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CALIFORNIA CORPORATE & SECURITIES LAW

California Securities Law Claims Founder On Personal Jurisdiction

Establishing personal jurisdiction may seem mundane, but without it a plaintiff may soon find itself out of court, as did the plaintiff in Marshall v. Galvanoni, 2017 U.S. Dist. LEXIS 185530. In Marshall, the plaintiff sued a half dozen companies and four individuals over failed investments.  Among other things, the plaintiff alleged violations of California…

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U.S. District Court Finds Personal Jurisdiction In Derivative Suit

I think it is beyond peradventure that a state enjoys personal jurisdiction over corporations incorporated within that state.  What about the personal jurisdiction over the corporation’s directors and officers?  That was the question addressed by U.S. District Judge Jennifer A. Dorsey in Sonoro Invest, S.A. v. Miller, 2017 U.S. Dist. LEXIS 9657 (D. Nev. Jan. 24,…

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Federal Court Rules “Mere Affiliation” Is Insufficient To Establish Personal Jurisdiction

Nearly four years ago, I wrote about a Nevada Supreme Court decision holding that Nevada courts can exercise personal jurisdiction over nonresident officers and directors who directly harm the corporation.  Consipio Holding, BV v. Carlberg, 282 P.3d 751 (2012).  At the time, Nevada did not have an implied consent statute similar to Del. Code tit. 10,…

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Three Questions To Ask Before Incorporating In Delaware

In the business world it was once commonly said that “no one ever was fired for buying IBM”.  Given Delaware’s preeminent market share, the same thinking may underlie a recommendation to incorporate there.  Before making that recommendation, I encourage you to consider the following three questions: Does the corporation want to pay a lot more money in…

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Court Addresses Jurisdiction Over Alleged Tortious Internet Conduct

By dramatically lowering the cost of disseminating information, the internet has made it possible for companies to “cybersmear” their competitors before a large potential audience at very little cost.  The internet also allows companies to disguise the source of the attack.  In Dinar Corp. v. Sterling Currency Group, LLC, 2014 U.S. Dist. LEXIS 114528 (D. Nev.…

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Court Rules LLC Form Provided No Fiduciary Shield To Personal Jurisdiction

Last Friday’s post concerned whether a plaintiff could establish jurisdiction by tagging a corporate officer attending a conference in California.  The question was whether a corporation is present wherever its officers are present.  Today’s post considers the converse question.  Is a member of an LLC present where the LLC is present? In Poga Mgmt Ptnrs LLC…

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Why October 1, 2014 Is An Important Date For Management Persons Of Nevada Entities

Two years ago, the Nevada Supreme Court in an en banc decision held that a state district court may exercise jurisdiction over the nonresident officers and directors of a Nevada corporation with its principal place of business in Spain.  Consipio Holding, BV v. Carlberg, 282 P.3d 751 (Nev. 2012).  The Supreme Court reasoned When officers…

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Non-Resident Officers And Directors Found Subject to Personal Jurisdiction Of Nevada Courts

In 1977, the United States Supreme Court dealt a mortal blow to Delaware’s sequestration scheme for establishing personal jurisdiction over non-resident directors.  Shaffer v. Heitner, 433 U.S. 186 (1977).  Within weeks, the Delaware legislature enacted an implied consent statute for directors. Del. Code tit. 10, § 3114(a).  In 2003, the legislature amended Section 3114 to…

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