Opinion
Civil Action No. 04-2169-CM.
March 2, 2005
MEMORANDUM AND ORDER
Plaintiff 555 Corporate Ventures, Ltd. (555) brings the instant action against Ash Grove Cement Company, Inc. (Ash Grove), alleging that it owns certain mineral rights on properties to which Ash Grove owns the surface rights. This matter is before the court on defendant's Motion to Dismiss (Doc. 7) and plaintiff's Request for Oral Argument (Doc. 17).
The court has discretion pursuant to D. Kan. Rule 7.2 to grant requests for oral argument on motions. The court believes that oral argument is not necessary in these circumstances. Accordingly, the motion at issue will be disposed of pursuant to this order and, therefore, the court denies plaintiff's request for oral argument.
I. Standards
The court will dismiss a cause of action for failure to state a claim only when it appears beyond a doubt that the plaintiff can prove no set of facts in support of the theory of recovery that would entitle him or her to relief, Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Maher v. Durango Metals, Inc., 144 F.3d 1302, 1304 (10th Cir. 1998), or when an issue of law is dispositive, Neitzke v. Williams, 490 U.S. 319, 326 (1989). The court accepts as true all well-pleaded facts, as distinguished from conclusory allegations, Maher, 144 F.3d at 1304, and all reasonable inferences from those facts are viewed in favor of the plaintiff, Witt v. Roadway Express, 136 F.3d 1424, 1428 (10th Cir. 1998). The issue in resolving a motion such as this is not whether the plaintiff will ultimately prevail, but whether he or she is entitled to offer evidence to support the claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183 (1984).
II. Facts
Ash Grove is a Delaware corporation which maintains its principal place of business and company headquarters in Overland Park, Kansas. 555 is a British Columbia limited liability company with its principal place of business in British Columbia.
Ash Grove is the holder of surface rights and the owner of fee simple title to certain property located in Texada Island, British Columbia, Canada. Since 1983, Ash Grove has operated a limestone quarry on a portion of its Texada Island property. Limestone from the quarry is used by Ash Grove in the manufacture of cement and by customers for agricultural, chemical, and construction purposes. Approximately twenty-four percent of limestone from the quarry is shipped to Ash Grove's lime plant in Portland, Oregon, and approximately forty percent is shipped to Ash Grove's cement plant in Seattle, Washington. The remaining thirty-six percent is shipped directly to customers.
555 alleges that it holds rights to certain minerals on some, but not all, of the property owned by Ash Grove on Texada Island. Specifically, 555 contends that Ash Grove has refused to either account for the metallic minerals it uncovers while quarrying and processing the limestone, return those minerals to 555, or compensate 555 for Ash Grove's taking of the minerals.
A. British Columbia Lawsuit
In November 1997, 555 filed a lawsuit (BC Lawsuit) against Ash Grove in the Supreme Court of British Columbia, British Columbia's general trial court. In that lawsuit, 555 made claims regarding ownership of mineral rights. Ash Grove filed a "Statement of Defense" in the BC Lawsuit, in which it admitted that 555 owned certain mineral rights but denied that Ash Grove had interfered with those rights or had any liability to 555.
In March 2000, 555 initiated a proceeding against Ash Grove before the Gold Commissioner for British Columbia. 555 claimed that Ash Grove was encountering mineral substances of value to 555 during expansion of the quarry and was denying 555 access to this material. After conducting an investigation, the Gold Commissioner issued an Order on February 27, 2002. In the Order, the Gold Commissioner concluded that Ash Grove owned the limestone on Ash Grove's property and that 555 held rights to gold, silver, and other minerals (not including limestone) on certain properties owned by Ash Grove. The Order further stated:
Under section 13 of the Mineral Tenure Act, RSBC 1996 chapter 292, disputes over rights to minerals must first be filed with the Gold Commissioner, a quasi-judicial official in the British Columbia Ministry of Energy and Mines.
[I]t would be to the claim holder's [555's] advantage to arrange with the quarry operator to monitor for metallic mineral occurrences in existing and new limestone quarries. Clearly, there exists a synergistic opportunity for the two companies to cooperate in the exploration and further development of the area. It should be kept in mind that the land owner's [Ash Grove] right to use the surface predates that of the mineral claim holder, and any dispute regarding access or use of the land must take this priority into consideration.
555 filed a Notice of Appeal of the Order, which remains pending. On November 4, 2002, 555 voluntarily dismissed the BC Lawsuit.
B. Oregon Lawsuit
Within a month after dismissing the BC Lawsuit, 555 filed an action against Ash Grove in federal district court in Portland, Oregon (Oregon Lawsuit). In the Oregon Lawsuit, 555 alleged that it holds rights to certain minerals on some, but not all, of the property owned by Ash Grove on Texada Island and brought claims for conversion, trespass, accounting, and declaratory relief.
555 also alleged that much, if not all, of the mineralized limestone, which was the subject of the Oregon Lawsuit, is shipped to Portland. Ash Grove moved to dismiss the Oregon Lawsuit on forum non conveniens grounds. After considering the briefs, hearing oral argument, and weighing the forum non conveniens factors, the District of Oregon concluded that "[British Columbia] is the more convenient forum" and dismissed the action on July 7, 2003. 555 did not appeal the dismissal.
The Findings and Recommendation were issued by Magistrate Judge Dennis J. Hubel on May 5, 2003 and adopted by District Judge Robert E. Jones.
C. Kansas Lawsuit
In April 2004, 555 filed the instant lawsuit, claiming that it holds rights to certain minerals on some of the property owned by Ash Grove on Texada Island. The relief sought in the BC and Oregon Lawsuits is virtually identical to the relief 555 seeks in the present action: (1) an accounting by Ash Grove of minerals it has extracted from certain properties; (2) general and punitive damages; (3) a declaration of the parties' rights; and (4) (in Canada and Oregon) an injunction against Ash Grove's alleged trespassing on 555's property or (in Kansas) a "declaration by the Court of the . . . method and means by which [the parties'] rights and duties will be determined as mining the Property proceeds." In essence, 555 seeks substantially the same relief in this court as it sought in the Oregon Lawsuit.
III. Discussion
A. Issue Preclusion
Ash Grove contends that 555 is estopped from relitigating the forum non conveniens issue in this court because the issue was decided by the District Court of Oregon. 555 argues that the Oregon court only decided the convenience of the Oregon courts and that, as a result, this court is not bound by the Oregon court's decision.
Federal circuit courts have held that a plaintiff cannot relitigate a forum non conveniens dismissal unless the relevant facts have changed. Pastewka v. Texaco, Inc., 565 F.2d 851, 853-54 (3d Cir. 1977) (affirming application of "direct estoppel by judgment" to preclude relitigation of forum non conveniens dismissal when plaintiff pointed to "no objective fact establishing that, unlike New York, Delaware would be a more convenient forum than England or that Delaware would be even as convenient as New York"); Exxon Corp. v. Chick Kam Choo, 817 F.2d 307, 314 (5th Cir. 1987) (affirming trial court's preclusion of relitigation of forum non conveniens issue, affirming sanctions, and applying rule that plaintiff cannot relitigate unless it can "show objective facts relevant to the [forum non conveniens] issue that materially alter the considerations underlying the previous resolution"), rev'd on other grounds, 486 U.S. 140 (1988); Villar v. Crowley Maritime Corp., 990 F.2d 1489 (5th Cir. 1993) (affirming res judicata dismissal of wrongful-death action shopped in three forums, and affirming sanctions and sua sponte injunction against subsequent actions); Aguilar v. Boeing Co., 11 F.3d 55, 59 (5th Cir. 1993) (affirming application of issue preclusion to dismiss case when plaintiffs "made no showing of `objective facts that materially alter the considerations underlying the previous [forum non conveniens dismissals]'" (citation omitted)).
555 asserts that the underlying facts of the case have changed. Specifically, 555 argues that, when deciding to file in Oregon, it was operating under the assumption that the Ash Grove offices in Oregon and Kansas were essentially the same. 555 directs the court's attention to an affidavit originally filed with the Oregon court and subsequently re-filed with this court, by Eileen Flink, Ash Grove's assistant secretary and assistant general counsel, stating that "all senior management" is located in Overland Park, Kansas, all contracts "emanate" from Kansas, and "the headquarters provide company wide direction and support." 555 contends that it is therefore entitled it to relitigate the Oregon court's previous forum non conveniens determination.
In support, 555 points to Mizokami Bros. of Arizona, Inc. v. Mobay Chemical Corp., 660 F.2d 712 (8th Cir. 1981). In Mizokami Bros., the case was dismissed without prejudice on the basis of forum non conveniens from an Arizona court and re-filed in Missouri. The Missouri court held that "[t]he convenience of the Arizona forum has been fully litigated and finally determined. Under the rules of issue preclusion Mizokami may not reopen that issue [in Arizona]. The dismissal is conclusive, however, only as to the availability of an Arizona forum. Further litigation on other procedural questions and the merits of the claim are not precluded." Mizokami Bros., 660 F.2d at 716-17.
Foremost, the court does not believe the underlying facts have materially changed. The only fact that has changed is 555's purported realization that Ash Grove's corporate headquarters are located in Kansas. However, this is not a "change." Ash Grove's offices have not moved from or to Overland Park, Kansas, and its location has never been a secret to 555. Indeed, 555's president wrote to Ash Grove's then president in Overland Park, Kansas as early as 1998.
Moreover, the court distinguishes Mizokami Bros. from the facts in this case. In Mizokami Bros., the court determined only that Arizona was not a convenient forum. The court, however, neither discussed nor decided which forum would in fact pass the forum non conveniens test. The case at hand differs, in that the Oregon court specifically held that this lawsuit should be pursued in British Columbia. After an exhaustive analysis, the court concluded:
I find that B.C. [British Columbia] is the more convenient forum because (1) the claims arose in B.C.; (2) access to evidence, particularly identified witnesses, is more readily available in B.C.; (3) B.C. law will be applied to the case; (4) any injunctive relief affecting the land would be ordered and enforced in B.C., the jurisdiction where the land is located; and (5) adjudicating the case in B.C. avoids the possibility of this court interfering in the ongoing proceedings before the Gold Commissioner in B.C.
(Findings and Recommendation at 20).
Once a court of competent jurisdiction has squarely passed on an issue between the same parties, on the merits of the cause or otherwise, that issue may not be relitigated. In this case, the District Court of Oregon squarely decided the issue of which jurisdiction is proper in this litigation. 555 neither appealed that decision, nor did 555 request a transfer to Kansas. The court therefore holds that, in these circumstances, 555 is precluded from relitigating the issue of forum non conveniens.
B. Application of Forum Non Conveniens Doctrine
Even if the court determined that 555 could relitgate the issue of forum non conveniens, dismissal would still be appropriate. In assessing the issue of forum non conveniens, the court considers the private interest factors, which are: (1) the relative ease of access to sources of proof; (2) availability of compulsory process for compelling attendance of witnesses; (3) cost of obtaining attendance of willing non-party witnesses; (4) possibility of a view of the premises, if appropriate; and (5) all other practical problems that make trial of the case easy, expeditious and inexpensive. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). The public interest factors the court considers include: (1) administrative difficulties of courts with congested dockets caused by cases not being filed at their place of origin; (2) the burden of jury duty on members of a community with no connection to the litigation; (3) the local interest in having localized controversies decided at home; and (4) the appropriateness of having diversity cases tried in a forum that is familiar with the governing law. See id. at 508-09.
The court also takes into consideration that, when the home forum has been chosen, it is reasonable to assume that this choice is convenient. When the plaintiff is foreign, as is the case here, this assumption is much less reasonable. Because the central purpose of any forum non conveniens inquiry is to ensure that the trial is convenient, a foreign plaintiff's choice deserves less deference. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981).
555's Complaint alleges conversion and seeks a declaratory judgment, accounting, and constructive trust. The alleged conversion would have occurred, and would continue to occur, in British Columbia, where the limestone containing the minerals at issue are mined. Thus, the central claim in this case arose in British Columbia, and, without question, the access to sources of proof weigh in favor of trying this case in British Columbia. 555 is a British Columbia corporation, and its known principals reside in Vancouver, British Columbia. Ash Grove's quarry manager and quarry superintendent, presumably the employees most knowledgeable about the quarry operations, the composition of materials in the quarry, and access issues, reside on Texada Island in British Columbia. Other witnesses, including individuals who have provided geology and consulting services to 555, also reside in British Columbia. Ash Grove additionally proffers that records regarding ownership and operation of its Texada Island property are at Ash Grove's office on Texada Island, including (1) shipping records; (2) tonnage-of-limestone records; (3) tonnage-of-waste records; (4) production drill analysis records; (5) core drill analysis records; and (6) analyses of quarry materials. In contrast, the extent of sources of proof available in the United States is uncertain at best.
In accordance with finding that the majority of witnesses are located in British Columbia, consideration of the availability of compulsory process for compelling attendance of witnesses and the cost of obtaining attendance of willing non-party witnesses favors litigation in British Columbia. Moreover, if there arose a possibility that the premises must be viewed, trial in British Columbia is most appropriate.
British Columbia's connection to the case is stronger than that of Kansas since the alleged conversion occurred and continues to occur in British Columbia. Accordingly, British Columbia has an interest in having this controversy decided there. The court finally considers the appropriateness of having diversity cases tried in a forum that is familiar with the governing law. British Columbia has a strong interest in enforcing mineral and real property rights according to its own laws and procedures. Canadian law likely would apply, specifically Canada's Mineral Tenure Act, and it is reasonable to assume that Canadian courts are more likely familiar with that governing law. Furthermore, the court is cautious about the possibility of interfering with the Gold Commissioner's proceeding in light of the fact that 555's appeal is still pending. On the whole, the factors weigh in favor of dismissing this action on the basis of forum non conveniens. The court, however, declines to issue an injunction enjoining further domestic filings by 555, nor is the court willing to award Ash Grove attorney's fees and costs.
IT IS THEREFORE ORDERED that plaintiff's Request for Oral Argument (Doc. 17) is denied, and defendant's Motion to Dismiss (Doc. 7) is granted. This case is hereby dismissed.