UNITED STATES COURT OF INTERNATIONAL TRADE

Slip Op. 25-31

Before the Court in United States v. Koehler Oberkirch GmbH, Court No. 24-00014, Slip Op. 25-31 (March 27, 2025) was the Government’s motion to collect over a quarter-billion dollars in unpaid antidumping duties and interest from Defendant Koehler Oberkirch GmbH and Koehler Paper SE, a pair of affiliated German producers of thermal paper. The action was brought to the Court of International Trade under its jurisdiction over “any civil action which arises out of an import transaction and which is connected by the United States . . . to recover customs duties.” [28 U.S.C. § 1581]. In front of the court also was defendants’ motion to dismiss this action asserting two defenses: (1) insufficient service of process as to both Defendants and (2) lack of personal jurisdiction over Koehler Paper, presenting issues of due process and civil procedure that, according to Judge Katzmann, are rarely litigated before the U.S. Court of International Trade due to their significance to international commerce.

The Court addressed the question of whether, where a successor entity inherits its corporate predecessor’s liabilities, does it also inherit the predecessor’s jurisdictional contacts. Under the well-established Supreme Court precedent in International Shoe Co. v. State of Wash., Off. Of Unem. Comp. & Placement, 326 U.S. 310, 316 (1945), personal jurisdiction over an out-of-forum defendant satisfies due process only where the defendant has “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” The Court addressed specific jurisdiction, which applies where “the suit ‘arises out of or relates to the defendant’s contacts with the forum.” To analyze whether specific jurisdiction over the defendant, the Court must address whether some act existed by which the defendant purposefully availed itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. In the cotext of imports, defendants make allegations about purposefully shipping merchandise into a particular forum through an established distribution channel. Thus, where a cause of action arises out of those activities, specific jurisdiction is sufficiently established. This case, however, did not concern imports into any state. The question was whether the defendants had minimum contacts with the nation as a whole such that minimum contacts would be established and form the basis for specific jurisdiction. The Court held that Koehler Oberkirch’s jurisdictional contacts were sufficient and that these should be imputed to Koehler Paper for the following reasons.

The issue turned on the company’s corporate transformation and some activity related to an antidumping duty order that was in effect between 2008 and 2013 covering imports of lightweight thermal paper from Germany. Producers subject to this order were Papierfabrik August Koehler AG and Koehler America. During this time, Commerce found that Papierfabrik August Koehler was engaged in a scheme of a “serious and egregious nature” to manipulate and conceal certain sales data. Accordingly, Commerce made an adverse interference which drove the duty rate on imports from this company up to 75.36 percent ad valorem. This rate continued to apply to the period of November 2009 and October 2011, generating an unpaid balance of $267,530,486.57 as of February 2025 representing Papierfabrik August Koehler AG’s entries of thermal paper during this period. This balance includes statutory interest and applies to the company with finality. One important fact is that Papierfabrik August Koehler AG has allegedly undergone a series of corporate transformations since the entries of the merchandise in question. First, it became Papierfabrik August Koehler SE, which in turn participated in a two-step “spin-off” that consisted of (1) the creation of Koehler Paper and (2) the transfer to Koehler Paper of certain assets and liabilities. What remained of Papierfabrik August Koehler SE then underwent a “statutory conversion” to become Koehler Oberkirch. And as of 2021, Koehler Oberkirch is a wholly owned subsidiary of Koehler Paper.

Defendants’ Motion to Dismiss for insufficient service of process and lack of personal jurisdiction was unsuccessful. First, the Court granted the Government’s for Alternative Service, making the delivery of the Summons proper and sufficient. Second, defendants’ motion to dismiss for lack of personal jurisdiction was unsuccessful because minimum contacts with the United States existed over Koehler Paper. The Government argued that the theory of successor jurisdiction applied, arguing that Koehler Paper voluntarily inherited the jurisdictional contacts of Koehler Oberkirch. Defendants challenged the Government’s argument the creation of Koehler Paper was the result of a corporate restructuring that took place within Germany under German Law and, as such, lacks forum contacts that would satisfy due process.

However, the Court agreed with the government that, since Koehler Oberkirch uncontestedly availed itself of the United States forum when it imported thermal paper into the United States accruing antidumping liability on those imports, and Koehler Paper is its successor in interest, it makes Koehler Paper liable, as well as Koehler Overkirch’s successor in interest. This was sufficient to establish the court’s personal jurisdiction over Koehler Paper because Koehler Oberkirch, as the direct corporate continuation of the importer of record of the subject thermal paper, established sufficient contacts with the United States to render the court’s exercise of personal jurisdiction over Koehler Oberkirch consistent with due process. The importation of 1,462 entries of thermal paper into the United States over the course of two years, for an action that directly concerns those entries was sufficient to establish minimum contacts without offending traditional notions of fair play and substantial justice, as required by the International Shoe standard. Put another way, in light of Koehler Oberkirch’s contacts and the successor-in-interest relationship, imputing personal jurisdiction on the successor corporate entity is sufficient for personal jurisdiction to be established.

Though the Government proposed a second theory for establishing personal jurisdiction–that plaintiff, Koehler Paper consented to personal jurisdiction by virtue of its ongoing challenge to the scope of the 2021 antidumping duty order determination at issue in Matra Ams., LLC v. United States, 48 CIT __, __, 681 F. Supp. 3d 1339, 1357–58 (2024)– the Court found the successor theory of personal jurisdiction sufficient and did not reach the second.