Alpine View Co Ltd v. Atlas Copco AB

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

____________________

No. 97-20879
____________________

ALPINE VIEW COMPANY LIMITED; BJORN HANSEN

Plaintiffs - Appellants

v.

ATLAS COPCO AB; ATLAS COPCO ROBBINS; ATLAS COPCO COMPRESSORS
INCORPORATED; ATLAS COPCO COMPTEC INCORPORATED

Defendants - Appellees

_________________________________________________________________

Appeal from the United States District Court
for the Southern District of Texas
_________________________________________________________________
February 25, 2000

Before KING, Chief Judge, and REYNALDO G. GARZA and EMILIO M.
GARZA, Circuit Judges.

KING, Chief Judge:

Plaintiffs-Appellants challenge the district court’s grant

of Defendants-Appellees’ motions to dismiss for lack of personal

jurisdiction and for forum non conveniens. They also challenge a

magistrate judge’s order denying them discovery on matters they

argue are relevant to the personal jurisdiction issue. We

conclude that the district court did not err in dismissing the

case against all of the defendants and therefore affirm.

1
 I. FACTUAL AND PROCEDURAL BACKGROUND

This case arises out of an alleged breach of a 1992

Intentional Agreement (“1992 Agreement”) between Alpine View

Company, Limited (“Alpine View”), and Uniroc AB (“Uniroc”), a

wholly-owned subsidiary of the Swedish holding company, Atlas

Copco AB (“ACAB”). In 1989, Bjørn Hansen, the president of

Alpine View, was granted exclusive worldwide rights to the

distribution and sale of offshore drill bits manufactured by

Shanghai Machinery & Equipment Import/Export Corporation

(“SMEC”), a Chinese company. To facilitate the sale of these

products, Hansen sought an established distributor, and

eventually executed the 1992 Agreement with Uniroc. Under the

1992 Agreement, Uniroc was to purchase drill bits from Bjørn

Hansen A/S, and eventually become the exclusive distributor of

those products in certain specified sectors of the world market.

Uniroc was to pay Alpine View a commission based on net sales to

users and distributors outside the Atlas Copco Group, which

comprises ACAB and its seventy-one subsidiaries. To enhance its

ability to deal directly with SMEC, Uniroc was also to enter into

a separate distributorship agreement with that company. The

existence of the separate distributorship agreement was a pre-

condition for the effectiveness of the 1992 Agreement.

The 1992 Agreement specified that all impasses were to be

submitted to arbitration in Oslo, Norway. A dispute arose that

was not resolved through negotiation, and in 1993, Alpine View

filed a writ of summons for an arbitration case in Oslo against

2
ACAB and Uniroc. As grounds for the suit, Alpine View alleged

that “the defendants are guilty of wilfully and negligently

committing a breach of contract and unlawfully interfering in the

plaintiff’s business affairs and other contractual rights in

China.” The arbitration panel issued its decision on July 2,

1996, dismissing the claim against ACAB as it was not a party to

the 1992 Agreement’s arbitration clause and finding in favor of

Uniroc because Alpine View had decided to withdraw its claim.

On August 5, 1995, prior to the arbitration proceeding’s

conclusion, Alpine View and Hansen (“Appellants”) filed suit in

the 281st Judicial District Court of Harris County, Texas against

four defendants; ACAB, Atlas Copco Compressors, Inc.

(“Compressors”), Atlas Copco Comptec, Inc. (“Comptec”), and Atlas

Copco Robbins (“Robbins”). Compressors, Comptec, and Robbins are

each wholly-owned subsidiaries of Atlas Copco North America, Inc.

(“ACNA”), which is, in turn, now only partially owned by ACAB.

Neither Uniroc nor ACNA was named as a party to the action. The

suit alleges breach of contract, common law fraud, fraudulent

inducement, breach of the duty of good faith and fair dealing,

tortious interference with a contract, and negligent

misrepresentation. Appellants claim that all of the named

defendants jointly violated the 1992 Agreement by forming their

own joint venture with SMEC, thereby undermining Appellants’

rights. None of the named defendants signed the 1992 Agreement.

On September 13, 1995, Comptec, Compressors, and Robbins

removed the case to the U.S. District Court for the Southern

3
District of Texas. Alpine View is incorporated under the laws of

the British Virgin Islands and Hansen is a resident of Norway.

Compressors and Comptec are each Delaware corporations, with

Compressors having its principal place of business in

Massachusetts and Comptec having its in New York. Robbins is a

Washington corporation and has its principal place of business in

that state. The basis for removal was diversity jurisdiction

under 28 U.S.C. § 1332, with the removing defendants arguing that

ACAB, formed under the laws of Sweden, was not a proper party to

the case and had been joined simply to defeat subject-matter

jurisdiction.

A flurry of motions followed removal. Appellants filed a

motion to remand the case. Robbins filed a motion for dismissal

based on a lack of personal jurisdiction. ACAB filed motions for

dismissal based on a lack of personal jurisdiction, on

insufficiency of service of process, and on a lack of subject-

matter jurisdiction. Compressors and Comptec filed motions to

dismiss for forum non conveniens. On January 19, 1996,

defendants were ordered to produce documents, in the context of

Federal Rule of Civil Procedure 26, regarding the jurisdictional

issues raised. The case was referred to Magistrate Judge Mary

Milloy under 28 U.S.C. § 636(b)(1)(A) and (B) on January 25,

1996.

On March 8, 1996, Appellants filed motions to compel ACAB to

respond to interrogatories and production requests. A similar

motion was filed on April 11 with regard to Robbins. The

4
magistrate judge held a motion conference on June 18, and entered

an order on that date granting in part, and denying in part, the

Appellants’ motions to compel. The Appellants requested that the

magistrate judge review her order, and on June 24, she indicated

with a notice to the parties that she declined to undertake that

review. Pursuant to Federal Rule of Civil Procedure 72,

Appellants filed on July 2 specific objections to the magistrate

judge’s decisions regarding the motions to compel.

On July 30, the magistrate judge issued a memorandum and

recommendation that ACAB’s and Robbins’ motions to dismiss for

lack of personal jurisdiction be granted, and that Appellants’

motion for remand be denied as moot. The next day, she issued a

memorandum and recommendation that Comptec’s and Compressors’

motions to dismiss for forum non conveniens be granted. Timely

objections to these recommendations were filed. The district

court denied Appellants’ motion to remand on September 5, 1996.

Both dismissal recommendations were adopted by the district court

on September 30. In addition, the district court ordered that

ACAB’s motion to dismiss for lack of subject-matter jurisdiction

be denied as moot.1 Appellants’ subsequent motions to amend and

for a new trial were denied. They timely appealed.

On August 20, 1998, a three-member panel following this

court’s en banc decision in Marathon Oil Co. v. A.G. Ruhrgas, 145

F.3d 211 (5th Cir. 1998), issued an order vacating both the

1
The district court’s order refers to “Robbins’ motion”
being denied. However, the docket number cited (26) refers to
ACAB’s motion.

5
magistrate judge’s recommendations and the district court’s

orders because the district court had dismissed for lack of

personal jurisdiction without first considering motions

challenging subject-matter jurisdiction. See Alpine View Co.

Ltd. v. Atlas Copco A.B., 180 F.3d 628 (5th Cir. 1998). The

Appellants timely appealed this order. The Supreme Court granted

certiorari, vacated the judgment, and remanded the case for

further consideration in light of its decision in Ruhrgas AG v.

Marathon Oil Co., 119 S. Ct. 1563 (1999). See Atlas Copco AB v.

Alpine View Co., Ltd., 119 S. Ct. 1790 (1999). We now undertake

that review.

II. THE DISMISSAL OF APPELLANTS’ CLAIMS

This case raises a number of issues regarding the district

court’s dismissal of Appellants’ claims against the Appellees.

We first determine whether the district court abused its

discretion in dismissing those claims without first considering

motions challenging its subject-matter jurisdiction. See Ruhrgas

AG v. Marathon Oil Co., 119 S. Ct. 1563 (1999). We next address

Appellants’ contentions that jurisdictional discovery was

improperly limited and that the court erred in dismissing claims

against ACAB and Robbins for lack of personal jurisdiction.

Finally, we consider Appellants’ argument that the district court

erred in dismissing claims against Compressors and Comptec for

forum non conveniens.

6
 A. Personal Jurisdiction Before Subject-Matter Jurisdiction

In Ruhrgas AG v. Marathon Oil, 119 S. Ct. 1563 (1999), the

Supreme Court rejected a rule, applicable to removed cases, that

required a district court to assess whether it had subject-matter

jurisdiction before it could determine whether motions to dismiss

for lack of personal jurisdiction should be granted. Id. at

1569. We read the Ruhrgas AG Court’s opinion to direct lower

courts facing multiple grounds for dismissal to consider the

complexity of subject-matter jurisdiction issues raised by the

case, as well as concerns of federalism, and of judicial economy

and restraint in determining whether to dismiss claims due to a

lack of personal jurisdiction before considering challenges to

its subject-matter jurisdiction. We use the same factors to

guide our assessment of whether the district court abused its

discretion, see id. at 1572, in its conclusion in this case.

In the case before us, two motions challenged the court’s

subject-matter jurisdiction. Appellants sought remand on the

ground that the alleged basis for removal – diversity of

citizenship under § 1332 – does not exist because alien parties

are present on both sides of the suit. One of those parties is

ACAB, which Appellants contend is a proper party.2 In a motion

filed prior to the resolution of the Norway arbitration

proceeding, ACAB challenged subject-matter jurisdiction pursuant

to the Convention of the Recognition and Enforcement of Foreign

2
In removing the case to federal court, Compressors,
Comptec, and Robbins contended that ACAB was fraudulently joined
solely to defeat diversity jurisdiction.

7
Arbitral Awards, 21 U.S.T. 2517, T.I.A.S. No. 6997, 330 U.N.T.S.

38.

The magistrate judge did not state that these motions raised

particularly thorny questions, and instead cited judicial economy

as the primary reason for considering motions for dismissal due

to a lack of personal jurisdiction before addressing the subject-

matter jurisdiction motions. Ruhrgas AG suggests this does not,

under the circumstances, constitute an abuse of discretion.

Under the Texas long-arm statute, see TEX. CIV. PRAC. & REM. CODE

ANN. § 17.042 (1997), a court has personal jurisdiction over a

foreign defendant to the fullest extent allowed by the federal

constitution. See Wilson v. Belin, 20 F.3d 644, 647 & n.1 (5th

Cir. 1994). As a result, this case does not raise “difficult

questions of state law.” See Ruhrgas AG, 119 S. Ct. at 1571. A

federal court may consider personal jurisdiction issues prior to

addressing a motion to remand where “federal intrusion into state

courts’ authority is minimized.” Id. (citing Asociacion Nacional

de Pescadores v. Dow Quimica, 988 F.2d 559, 566-57 (5th Cir.

1993)). On this basis, we find no abuse of discretion.

B. Issues Concerning Claims Against ACAB and Robbins

Appellants challenge the district court’s dismissal of their

claims against ACAB and Robbins, arguing that submitted evidence

satisfies Appellants’ burden of making a prima facie showing of

personal jurisdiction. There are several components to

Appellants’ challenge. First, they argue that they were required

8
do more than make out a prima facie case. Second, Appellants

contend that submitted evidence demonstrates that the court may

assert personal jurisdiction over both ACAB and Robbins as the

requirements of specific jurisdiction have been met. Third, they

argue that they established that the court may assert general

jurisdiction over both ACAB and Robbins. Appellants also

challenge the determination to restrict jurisdictional discovery.

Because our resolution of the discovery issue is best understood

in light of our resolution of the dismissal issue, we discuss the

dismissal issue first.

1. Dismissal for Lack of Personal Jurisdiction

We review de novo a district court’s dismissal for want of

personal jurisdiction. See Gardemal v. Westin Hotel Co., 186

F.3d 588, 592 (5th Cir. 1999). Under the Federal Rules of Civil

Procedure, a federal court in a diversity case may exercise

jurisdiction over a nonresident corporate defendant only if

permitted by state law. See FED. R. CIV. P. 4(e)(1), 4(h)(1),

4(k)(1). As noted above, the Texas long-arm statute has been

determined to have the same scope as the Constitution. See

Wilson v. Belin, 20 F.3d 644, 647 & n.1 (5th Cir. 1994). Thus,

our usual two-step analysis reduces to one step, and we consider

whether exercising jurisdiction over either ACAB or Robbins is

consistent with the Due Process Clause of the Fourteenth

Amendment. See Mink v. AAAA Dev. LLC, 190 F.3d 333, 335 (5th

Cir. 1999).

9
 “The Due Process Clause . . . permits the exercise of

personal jurisdiction over a nonresident defendant when (1) that

defendant has purposefully availed himself of the benefits and

protections of the forum state by establishing ‘minimum contacts’

with the forum state; and (2) the exercise of jurisdiction over

that defendant does not offend ‘traditional notions of fair play

and substantial justice.’” Id. at 336 (quoting Latshaw v.

Johnston, 167 F.3d 208, 211 (5th Cir. 1999) (in turn quoting

International Shoe Co. v. State of Washington, 326 U.S. 310, 316

(1945))). “Minimum contacts” can be established either through

contacts sufficient to assert specific jurisdiction, or contacts

sufficient to assert general jurisdiction. See Wilson, 20 F.3d

at 647. Specific jurisdiction over a nonresident corporation is

appropriate when that corporation has purposefully directed its

activities at the forum state and the “litigation results from

alleged injuries that ‘arise out of or relate to’ those

activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472

(1985) (quoting Helicopteros Nacionales de Colombia, S.A. v.

Hall, 466 U.S. 408, 414 (1984)). General jurisdiction, on the

other hand, will attach where the nonresident defendant’s

contacts with the forum state, although not related to the

plaintiff’s cause of action, are “continuous and systematic.”

Helicopteros, 466 U.S. at 415-16.

When, as here, the district court conducted no evidentiary

hearing, the party seeking to assert jurisdiction must present

sufficient facts as to make out only a prima facie case

10
supporting jurisdiction. See Felch v. Transportes Lar-Mex SA DE

CV, 92 F.3d 320, 326 (5th Cir. 1996). We must accept as true

that party’s uncontroverted allegations, and resolve in its favor

all conflicts between the facts contained in the parties’

affidavits and other documentation. See Guidry v. United States

Tobacco Co., 188 F.3d 619, 625-26 (5th Cir. 1999); Latshaw v.

Johnston, 167 F.3d 208, 212 (5th Cir. 1999); Ruston Gas Turbines,

Inc. v. Donaldson Co., 9 F.3d 415, 418 (5th Cir. 1993) (“When

alleged jurisdictional facts are disputed, we must resolve all

conflicts in favor of the party seeking to invoke the court’s

jurisdiction.”); Bullion v. Gillespie, 895 F.2d 213, 217 (5th

Cir. 1990). With this standard in mind, we turn to Appellants’

contentions regarding specific and general jurisdiction.

a. Specific Jurisdiction and the Stream of Commerce Theory

As the Supreme Court noted in Burger King Corp. v.

Rudzewicz, 471 U.S. 462 (1985), “the constitutional touchstone”

for asserting personal jurisdiction over a nonresident defendant

is “whether the defendant purposefully established ‘minimum

contacts’ in the forum State.” Id. at 474. It went on to

discuss the role of foreseeability in establishing such contacts,

and to state that the “‘foreseeability that is critical to due

process analysis . . . is that the defendant’s conduct and

connection with the forum State are such that he should

reasonably anticipate being haled into court there.’” Id.

(quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,

11
297 (1980)). Appellants draw on this language to argue that

district court erred in refusing to assert specific jurisdiction

over ACAB and Robbins. They contend that substantial evidence

supported the conclusion that ACAB and Robbins directed their

products and business activities into Texas, and thus the

corporations should have anticipated being haled into Texas

courts.

In making this argument, Appellants rely heavily on the

stream-of-commerce theory. See World-Wide Volkswagen, 444 U.S.

at 298. They take issue with the district court’s refusal to

apply that theory to this case, noting that (1) no Fifth Circuit

opinion has explicitly stated that the stream-of-commerce theory

could not be applied to “economic” cases; and (2) that the

instant suit represents a prime opportunity for its application

to such cases. In support of their argument that the stream-of-

commerce theory is applicable to cases other than those involving

products liability, Appellants point to courts applying the

theory to cases raising antitrust or intellectual property

related claims. See, e.g., Beverly Hills Fan Co. v. Royal

Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994); Allen Organ Co.

v. Kawai Musical Instruments Mfg. Co., 593 F. Supp. 107 (E.D. Pa.

1984); Pfeiffer v. International Academy of Biomagnetic Med., 521

F. Supp. 1331 (W.D. Mo. 1981).

As we noted in Bearry v. Beech Aircraft Corp., 818 F.2d 370

(5th Cir. 1987), when a nonresident’s contact with the forum

state “stems from a product, sold or manufactured by the foreign

12
defendant, which has caused harm in the forum state, the court

has [specific] jurisdiction if it finds that the defendant

delivered the product into the stream of commerce with the

expectation that it would be purchased by or used by consumers in

the forum state.” Id. at 374 (citing World-Wide Volkswagon, 444

U.S. at 298). Appellants are correct in noting that we have not,

in our decisions dealing with the stream-of-commerce theory,

entirely foreclosed its application to cases not involving

product liability claims. We need not decide here whether the

theory is, or is not applicable to a broader range of cases.

Appellant’s challenge must be rejected because delivery of

products into the stream of commerce does not support assertion

of specific jurisdiction over ACAB and Robbins.

In concluding their argument that the stream-of-commerce

theory is appropriately applied in this case, Appellants contend

that

[w]here parties, like ACAB and Robbins, either sell or
attempt to sell a product in the Texas market, then it
cannot be said that it is unfair or unjust [to] subject
them to jurisdiction with respect to any claims that
might be brought against them. Put another way, if a
party is selling or trying to sell goods in a
particular state, they are obviously seeking to avail
themselves of the benefits of the forum and should not
be allowed to shield themselves from the ultimate
accountability that might follow.

Appellants’ Br. at 40. Based on the evidence they contend

supports assertion of specific jurisdiction, Appellants clearly

intend to focus the court’s attention on all products – not just

drill bits – ACAB and Robbins allegedly put into the stream of

commerce. Moreover, Appellants argue that putting products into

13
the stream of commerce with the expectation that Texans will

purchase or use those products suffices to establish jurisdiction

with respect to “any claims.”

This is more akin to a general jurisdiction argument than to

a specific jurisdiction argument. Appellants make no attempt to

link Appellees’ contacts with Texas and the instant litigation.

This is a link that specific jurisdiction requires. See Shaffer

v. Heitner, 433 U.S. 186, 204 (1977); Guidry v. United States

Tobacco Co., 188 F.3d 619, 625 (5th Cir. 1999). Instead,

Appellants assert that ACAB’s and Robbins’ contacts should be

sufficient to subject them to jurisdiction with respect to “any

claims.” We have specifically rejected a party’s reliance on the

stream-of-commerce theory to support asserting general

jurisdiction over a nonresident defendant. See Bearry, 818 F.2d

at 375.

Even assuming that ACAB and Robbins delivered their products

into the stream of commerce with the expectation that they would

be purchased, or used, by Texas consumers, those activities do

not support a finding of any connection between Appellees’

contacts, the forum state, and Appellants’ causes of action. See

Shaffer, 433 U.S. at 204. Appellants’ claims arise out of losses

they experienced as a result of ACAB’s and Robbins’ alleged

actions vis-à-vis the 1992 Agreement, not as a result of any

contact with a product. Cf. Ham v. La Cienega Music Co., 4 F.3d

413, 416 (5th Cir. 1993) (finding that defendants’ activities,

though connecting them to Texas within meaning of stream-of-

14
commerce cases, were insufficient to support jurisdiction given

“at best a highly attenuated relationship” between the litigation

and those activities); Gulf Consol. Servs. Inc. v. Corinth

Pipeworks, S.A., 898 F.2d 1071, 1073-74 (5th Cir. 1990) (applying

stream-of-commerce principles to establish specific jurisdiction

over defendant to a breach of warranty action, noting that

product caused harm in forum state). Appellants have not

asserted that the alleged misdeeds occurred in Texas, or that the

1992 Agreement was negotiated or executed in Texas.3 Neither

Alpine View nor Hansen is considered a Texas resident.

Appellants assert that Texas businesses have been subjected

to less competition in the drill bit market and to restricted

access to improved technology as a result of ACAB’s and Robbins’

actions. However, these are neither harms that stem from ACAB’s

or Robbins’ delivery of products into the stream of commerce,

harms from which the Appellants’ causes of action arise, nor

harms to which those causes of action are related. In short,

Appellants have failed to make a prima facie showing that the

“litigation results from alleged injuries that arise out of or

relate to” ACAB’s or Robbins’ contacts with Texas. Burger King,

3
The only activities even remotely related to circumstances
surrounding the 1992 Agreement that Appellants allege occurred in
Texas are: (1) a 1983 meeting between Hansen and representatives
of Chinese manufacturing facilities at an offshore technology
conference held in Houston, Texas; (2) Hansen’s employment of
counsel in Houston to prepare a renewed distribution agreement
between Alpine View and SMEC; (3) significant negotiations
between Hansen and SMEC in Houston; and (4) Hansen’s meeting with
unidentified distributors of ACAB products in Texas to negotiate
“potential distribution alternatives” in the United States.

15
471 U.S. at 472 (citation and internal quotation marks omitted).

It simply cannot be said that ACAB or Robbins, based on the sale

of products in Texas, could have anticipated being haled into

court to defend the instant suit. Compare Calder v. Jones, 465

U.S. 783, 790 (1984) (finding that defendants’ allegedly libelous

actions were expressly aimed at a California resident, and thus

could reasonably anticipate being haled into California courts to

answer for the truth of statements made). As a result, we

conclude that the district court did not err in finding that

Appellants did not make a prima facie case supporting specific

jurisdiction.

b. General Jurisdiction and the Alter-Ego Doctrine

Appellants also challenge the district court’s conclusion

that they had not shown that assertion of general jurisdiction

was proper in this case. They contend that both ACAB and Robbins

have sufficient direct contacts with Texas to support general

jurisdiction. Appellants also maintain that the district court

could assert general jurisdiction over ACAB and Robbins by virtue

of their subsidiaries’ and other third parties’ contacts with

Texas because ACAB and Robbins were the alter egos of those

entities.

To make a prima facie showing of general jurisdiction,

Appellants must produce evidence that affirmatively shows that

ACAB’s and Robbins’ contacts with Texas that are unrelated to the

litigation are sufficient to satisfy due process requirements.

16
See Felch, 92 F.3d at 327. Those unrelated contacts must be

substantial, see Wilson, 20 F.3d at 649-50 & n.5, continuous and

systematic, see Helicopteros, 466 U.S. at 416; Wilson, 20 F.3d at

649. As we recently noted, “general jurisdiction can be assessed

by evaluating contacts of the defendant with the forum over a

reasonable number of years, up to the date the suit was filed.”

Access Telecom, Inc. v. MCI Telecomm. Corp., 197 F.3d 694, 717

(5th Cir. 1999).

Examining the submitted evidence, it is clear that

Appellants have not demonstrated that Robbins’ direct contacts

with Texas during the relevant period were sufficient to

establish general jurisdiction. The evidence shows, at best,

that Robbins sold, on isolated occasions, products to entities

located in Texas, that it was party to an agreement to provide

Mexican mines with products that were shipped to Texas before

being shipped to Mexico, that companies used Robbins’ products

for projects in Texas, and that Robbins’ personnel made field

service visits to Texas between December 1992 and December 1993.

These contacts are neither substantial, continuous, nor

systematic.

The same conclusion is compelled with regard to ACAB. To

demonstrate ACAB’s “direct” contacts with Texas, Appellants rely

on evidence that (1) indicates that the products of ACAB’s

subsidiaries are sold in Texas; and (2) otherwise indicates the

presence and activities in Texas of ACAB’s subsidiaries and of

17
subsidiaries of those subsidiaries.4 This is not surprising,

given ACAB is a holding company. However, “a foreign parent

corporation is not subject to the jurisdiction of a forum state

merely because its subsidiary is present or doing business there;

the mere existence of a parent-subsidiary relationship is not

sufficient to warrant the assertion of jurisdiction over the

foreign parent.” Hargrave v. Fibreboard Corp., 710 F.2d 1154,

1159 (5th Cir. 1983).

Thus, due largely to ACAB’s corporate structure, Appellants

must make a prima facie showing that ACAB so controls other

organizations that the activities of those organizations may be

fairly attributed to ACAB for purposes of asserting jurisdiction

over it. See Gardemal v. Westin Hotel Co., 186 F.3d 588, 593

(5th Cir. 1999) (describing that under Texas law, the alter ego

doctrine “applies ‘when there is such unity between the parent

corporation and its subsidiary that the separateness of the two

corporations has ceased and holding only the subsidiary

corporation liable would result in injustice’” (quoting Harwood

Tire–Arlington, Inc. v. Young, 963 S.W.2d 881, 885 (Tex.

App.–Fort Worth 1998, writ dism’d by agr.))); Hargrave, 710 F.2d

at 1161 (describing burden on party seeking to establish “alter

ego jurisdiction”).

4
There are isolated exceptions that do not fall cleanly
into one of these categories, but those exceptions also involve
ACAB subsidiaries. For example, ACAB stated that it was one of
five signatories to an agreement that required Atlas Copco France
Holdings, S.A., a French corporation, to wire payment for stock
in another French company to Dallas, Texas.

18
 In Gundle Lining Constr. Corp. v. Adams County Asphalt,

Inc., 85 F.3d 201, 208-09 (5th Cir. 1996), we listed twelve

factors to be used when assessing whether a subsidiary is the

alter ego of its parent. However, we also noted that the

assessment is based on a consideration of totality of the

circumstances. Id. at 209. Here, although only a prima facie

case is required, Appellants’ task is made more difficult by the

existence of multiple levels of ACAB subsidiaries. For example,

in order for the activities of Compressors, Comptec, and Robbins

to be attributed to ACAB, Appellants must make a prima facie case

that ACAB controls ACNA, itself a holding company, and controls

Compressors, Comptec, and Robbins.

Keeping in mind that we must resolve factual disputes in

Appellants’ favor, our review of the record nonetheless leads us

to conclude that Appellants have not met their burden. ACAB

owned all the stock of ACNA, which in turn owns all the stock of

Comptec, Compressors, and Robbins. A number of individuals

appear to have been directors or officers for multiple companies.

By virtue of its stock ownership, ACAB received dividends from

corporations that do business in Texas. Evidence also indicates

that interest-bearing loans were made between corporations.

We have said, however, that “100% stock ownership and

commonality of officers and directors are not alone sufficient to

establish an alter ego relationship between two corporations.”

Hargrave, 710 F.2d at 1160; see also Gardemal, 186 F.3d at 593

(noting that ties “through stock ownership, shared officers,

19
financing arrangements, and the like” do not, by themselves,

establish an alter-ego relationship). Instead, “[t]he degree of

control exercised by the parent must be greater than that

normally associated with common ownership and directorship.”

Hargrave, 710 F.2d at 1160 (citing Reul v. Sahara Hotel, 372 F.

Supp. 995, 998 (S.D. Tex. 1974)).

Such control has not been indicated here. The existence of

intercorporate loans does not establish the requisite dominance,

see United States v. Fidelity Capital Corp., 920 F.2d 827, 838

(11th Cir. 1991), and in fact, interest-bearing loans suggest

separation of corporate entities. See, e.g., Doe v. Unocal

Corp., 27 F.Supp.2d 1174, 1188 (C.D. Cal. 1998). Appellants’

evidence does not suggest that ACAB otherwise financed its

subsidiaries’ operations; that ACAB caused the incorporation of

its subsidiaries; that its subsidiaries are grossly

undercapitalized; that ACAB paid the salaries and other expenses

of the subsidiaries; that subsidiaries received all their

business from ACAB; that ACAB used subsidiaries’ property as its

own; that daily operations of the corporations were not separate;

or that subsidiaries do not observe corporate formalities.5 As a

result, they have not met their burden. Even if we were to

assume that all of ACAB’s subsidiaries had substantial,

5
Appellants include Robbins in their arguments urging us
to find that they have met their burden with regard to general
jurisdiction through the contacts of subsidiaries and
distributors. However, they do not point to any evidence that
supports the conclusion that Robbins controlled its subsidiaries
or distributors to such a degree that the activities of those
entities may be fairly attributed to Robbins.

20
continuous, and systematic contacts with Texas, those contacts

could not, based on Appellants’ evidence, be attributed to ACAB.

We conclude that the district court did not err in dismissing

Appellants’ claims against Robbins and ACAB for lack of personal

jurisdiction.6

2. Limitations on Discovery

Appellants contend that the district court abused its

discretion by adopting the magistrate judge’s dismissal

recommendations without “affording Alpine View important

jurisdictional discovery.” They argue that the magistrate judge

erred in limiting discovery related to attempts by ACAB and

Robbins to place their products into the stream of commerce and

to their actions in selling, distributing or marketing products

to entities that were not parties to the suit.

Appellants’ contentions assume that the district court

overruled their objections to the magistrate judge’s order

denying in part and granting in part Appellants’ motions to

compel discovery. However, as the Appellants also note, the

district court never explicitly ruled on those objections. As a

result, we face a record that is silent on the district court’s

6
Because we find Appellants have not made a prima facie
showing that ACAB or Robbins have the requisite minimum contacts
with Texas to support personal jurisdiction, we need not review
the district court’s conclusion regarding whether the exercise of
jurisdiction over ACAB or Robbins offends “traditional notions of
fair play and substantial justice,” International Shoe Co. v.
State of Washington, 326 U.S. 310, 316 (1945). See Wilson, 20
F.3d at 650 n.7.

21
disposition of Appellants’ objections to the magistrate’s

discovery order.

Under these circumstances, we must first ensure that we have

subject-matter jurisdiction to consider Appellant’s challenge to

the magistrate judge’s discovery order. The discovery order

rendered was within the magistrate judge’s power to issue. See

28 U.S.C. § 636(b)(1)(A). However, such orders are not final

orders under 28 U.S.C. § 1291. See Hutchinson v. Pfeil, 105 F.3d

562, 566 (10th Cir. 1997) (“Under § 636(b)(1)(A), a magistrate

judge may not issue a final order directly appealable to the

court of appeals.”); Reynaga v. Cammisa, 971 F.2d 414, 416 (9th

Cir. 1992) (“Under neither [§ 636(b)(1)(A) nor § 636(b)(1)(B)]

may a magistrate issue a final order directly appealable to the

court of appeals . . . .”); Glover v. Alabama Bd. of Corrections,

660 F.2d 120, 122 (5th Cir. Unit B Oct. 1981) (“The decision of a

magistrate [under § 636(b)] does not meet the requirements of

[§ 1291]. Subsection (b) does not grant to a magistrate the

authority to render a final judgment. Only a district court can

make a magistrate’s decision final, and therefore appealable.”

(footnotes omitted)). Thus, without some indication that the

district court considered and ruled on the Appellant’s

objections, we are without subject-matter jurisdiction over the

magistrate judge’s order.

We conclude that we do have subject-matter jurisdiction over

22
the discovery order.7 This conclusion is based on a number of

facts indicated in this case. First, Appellants filed their

objections in a timely manner. See FED. R. CIV. P. 6, 72.

Second, the Appellants restated several of their specific

objections to the magistrate judge’s discovery order in

subsequent filings (e.g., in their Rule 72 objections to the

magistrate judge’s report and recommendation to dismiss for lack

of personal jurisdiction). The district court clearly ruled on

the objections to the magistrate judge’s report and

recommendation and on subsequent motions in which objections to

the magistrate judge’s discovery order were described. Third,

interpreting the lack of an explicit statement on the part of the

district court as a refusal to overrule the magistrate judge’s

order is consistent with the district court’s determination to

adopt the magistrate judge’s dismissal recommendation. Such

consistency allows us to apply the general rule is that “appeal

from final judgment opens the record and permits review of all

rulings that led up to the judgment,” including non-final

pretrial orders. 15A CHARLES ALAN WRIGHT, ET AL. FEDERAL PRACTICE &

PROCEDURE: JURISDICTION 2D § 3905.1, at 250 (1992). The district

court’s judgment, based on its adoption of the magistrate judge’s

recommendation, is clearly a final order; the decision to deny

additional discovery (i.e., allow the magistrate’s order to

7
Judge Emilio M. Garza would hold that we have no subject-
matter jurisdiction over the discovery order.

23
stand) arguably led up to that final judgment.8 We consider only

those Rule 72 objections that were raised on appeal.

We have previously noted that a district court has “broad

discretion in all discovery matters,” Wyatt v. Kaplan, 686 F.2d

276, 283 (5th Cir. 1982), and that “‘such discretion will not be

disturbed ordinarily unless there are unusual circumstances

showing a clear abuse.’” Id. (quoting Associated Metals &

Minerals Corp. v. S.S. Geert Howaldt, 348 F.2d 457, 459 (5th Cir.

1965)). Appellants argue that it was an abuse of discretion to

restrict discovery given Rule 26(b)’s broad definition of

relevance. For example, they contend it was error to limit

discovery related to the stream-of-commerce theory because ACAB’s

and Robbins’ introduction of products into the stream of commerce

was relevant to Appellants’ assertion of specific jurisdiction

and because no Fifth Circuit case had ruled out the application

of the stream-of-commerce theory to a case such as this one.

We cannot say that the district court abused its discretion

in dismissing Appellants’ claims without affording them discovery

8
Our conclusion that we have subject-matter jurisdiction
over the discovery order issued in this case may be interpreted
to suggest that parties who timely object to a magistrate judge’s
action have guaranteed that we have the power to review, on
appeal, that action even though the district court issues no
explicit ruling on the matter. We caution against such an
interpretation. It is clear that had there been no explicit
judgment adopting the magistrate judge’s report and
recommendation, we would not have jurisdiction. Moreover, if the
district court had decided in favor of Alpine View and Hansen on
the personal jurisdiction issue and ACAB and Robbins had appealed
that decision, we would face a much different case regarding our
jurisdiction over the discovery issue, assuming that decision
would again be challenged by Alpine View and Hansen.

24
related to ACAB’s and Robbins’ delivery of products into the

stream of commerce. “[T]his Court affirms denials of discovery

on questions of personal jurisdiction in cases where discovery

sought ‘could not have added any significant facts’.” Wyatt, 686

F.2d at 284 (quoting Washington v. Norton Mfg., Inc., 588 F.2d

441, 447 (5th Cir. 1979)). As we suggested above, no amount of

information on such contacts with Texas would strengthen

Appellants’ showing of specific jurisdiction, given Appellants’

inability to connect such contacts to the instant litigation. We

also do not find that the district court erred in not affording

Appellants additional discovery related to ACAB’s and Robbins’

actions in selling, distributing, or marketing products to

entities not parties to the suit. Such information would not

have strengthened Appellants’ ability to demonstrate either

ACAB’s or Robbins’ direct contacts with Texas, or their control

over entities such that their activities could be fairly

attributed to Appellees for purposes of asserting general

jurisdiction.

C. Issues Concerning Claims Against Comptec and Compressors

Appellants challenge the district court’s dismissal of their

claims against Comptec and Compressors for forum non conveniens,

arguing that the dismissal is based on the magistrate judge’s

incorrect factual findings and conclusions. We review a district

court’s dismissal for forum non conveniens for an abuse of

discretion. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257

25
(1981); Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 335

(5th Cir. 1999). As a result, we follow the analysis set out in

Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09 (1947), and

review the lower court’s decision-making process and conclusion

and determine if it acted reasonably. See Dickson Marine, 179

F.3d at 335.

A court facing a motion to dismiss for forum non conveniens

must first assess whether an alternate forum is both available

and adequate. As we have stated,

A foreign forum is available when the entire case and
all parties can come within the jurisdiction of that
forum. A foreign forum is adequate when the parties
will not be deprived of all remedies or treated
unfairly, even though they may not enjoy the same
benefits as they might receive in an American court.

In re Air Crash Disaster Near New Orleans, La., 821 F.2d 1147,

1165 (5th Cir. 1987) (citations omitted). Based on our review of

the record, it was not error to conclude that a foreign forum was

available and adequate. All four defendants agreed to submit to

the jurisdiction of either Swedish or Norwegian courts, and to

have either Swedish or Norwegian law apply to the instant

controversy between the parties. Appellants had agreed to submit

disputes under the 1992 Agreement to arbitration in Norway, and

had instituted a suit before a Norwegian arbitration panel. In

that suit, Appellants claimed breach of contract and “unlawful[]

interfer[ence] in the plaintiff’s business affairs and other

contractual rights in China,” and sought up to $54.5 million

dollars in compensation. If nothing else, this suggests that

Hansen did not believe the Norwegian forum would be biased

26
against him, as he argues before us. From this and other

evidence contained in the record, the court could conclude that

Norway presented an adequate forum.

If an alternate forum that is both available and adequate

exists, the court must next assess whether, considering relevant

private interest and public interest factors, dismissal is

warranted. See Dickson Marine, 179 F.3d at 342. In addition to

the balancing of relevant private interest factors, the court

must give “the relevant deference” to the plaintiff’s choice of

forum. See In re Air Crash, 821 F.2d at 1165. Appellants

recognize that, as foreign plaintiffs, their initial choice of

forum merits less deference than courts typically give to such

decisions. See Reyno, 454 U.S. at 255; Empresa Lineas Maritimas

Argentinas, S.A. v. Schichau-Unterweser, A.G., 955 F.2d 368, 373

(5th Cir. 1992). In reviewing the ultimate determination to

dismiss, “where the [district] court has considered all relevant

public and private interest factors, and where its balancing of

these factors is reasonable, its decision deserves substantial

deference.” Reyno, 454 U.S. at 257.

Our review of the lower courts’ determination leads us to

conclude that the decision to dismiss Appellants’ claims against

Comptec and Compressors was not an abuse of discretion.

Appellants challenge the magistrate judge’s balancing of private

interest factors and the balancing of public interest factors.9

9
Because we find that the assessment of private interest
factors supports the dismissal, we do not describe our review of
the public interest factors. See In re Air Crash, 821 F.2d at

27
With respect to private interest factors, Appellants note that

Compressors and Comptec are each located in the U.S., and thus

contend that the court erred in finding that most of the

necessary witnesses will be forced to travel great distances if

the suit remained in Texas. It is the case, however, that

Appellants identified not one individual in the U.S. from whom

oral depositions would be taken for purposes of general

discovery.10 Appellants point to the existence of documents in

the U.S., but those documents were reproduced for purposes of

jurisdictional discovery. It was not error for the magistrate

judge to conclude that documents necessary for determination of

the merits of the case existed, for the most part, outside the

U.S. Our review of the magistrate judge’s consideration of other

relevant private interest factors does not indicate that the

district court abused its discretion in adopting the

recommendation to dismiss the claims against Comptec and

Compressors.

III. CONCLUSION

For the foregoing reasons, we AFFIRM the orders of the

1165 (instructing courts to consider public interest factors if
they find that private interests do not weigh in favor of
dismissal).
10
It is true that the magistrate judge stated,
incorrectly, that witnesses had already traveled to Norway for
purposes of the arbitration. Given the other evidence weighed,
we cannot conclude that this misstatement rendered the magistrate
judge’s recommendation, or the district court’s adoption of that
recommendation, unreasonable.

28
district court dismissing claims against Robbins and ACAB for

lack of personal jurisdiction and against Comptec and Compressors

for forum non conveniens.

29