(dissenting).
{49} I dissent from the majority’s affirmance of the district court’s denial of the motion to dismiss. In my opinion, neither Judge Kennedy’s opinion nor Judge Sutin’s opinion is supported by the authorities cited, their opinions are contrary to what I view to be the better reasoned of out-of-state cases, and their opinions would open the door to jurisdiction whenever there is a parent corporation of a subsidiary doing business in New Mexico unless the parent had nothing whatsoever to do with the subsidiary, which is virtually impossible as well as impractical.
{50} The beginning of Judge Kennedy’s opinion suggests that Cruttenden v. Mantura, 97 N.M. 432, 434-35, 640 P.2d 932, 934-35 (1982), was a case involving the question of the substantive liability of a parent for the acts of its subsidiary. Kennedy op. ¶ 19. Yet, the opinion subsequently concludes that the case was about whether service on a parent would subject the subsidiary to the court’s jurisdiction. Kennedy op. ¶ 27. Further, the opinion concludes that such is a question “entirely different” from that before us today. Id. While the issues are somewhat different, I am unable to conclude that they are so entirely different that Cruttenden does not lend any guidance to this case.
{51} In my view, the Cruttenden factors are the beginning of the analysis when one seeks to pierce the corporate veil, whether for jurisdictional or liability purposes. When evaluating for jurisdiction, piercing the corporate veil is sometimes known as the alter ego doctrine. See Jemez Agency, Inc. v. CIGNA Corp., 866 F.Supp. 1340, 1343-45 (D.N.M.1994). Piercing the corporate veil has three requisites: instrumentality, improper purpose, and proximate causation. Harlow v. Fibron Corp., 100 N.M. 379, 382, 671 P.2d 40, 43 (Ct.App.1983). As Judge Sutin notes, the instrumentality requisite is sometimes called the alter ego doctrine. Sutin op. ¶ 43. See Harlow, 100 N.M. at 382, 671 P.2d at 43.
{52} In Judge Sutin’s view, instrumentality is the only requisite that is relevant for jurisdictional purposes. Sutin op. ¶ 45. However, no New Mexico case has ever said that. It is true that Cruttenden addressed only instrumentality. 97 N.M. at 434-35, 640 P.2d at 934-35. But that case found no instrumentality and therefore “did not reach the question of improper purpose.” Harlow, 100 N.M. at 382, 671 P.2d at 43. Cases are not authority for propositions not considered. Fernandez v. Farmers Ins. Co., 115 N.M. 622, 627, 857 P.2d 22, 27 (1993).
{53} Other jurisdictions that have addressed the issue have unequivocally held that for purposes of personal jurisdiction, it is not sufficient to establish only instrumentality, and instead a plaintiff must also establish that the corporation that is using another corporation as its instrumentality has formed it or is using it to perpetrate a fraud or other injustice or for some other improper purpose. See, e.g., Harris Rutsky & Co. Ins. Svcs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1134-35 (9th Cir.2003) (“To satisfy the alter ego exception to the general rule that a subsidiary and the parent are separate entities [for purposes of personal jurisdiction], the plaintiff must make out a prima facie case (1) that there is such unity of interest and ownership that the separate personalities [of the two entities] no longer exist and (2) that failure to disregard [their separate identities] would result in fraud or injustice.” (internal quotation marks and citations omitted)); Doe v. Unocal Corp., 248 F.3d 915, 926-28 (9th Cir.2001) (holding that a parent’s ownership of subsidiary and facts that the same people served as directors of both companies and that a parent was involved in macro-management and finances of subsidiary did not satisfy first prong of alter ego test and thus the court did not need to reach second prong dealing with equities); United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1091-93 (1st Cir.1992) (deciding the question of personal jurisdiction using federal veil piercing standard for ERISA cases and holding that fraudulent intent and injustice are elements of the standard), superseded by rule on other grounds as stated in Cent. States, Southeast and Southwest Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 940 (7th Cir. 2000); ACE & Co. v. Balfour Beatty PLC, 148 F.Supp.2d 418, 425 (D.Del.2001) (holding that Delaware law requires fraud, injustice, or inequity to be shown before the alter ego doctrine can be used to find personal jurisdiction over a parent corporation); Medina v. Four Winds Int’l Corp., 111 F.Supp.2d 1164, 1168-69 (D.Wyo.2000) (same under Wyoming law); Sonora Diamond Corp. v. Super. Ct., 83 Cal.App.4th 523, 99 Cal.Rptr.2d 824, 835-37 (2000) (indicating that California requires two factors to be met before corporate veil may be pierced for jurisdictional purposes — (1) unity of interest and ownership and (2) inequitable result caused by wrongdoing or fraud); Flight Int’l Aviation Training Ctr., Inc. v. Rivera, 651 So.2d 1265, 1266 (Fla.Dist.Ct.App.1995) (holding that wrongful or improper purpose must be shown for jurisdictional purposes). The reason for this rule is that corporations are formed precisely for the purpose of insulating the owners thereof and such purpose ought to be respected, whether for liability or jurisdiction, unless there are countervailing reasons not to do so. See United Elec. Workers, 960 F.2d at 1091; Jemez Agency, Inc., 866 F.Supp. at 1347; Sonora Diamond Corp., 99 Cal.Rptr.2d at 836.
{54} Judge Kennedy suggests that no New Mexico case has ever held that personal jurisdiction over an out-of-state parent of a subsidiary doing business in New Mexico must be supported by either the doctrines of alter ego, agency, or conspiracy. He characterizes the analysis in Smith v. Halliburton Co., 118 N.M. 179, 186, 879 P.2d 1198, 1205 (Ct.App.1994), seeming to require some recognized theory in order to assert personal jurisdiction over a parent, as dicta. Kennedy op. ¶ 27. Although the Court did not find any recognized theory to be applicable to the facts of that case, I cannot say its analysis was entirely dicta.
{55} To be sure, we did not in that case specifically consider and reject the analysis of Energy Reserves Group, Inc. v. Superior Oil Co., 460 F.Supp. 483 (D.Kan.1978) (Energy Reserves), on which Judge Kennedy’s opinion so heavily relies. But the fact that our Court considered it necessary to accept the traditional analysis indicates to me that it would not follow the Energy Reserves analysis, just as the New Mexico Federal District Court in Jemez Agency, Inc., 866 F.Supp. at 1346-47, did not follow it.
{56} One important reason not to follow Energy Reserves in New Mexico is that that case was analyzing personal jurisdiction pursuant to the Kansas long-arm statute, which is considerably broader than New Mexico’s. Compare Energy Reserves, 460 F.Supp. at 490 (indicating that the Kansas statute uses the phrase “agent or instrumentality”), with NMSA 1978, § 38-1-16(A) (1971) (permitting long-arm jurisdiction when certain things are done “in person or through an agent”); see Lonny Sheinkopf Hoffman, The Case Against Vicarious Jurisdiction, 152 U. Pa. L.Rev. 1023, 1036 (2004) (indicating that statutes that use the words “agent or instrumentality” are more expansive than statutes like New Mexico’s that use only the word “agent”).
{57} Although many of our cases contain language indicating that personal jurisdiction analysis considers only the outer boundaries of due process, see, e.g., Santa Fe Techs., Inc. v. Argus Networks, Inc., 2002-NMCA-030, ¶ 13, 131 N.M. 772, 42 P.3d 1221, and eases cited therein, I am unaware of any case in which it was not clear that there was the doing of an act under the long-arm statute, whether the act was the transaction of business or the commission of a tort. I believe that it is important that our legislature used certain language in the statute and note that the legislature did not write that “New Mexico has jurisdiction whenever due process would allow it.” See generally Hoffman, supra at 1036-37 (suggesting that using various substantive doctrines to invoke amenability to jurisdiction does not honor legislative intent); Applied Biosystems, Inc. v. Cruachem, Ltd., 772 F.Supp. 1458, 1465 (D.Del. 1991) (“In considering a recent Delaware Supreme Court decision, which stated that the Delaware long-arm statute confers jurisdiction to the maximum extent allowable under the Due Process Clause, the ... court stated that: ‘the [Delaware] Supreme Court did not intend ... to direct the trial court to ignore the specific words of [the long-arm statute] and to henceforth analyze all questions arising under [that statute] only in the broad terms of fundamental fairness that guide determination of the constitutional question. The Supreme Court commands that this statute be given a liberal construction so that its purpose is achieved, but it has not directed that the application of statutory words to the facts in hand be slighted.’ ” (citations omitted)).
{58} Thus, under the facts and allegations of this ease, I conclude that the New Mexico long-arm statute requires the transaction of business by Amrep or its agent (or co-conspirator). Since the issues of agency or conspiracy are not before us, we are left with determining whether Amrep transacted any business.
{59} Prior to discussing Amrep’s transaction of business, a brief digression into the agency and conspiracy theories may be helpful. As both Judge Kennedy’s and Judge Sutin’s opinions make clear, Plaintiffs do not rely on the agency theory. Kennedy op. ¶ 16; Sutin op. ¶ 41. Nonetheless, it is important to understand that the agency theory, for purposes of personal jurisdiction, goes far beyond the simple fact that a subsidiary is doing the parent’s business under parent’s general control. See Sonora Diamond Corp., 99 Cal.Rptr.2d at 837-38. Instead, for the agency theory of jurisdiction to be found, it must be shown that the parent has “in effect taken over performance of the subsidiary’s day-to-day operations[.]” Id. at 838. Perhaps the parties do not argue agency because there is clearly no sufficient showing of it in this case. Nor is there any contention of a conspiracy. I return then to the transaction of business.
{60} I do not believe that Amrep’s formation of subsidiary corporations to do business in New Mexico can amount to Amrep’s transaction of business; otherwise, every parent corporation would be amenable to suit, and there would be no call for doctrines such as alter ego or agency. Nor do I believe that the shareholder parent’s injection of capital into the subsidiary corporation or the corporations’ sharing of key staff or officers is enough to amount to the transaction of business by the parent. I would hold that it is only if Plaintiffs can pierce the corporate veil of EUI that Amrep should be considered to have transacted EUI’s business.
{61} I do not disagree with the other judges that, given the standard of review for jurisdictional issues when there is no evidentiary hearing, a court could find that Plaintiffs have just barely established a prima facie case of instrumentality under the Cruttenden factors. See id. at 434-35, 640 P.2d at 934-35. But Plaintiffs have not shown any sort of fraud, improper purpose, or inequity in the operation of EUI or Amrep’s use of EUI as an independent water-utility corporation in this case, and our statute does not allow jurisdiction over an entity that transacts business through the use of an instrumentality. I would therefore reverse and order that the complaint against Amrep be dismissed and that Plaintiffs be required to have their remedy, if any, against the corporations doing business in New Mexico.