Reported / Citable
Background
In 2008, California residents Brad Pitt and Angelina Jolie purchased Chateau Miraval S.A. — a French company that owns a celebrated vineyard and estate in Provence — through their respective California limited liability companies. Pitt held his interest through Mondo Bongo, LLC; Jolie held hers through Nouvel, LLC, each owning 50 percent. The Quimicum articles of association (the Luxembourg holding company that owned Miraval) required three-quarters shareholder consent before shares could be transferred to an outsider.
After Jolie filed for divorce from Pitt in 2016, the former couple spent years negotiating how to divide Miraval. In mid-2021, Jolie broke off those negotiations and instead secretly sold Nouvel — her California LLC — to Tenute del Mondo B.V., a Dutch company ultimately owned by Yuri Shefler, a Russian-born billionaire best known as the beneficial owner of Stolichnaya Vodka’s parent company, SPI Group. Shefler is based in Switzerland.
Pitt and Mondo Bongo sued Jolie, Shefler, Tenute, and others for breach of contract, tortious interference, and related claims, alleging the sale violated the transfer-restriction provisions in the Quimicum articles. Shefler moved to quash service of summons, arguing he was a Swiss resident with minimal involvement in a European transaction negotiated by European companies in Europe. The Los Angeles Superior Court agreed and dismissed Shefler for lack of personal jurisdiction. Pitt appealed.
The Court’s Holding
The Second District Court of Appeal reversed, holding that Shefler purposefully availed himself of the California forum. The court distinguished between jurisdiction based merely on the foreign effect of foreign conduct — which generally is insufficient — and jurisdiction grounded in Shefler’s own deliberate California contacts, which is sufficient.
Shefler’s California contacts were substantial: he directed negotiations to purchase Nouvel LLC, a California limited liability company registered under California law; the seller, Jolie, was a California resident; the final purchase agreement was expressly governed by California law and contained a California forum-selection clause; Shefler personally wrote a letter to Jolie (a California resident) confirming the deal; and Shefler personally guaranteed $39 million of the $64 million purchase price, providing his bank’s guarantee letter specifically referencing the California entity and the California-domiciled seller. Shefler also instructed subordinates to apply pressure on Jolie’s team during negotiations through communications that affected the California entities and their California members.
The court emphasized that specific jurisdiction requires only that the controversy arise out of the defendant’s contacts with the forum — not that the defendant physically entered California. Here, the lawsuit arose directly from Shefler’s direction and financing of the acquisition of a California company from a California resident in a deal governed by California law.
Key Takeaways
- A foreign defendant who deliberately purchases, finances, or directs the acquisition of a California LLC — even without ever entering California — can be subject to personal jurisdiction in California courts if the lawsuit arises from that transaction.
- Structuring a deal with a California-law governing clause and a California forum-selection clause is itself evidence that the foreign buyer purposefully availed itself of California.
- A personal guarantee of purchase-price payments to a California resident strengthens the jurisdictional nexus, especially when the guarantee letter references the California entity being sold.
- Routing a transaction through European subsidiaries does not insulate a beneficial owner from California jurisdiction when the beneficial owner directed, approved, and financed the deal and personally communicated with the California seller.
- The three-part purposeful availment test — purposeful direction of activities at the forum, a claim arising out of those activities, and reasonableness — was satisfied here even though all negotiations occurred in Europe, because the subject matter of the deal (Nouvel, a California LLC, owned by a California resident) anchored California’s interest.
Why It Matters
This case extends and clarifies California’s personal jurisdiction doctrine for foreign investors who transact in California-organized entities without stepping foot in the state. The result matters broadly: wealthy foreign buyers routinely acquire interests in California companies, real estate holding entities, and tech startups through offshore structures. Under this ruling, if the transaction is over a California entity, is governed by California law, and the buyer personally directs and finances the deal, California courts can assert jurisdiction over the foreign buyer in any dispute arising from that transaction.
For California businesses and investors, the ruling is reassuring: counter-parties who use California’s legal framework to do a deal cannot later argue they are beyond California’s judicial reach. For foreign buyers and their counsel, it underscores the need to assess jurisdictional exposure carefully when acquiring California-registered entities from California residents, regardless of where the negotiations physically occur.