Gas Sensing Technology Corp. v. Ashton ( 2020 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT January 6, 2020
_________________________________
Christopher M. Wolpert
Clerk of Court
GAS SENSING TECHNOLOGY CORP.,
a Wyoming company,
Plaintiff - Appellant,
v. No. 18-8089
(D.C. No. 2:18-CV-00095-NDF)
SIMON ASHTON; KINABALU (D. Wyo.)
AUSTRALIA PTY LTD, as Trustee for
KINABALU AUSTRALIA TRUST;
PROX PTY LTD; GRAEME
LINKLATER; LINKLATER FAMILY
TRUST; QUENTIN MORGAN; JOHN
DUGALD MACTAGGART; BRISBANE
ANGELS GROUP LTD.; JONTRA
HOLDINGS PTY LTD.; ASSOCIATED
CONSTRUCTION EQUIPMENT PTY
LTD; EWAN MELDRUM; and JOHN
DOES 1-20,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before PHILLIPS, EBEL, and O’BRIEN, Circuit Judges.
_________________________________
Plaintiff-Appellant Gas Sensing Technology Corp. (GSTC) is an
energy-focused technical services company based in Wyoming and having done
*
This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
business in Australia through its Australian subsidiary, WellDog Pty Ltd (WellDog).
This appeal involves the second federal court action involving GSTC’s claims against
the above-named Australian defendants who provided financing to or were employed
by GSTC or WellDog. Both suits alleged that the defendants improperly attempted
to take over ownership and control of WellDog and to misappropriate GSTC’s
intellectual property, trade secrets, and business opportunities. The district court
dismissed the first action, concluding that several defendants were not subject to
personal jurisdiction in Wyoming, that the claims against other defendants were more
properly heard in Australia, and that some claims failed to state a claim because
GSTC relied on group pleading, making it impossible to determine the specific
allegations against each defendant. Gas Sensing Tech. Corp. v. Ashton, No. 16-CV-
272-F, 2017 WL 2955353, at *6, *9, *11–14, *17 (D. Wyo. June 12, 2017) (Ashton
I). No appeal was taken from the decision, but about a year later, GSTC initiated
what eventually became the second federal action by refiling its claims in Wyoming
state court. After defendants removed the case to federal court, the district court
denied GSTC’s motion to remand and granted the defendants’ motion to dismiss the
amended complaint on issue preclusion, forum non conveniens, and jurisdictional
grounds. Gas Sensing Tech. Corp. v. Ashton, 353 F. Supp. 3d 1192, 1202–03, 1205,
1207, 1210–11 (D. Wyo. 2018) (Ashton II). Because GSTC did not appeal Ashton I,
we review only the district court’s order in Ashton II, and we affirm.1
1
Our jurisdiction derives from 28 U.S.C. § 1291.
2
BACKGROUND
The complex factual and procedural background of this case is summarized in
detail in Ashton I and II, and we need not repeat it here. Instead, we provide only
enough background to identify the parties and provide necessary context for our
consideration of GSTC’s claims on appeal.
GSTC formed WellDog in an effort to expand its energy services throughout
Australia. To finance that effort and expand WellDog, GSTC sought private venture
equity and debt from experts in the energy industry, including ProX Pty Ltd (ProX),
an Australian entity controlled by Australian Simon Ashton. Between 2011 and
2014, ProX made loans to WellDog secured by promissory notes (the ProX Notes).
Two other Ashton-controlled entities, Kinabalu Australia Pty Ltd, as Trustee for the
Kinabalu Australia Trust (collectively Kinabalu), invested significant private venture
equity in WellDog by purchasing shares of GSTC stock. In addition, two entities
controlled by John Dugald Mactaggart—Jontra Holdings Pty Ltd (Jontra) and
Associated Construction Equipment Pty Ltd (ACE)—lent money to WellDog. After
those loans were transferred to and assumed by GSTC, GSTC issued promissory
notes (Finance Notes) to Jontra and ACE. The Linklater Family Property Trust
(Linklater Trust), Graeme Michael Linklater (Linklater), and non-party Meldrum
Family Trust (Meldrum Trust) also provided private venture equity and debt to GSTC
in exchange for GSTC Finance Notes, as did non-party Brisbane Angels Nominees
Pty Ltd (BAN), an entity controlled by Mactaggart and related to defendant Brisbane
Angels Group Ltd (BAG).
3
As a result of Kinabalu’s equity investment in GSTC, Ashton was appointed as
GSTC’s director, and at his request Quentin Morgan was hired as its Chief
Technology Officer. GSTC alleged that the Ashton and Mactaggart-controlled
defendants conspired to take control of GSTC. It maintained that Ashton and
Morgan improperly used their executive level positions to facilitate the takeover
effort. GSTC also alleged that Linklater, who was an employee of GSTC and
WellDog’s Chief Financial Officer, used confidential financial and company
information he acquired while working there to direct and assist the takeover effort.
GSTC claimed Mactaggart, who briefly served as a director of WellDog, and another
WellDog employee, Ewan Meldrum, also participated in the takeover plan.
In 2016, GSTC and WellDog encountered financial problems with creditors
and suppliers. WellDog defaulted on the ProX Notes and GSTC defaulted on all the
Finance Notes. Later that year, GSTC, WellDog, and GSTC’s majority shareholder,
The Blue Sky Group (Blue Sky) filed a tort action in Western Australia against
Ashton, ProX, Kinabalu and others (the Australia Action) alleging that the defendants
were improperly attempting to wrest control of WellDog from GSTC. One week
later, GSTC and Blue Sky filed the complaint and later an amended complaint in
Ashton I. The Ashton I defendants included Ashton, ProX, Kinabalu, Linklater, the
Linklater Trust, Jontra, ACE, BAG, Morgan, Mactaggart, and Meldrum. The claims
asserted in the Australia Action and Ashton I were similar and based on the same
factual allegations.
4
The Ashton I defendants moved to dismiss GSTC’s complaint on multiple
grounds. While those motions were pending, WellDog’s financial problems in
Australia continued to mount and in mid-2017 its creditors resolved to wind up the
company and liquidators were appointed as to WellDog in Australia. In addition,
Jontra, ACE, and BAN filed suit against GSTC in Wyoming state court seeking to
recover payment on the defaulted Finance Notes they held (the Jontra Collection
Action). And the Linklater Trust, the Meldrum Trust, and several other creditors
filed an action against GSTC in Wyoming state court in early 2018 to collect on their
respective Finance Notes, which by that time had matured and gone into default (the
Linklater Collection Action, and together with the Jontra Collection Action, the
Wyoming Collection Actions).
In June 2017, the district court dismissed the Ashton I complaint in its entirety.
It dismissed the claims against ProX, Mactaggart, and Meldrum for lack of personal
jurisdiction, concluding that they lacked sufficient minimum contacts with the forum
state (Wyoming). Ashton I, 2017 WL 2955353, at *6, *9–11. In so concluding, the
court rejected GSTC’s jurisdictional arguments based on corporate alter ego,
surrogacy, and conspiracy theories, and denied its motion for jurisdictional
discovery. Id. It dismissed the claims against Linklater, the Linklater Trust,
Kinabalu, BAG, Jontra, and ACE, because GSTC’s use of group pleading did not
provide them with adequate notice of the specific claims against each of them and
therefore did not meet the notice requirements of Fed. R. Civ. P. 8 or plead a
plausible claim for relief under Fed. R. Civ. P. 12(b)(6). Ashton I, 2017 WL
5
2955353, at *12–14. Finally, the court dismissed the claims against Ashton,
Kinabalu, and Morgan under the forum non conveniens doctrine, holding that both
private and public interests favored requiring GSTC to litigate its claims in Australia
because (1) the Australia Action, which GSTC filed, provided an adequate alternative
forum for resolving the parties’ disputes, id. at *15; (2) the ProX Notes, which the
court concluded were “central” to GSTC’s claims, contained Australian choice-of-
law provisions and “the majority of this case [was] subject to Australian law” id.; and
(3) the majority of the relevant evidence was located in Australia because the
defendants all resided there and most of the events the claims were based on
happened there, id. at *16–17. We repeat, GSTC did not appeal that order.
Instead, about a year after the court dismissed Ashton I, GSTC filed what
became Ashton II in Wyoming state court. The state court complaint was virtually
identical to the Ashton I complaint. Specifically, it (1) named the same defendants,
including ProX, Mactaggart and Meldrum, despite the court’s conclusion in Ashton I
that they were not subject to personal jurisdiction in Wyoming; (2) reasserted the
same claims the court had dismissed on forum non conveniens grounds; and (3) used
group pleading, which the court had concluded was insufficient to satisfy the Rule 8
and 12(b)(6) notice and pleading requirements. Ashton, Kinabalu, and ProX, with
the other defendants’ consent, removed the case to federal court, where it was
assigned to the same judge who had presided over Ashton I.
GSTC then filed an amended complaint removing ProX as a named defendant
but continuing to refer to it and issues relating to the ProX Notes in setting forth the
6
basis for its claims against the remaining defendants. It also filed a motion to remand
Ashton II to Wyoming state court, arguing that the Finance Notes between it and
Jontra, ACE, and BAG2 contained a forum selection clause waiving their right to
removal and, in the alternative, that the court should decline to exercise jurisdiction
over this case because it raised purely state law claims that overlapped with those at
issue in the Wyoming Collections Actions. The defendants opposed the motion to
remand and moved to dismiss the complaint on issue preclusion, forum non
conveniens, personal jurisdiction, lack of service, and group pleading grounds.
Meanwhile, the court in the Australia Action dismissed Blue Sky from the case
and ordered GSTC to produce documents it claimed supported its case. The parties
(including GSTC) later consented to the discontinuation of WellDog’s claim against
the Australian defendants because it had been forced into receivership. And, while
the motions to dismiss Ashton II were pending, GSTC voluntarily discontinued the
Australia Action against all defendants except ProX.
Soon thereafter, the district court in Ashton II denied GSTC’s motion to
remand and granted defendants’ motions to dismiss. 353 F. Supp. 3d at 1211. With
respect to the remand motion, the court determined that the language in the Finance
Notes was a permissive forum selection clause, not a waiver of the right to remove,
and that jurisdictional abstention was not warranted because the Ashton II complaint
raised more claims and involved more defendants (including foreign defendants) than
2
As noted above and discussed more fully below, BAN, not BAG, held
Finance Notes.
7
did the state law claims against the limited group of defendants in the Wyoming
Collections Actions. Id. at 1201–02. It also decided issue preclusion barred GSTC
from relitigating matters that had been decided in Ashton I, including the personal
jurisdiction, forum non conveniens, and jurisdictional discovery rulings described
above. Id. at 1205, 1210. In short, it explained: if GSTC disagreed with those prior
rulings it should have appealed from them “rather than refiling the same claims” in a
new lawsuit. Id. at 1205. In so concluding, the court rejected GSTC’s arguments
that its claims were not barred because it both presented new evidence to support
them and narrowed its claims by dismissing ProX, which GSTC conceded was not
subject to the court’s jurisdiction. Id. at 1207–08. It also concluded the same public
and private factors justifying dismissal of Ashton I based on forum non conveniens
were still present in Ashton II. Id. at 1209–10. And it dismissed GSTC’s remaining
claims on personal jurisdiction grounds, because BAG did not have the requisite
minimum contacts with Wyoming, id. at 1207, and that the claims against Jontra,
ACE, and Meldrum failed for lack of service of process, id. at 1202–03.
DISCUSSION
On appeal, GSTC challenges most of the district court’s rulings in Ashton II,3
and in so doing, also challenges some of the rulings in Ashton I. We will not
consider GSTC’s arguments regarding Ashton I and reject its attacks on Ashton II.
3
Because GSTC does not adequately raise and pursue challenges to the district
court’s dismissal of the claims against Morgan and Meldrum, we do not review those
rulings. Bronson v. Swenson, 500 F.3d 1099, 1104 (10th Cir. 2007) (“[T]he omission
8
I. Denial of Motion to Remand
GSTC claims its motion to remand should have been granted. Specifically, it
relies on a provision it characterizes as a mandatory forum selection clause in the
Finance Notes held by Jontra, ACE, and BAG (really non-party BAN) waived their
right to removal and, because removal requires unanimity among defendants,4
invalidated the other defendants’ consent to removal. We disagree.5
The meaning and enforceability of a contractual forum selection clause are
questions of law that we review de novo. K & V Sci. Co. v. Bayerische Motoren
Werke Aktiengesellschaft, 314 F.3d 494, 497 (10th Cir. 2002); see also Excell, Inc. v.
Sterling Boiler & Mech., Inc., 106 F.3d 318, 320 (10th Cir. 1997) (applying a de
novo standard in reviewing a district court’s ruling on a motion to remand based on a
contractual forum selection clause).
The contracts at issue here—the Finance Notes held by Jontra, ACE, and
BAG—are governed by Wyoming law, which requires us to construe the Finance
of an issue in an opening brief generally forfeits appellate consideration of that
issue.”).
4
See 28 U.S.C. §§ 1441(a), 1446(a); Akin v. Ashland Chem. Co., 156 F.3d
1030, 1034 (10th Cir. 1998).
5
GSTC also argued in its motion to remand that the district court should
decline to exercise jurisdiction under the Colorado River doctrine, which allows a
federal court to dismiss or stay a federal action in deference to a pending duplicative
state court proceeding. D.A. Osguthorpe Family P’ship v. ASC Utah, Inc., 705 F.3d
1223, 1233 (10th Cir. 2013) (referring to Colo. River Water Conservation Dist. v.
United States, 424 U.S. 800 (1976)). The district court rejected GSTC’s argument,
concluding that the removed federal action and the state court collection actions were
not duplicative. Ashton II, 353 F. Supp. 3d at 1202. Because GSTC did not
challenge that ruling on appeal, we do not address it.
9
Notes using general principles of contract interpretation, including that our goal in
interpreting the contracts is to ascertain and give effect to the parties’ intent and that
we give the words used their plain and ordinary meaning. Sutherland v. Meridian
Granite Co., 273 P.3d 1092, 1095 (Wyo. 2012).
The Wyoming Supreme Court has enforced mandatory forum selection
clauses. Durdahl v. Nat’l Safety Assocs., Inc., 988 P.2d 525, 527–29 (Wyo. 1999)
(Wyoming district court properly declined to exercise jurisdiction where forum
selection clause provided that the parties “agree[d] that any and all claims involving
this agreement shall be brought solely in the courts of Shelby County[,] Tennessee”
(internal quotation marks omitted) (second alteration in original)). But it has also
recognized that a provision consenting to jurisdiction is not the same as a mandatory
forum selection clause. See Venard v. Jackson Hole Paragliding, LLC, 292 P.3d 165,
169–70, 173 (Wyo. 2013) (whether third-party beneficiaries could enforce
contractual forum selection clause depended on whether they were bound by contract
based on their relationship to signatory, not on their consent in separate contract to
jurisdiction in forum state); see also Crites v. Alston, 837 P.2d 1061, 1067–69 (Wyo.
1992) (jurisdiction retention provision in divorce decree did not constitute forum
selection clause).
Wyoming law drawing a distinction between forum selection clauses and
jurisdictional concessions is consistent with our decisions explaining the difference
between mandatory and permissive forum selection clauses: “[m]andatory forum
selection clauses contain clear language showing that jurisdiction is appropriate only
10
in the designated forum,” whereas “permissive forum selection clauses authorize
jurisdiction in a designated forum, but do not prohibit litigation elsewhere.” Excell,
106 F.3d at 321 (internal quotation marks and brackets omitted). An agreement to
submit to jurisdiction in a particular state’s court or that venue is proper there is thus
a permissive, not a mandatory, forum selection clause. Id.; see also Am. Soda, LLP v.
U.S. Filter Wastewater Grp., Inc., 428 F.3d 921, 927 (10th Cir. 2005) (a forum
selection clause specifying only jurisdiction will not be enforced as a mandatory
forum selection unless it includes “some additional language indicating the parties’
intent to make venue exclusive”).
Where a contract’s forum selection clause permits but does not require state
court venue, it does not waive the parties’ right to remove to federal court. K & V,
314 F.3d at 500–01 (district court removed case because it erroneously construed a
forum selection clause referring to jurisdiction in non-exclusive terms to be
mandatory). To constitute a waiver of the right to remove, the agreement must not
only identify a specific venue but also include language requiring the parties to
resolve disputes in a specific court. See Am. Soda, 428 F.3d at 927 (clause
consenting to state court jurisdiction and selecting the state courts as the “exclusive
forum” waived right to remove to federal court (internal quotation marks omitted)).
That is so because waiver of the statutory right to removal “must be clear and
unequivocal,” City of Albuquerque v. Soto Enters., Inc., 864 F.3d 1089, 1098
(10th Cir. 2017), cert. denied, 138 S. Ct. 983 (2018); Milk ‘N’ More, Inc. v. Beavert,
963 F.2d 1342, 1346 (10th Cir. 1992).
11
The Finance Notes provided: “[i]f there is a lawsuit, [the parties] agree to
submit to the jurisdiction of the courts of Albany County, the State of Wyoming,
United States.” Aplt. App., Vol. 4 at 422, 425, 428, 431, 434 (exemplar Finance
Notes attached to Br. in Supp. of Pl.’s Mot. to Remand). The chosen language, like
the language at issue in K & V, “refers only to jurisdiction and does so in
non-exclusive terms,” 314 F.3d at 500, and the Finance Notes contain no additional
language evincing an intent to litigate only in Wyoming state court. Accordingly,
these defendants’ agreement to submit to jurisdiction in Wyoming did not constitute
a mandatory forum selection clause that clearly and unequivocally waived their right
to remove to federal court, and the district court properly denied GSTC’s motion to
remand. See id.
II. Dismissal of Claims Against Mactaggart
GSTC next argues the district court erred in dismissing its claims against
Mactaggart on issue preclusion and lack of personal jurisdiction grounds.
Specifically, it claims that issue preclusion does not apply here because GSTC
alleged new facts in the Ashton II complaint supporting the court’s exercise of
jurisdiction over Mactaggart. We are not persuaded.
“To obtain personal jurisdiction over a nonresident defendant in a diversity
action, a plaintiff must show that jurisdiction is legitimate under the laws of the
forum state and that the exercise of jurisdiction does not offend the due process
clause of the Fourteenth Amendment.” Emp’rs Mut. Cas. Co. v. Bartile Roofs, Inc.,
618 F.3d 1153, 1159 (10th Cir. 2010). With that standard in mind, a review of
12
additional background information (contained in the record) puts GSTC’s argument
in context and justifies the district court’s reasoning.
In dismissing GSTC’s claims against Mactaggart for lack of personal
jurisdiction, the court in Ashton I rejected GSTC’s arguments that (1) he consented to
Wyoming’s jurisdiction because the companies he controlled (Jontra, ACE, and
BAG) consented to Wyoming’s jurisdiction in the Finance Notes; and (2) he was the
alter-ego of those companies and therefore had sufficient minimum contacts with
Wyoming to justify the court’s exercise of jurisdiction over him individually.
2017 WL 2955353, at *10–11 (citing Ten Mile Indus. Park v. W. Plains Serv. Corp.,
810 F.2d 1518, 1526–27 (10th Cir. 1987)). The Ashton I court held GSTC was not
entitled to jurisdictional discovery because it failed to explain why such discovery
was necessary and how the lack of discovery would affect the outcome of the case.
Id. at *11; see also Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino &
Resort, 629 F.3d 1173, 1189 & n.11 (10th Cir. 2010) (the party seeking jurisdictional
discovery has the burden of demonstrating entitlement to and prejudice from the
denial of discovery).
The allegations in the Ashton II complaint supporting jurisdiction over
Mactaggart were virtually identical to the jurisdictional allegations in the Ashton I
complaint and the allegations against him were essentially the same. But the
Ashton II complaint made new factual allegations about the Mactaggart-controlled
defendants’ filing of the Jontra Collection Action in Wyoming state court and about
13
Mactaggart’s involvement as their director/owner in the alleged conspiracy to take
control of GSTC and misappropriate its technology.
Mactaggart moved to dismiss the claims against him, arguing that he was not
subject to jurisdiction in Wyoming and that GSTC’s failure to appeal the Ashton I
court’s jurisdictional determination barred it from relitigating that issue. Relying on
its new factual allegations, GSTC maintained that issue preclusion did not apply
because the factual and legal issues regarding jurisdiction over Mactaggart had
changed. The district court disagreed, noting that it had already considered
Mactaggart’s role in the companies he controlled and that none of the new factual
allegations or supporting documents changed its prior analysis of his contacts with
Wyoming, either individually or through his entities:
The [new allegations] may show that Mactaggart was engaged
in a scheme related to the Australian entity, WellDog.
However, the allegations in this case are that GSTC actively
sought out Australian investors, to help start an Australian
company. There are no allegations that Mactaggart targeted
GSTC as a Wyoming resident in the first instance. While GSTC
claims Mactaggart chose to conduct business with GSTC in the
forum (Wyoming), there is no evidence that Mactaggart
conducted any activities directed to Wyoming related to the
takeover of WellDog. Rather, Mactaggart’s activities all
occurred in Australia, involving Australian entities.
Ashton II, 353 F. Supp. 3d at 1205 & n.4. The court decided the new allegations
“fail[ed] to establish a new legal situation or altered rights in relation to [Ashton I].”
Id. at 1205.
We review its order de novo. See Campbell v. City of Spencer, 777 F.3d 1073,
1077 (10th Cir. 2014) (reviewing application of issue preclusion de novo); Dudnikov
14
v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008)
(reviewing dismissal of complaint for lack of personal jurisdiction de novo).
The doctrine of issue preclusion “prevents a party that has lost the battle over
an issue in one lawsuit from relitigating the same issue in another lawsuit.” In re
Corey, 583 F.3d 1249, 1251 (10th Cir. 2009). As the Supreme Court put it, “once a
court has decided an issue of fact or law necessary to its judgment, that decision may
preclude relitigation of the issue in a suit on a different cause of action involving a
party to the first case.” Allen v. McCurry, 449 U.S. 90, 94 (1980). Issue preclusion
applies when:
(1) the issue previously decided is identical with the one
presented in the action in question, (2) the prior action has been
fully adjudicated on the merits, (3) the party against whom the
doctrine is invoked was a party, or in privity with a party, to the
prior action, and (4) the party against whom the doctrine is
raised had a full and fair opportunity to litigate the issue in the
prior action.
Dodge v. Cotter Corp., 203 F.3d 1190, 1198 (10th Cir. 2000).
A dismissal for lack of jurisdiction “preclude[s] relitigation of the issues
determined in ruling on the jurisdiction question.” Matosantos Commercial Corp. v.
Applebee’s Int’l, Inc., 245 F.3d 1203, 1209 (10th Cir. 2001) (internal quotation marks
omitted). We have recognized that, under the curable-defect doctrine, a jurisdictional
dismissal does not bar another suit if the jurisdictional defect has been cured or loses
its controlling force. Park Lake Res. Ltd. Liab. Co. v U.S. Dep’t of Agric., 378 F.3d
1132, 1137 (10th Cir. 2004); see also Montana v. United States, 440 U.S. 147, 159
(1979) (“[C]hanges in facts essential to a judgment will render [issue preclusion]
15
inapplicable in a subsequent action raising the same issues.”). “But the change in
circumstances that cures the jurisdictional defect must occur subsequent to the prior
litigation.” Park Lake, 378 F.3d at 1137. The rule requiring presentation of material
post-litigation facts in order to overcome prior jurisdictional determinations is
consistent with the principles underlying issue preclusion, because it avoids the
expense, vexation and inefficiency of “‘allow[ing] a plaintiff to begin the same suit
over and over again in the same court, each time alleging additional facts that the
plaintiff was aware of from the beginning of the suit, until it finally satisfies
the jurisdictional requirements.’” Id. at 1138 (quoting Magnus Elecs., Inc. v.
La Republica Argentina, 830 F.2d 1396, 1401 (7th Cir. 1987) (curable-defect
exception does not allow party to rely on facts that were previously available to avoid
preclusive effect of prior jurisdictional determination)).
Contesting the first element of issue preclusion—that the issue previously
decided is identical with the one presented in the subsequent action—and invoking
the curable-defect exception, GSTC claims it alleged sufficient new facts about the
alleged conspiracy between Mactaggart, the companies he controlled, and the other
defendants to overcome issue preclusion.6 But the new allegations it relies on to
bolster its conspiracy/alter-ego theories in support of jurisdiction over Mactaggart do
6
We do not consider GSTC complaints about the Ashton I court’s rejection of
its conspiracy and alter-ego theories in support of jurisdiction over Mactaggart
because our review here is limited to the question whether the Ashton II court erred
in concluding that issue preclusion barred relitigation of those claims. If it disagreed
with the Ashton I court’s rulings, it should have appealed.
16
not involve post-litigation events that could overcome issue preclusion. Instead, as
the district court found, and GSTC does not dispute, the facts it now relies upon
pre-dated the dismissal of the complaint in Ashton I. As we explain below, its
arguments about lack of access to that information during the Ashton I litigation fail.
Presenting previously available facts in a new complaint does not constitute a
“change in circumstances” that can avoid the preclusive effect of a jurisdictional
determination in an earlier action. Park Lake, 378 F.3d at 1137. Consequently, the
jurisdictional issue before us is substantively the same as that raised and decided in
Ashton I, and it cannot be relitigated. See id. at 1137–38.
The out-of-circuit case GSTC relies upon to support its “sufficient new facts”
argument does not help its cause. In that case, the Eighth Circuit concluded that a
state appellate court’s determination of a personal jurisdiction issue decided in the
plaintiff’s first suit did not bar relitigation of the issue in his second suit because the
defendant raised the issue in the first suit in a mid-trial motion for directed verdict,
the trial court did not make any jurisdictional fact findings in denying the motion,
and the appellate court’s ruling “shed[] little if any light on the different legal issue
whether [that state] had personal jurisdiction over [the defendant] when the second
suit was commenced” some four years later. Pohlmann v. Bil-Jax, Inc., 176 F.3d
1110, 1113 (8th Cir. 1999). Here, in contrast, Mactaggart and the other defendants
moved to dismiss shortly after the Ashton I complaint was filed, the parties had
ample opportunities to develop their factual and legal arguments, and the court made
detailed factual findings supporting its jurisdictional determinations. Thus, unlike
17
the court in Pohlman, the court in Ashton II fully understood the factual and legal
landscape when it concluded that the jurisdictional issue was substantively the same
despite GSTC’s new factual allegations. Moreover, Pohlman’s holding was based on
law consistent with ours—that issue preclusion does not bar relitigation of a
jurisdictional issue when “subsequent events create a new legal situation or alter the
legal rights or relations of the litigants”—and recognized that the lack of factual
development in the first case made it impossible for the court in the second case to
determine whether subsequent events may have changed the jurisdictional analysis.
Id. (emphasis added, ellipsis and internal quotation marks omitted). That is simply
not the case here, both because the Ashton I court thoroughly analyzed the issue and
because this case does not involve material events that occurred after Ashton I was
decided. The “new” facts about Mactaggart’s pre-Ashton I activities that GSTC
claims were directed at Wyoming may be new to GSTC, but they do not involve
post-litigation events.7
In a related claim contesting the fourth element of issue preclusion—that the
party who suffered the adverse ruling in the first case had a full and fair opportunity
to litigate the issue—GSTC complains that the denial of jurisdictional discovery in
Ashton I deprived it of the ability to present jurisdictional evidence against
7
In ruling on defendants’ motion for sanctions against GSTC, the district court
indicated that it was “troubled” by the fact that the substance of GSTC’s original
complaint in Ashton II “was nearly identical” to the Ashton I complaint and that
“[m]any of the newly added allegations were likely available at the time GSTC filed
Ashton I.” Ashton II, 353 F. Supp. 3d at 1210.
18
Mactaggart (including the additional facts it alleged in the Ashton II complaint) in
that litigation. But we agree with the district court’s conclusion that if GSTC
disagreed with the Ashton I court’s adverse discovery ruling, its remedy was to
appeal that ruling, not to challenge it in the guise of a defense to issue-preclusion in a
subsequent lawsuit. Accordingly, we decline to address whether the Ashton I court
abused its discretion in denying GSTC’s request for jurisdictional discovery.
III. Dismissal of Claims Against Jontra and ACE
Ashton I and II dismissed the claims against Jontra and ACE for different
reasons: Ashton I dismissed them for failure to state a claim based on GSTC’s
improper use of group pleading, 2017 WL 2955353, at *12; and Ashton II dismissed
them for lack of personal jurisdiction because GSTC failed to properly serve those
defendants, who are both Australian residents, 353 F. Supp. 3d at 1203. Although
GSTC’s appellate briefs repeatedly suggest the district court erroneously concluded it
lacked jurisdiction over Jontra and ACE, it cannot challenge the Ashton I court’s
ruling in this appeal, and it does not dispute the correctness of the Ashton II court’s
lack-of-proper-service determination. We thus do not address either of those rulings
here and reject GSTC’s undeveloped and conclusory jurisdictional arguments as to
Jontra and ACE.
IV. Dismissal of Claims Against BAG
We also reject GSTC’s contention that BAG had sufficient contacts with
Wyoming to trigger the Court’s jurisdiction.
19
The plaintiff generally has the burden of establishing personal jurisdiction over
the defendants, but when, as here, a court rules on a motion to dismiss based on the
parties’ pleadings and attached affidavits without holding an evidentiary hearing, the
plaintiff can meet its burden with only a prima facie showing. OMI Holdings, Inc. v.
Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998). We review a district
court’s dismissal of a complaint for lack of personal jurisdiction de novo. Dudnikov,
514 F.3d at 1070. In determining whether the plaintiff met its burden, we accept all
well-pled factual allegations as true and view them in the light most favorable to the
plaintiff. See AST Sports Sci., Inc. v. CLF Distribution Ltd., 514 F.3d 1054, 1057
(10th Cir. 2008).
As pertinent here, in order for a Wyoming court to exercise personal
jurisdiction over a nonresident, the defendant must, at a minimum, have sufficient
contacts with the state that it “should reasonably anticipate being haled into court
there.” Bartile Roofs, 618 F.3d at 1159–60 (internal quotation marks omitted).
The minimum contacts test “encompasses two distinct requirements: first, that the
out-of-state defendant must have purposefully directed its activities at residents of
the forum state, and second, that the plaintiff’s injuries must arise out of defendant’s
forum-related activities.” Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir.
2011) (internal quotation marks omitted).
The purposeful availment inquiry requires us to examine both the “quantity
and quality” of the defendant’s contacts with Wyoming to determine whether they
“create a substantial connection” with Wyoming. Bartile Roofs, 618 F.3d at 1160
20
(internal quotation marks omitted). Merely entering into a contract with a company
located in the forum state “is not enough on its own” to subject a defendant company
to jurisdiction in that state. Pro Axess, Inc. v. Orlux Distribution, Inc., 428 F.3d
1270, 1277 (10th Cir. 2005). But “creat[ing] continuing relationships and obligations
with citizens of [the forum] state [will] subject” a company to jurisdiction there.
Id. (internal quotation marks omitted). And “conducting business through [a]
subsidiar[y] can qualify as transacting business in a state, provided the parent
[company] exercises sufficient control over the subsidiary.” Id. at 1278 (citing
Curtis Publ’g Co. v. Cassel, 302 F.2d 132, 137 (10th Cir. 1962) (recognizing that
when a wholly owned subsidiary’s activities as an agent of its parent company “are
of such a character as to amount to doing business of the parent,” the parent is subject
to jurisdiction in the state where the activities occurred)).
Here, GSTC claims BAG—an Australian company that never lent money to or
held stock in GSTC or WellDog and never did business in Wyoming—is subject to
jurisdiction in Wyoming through its wholly-owned subsidiary and alter-ego, BAN,
which submitted to Wyoming jurisdiction in the GSTC Finance Notes it held and was
one of the plaintiffs in the Jontra Collection Action in Wyoming state court. In
support of its alter-ego theory, GSTC alleges: (1) Mactaggart controlled both
companies (he was the sole director of BAN and one of several directors of BAG);
(2) BAN and BAG had the same address as Jontra and ACE, two other
Mactaggart-controlled entities; and (3) the BAN/BAG corporate structure was
unclear and GSTC was confused about which of them held the Finance Notes.
21
But the district court concluded that these factual allegations were insufficient
to establish that BAN was acting as BAG’s alter ego. Ashton II, 353 F. Supp. 3d at
1206–07. We agree that Mactaggart’s involvement in both entities, their common
mailing address, and GSTC’s claimed confusion about their corporate structure—and
thus the identity of GSTC’s lender8—do not establish a “unity of interests and
ownership” between BAN and BAG. Ten Mile Indus. Park, 810 F.2d at 1527.9 Nor
do these facts undermine BAN’s status as a valid corporate entity separate from BAG
such that a Wyoming court could reasonably conclude that a foreign corporation with
no connection to Wyoming and no involvement in the events giving rise to the
litigation nonetheless “purposefully availed [itself] of the privilege” of doing
business in Wyoming and should “anticipate being haled into court” there, id. at
1526; see also Ashton I, 2017 WL 2955353, at *11 (concluding that similar evidence
8
We note that the district court questioned the sincerity of GSTC’s claimed
confusion about the distinction between BAN and BAG, noting that it had “serious
concerns” about GSTC’s “conduct in this case,” including the fact that despite being
“aware of the distinction between the two entities through the proceedings on the
Financing Notes, GSTC failed to take steps to dismiss its claims against BAG, or
replace it as a Defendant with BAN,” and referred instead to “Brisbane Angels
(BA).” Ashton II, 353 F. Supp. 3d at 1211 (internal quotation marks omitted).
9
Under Wyoming law (1) a corporation will not be considered the alter ego of
the person who controls it unless “there is such a unity of interest and ownership
that” adhering to “the fiction of the separate existence of the corporation would . . .
sanction a fraud or promote injustice”; and (2) jurisdiction over a corporation’s
officers and directors “may not be predicated on jurisdiction over the corporation
itself” and “must be based on their individual contacts with the forum state” unless
“the corporation is not a viable one and the individuals are . . . using the corporate
form as a shield.” Ten Mile Indus. Park, 810 F.2d at 1526–27 (internal quotation
marks omitted).
22
was insufficient to support GSTC’s alter-ego theories about Mactaggart and the
Mactaggart-controlled defendants).10
V. Dismissal of Claims Against Ashton Defendants
GSTC’s final claim is that issue preclusion does not bar relitigation of the
claims against Ashton and the Ashton-controlled defendants following Ashton I’s
dismissal of those claims on forum non conveniens grounds. More specifically, it
maintains that the forum non conveniens issue should not be res judicata because
GSTC narrowed the facts, claims, and parties involved so that the claims asserted in
Ashton II involve only the defendants’ conduct directed at GSTC (as opposed to its
Australian subsidiary) and Australian law no longer applies. We disagree, because
the differences between the Ashton I and Ashton II complaints do not change the
fundamental forum non conveniens question common to both cases.
“A plaintiff may not relitigate a forum non conveniens issue unless he can
show some objective facts that materially alter the considerations underlying the
previous resolution.” Villar v. Crowley Mar. Corp., 990 F.2d 1489, 1498 (5th Cir.
1993) (internal quotation marks omitted), abrogated on other grounds by Marathon
Oil Co. v. Ruhrgas, 145 F.3d 211 (5th Cir. 1998) (en banc), rev’d, 526 U.S. 574
(1999); see also 18A Charles A. Wright, Arthur R. Miller, & Edward H. Cooper,
10
We decline to address GSTC’s argument that instead of dismissing the
claims against BAG, the district court should have substituted BAN or required that it
be joined as a party. GSTC did not seek substitution or joinder below and we will
not consider “secondary, back-up theories . . . mounted for the first time” on appeal,
Tele-Commc’ns, Inc. v. Comm’r, 104 F.3d 1229, 1233 (10th Cir. 1997).
23
Federal Practice and Procedure Juris. § 4436 (3d ed., Aug. 2019 update) (forum non
conveniens issue cannot be relitigated if “the issue actually remains the same”).
Thus, the plaintiff must do more than ask for a rebalancing of forum non conveniens
considerations. Pastewka v. Texaco Inc., 565 F.3d 851, 854 (3rd Cir. 1977).
Here, GSTC maintains that the forum non conveniens issue in the two cases is
materially different because the Ashton II complaint (1) “eliminated” the claims
regarding defendants’ alleged effort to take control of its Australian subsidiary
WellDog, Aplt. Br. at 5, which was “forced into receivership and sold” after Ashton I
was decided, id. at 24; (2) “narrowed” the claims to focus on defendants’ “ongoing
conspiracy . . . to destroy” “GSTC’s business in the United States,” id. at 5, 24; and
(3) took Australian law out of the analysis by “omitting” the claims involving the
ProX Notes, which are governed by Australian law, and against ProX, which is not
subject to jurisdiction in Wyoming,11 id. at 5, 25.
But these changes are superficial and do not materially change the forum non
conveniens question. As the district court found after comparing the factual
allegations, claims, and relief sought in both cases, despite GSTC’s modifications to
the amended complaint, Ashton II “is substantially the same as Ashton I, with the
same claims based on the same facts, against most of the same Defendants.”
11
Although GSTC deleted ProX as a party and from the caption of the
amended complaint, the district court included ProX in the dismissal order, Ashton II,
353 F. Supp. 3d at 1211, and the clerk of the court included it in the judgment
dismissing the case.
24
353 F. Supp. 3d at 1208.12 The court explained that, despite the focus on defendants’
actions directed at GSTC instead of WellDog, the claims in Ashton II, like those in
Ashton I, “arise from GSTC’s claims that Ashton and others engaged in self-dealing
and collusive efforts to improperly take ownership and control of WellDog, to divert
its assets, and cause injury to GSTC,” id. at 1208.
With respect to the elimination of ProX as a party, the district court observed
that GSTC’s conspiracy theory in both cases
rests on the idea that Ashton planned to take control of WellDog
and Mactaggart, Jontra, ACE and BAG to take control of GSTC.
To achieve the conspiracy, GSTC alleged Defendants, including
Ashton and his alter ego ProX planned to foreclose on their
venture debt to attain control of WellDog. The basis of these
allegations and claims still rely on ProX’s ability to foreclose on
the venture debt, an issue that is governed by Australian law.
Id. at 1209 (citations and footnotes omitted). Thus, “GSTC did not actually take out
ProX or the allegations related to ProX. It just made ProX an ‘alter ego’ of Ashton.”
Id. at 1211. Indeed, “GSTC could not completely remove ProX” from the complaint
(and thus the forum non conveniens analysis) because ProX’s decision to call in the
ProX Notes is at the heart of GSTC’s allegations, which means that resolution of
GSTC’s claims still turns on whether, under Australian law, ProX improperly
enforced the ProX Notes. Id. at 1211 n.8. Thus, the district court noted, it is “very
12
In the district court, GSTC also claimed the filing of the Wyoming
Collection Actions changed the forum non conveniens analysis in Ashton II. But the
court rejected that argument, and because GSTC did not pursue it on appeal, we do
not address it.
25
likely that ProX would be an indispensable party to” Ashton II if it survived the
motion to dismiss. Id.
Based on our de novo review of the relevant pleadings, we agree with the
district court’s conclusions that the forum non conveniens issue presented in Ashton
II was substantially the same as the one presented in Ashton I, id. at 1208, and that
GSTC failed to show “‘objective facts that materially alter the considerations
underlying the previous resolution,’” id. at 1209 (internal quotation marks omitted).
Accordingly, we conclude the district court properly dismissed the claims against
Ashton and the Ashton-controlled entities on issue preclusion grounds.
In so concluding, we reject GSTC’s argument that the district court failed to
give proper deference to GSTC’s choice of forum. We recognize that “there is
ordinarily a strong presumption in favor of” hearing the case in the plaintiff’s chosen
forum, but that presumption can be overcome “when the private and public interest
factors clearly point towards trial in” a different forum. Piper Aircraft Co. v. Reyno,
454 U.S. 235, 255 (1981). Thus, the plaintiff’s choice of forum is just one factor in
the forum non conveniens analysis, and the court concluded in Ashton I that GSTC’s
preference for Wyoming as the forum was outweighed by the private and public
interests favoring resolution of its claims in Australia. 2017 WL 2955353, at *14–17.
GSTC did not appeal that determination, and we will not review it here.
Accordingly, we decline to consider GSTC’s related argument that “applying the
forum non conveniens test to the Ashton II complaint warrants denial of” the motion
to dismiss. Aplt. Br. at 26 (capitalization omitted and italics added). This argument
26
merely seeks a rebalancing of the forum non conveniens factors, an issue we have
concluded GSTC is barred from relitigating. See Pastewka, 565 F.3d at 854.
CONCLUSION
The district court’s order is affirmed. We deny GSTC’s Motion to Take
Judicial Notice of 2019 jury verdicts and other documents related to the Wyoming
Collection Actions, because they do not bear directly on our disposition of this appeal
from a 2018 dismissal order that was based largely on the preclusive effect of an
unappealed 2017 judgment. See United States v. Ahidley, 486 F.3d 1184, 1192 n.5
(10th Cir. 2007) (court has discretion to judicially notice publicly-filed records in
certain other courts “concerning matters that bear directly upon the disposition of the
case at hand”).
Entered for the Court
Terrence L. O’Brien
Circuit Judge
27