LAS VEGAS, Nev.—An en banc panel of the Nevada Supreme Court has ruled in Consipio Holding v. Carlberg, a case brought on appeal by the plaintiff Consipio v. Private Media Group challenging an order by lower court judge Elizabeth Gonzalez that granted a motion to dismiss filed by several of the defendants—Johan Carlberg, Peter Oixinger, Bo Rodebrandt, Johan Gillborg and Philip Christmas—who had argued that as Private Media officers with no personal connection to the state, the court had no jurisdiction over them. The Supremes did not agree, but neither did they think the lower court had fully evaluated the extent of the harm done by the officers to Consipio, which the court said is a citizen of the state entitled to the protection of the state.
"In this appeal," read the opening of the August 9 ruling authored by Justice Mark Gibbons, "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."
However, continued the 4-page ruling, "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."
Some sentences plucked from the ruling make for an enlightening read:
"A corporation that is incorporated in Nevada is a Nevada citizen."
"When officers or directors directly harm a Nevada corporation, they are harming a Nevada citizen."
"A district court can exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada corporation."
"Officers or directors who directly harm a Nevada corporation are affirmatively directing conduct toward Nevada, and by doing so can be subject to personal jurisdiction even without a director consent statute." [A director consent statute notices directors that by accepting a position as a director of a corporation, the director consents to service of process in that jurisdiction.]
After making a rather succinct case in support of "a district court's authority to exercise personal jurisdiction over officers and directors in such lawsuits," the court also stated: "The district court held hearings based on the motions to dismiss where it granted the motions, stating that an individual's position as a Nevada corporation's director does not automatically subject that individual to jurisdiction in Nevada. While we agree with this statement, the district court needed to conduct further factual analysis in order to determine whether the respondents' conduct subjected them to jurisdiction in Nevada. On remand, the district court must conduct further factual analysis in order to determine whether it can exercise personal jurisdiction over the respondents."
Justice Gibbons, with six other justices concurring, concluded, "A district court can exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada corporation. In light of this opinion, the district court must further analyze the respondents' conduct and contacts with Nevada. Accordingly, we vacate the district court order and remand this matter for further proceedings."
The Nevada Supreme Court ruling can be read here.
