offices, if they share board members or
executives, if all of the parent’s revenue comes from the subsidiary’s sales, if all
capital for the subsidiary is provided by the parent, if the subsidiary purchases
supplies exclusively from the parent, if the subsidiary is seriously
undercapitalized, if the parent regularly provided gratuitous services to the
subsidiary, if the parent handled the subsidiary’s payroll, if the parent directed the
policies and decisions of the subsidiary, and if the parent considered the
subsidiary’s project to be its own.

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Id. (citing Seasword, 449 Mich. at 548 n. 10, and Herman v. Mobile Homes Corp., 317 Mich.
233, 239–41 (1947)).
ii.
In her declaration, Dr. Friesler states that MEG Americas is one of the eight subsidiaries
of MEGlobal BV. Friesler Dec. ¶ 18. This means that MEG International is neither a parent nor
subsidiary of MEG International, but is instead a kind of “nephew” entity of MEG Americas.
MEG International argues that a finding of alter-ego jurisdiction is therefore improper because
the entities do not have a parent-subsidiary relationship.
“Normally, courts apply the alter-ego theory of personal jurisdiction to parent-subsidiary
relationships.” Estate of Thompson, 545 F.3d at 362. This however is a case outside of the norm,
where Anwar alleges that all of the MEGlobal entities act as a single entity.
Dr. Friesler states that MEG International and MEG America “are separate legal entities,
maintain separate offices, have separate and distinct operations, finances and management.”
Friesler Dec. at ¶ 20. Dr. Friesler notes that MEG International has a services agreement with
MEG Americas by which MEG Americas supplies controller services to MEG International, and
that MEG International resells certain products to MEG Americas for supply to a MEG Americas
client in California. Id. at ¶ 20; Def.’s Mot. for Summ. J. I Leikhim Decl. Ex. 2. Dr. Friesler
further states that no employee of MEG International is also an employee of MEG Americas, and
that no director of MEG International is a director of MEG Americas. Friesler concedes that
both she and Defendant Ramachandran serve on the board of directors for MEG Americas, but
claims that neither are employees of MEG Americas and neither have an office at MEG
Americas. Friesler Dec. at ¶ 22.

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Plaintiff Anwar contradicts Dr. Friesler’s claims by pointing to her own declaration.
There, Anwar states that as a former member of the MEGlobal Management Team, she knows
that other members of the Management Team worked in several different offices across the
MEGlobal subsidiaries, that all subsidiaries have the same board of directors, all subsidiaries
share one common website, and that MEGlobal advertises itself as a global company. Pl. Resp.
to Mot. for Summ. J. I, Ex. 1, Anwar Dec. ¶¶ 7, 9-12, 15-17. Anwar further states that the
MEGlobal subsidiaries do not conduct their own business or financial operations, that the
subsidiaries are all directed by a single Management Team, and that the subsidiaries act as a
single company. Id. at ¶¶ 13-14.
Because there are material factual disputes regarding the ownership, management, and
business and financial operations of the MEGlobal subsidiaries, discovery will be opened for 90
days for the limited purpose of obtaining information related to these issues. Defendants will
then be directed to submit supplemental briefs addressing the alleged interrelatedness of the
MEGlobal subsidiaries within 15 days of the close of discovery.
IV.
Defendant Dow has also filed a motion to dismiss. Dow argues that Anwar has failed to
state a claim against it under Rule 12(b)(6) because Anwar was not an employee of Dow at the
time of alleged acts. In the alternative, Dow argues that Anwar’s claims should be dismissed on
grounds of forum non conveniens.
As explained by the Sixth Circuit, “Title VII applies only to ‘employers.’” Sutherland v.
Michigan Dept. of Treasury, 344 F.3d 603, 611 (6th Cir. 2003) (quoting 42 U.S.C. § 2000e-2).
See also Morris v. Oldham Cnty. Fiscal Ct., 201 F.3d 784, 795 (6th Cir.2000) ( “Congress chose
to limit Title VII liability to employers only”); Swallows v. Barnes & Noble Book Stores, Inc.,

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128 F.3d 990, 992 (6th Cir.1997) (holding that the plaintiff must demonstrate that the defendant
was an employer within the meaning of the statute to establish liability under the ADA). “The
determination of whether a particular entity is an employer of a Title VII plaintiff involves an
examination of whether the alleged employer exercises control over the manner and means of the
plaintiff's work.” Sutherland, 344 F.3d at 612.
ELCRA also applies only to employers. M.C.L.A. § 37.2202 (“An employer shall not…
discharge, or otherwise discriminate against an individual with respect to employment,
compensation, or a term condition or privilege of employment, because of religion, race, color,
national origin, age, sex, height, weight, or marital status.” (emphasis added)). See also Seabrook
v. Mich. Nat’l Corp., 206 Mich.App. 314, 315–16 (Mich.Ct.App.1994) (affirming state trial
court’s grant of summary judgment to the defendant on an ELCRA claim because the plaintiff
failed to show that an employment relationship existed between her and the defendant).
Michigan courts use the “economic realities test” to determine whether an employment
relationship exists for purposes of ELCRA. Varlesi v. Wayne State University, 909 F.Supp. 2d
827, 843-44 (E.D. Mich. 2012). Therefore, in determining whether an employment relationship
exists courts must consider the totality of circumstances surrounding the plaintiff’s work,
including the following non-controlling factors: (1) control of a worker’s duties; (2) payment of
wages; (3) right to hire, fire, and discipline; and (4) performance of the duties as an integral part
of the employer’s business toward the accomplishment of a common goal. Chilingirian v. City of
Fraser, 194 Mich.App. 65, 486 N.W.2d 347, 349 (1992).
In arguing that Defendant Dow should be liable for the actions of Defendant MEG and
Defendant Ramachandran, Anwar does not claim that she was directly employed by Dow.
Instead, Anwar claims that Defendant Dow controlled her employment through MEG

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International managers who were also Dow employees. See Compl. ¶¶ 6, 8-12. Anwar thus
argues that Dow exercised control over MEG International’s employees such that it should be
treated as a joint employer. See Swallows, 128 F.3d. at 993. Dow disputes this, claiming that
Defendant Ramachandran and the other managers were not employees of Dow, but were instead
employees of Dow affiliates.
Resolving this dispute is important first because it will determine whether Anwar has
stated a claim against Defendant Dow and, consequently, whether the United States District
Court in the Eastern District of Michigan is a proper forum for resolving Anwar’s claims under
the doctrine of forum non conveniens. Dow’s motion to dismiss will be converted into a motion
for summary judgment, and the Court will address the facts relating to Anwar’s jurisdiction
claim learned in discovery.

In order to assist the Court in making these determinations,

discovery will be opened for 90 days for the limited purpose of determining the Defendant
Dow’s relationship with the MEG International managers, including Defendant Ramachandran.
The parties will then have 15 days after the close of discovery to file supplemental briefs
addressing these issues.
V.
Accordingly, it is ORDERED that Defendant Ramachandran is DISMISSED from this
action for lack of personal jurisdiction.
It is further ORDERED that discovery is OPENED for the limited purposes of (1)
investigating Anwar’s allegations that MEG International does business as MEG Americas and
that the MEGlobal subsidiaries act as a single entity and (2) Anwar’s allegation that
Ramachandran and other MEG International managers are employed by Defendant Dow. The
parties will have 90 days from the entry of this order to conduct this limited discovery.

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It is further ORDERED that the parties are DIRECTED to file supplemental briefs
addressing these two issues within 105 days from the entry of this order.
The parties are hereby put on NOTICE that Defendant Dow’s motion to dismiss, ECF
No. 19, will be CONVERTED into a motion for summary judgment, to be decided after
receiving the parties’ supplemental briefs.
s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
Dated: January 26, 2016

PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on January 26, 2016.
s/Michael A. Sian
MICHAEL A. SIAN, Case Manager

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