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