572 F.Supp.3d 950
D. Nev.2021Background
- The Crescent Dunes solar-thermal Project in Tonopah, NV involved multiple entities (plaintiffs: CMB 9, CMB 11, CMBE; defendants: ACS, Santander, TSE, and several Cobra affiliates) and financing including $170M private loans and a $715M DOE-guaranteed loan.
- CTPI built the Plant under an EPC contract with TSE; ACS unconditionally guaranteed CTPI’s EPC obligations; plaintiffs allege thousands of construction defects and premature "provisional acceptance."
- Plaintiffs say CEIF, CTPI, ACS, Santander, TSE and the Cobra entities concealed defects, misrepresented progress, prevented enforcement of lenders’ rights, and thereby caused loan defaults and losses.
- Plaintiffs sued in Nevada state court; defendants removed to federal court in 2021; plaintiffs moved to remand; multiple defendants moved to dismiss; Cobra defendants moved to compel arbitration.
- Court resolved: remand denied; ACS not entitled to dismissal for lack of personal jurisdiction; Santander dismissal denied in part but limited jurisdictional discovery ordered; certain aiding-and-abetting tortious-interference claims dismissed with prejudice; Cobra’s motion to compel arbitration granted and case stayed as to Cobra parties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over ACS | ACS aided/abeted fraud and guaranteed EPC obligations tied to Nevada Project, so Nevada courts have specific jurisdiction | ACS: foreign parent not subject to Nevada jurisdiction | Court: ACS’s guaranty and substantial involvement in Project support specific jurisdiction; ACS’s motion to dismiss DENIED |
| Personal jurisdiction over Santander | Santander directed or controlled subsidiary actions that caused harm in Nevada | Santander: insufficient Nevada contacts; statute-of-limitations and jurisdiction defenses | Court: record undeveloped on alter-ego/agency; DENIED Santander’s motion without prejudice; limited jurisdictional discovery authorized |
| Validity of aiding-and-abetting tortious-interference claim | Plaintiffs assert defendants aided interference with loan rights | Defendants: claim legally unavailable under Nevada law and/or untimely | Court: aiding-and-abetting tortious-interference is not cognizable in Nevada; claim DISMISSED WITH PREJUDICE (Santander and TSE) |
| Sufficiency of process/service on TSE | Plaintiffs served TSE after removal but had actual notice; service should be excused | TSE: service defective and untimely under FRCP 4(m) | Court: TSE consented to removal and had notice; excused delay; motion to dismiss for insufficient process/service DENIED |
| Motion to compel arbitration (Cobra defendants) | Plaintiffs: nonsignatories and some claims fall outside guaranty arbitration clause | Cobra: guaranty contains broad ICC arbitration clause; nonsignatories may compel under estoppel/agency | Court: arbitration clause valid, survives termination for related disputes; delegation clause kicks arbitrability to arbitrator; nonsignatory estoppel applies; Motion to compel GRANTED; action STAYED as to Cobra parties |
| Motion to remand to state court | Plaintiffs: removal untimely; abstention and lack of bankruptcy-related subject-matter jurisdiction | Defendants: removal timely; federal jurisdiction exists under 28 U.S.C. § 1452 as action "related to" TSE bankruptcy; abstention inapplicable post-removal | Court: removal timely; abstention not warranted; related-to bankruptcy jurisdiction exists (close nexus); Motion to remand DENIED |
Key Cases Cited
- Walden v. Fiore, 571 U.S. 277 (personal-jurisdiction requires defendant’s forum contacts)
- Daimler AG v. Bauman, 571 U.S. 117 (limits on general jurisdiction)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (minimum contacts standard)
- Forsythe v. Overmyer, 576 F.2d 779 (guarantor’s forum-related commitments can support jurisdiction)
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (delegation of arbitrability to arbitrator enforces arbitrator-first rule)
- Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220 (FAA’s strong federal policy favoring arbitration)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (federal pleading standard: plausibility)
- In re Pegasus Gold Corp., 394 F.3d 1189 ("close nexus" test for bankruptcy-related jurisdiction)