Blair v. Infineon Technologies Ag

720 F.Supp.2d 462 (2010)

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Nature of the Case

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Facts

The defendant corporations in this litigation were formed by a series of 'spin-offs' or 'carve-outs' originating with Siemens AG ('Siemens'), a German Corporation that entered the semiconductor industry around 1952. Siemens formed Infineon AG and Infineon North America in order to insulate itself from the volatility in the semiconductors market.

Siemens divested itself of all Infineon* shares in April 2006. D spun off its memory chip operations in May 2006 to form Qimonda AG and the Qimonda Subsidiaries (collectively, the 'Qimonda entities'), and employees at the Virginia, North Carolina, and California facilities became employees of the Qimonda Subsidiaries. D retained over 85% of the stock in Qimonda AG, and it also provided Qimonda AG with 565 million EU of financing. Today, Infineon* holds approximately 77.5% of the shares in Qimonda AG. Qimonda had limited ability to obtain financing or make acquisitions due to a lack of independent credit history and D's substantial shareholder stake in the company. D announced it would begin classifying Qimonda's performance as 'discontinued operations' on its consolidated balance sheets. Qimonda had posted significant losses for the first half of the 2007/2008 fiscal year. On October 13, 2008, less than three years after D had announced its expansion plans in the United States, the Qimonda Subsidiaries announced that they would close their Richmond, Virginia facility by January 2009. Qimonda Subsidiaries were being forced, as 'captive sellers,' to give 87% of their sales revenue to Qimonda AG in order for D to 'prop up' Qimonda for possible sale at the expense of letting the Qimonda Subsidiaries simply 'bleed dry.' A financing plan never materialized. The Qimonda Subsidiaries closed their facilities in North Carolina, Virginia, and California and filed for bankruptcy on February 20, 2009. Ps allege they were terminated without severance, and many contend they were not given proper legal notice under either the WARN Act or the California WARN Act. Ps assert that Ds should be treated as an alter ego or single employer and should be held liable for the injury to former employees of the Qimonda Subsidiaries. Ds moved to dismiss under Federal Rule of Civil Procedure 12(b)(6).