Ostrolenk Wins Decision Against LEGO Barring Assertion of Defamation Claim Against Corporate Officer
In Lego Systems v. Best-Lock Construction Toys, Ostrolenk Faber successfully defended our client’s chief executive officer from a charge of defamation. The case was filed by Lego in the U.S. District Court for the District of Connecticut against firm client Best-Lock.
After suit was commenced, Lego brought a motion to join Best-Lock’s CEO, Torsten Geller, as a party defendant on a charge of defamation. The charge was based on interviews Mr. Geller had given to the Hartford, Connecticut media. Ostrolenk objected on behalf of Mr. Geller, asserting that he was not subject to the Court’s jurisdiction and that Lego’s maintenance of the claim was futile.
In their motion, Lego argued that Mr. Geller was subject to the Court’s jurisdiction and therefore a proper party to the suit. Lego alleged two grounds in support of their position. First, the Connecticut long arm statute provided a basis for the exercise of jurisdiction. Second, jurisdiction was proper because Best-Lock was merely Mr. Geller’s alter ego; therefore, piercing the corporate veil was appropriate to assert jurisdiction over Mr. Geller.
In response, Ostrolenk first argued that the long arm statute could not be interpreted to reach the acts Lego asserted as the basis for jurisdiction - - providing interviews to the Hartford media. Moreover, the exercise of jurisdiction was inconsistent with due process. With regard to the second argument, we demonstrated that Lego had not carried its evidentiary burden to sustain its alter ego theory. Finally, we pointed out that Lego’s attempt to bring the defamation claim against Mr. Geller was unduly prejudicial and simply a tactic to harass him.
The Court agreed with us on all of these points and refused to allow Lego to join Mr. Geller as an additional party, finding in pertinent part, “[t]hat jurisdiction cannot be founded upon the Connecticut long-arm statute; and concepts of corporate veil-piercing have no legitimate function to perform in the jurisdictional analysis.” The upshot of this decision is that Mr. Geller and his personal assets were effectively insulated from any judgment in the case.
Ostrolenk consistently strives to achieve the best results for our clients. We are pleased to be able to share this example. For a full copy of the Court’s decision, please click here.