Paulsson v. Dorosz

Seismic Reservoir 2020, Inc. (Seismic), a California company, brought suit against Bjorn Paulsson. Paulsson counterclaimed against two Canadian directors of Seismic arising from his status as a shareholder and director of Seismic’s parent company, a corporation existing under the laws of Province of Alberta, Canada. Paulsson sought damages for breach of fiduciary duties owed by directors of the Alberta company under section 242 of the Alberta Business Corporations Act. The district court dismissed the counterclaim pursuant to Fed. R. Civ. P. 12(b)(1) for lack of jurisdiction, concluding that it could not issue a remedy under the Alberta statute. A panel of the Ninth Circuit affirmed, holding (1) the district court had jurisdiction to entertain the controversy; and (2) the district court should have dismissed Paulsson’s counterclaim under Fed. R. Civ. P. 12(b)(6) for failure to state a cause of action rather than under Rule 12(b)(1) because Paulsson’s counterclaim arising under the Alberta Act did not raise a cause of action for which the district court could grant relief. View "Paulsson v. Dorosz" on Justia Law