By the Court,
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; Han 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.,
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 Nеvada 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) confеrs 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.
DISCUSSION
When a pаrty 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,
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,
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,
[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 causе 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 reasоnable.
Jarstad v. National Farmers Union,
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,
(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 fundamеntal substantive social policies.”
Emeterio v. Clint Hurt and Assocs.,
A corporation that is incorporated in Nevada is a Nevada citizen. Quigley v. C. P. R. R. Co.,
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.
Unlike the directors in Shaffer, the complaint in this case does not assert that respondents are harming a cоrporation by opening it up to liability in other jurisdictions; rather, they allegedly are causing direct harm to a Nevada citizen in Nevada for personal gain. Officers or directors who directly harm a Nevada corporation are affirmatively directing conduct toward Nevada, аnd by doing so can be subject to personal jurisdiction even without a director consent statute. See DeCook v. Environmental Sec. Corp., Inc.,
This case is further distinguishable from Shaffer, as here there is statutory support for allowing a district court to exercise personal jurisdiction over a nonresident officer or director. NRS 78.135(1) authorizes lawsuits “against the officers or directors of the corporation for violation of their authority.’ ’
Statutory interpretation is a question of law that we review de novo. Sims v. Dist. Ct.,
NRS 78.135(1) not only authorizes suits, but also provides notice to officers and directors that they are subject to derivative suits
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.
CONCLUSION
A district court can exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada сorporation. 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.
Notes
Milton, Jr., is not a party to this appeal.
Consipio also contends that the fiduciary shield doctrine does not protect the respondents from being subject to personal jurisdiction in Nevada. “Under the fiduciary shield doctrine, a person’s mere association with a corporation that causes injury in the forum state is not sufficient in itself to permit that forum to assert jurisdiction over the person.” Davis v. Metro Productions, Inc.,
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. See, e.g., Del. Code Ami. tit. 10, § 3114 (Supp. 2010).
We nоte that after the district court determines that an officer or director directly harmed a Nevada corporation, it must also determine whether it is reasonable to exercise personal jurisdiction. Trump,
NRS 78.135(1) states in its entirety:
The statement in the articles of incorporation of the objects, purposes, powers and authorized business of the corporation constitutes, as between the corporation and its directors, officers or stockholders, an authorization to the directors and a limitation upon the actual authority of the representatives of the corporation. Such limitations may be asserted in a proceeding by a stockholder or the State to enjoin the doing or continuation of unauthorized business by the corporation or its officers, or both, in cases where third parties have not acquired rights thereby, or to dissolve the corpоration, or in a proceeding by the corporation or by the stockholders suing in a representative suit against the officers or directors of the corporation for violation of their authority.
NRS 78.135(1) notes that “[t]he statement in the articles of incorporation of the objects, рurposes, powers and authorized business of the corporation constitutes” a corporate director’s authority. A corporation’s bylaws and a state’s laws also establish a director’s authority. 18B Am. Jur. 2d Corporations § 1289 (2004). A corporate officer’s or agent’s authority is established by a corporаtion’s board of directors. Id. § 1316. However, the authority may not include acts that a state’s laws or a corporation’s articles of incorporation or bylaws forbid. Id.; see NRS 78.135(1) (noting that the articles of incorporation acts as a limitation on the actual authority of a corporatiоn’s representative).
The Delaware Legislature has enacted a director consent statute, which states that when a nonresident accepts election or appointment as a director, trustee, or member of a governing body of a corporation, the nonresidеnt consents to jurisdiction in Delaware in an action for a violation of his or her duty in such capacity. Del. Code Ann. tit. 10, § 3114 (Supp. 2010). Although we conclude that NRS 78.135(1) supports a district court’s exercise of personal jurisdiction over officers and directors who violate their authority, we note that our Legislature would need to modify NRS 78.135(1) in order for it to have the same scope as Delaware’s director consent statute.
