The fiduciary shield doctrine does not provide absolute protection from jurisdiction. The New Mexico Court of Appeals stated in Santa Fe Technologies, Inc. v. Argus Networks, Inc. that, inasmuch as New Mexico exercises personal jurisdiction to the full extent the U.S. Constitution allows, the fiduciary shield doctrine is not constitutionally required in New Mexico. An employee of a corporation subject to personal jurisdiction will not be shielded from jurisdiction if he or she is a primary participant in the alleged wrongdoing intentionally directed at the forum state, which activities formed the bases of the jurisdiction over the corporation.
Plaintiff, New Mexico residents, obtained a mortgage through defendant company. Plaintiffs filed a lawsuit in a New Mexico state court, alleging fraud and violations of the New Mexico Unfair Practices Act (UPA) with respect to their mortgage transaction with defendant company, and after that lawsuit was filed, defendant company’s president obtained a copy of plaintiffs' credit report and sent it to their attorney in New Mexico. After plaintiffs’ attorney received the report, plaintiffs sued defendant company and its president in the United States District Court for the District of New Mexico, claiming that defendant company president violated their rights under the Fair Credit Reporting Act (FCRA) and the UPA. Defendant company president filed a motion to dismiss the action for lack of personal jurisdiction. The court denied defendant company president's motion to dismiss.
Did the court have personal jurisdiction over defendant president because the fiduciary shield doctrine did not apply?
The federal district court had personal jurisdiction over defendant company president. Defendant company president requested a copy of plaintiff New Mexico residents' credit report and sent it to their attorney, so any violation of the FCRA or the UPA affected plaintiffs' in New Mexico. Because defendant company president requested the report and sent it to New Mexico himself, he could not use the fiduciary shield doctrine as a defense.