Ninth Circuit vacates district court’s dismissal of Fox’s claims against German owner of distributor of Fox films in Russia for lack of personal jurisdiction, holding that lower court erred by not allowing limited jurisdictional discovery.Twentieth Century Fox International Corp. entered into a distribution agreement with defendant Gemini Film International (GFI), a Russian corporation allegedly owned and controlled by defendant Bodo Scriba, a German citizen. After GFI allegedly failed to make several payments to Fox, Fox sued Scriba and GFI.
Scriba, who had only the barest personal contacts with California, moved to dismiss for lack of personal jurisdiction. Fox contended that GFI was Scriba’s alter ego and that the court’s uncontested jurisdiction over GFI should be extended to Scriba. The district court granted the motion to dismiss, holding that the exercise of jurisdiction over Scriba would be unreasonable, and declined Fox’s request for jurisdictional discovery on the alter ego issue.
Fox appealed and the U.S. Court of Appeals for the Ninth Circuit vacated the dismissal and remanded, holding that, although the question is a close one, the lower court erred by ruling on an incomplete record rather than allowing limited jurisdictional discovery. According to the court, Fox made an adequate showing that the denial of discovery would result in actual and substantial prejudice to it. The court noted that Fox’s alter ego theory, if supported by evidence, would provide a strong argument for the exercise of jurisdiction over Scriba. “In sum, a more full and satisfactory showing of the facts is required before the district court can adequately determine whether personal jurisdiction over Scriba exists in California. Accordingly, we vacate the district court’s order dismissing the case against Scriba and remand with instructions for the district court to permit the parties to engage in jurisdictional discovery.”