The spec does not define how a dialog should react if the bottom edge of a parent frame is offscreen, and loads a dialog based off of setLocationRelativeTo() call.

The test below shows that the child dialog loads to the left of the parent when the parent is partially below the screen.

import java.awt.event.*;
import javax.swing.*;

public class test extends JFrame implements ActionListener {

  public void init() {
     JButton aButton = new JButton("Load Window");
     this.getContentPane().add(aButton);
     aButton.addActionListener(this);
  }

  public static void main(String[] args) {
     test aFrame = new test();
     aFrame.setSize(500,150);
     aFrame.init();
     aFrame.setVisible(true);
  }

  public void actionPerformed(ActionEvent e) {
     JDialog dialog = new JDialog();
     dialog.setSize(100, 100);
     dialog.setLocationRelativeTo(this);
     dialog.setVisible(true);
  }
}