## F I L E D United States Court of Appeals Tenth Circuit 

### OCT 13 1999 

### PATRICK FISHER Clerk 

### UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

RAPHAEL F. NEVINS, Plaintiff-Appellant/Cross-Appellee,

v. MCKINLEY CAPITAL MANAGEMENT, INC., an Alaska corporation, Defendant-Appellee, MCKINLEY SELECT, LTD., (Bermuda), a Bermuda exempt company; MCKINLEY OFFSHORE MANAGEMENT, LTD, a Bermuda exempt company; MCKINLEY PARTNERS LLC, a Delaware limited liability company; ROBERT B. GILLAM, individually, as Chief Investment Officer of McKinley Capital Management, Inc., as Director of McKinley Select (Bermuda) Ltd. and as Director of McKinley Offshore Management Ltd.; DIANE WILKE, individually and as Chief Operating Officer and Compliance Officer of McKinley Capital Management, Inc., and as Director of McKinley Offshore Management, Ltd.; CHRISTOPHER J. GUPTILL, individually and on behalf of McKinley Capital Management, Inc.; ERIC SIPPEL, individually and as partner in Shartsis, Friese & Ginsburg, LLP, a law firm in San Francisco, CA,Defendants-Appellees/CrossAppellants. Nos. 97-2355 97-2364 97-2365 (D.C. No. CIV-96-1387-BB)

(D.N.M.)* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 2-- 

### ORDER AND JUDGMENT *

Before SEYMOUR , Chief Judge, ANDERSON and HENRY, Circuit Judges.

This suit arises out of an alleged agreement betwee n Raphael Nevins, a New York resident, and McKinley Capital Management, Inc. (MCM), an Alaskabased corporation, to set up an off-shore investment fund. Per the agreement, Mr. Nevins worked from New York with Eric Sippel of Shartsis, Friese & Ginsburg, MCM’s California-based law firm. In late 1995, MCM and Mr. Sippel ceased all communications with Mr. Nevins. Mr. Nevins asserts he continually attempted to contact defendants, but to no avail. In early 1996 , Mr. Nevins moved to New Mexico where he continued his attempts to contact d efendants. Mr. Nevins eventually discovered the offshore investment fund had already been formed and filed suit in New Mexico claiming breach of contrac t and various business torts against MCM, all of the companies formed in accorda nce with the agreement, the executives of MCM as individuals, the firm of Shart sis, Friese & Ginsburg, and Mr. Sippel individually. Mr. Nevins appeals the di strict court’s dismissal of his1 N.M. Stat. Ann. § 38-1-16(a) states, “Any person, w hether or not a citizen

or resident of this state, who in person or throughan agent does any of the acts enumerated in this subsection thereby submits himse lf or his personal representative to the jurisdiction of the courts of this state as to any cause of action arising from: (1) the transaction of any bus iness within this state; . . . (3) the commission of a tortious act within this state;

. . . . 3-- suit against all named defendants for lack of perso nal jurisdiction. All defendants except MCM cross-appeal the district court’s denial of their motions for imposition of Rule 11 sanctions. We affirm in partand remand in part. On a motion to dismiss for lack of personal jurisdi ction, the plaintiff must show that the district court has power over each fo reign defendant under the state’s long-arm statute and that exercise of such jurisdiction is consistent with due process limitations. See Far West Capital, Inc., v. Towne , 46 F.3d 1071, 1074 (10th Cir. 1995). We review de novo a dismissal for lack of personal jurisdiction. See Trierweiler v. Croxton & Trench Holding Corp. , 90 F.3d 1523, 1533 (10th Cir. 1996). New Mexico’s long-arm statute, N.M. Stat. Ann. § 38 -1-16 (Michie 1978), 1 requires a pled cause of action to arise out of the same activity by which the foreign defendant submitted to New Mexico’s persona l jurisdiction. See CABA, Ltd. Liab. Co. v. Mustang Software, Inc. , 1999 WL 428242 at *8 (N.M. Ct. App. May 25, 1999). Mr. Nevins’ complaint alleges breac h of a contract negotiated and formed in New York and Alaska. Mr. Nevins’ cla ims do not arise from any of defendants’ activities within or contacts with N ew Mexico.2 Mr. Nevins asserts that he was harmed within New Me xico by MCM’s and

related defendants’ breach and tortious conduct, th ereby satisfying § 38-1-16. This argument ignores New Mexico law holding that the mere effect in New Mexico of wrongful activity elsewhere does not conf er jurisdiction on its courts. See DeVenzeio v. Rucker, Clarkson & McCashin , 918 P.2d 723, 727 (N.M. Ct. App. 1996).

3 Mr. Nevins also claims MCM is generally present in New Mexico, thereby permitting personal jurisdiction over it. See Visarraga , 717 P.2d at 601 (where activities of a nonresident defendant are extensive , systematic and continuous, New Mexico courts may subject the defendant to pers onal jurisdiction on a cause of action unrelated to those activities). Although he put forth evidence that MCM had a license from the New Mexico Securities Divisi on, Mr. Nevins did not 4-- The analysis does not end there, however. New Mexi co courts equate the transaction of business or tortious conduct require ments of section 38-1-16 with the due process requirement of minimum contacts. See CABA , 1999 WL 428242, at *3 (quoting Telephonic, Inc. v. Rosenblum , 543 P.2d 825, 827 (N.M. 1975)). In this case, defendants had no contacts with New Mexi co that led to the subject matter of this suit other than Mr. Nevins’ decision to relocate there. 2 Defendants cannot be subjected to personal jurisdiction in NewMexico merely because of Mr. Nevins’ unilateral act. See Burger King Corp. v. Rudzewicz , 471 U.S. 462, 474-75 (1985); Visarraga v. Gates Rubber Co. , 717 P.2d 596, 600 (N.M. Ct. App. 1986). In addition, Mr. Sippel’s and his firm’s al leged malpractice in California is not considered a contact with New Mexico establi shing personal jurisdiction. See DeVenzeio , 918 P.2d at 727. The district court’s dismissal of all defendants was therefore proper. 3timely present any evidence regarding its actual en gagement in business or the

volume of its business in New Mexico. Mr. Nevins attempted to enter evidence regarding the MCM office in Santa Fe, its web site, and copies of its advertisements, but the district court refused to a dmit such evidence as untimely. We will not consider evidence that was not properlybefore the district court. Thus, we have no basis for considering Mr. Nevins’ argument that MCM is generally present in New Mexico. 5-- Mr. Nevins further asserts MCM consented to persona l jurisdiction in New Mexico by signing a waiver consenting to service of process when registering with the New Mexico Securities Division. The waive r was specific, however, consenting only to service for those actions arisin g out of its investment advisor activities. See N.M. Stat. Ann. § 58-13B-50 (Michie 1978). Since Mr. Nevins’ complaint does not arise out of MCM’s investment ad visor activities, MCM’s consent does not extend to this action. All defendants except MCM cross-appeal the districtcourt’s refusal to impose Rule 11 sanctions against Mr. Nevins for fil ing this complaint. We review the denial of Rule 11 sanctions for an abuse of discretion. See Barrett v. Tallon , 30 F.3d 1296, 1301 (10th Cir. 1994). Whether Rul e 11 sanctions are available is determined by an objective standard of reasonableness. See Adamson v. Bowen , 855 F.2d 668, 673 (10th Cir. 1988). Judge Black stated he declined to impose sanctions because as an attorney he had asserted similar arguments, thus implying Mr . Nevins’ complaint was reasonable. See Aplee. Jt. App. at 227, 257. This statement was c learly directed6--

at Mr. Nevins’ complaint against the non-lawyer def endants. See id. at 227 (citing Budde v. Ling-Temco-Vaught, Inc. , 511 F.2d 1033 (10th Cir. 1975) (holding service on New Mexico corporation’s statut ory service agent ineffective to establish jurisdiction for cause of action unrel ated to corporation’s activities in state). We are not convinced the district court ab used its discretion in so deciding as to those defendants. It is not clear, however, whether Judge Black gave separate consideration to the lawyer-defendants’ ar guments regarding reasonableness. See id. at 257. We therefore remand this case to Judge Bl ack to separately state whether Mr. Nevins should or shoul d not be sanctioned under Rule 11 for filing this complaint against the lawye r-defendants, and to state his reasons for so deciding. See Griffen v. City of Oklahoma City , 3 F.3d 336, 340 & 340 n.4 (10th Cir. 1993). We AFFIRM in part andREMAND in part. ENTERED FOR THE COURT
Stephanie K. Seymour Chief Judge