MICHAEL A. TRICARICHI, Appellant,
COOPERATIEVE RABOBANK, U.A.; UTRECHT-AMERICA FINANCE CO.; AND SEYFARTH SHAW LLP, Respondents.
from district court orders, certified as final pursuant to
NRCP 54(b), dismissing tort claims for lack of personal
jurisdiction. Eighth Judicial District Court, Clark County;
Joseph Hardy, Jr., Judge.
Hutchison & Steffen, LLC, and Michael K. Wall, Mark A.
Hutchison, and Todd W. Prall, Las Vegas; Sperling &
Slater and Thomas D. Brooks and Scott F. Hessell, Chicago,
Illinois, for Appellant.
Roca Rothgerber Christie LLP and Dan R. Waite, Las Vegas;
Hughes Hubbard & Reed LLP and Chris Paparella, New York,
New York, for Respondents Cooperatieve Rabobank, U.A., and
Utrecht-America Finance Co.
Law Group and Steve L. Morris, Akke Levin, and Ryan M. Lower,
Las Vegas, for Respondent Seyfarth Shaw LLP.
HARDESTY, STIGLICH and SILVER, JJ.
appeal, we address specific personal jurisdiction and whether
to adopt the conspiracy-based theory of personal
jurisdiction. In the underlying case, Michael Tricarichi sued
respondents for luring him into an intermediary or
"Midco" tax shelter scheme that left him liable as
a transferee for a $21.2 million federal tax deficiency and
penalty. The district court dismissed Tricarichi's fraud,
conspiracy, and racketeering claims for lack of personal
jurisdiction over respondents, and concluded that Walden
v. Fiore, 571 U.S. 277 (2014), overruled Davis v.
Eighth Judicial District Court, 97 Nev. 332, 629 P.2d
1209 (1981), to the extent Davis supported a
conspiracy-based theory of personal jurisdiction.
as to specific personal jurisdiction, we conclude that
neither sufficient minimum contacts nor conspiratorial acts
targeted at Tricarichi support jurisdiction in Nevada.
Tricarichi did not identify a link between the acts or
conduct underlying his tort claims and Nevada, and because
Tricarichi's injury does not connect respondents'
actions to Nevada in a jurisdictionally significant way, the
district court correctly determined that respondents lacked
minimal contacts with Nevada to satisfy due process and
support personal jurisdiction. Second, we clarify that
Walden did not overrule Davis and that
Nevada's long-arm statute encompasses a conspiracy-based
theory of personal jurisdiction, which we adopt herein as a
basis on which specific jurisdiction may lie. However, we
conclude Tricarichi fails to establish personal jurisdiction
under that theory because the complaint does not allege
conspiratorial acts sufficient to establish the requisite
minimum contacts with Nevada. We therefore affirm the
district court's orders.
AND PROCEDURAL HISTORY
Michael Tricarichi was the president and sole shareholder of
Westside Cellular, Inc., an Ohio C corporation. Relevant
here, when Westside dissolved, it realized roughly $40
million from a settlement agreement in a civil lawsuit. Under
the C corporate tax structure, Westside's proceeds were
taxable both to Westside at the corporate level and, after
distribution, to Tricarichi at the shareholder level.
International, LLC, a now defunct San Francisco-based
"Midco" promoter, proposed Tricarichi engage in an
intermediary transaction tax shelter known as a "Midco
transaction" in order to avoid double taxation. Midco
transactions are structured to provide the seller with the
benefits of a stock sale and the buyer with the benefits of
the asset purchase while avoiding the gain tax liability by
claiming certain tax attributes-such as losses-that would
allow the party to absorb the liability were the tax
attributes legitimate. Salus Mundi Found, v. C.I.R.,
776 F.3d 1010, 1013 (9th Cir. 2014). In 2001, the IRS
determined that Midco transactions were improper tax
avoidance schemes, for which fictional losses would be
disallowed and corporate tax liability assessed. See
Tricarichi v. C.I.R., 110 T.C.M. (CCH) 370 (T.C. 2015).
Thus, if the IRS determines that the attributes of the Midco
are artificial, the tax liability created by the built-in
gain on the sold assets remains due. Salus Mundi
Found., 776 F.3d at 1013.
began negotiating with Tricarichi around March 2003 for the
purchase of Tricarichi's Westside stock. At that time,
Tricarichi resided in Ohio, but moved to Nevada in May 2003.
In July 2003, Fortrend's affiliate intermediary, Nob
Hill, Inc., sent Tricarichi a letter of intent to purchase
his Westside stock. In August 2003, Fortrend contacted
respondent Cooperatieve Rabobank, U.A., to request a
short-term loan to Nob Hill to finance the Westside stock
purchase. Westside would then repay the loan once the stock
purchased closed. Rabobank, which is organized under Dutch
law and has its principle place of business in the
Netherlands, also has principal branches in Utrecht,
Netherlands, and New York, New York. To facilitate the funds
transfer, Westside opened an escrow account with Rabobank.
The account documents list Tricarichi's Nevada
September 9, 2003, Tricarichi sold all of his Westside stock
to Nob Hill for $34.6 million. Rabobank's wholly owned
subsidiary, respondent Utrecht-America Finance Co., a
Delaware corporation with its principal place of business in
New York, New York, thereafter made a short-term loan to Nob
Hill in New York for $2.9 million for the purchase of
Westside. Nob Hill then transferred those
proceeds, along with the remainder of the purchase price,
from its Rabobank account to Tricarichi's Rabobank
account. Tricarichi thereafter transferred the funds to
another bank account he controlled in New York. Nob Hill
repaid Utrecht the $2.9 million with Westside's funds,
and Rabobank received a $150, 000 fee from Nob Hill. Nob Hill
thereby acquired Tricarichi's Westside stock.
resigned from Westside. Nob Hill represented to Tricarichi
that Westside's tax liability for 2003 would be satisfied
and further agreed to indemnify Tricarichi against
Westside's tax liability. Nob Hill also warranted that it
did not intend to cause Westside to engage in an IRS
with the way Midco transactions operate, Nob Hill quickly
merged into Westside. At that point, roughly $5.2 million
remained in Westside's account. According to Tricarichi,
Fortrend transferred the funds to its affiliates over the
next few months rather than using those funds to facilitate
Nob Hill's debt-collection business.
Nob Hill purchased Westside's stock, Nob Hill's sole
shareholder, Millennium Recovery Fund, LLC,  contributed a
portion of debt to Westside with a purported tax basis of
about $43 million. Westside then wrote off the debt as
uncollectable and used it to claim a bad debt tax deduction
of roughly $42.5 million, thereby offsetting the settlement
income and claiming it had no income tax liability for 2003.
Similarly, Millennium previously planned to acquire a
distressed Japanese debt for $137, 000 and claim a $314
million basis for it. In that case,  respondent Seyfarth
Shaw LLP, a Chicago, Illinois, law firm, advised Nob
Hill's president, John McNabola, that this high tax basis
was appropriate. Seyfarth has offices in ten United
States locations but none in Nevada and is not registered to
do business in Nevada. None of Seyfarth's attorneys have
practiced in Nevada in connection with any matter involving
audited Westside's 2003 tax return and disallowed roughly
$42.5 million in bad debt deductions and over $1.65 million
claimed deductions for legal and professional fees. Westside
did not pay the resulting tax deficiency of $15, 186, 570 and
penalties of $6, 012, 777, as it had no assets. Thus, the IRS
determined that Tricarichi had transferee liability.
Tricarichi petitioned for review in the U.S. Tax Court. That
court determined that the Westside stock transfer was an
improper Midco transaction, Tricarichi had constructive
knowledge that Fortrend intended to employ an illegal tax
shelter, and Tricarichi was liable for the tax deficiency and
penalties plus interest. See Tricarichi v. C.I.R.,
110 T.C.M. (CCH) 370 (T.C. 2015).
filed the underlying complaint against respondents Rabobank,
Utrecht, and Seyfarth, asserting claims for aiding and
abetting fraud, civil conspiracy, and violation of
Nevada's racketeering statute (NRS 207.400(1)).
Tricarichi also asserted a claim for unjust enrichment
against Rabobank and Utrecht. Seyfarth, Rabobank, and
Utrecht filed motions to dismiss the complaint for lack of
on Walden v. Fiore,571 U.S. 277 (2014), the
district court granted the motions, finding that Tricarichi
had not shown conduct by respondents in Nevada or directed at
Nevada that would enable the court to exercise personal
jurisdiction. The district court also concluded that
appellant's reliance on Davis v. Eighth Judicial
District Court,97 Nev. 332, 629 P.2d 1209 (1981), for a
conspiracy-based theory of personal jurisdiction was
misplaced because Walden overruled Davis.
And, even though Tricarichi alleged Rabobank and Utrecht knew
he was a Nevada resident when they contacted ...