Consipio Holding, BV v. Carlberg

• Decision Date: 09 August 2012
• Docket Number: No. 58128.,58128.
• Citation: 282 P.3d 751,128 Nev. Adv. Op. 43
• Parties: CONSIPIO HOLDING, BV, a Corporation Organized under the Laws of the Netherlands; Ilan Bunimovitz, an individual; Tisbury Services, Inc., a Corporation Organized under the Laws of the British Virgin Islands; and Claudio Gianascio, an Individual, Appellants, v. Johan CARLBERG; Peter Dixinger; Bo Rodebrant; Johan Gillborg; and Philip Christmas, Respondents.
• Court: Nevada Supreme Court

282 P.3d 751

128 Nev. Adv. Op. 43

CONSIPIO HOLDING, BV, a Corporation Organized under the Laws of the Netherlands; Ilan Bunimovitz, an individual; Tisbury Services, Inc., a Corporation Organized under the Laws of the British Virgin Islands; and Claudio Gianascio, an Individual, Appellants,

v.Johan CARLBERG; Peter Dixinger; Bo Rodebrant; Johan Gillborg; and Philip Christmas, Respondents.

No. 58128.

Supreme Court of Nevada.

Aug. 9, 2012.

Lionel Sawyer & Collins and Meredith L. Markwell and Charles H. McCrea, Jr., Las Vegas, for Appellants.

Laxalt & Nomura, Ltd., and Justin C. Vance and Robert A. Dotson, Reno, for Respondents.

BEFORE THE COURT EN BANC.

OPINION

By the Court, GIBBONS, J.:

In this appeal, we consider whether Nevada courts can properly exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada corporation. We conclude that they can. Here, the district court failed to conduct adequate factual analysis to determine whether it could properly exercise personal jurisdiction over the respondents before dismissing the complaint against them. Accordingly, we vacate the dismissal order and remand this matter to the district court for further proceedings.

FACTS AND PROCEDURAL HISTORY

Appellants Consipio Holding, BV; Ilan Bunimovitz; Tisbury Services, Inc.; and Claudio Gianascio (collectively, Consipio) are shareholders of Private Media Group, Inc. (PRVT). In August 2010, Consipio filed a complaint in the Nevada district court, seeking injunctive relief and the appointment of a receiver for PRVT. Consipio also asserted derivative claims on behalf of PRVT against PRVT's former CEO and president, Berth H. Milton, Jr.,¹ and against officer and director respondents Johan Carlberg (PRVT director), Peter Dixinger (PRVT director), Bo Rodebrant (PRVT director), Johan Gillborg (former PRVT CFO), and Philip Christmas (PRVT subsidiary CFO). The claims focus on respondents' alleged conduct in assisting Milton, Jr., to financially harm PRVT for their personal gain. The complaint alleges that respondents assisted Milton, Jr., in obtaining significant loans for himself and entitieshe controls. It further states that respondents have failed to demand repayment on these loans and that they have helped Milton, Jr., in removing funds from PRVT and concealing the wrongdoing. Given these allegations, Consipio contends that respondents collectively have been guilty of misfeasance, malfeasance, and breach of their fiduciary duties.

PRVT is incorporated in Nevada with its principal place of business in Spain. Respondents are all citizens and residents of European nations. Only three of the respondents, Dixinger, Carlberg, and Gillborg, have visited Nevada in the past. Dixinger visited Nevada in order to consult with attorneys in preparation for this matter, and Carlberg and Gillborg each visited Nevada once several years ago for personal reasons. Citing a lack of contacts with Nevada, each of the respondents moved to dismiss the action against them for lack of personal jurisdiction. Without conducting an evidentiary hearing, the district court granted their motions and certified its dismissal orders as final under NRCP 54(b).

Consipio now appeals, contending that the district court erred in granting respondents' motions to dismiss for lack of personal jurisdiction. Consipio contends that respondents' conduct created sufficient minimum contacts with Nevada and that NRS 78.135(1) confers jurisdiction over nonresident officers and directors who violate their corporate authority. We conclude that a district court can exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada corporation.²

DISCUSSION

When a party challenges personal jurisdiction, the plaintiff typically has the burden of producing evidence that establishes a prima facie showing of jurisdiction. See Trump v. District Court, 109 Nev. 687, 692, 857 P.2d 740, 743 (1993). “[A] plaintiff may make a prima facie showing of personal jurisdiction prior to trial and then prove jurisdiction by a preponderance of the evidence at trial.” Id. We review a district court's order dismissing for lack of personal jurisdiction de novo. Baker v. Dist. Ct., 116 Nev. 527, 531, 999 P.2d 1020, 1023 (2000); see CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir.2011).

A district court can exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada corporation

Nevada's long-arm statute permits personal jurisdiction over a nonresident defendant unless the exercise of jurisdiction would violate due process. NRS 14.065(1). “Due process requires ‘minimum contacts' between the defendant and the forum state ‘such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.’ ” Trump, 109 Nev. at 698, 857 P.2d at 747 (quoting Mizner v. Mizner, 84 Nev. 268, 270, 439 P.2d 679, 680 (1968)). “[T]he defendant's conduct and connection with the forum State [must be] such that he should reasonably anticipate being haled into court there.” World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).

The parties agree that specific, not general, personal jurisdiction is at issue here. A court may exercise specific personal jurisdiction over a defendant only when “the cause of action arises from the defendant's contacts with the forum.” Trump, 109 Nev. at 699, 857 P.2d at 748. Specific personal jurisdiction is appropriate when the defendant has “purposefully established minimum contacts” such that jurisdiction would “comport with ‘fair play and substantial justice.’ ” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Internat. Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). To exercise specific personal jurisdiction over a nonresident defendant,

[t]he defendant must purposefully avail himself of the privilege of acting in the forum state or of causing important consequences in that state. The cause of action must arise from the consequences in the forum state of the defendant's activities, and those activities, or the consequences thereof, must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.

Jarstad v. National Farmers Union, 92 Nev. 380, 387, 552 P.2d 49, 53 (1976).

Questions involving personal jurisdiction mandate an inquiry into whether it is “ ‘reasonable ... to require [the defendant] to defend the particular suit [in the jurisdiction where it is brought].’ ” Trump, 109 Nev. at 701, 857 P.2d at 749 (first and second alterations in original) (quoting World–Wide Volkswagen Corp., 444 U.S. at 292, 100 S.Ct. 559). Factors to consider in determining whether assuming personal jurisdiction is reasonable include:

(1) “the burden on the defendant” of defending an action in the foreign forum, (2) “the forum state's interest in adjudicating the dispute,” (3) “the plaintiffs interest in obtaining convenient and effective relief,” (4) “the interstate judicial system's interest in obtaining the most efficient resolution of controversies,” and (5) the “shared interest of the several States in furthering fundamental substantive social policies.”

Emeterio v. Clint Hurt and Assocs., 114 Nev. 1031, 1036–37, 967 P.2d 432, 436 (1998) (quoting World–Wide Volkswagen Corp., 444 U.S. at 292, 100 S.Ct. 559).

A corporation that is incorporated in Nevada is a Nevada citizen. Quigley v. C.P.R.R. Co., 11 Nev. 350, 357 (1876) (“[A] corporation is a citizen of the state where it is created.”). When officers or directors directly harm a Nevada corporation, they are harming a Nevada citizen. By purposefully directing harm towards a Nevada citizen, officers and directors establish contacts with Nevada and “affirmatively direct[ ] conduct” toward Nevada. Trump, 109 Nev. at 700, 857 P.2d at 748. Further, officers or directors “caus[e] important consequences” in Nevada when they directly harm a Nevada corporation. See Jarstad, 92 Nev. at 387, 552 P.2d at 53. When a cause of action arises out of an officer's or director's purposeful contact with Nevada, a district court can exercise personal jurisdiction over that officer or director. See id.

Respondents rely on the United States Supreme Court's holding in Shaffer v. Heitner to assert that allowing a district court to exercise personal jurisdiction over them would offend due process. 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). However, Shaffer does not prohibit a state court from exercising jurisdiction over nonresident officers and directors who directly harm a corporation that is incorporated in that state, even when the state does not have a director consent statute.³ In Shaffer, the plaintiffs filed a complaint in Delaware against a Delaware corporation's directors who exposed the corporation to claims of third parties in another state. Id. at 189–90, 97 S.Ct. 2569. The cause of action arose from activities that took place outside Delaware. Id. at 190, 97 S.Ct. 2569. The plaintiffs asserted that Delaware courts could exercise personal jurisdiction given the presence of the defendant's property in the jurisdiction. Id. at 213, 97 S.Ct. 2569. However, the United States Supreme Court held that the directors were not subject to personal jurisdiction in Delaware because the property was not the matter of the litigation and the plaintiff did not “identify any act related to his cause of action as having taken place in Delaware.” Id. at 213, 97 S.Ct. 2569. The Court also noted that Delaware did not have a director consent statute that would treat the acceptance of election as a director as consent to jurisdiction in Delaware. Id. at 214–15, 97 S.Ct. 2569.

Unlike the directors in Shaffer, the complaint in this case does not assert that respondents are harming a corporation by opening it up to liability in other...