GMBH v. Eighth Judicial Dist. Court of State

• Decision Date: 29 May 2014
• Docket Number: No. 59976.,59976.
• Citation: 130 Nev. Adv. Op. 40,328 P.3d 1152
• Parties: VIEGA GMBH; and Viega International GmbH, Petitioners, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, in and for the County of Clark; and the Honorable Susan Johnson, District Judge, Respondents, and Aventine–Tramonti Homeowners' Association, Real Party in Interest.
• Court: Nevada Supreme Court

328 P.3d 1152
130 Nev. Adv. Op. 40

VIEGA GMBH; and Viega International GmbH, Petitioners,
v.
The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, in and for the County of Clark; and the Honorable Susan Johnson, District Judge, Respondents,
and
Aventine–Tramonti Homeowners' Association, Real Party in Interest.

No. 59976.

Supreme Court of Nevada.

May 29, 2014.

[328 P.3d 1154]

Fennemore Craig, P.C., and John H. Mowbray, Janice Proctor–Murphy, and Kevin M. Green, Las Vegas; Lincoln, Gustafson & Cercos and Nicholas B. Salerno and Christopher A. Turtzo, Las Vegas; Carroll Burdick & McDonough and Matthew J. Kemner, San Francisco, California, for Petitioners.

Canepa Reidy & Rubino and Scott K. Canepa and Terry W. Reidy, Las Vegas; Carraway & Associates, LLC, and James D. Carraway, Las Vegas; Kemp, Jones & Coulthard, LLP, and J. Randall Jones, Las Vegas; Lynch, Hopper & Salzano LLP and Francis I. Lynch, Las Vegas; Maddox, Isaacson & Cisneros and Robert C. Maddox, Las Vegas, for Real Parties in Interest.

Before the Court En Banc.¹

OPINION
By the Court, HARDESTY, J.:

In this original petition for a writ of prohibition, two foreign companies challenge the Nevada district court's assertion of personal jurisdiction over them. The district court asserted jurisdiction after determining that the foreign companies' American subsidiaries acted as their agents and then attributing to them the subsidiaries' Nevada contacts. The foreign companies argue that, in so doing, the district court violated due process.

[328 P.3d 1155]

We agree. Although a Nevada plaintiff may establish personal jurisdiction over nonresident parent companies by showing that their subsidiaries acted in the forum as the parents' agents, so that the subsidiaries' local contacts can be imputed to the parents, no agency relationship was shown here. Accordingly, in imputing the subsidiaries' contacts to the foreign parents here, the district court exceeded its jurisdiction, warranting writ relief.

FACTS AND PROCEDURAL HISTORY

Petitioners Viega GmbH and Viega International GmbH are German limited liability corporations. Viega GmbH designs and manufactures plumbing and heating components in Germany. Viega GmbH wholly owns Viega International, a holding company for Viega GmbH's international subsidiaries. In turn, Viega International wholly owns Viega Inc., a holding company incorporated in Delaware. Viega Inc. owned Viega NA, Inc., which sold Viega GmbH's plumbing products in the United States.

In October 2005, Viega Inc. purchased Vanguard, LLC, a Kansas-based yellow brass plumbing parts manufacturer and distributer. As part of the purchase, Viega Inc. assumed Vanguard's liabilities. In 2007, Viega Inc. then formed Viega LLC, a Delaware limited liability company headquartered in Kansas, to integrate Viega NA and Vanguard, along with a third company, into one entity. Viega LLC owns a distribution center in Reno and regularly conducts business in this state. According to real party in interest, Viega Inc. and Viega LLC are the sole means by which Viega GmbH and Viega International conduct any activities in, and by which Viega products enter, the American plumbing market. For purposes of this case, the parties do not dispute that Viega Inc. and Viega LLC are subject to personal jurisdiction in Nevada.

Prior to Viega Inc.'s 2005 purchase of Vanguard and assumption of its liabilities, Vanguard's yellow brass plumbing parts were distributed and installed in the Aventine–Tramonti common interest community in Las Vegas, Nevada. Asserting that the plumbing parts were defective, in 2008, real party in interest, the Aventine–Tramonti Homeowners' Association, filed a construction defect complaint that named, among others, Vanguard, Viega Inc., and Viega LLC as being responsible for the production, distribution, and sale of the allegedly faulty plumbing parts.

The HOA later amended its complaint to add Viega GmbH and Viega International as defendants. Both German companies moved to dismiss the complaints, arguing that the district court lacked personal jurisdiction over them because neither company had a direct connection to Nevada, manufactured or distributed the allegedly faulty plumbing parts, or had responsibility or control over the American subsidiaries such that the subsidiaries' contacts with Nevada could be imputed to the German companies.

The district court held a nonevidentiary hearing on the motions, after which the court concluded that the HOA had made a prima facie showing of general and specific personal jurisdiction and thus denied the German companies' motions to dismiss. In determining whether the German companies' contacts with Nevada were sufficient to support the exercise of jurisdiction over them, the district court considered (1) whether the German companies exercised “pervasive and continual” control over Viega Inc. and whether Viega Inc. was sufficiently important to the German Viega companies such that they would undertake Viega Inc.'s activities if it did not exist. The district court found that the HOA had demonstrated that, although Viega GmbH, Viega International, and Viega Inc. were separately created entities, they essentially acted as one company. As a result, the court concluded, Viega Inc.'s contacts with Nevada could be imputed to Viega GmbH and Viega International. Based on those contacts, the district court held that both Viega GmbH and Viega International were subject to personal jurisdiction in Nevada. This writ petition followed.² Because the

[328 P.3d 1156]

parties largely refer to Viega Inc. and Viega LLC as “American Viega” and to Viega International and Viega GmbH as “German Viega” and do not assert that they should be viewed differently, we do likewise.

DISCUSSION

A writ of prohibition is available to arrest or remedy district court actions taken without or in excess of jurisdiction. NRS 34.320; State, Office of the Attorney Gen. v. Eighth Judicial Dist. Court (Anzalone), 118 Nev. 140, 146–47, 42 P.3d 233, 237 (2002). Writ relief is an extraordinary remedy that this court will only “exercise [its] discretion to consider ... when there is no plain, speedy and adequate remedy in the ordinary course of law.” Cheung v. Eighth Judicial Dist. Court, 121 Nev. 867, 869, 124 P.3d 550, 552 (2005) (internal quotations marks omitted); NRS 34.330. As no adequate and speedy legal remedy typically exists to correct an invalid exercise of personal jurisdiction, a writ of prohibition is an appropriate method for challenging district court orders when it is alleged that the district court has exceeded its jurisdiction. South Fork Band, Te–Moak Tribe v. Sixth Judicial Dist. Court, 116 Nev. 805, 811, 7 P.3d 455, 459 (2000). Because Viega GmbH and Viega International challenge the validity of the district court's exercise of jurisdiction over them, we exercise our discretion to consider this writ petition.

Establishing personal jurisdiction over a nonresident parent company

To avoid dismissal of the German Viega companies at this stage of the proceedings below, the HOA was required to make a prima facie showing with “competent evidence of essential facts” that, if true, would support jurisdiction. Trump v. Eighth Judicial Dist. Court, 109 Nev. 687, 692, 857 P.2d 740, 743 (1993) (internal quotation marks omitted). “The court may consider evidence presented in affidavits to assist it in its determination,” Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir.2001), and the court must accept properly supported proffers of evidence as true. Trump, 109 Nev. at 692, 857 P.2d at 743. When factual disputes arise, “those disputes must be resolved in favor of the plaintiff.” Id. at 693, 857 P.2d at 744 (internal quotation marks omitted). Once a prima facie showing is made, the plaintiff then bears the burden at trial to prove jurisdiction by a preponderance of evidence. Trump, 109 Nev. at 693, 857 P.2d at 744. As a question of law, the district court's determination of personal jurisdiction is reviewed de novo, even in the context of a writ petition. Hosp. Corp. of Am. v. Second Judicial Dist. Court, 112 Nev. 1159, 1160, 924 P.2d 725, 725 (1996).

Jurisdiction over a nonresident defendant is proper only if the plaintiff shows that the exercise of jurisdiction satisfies the requirements of Nevada's long-arm statute and does not offend principles of due process. Arbella Mut. Ins. Co. v. Eighth Judicial Dist. Court, 122 Nev. 509, 512, 134 P.3d 710, 712 (2006); see also Consipio Holding, BV v. Carlberg, 128 Nev. ––––, ––––, 282 P.3d 751, 754 (2012) (“Nevada's long-arm statute permits personal jurisdiction over a nonresident defendant unless the exercise of jurisdiction would violate due process.”). Nevada's long-arm statute, NRS 14.065, reaches the constitutional limits of due process under the Fourteenth Amendment, which requires that the defendant have such minimum contacts with the state that the defendant could reasonably anticipate being haled into court here, thereby complying with “traditional notions of fair play and substantial justice.” Arbella, 122 Nev. at 512, 134 P.3d at 712 (internal quotation marks omitted) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Accordingly, we must look to whether the exercise of jurisdiction over Viega GmbH and Viega International comports with due process.

Due process requirements are satisfied if the nonresident defendants' contacts are sufficient to obtain either (1) general jurisdiction, or (2) specific personal jurisdiction and it is reasonable to subject the nonresident defendants to suit here. Arbella, 122 Nev. at 512, 516, 134 P.3d at 712, 714; see Daimler AG v. Bauman, 571 U.S. ––––, –––– n. 20, 134 S.Ct. 746, 762 n. 20, 187 L.Ed.2d 624 (2014). A court may exercise general jurisdiction over a foreign company

[328 P.3d 1157]

when its contacts with the forum state are so “ ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” Goodyear Dunlop...