Opinion
Civil Action No: 04-1004 SECTION: "J" (1).
January 21, 2005
ORDER AND REASONS
Before the Court is the Motion to Dismiss for lack of personal jurisdiction and for improper venue filed by the defendants. Rec. Doc. 13. Plaintiff opposes the motion. The motion, set for hearing on November 10, 2004, is before the Court on briefs without oral argument. For the reasons which follow, the Court finds that it lacks personal jurisdiction over Chevron and ChevronTexaco, but that venue in this district is proper over the remaining defendants.
Factual and Procedural History
In the 1950s, Stanolind Oil and Gas Company (now Amoco) acquired five mineral leases in Vermilion Parish. Amoco Prod. Co. v. Texaco, Inc., 838 So. 2d 821, 825 (La.App. 3d Cir. 2003). Stanolind Oil subleased these leases in 1955 to Charles B. Wrightsman, predecessor in interest of IMC Exploration Company ("IMC"), and Seaboard Oil Commpany, predecessor in interest of Texaco, Inc. ("Texaco"). Id. at 826. The subleases contained a reassignment provision in which the assignee agreed that should he "elect to surrender, let expire, abandon or release any or all rights in said lease, acreage, or any part thereof," then the assignee should notify assignor sixty days prior to any such surrender, expiration, or abandonment of the lease. Id. Further, the assignee agreed to reassign his rights to the assignor if the assignor so requested. Id. In 1976, IMC acquired a fifty percent interest in the above mineral leases and Texaco acquired the other fifty percent interest. Id. After some complications, one of the mineral leases subject to the reassignment provision lapsed, resulting in a formal release in the parish records in 1977. Id. Amoco then maintained that it had not been notified of the lapse of the lease as required by the reassignment clause. Id. Other releases occurred by IMC and Texaco in response to a lawsuit by some of the royalty owners of the leases. Id. Amoco again maintained that it was not notified of these releases. Id. Amoco discovered the releasing of the leases in 1993. Id. at 827.
Upon discovering the releases, Amoco filed suit against Texaco and IMC in April 1994, alleging that Texaco and IMC violated the release provision in the 1955 subleases by releasing the mineral leases without notifying Amoco. Id. Amoco dismissed Texaco from the suit and proceeded to trial solely against IMC.Id. A judge directed a verdict for Amoco on the issue of liability and held that a breach of contract did occur and that reasonable minds could not differ on that issue. Id. Thus, the case went to the jury solely on the issue of damages. Id. The jury returned a $30,000,000.00 award in favor of Amoco. Id. at 828. On appeal, the Third Circuit affirmed the trial court's ruling.
IMC filed suit in the Eastern District of Louisiana against Texaco, Inc., Texaco Exploration and Production, Inc., Chevron U.S.A., Inc., Chevron Corporation, and ChevronTexaco Corporation. IMC has filed suit against the defendants for multiple breach of contract claims, asserting that Texaco failed to fulfill its obligations to IMC under an oil and gas Operating Agreement, which resulted in damages to IMC in the amount of $30,000,000.00. IMC alleges that in 1976 when it bought an interest in the mineral leases, they were subject to an Operating Agreement. It further alleges that IMC became a successor in interest to the Operating Agreement entered into by its predecessor in title. Further, IMC maintains that Texaco was also a party to the Operating Agreement as successor in interest. Under the Operating Agreement, IMC argues that it is the non-operator and Texaco is the operator. Thus, IMC contends that it was Texaco's job to perform all acts necessary to manage and operate the leases for both Texaco and IMC. As non-operator, IMC maintains that its only obligation was to pay fifty percent of the expenses incurred in the management and development of the leases. IMC alleges that Texaco has breached the agreement because it let certain leases lapse without notifying Amoco prior to such lapse pursuant to the reassignment provision. Thus, IMC maintains that the failure of Texaco to notify Amoco resulted in a breach of the Operating Agreement between IMC and Texaco. IMC further maintains that Texaco breached its obligation to IMC under their agreement when it left IMC to defend the Amoco suit alone. As a result of Texaco's alleged breaches, IMC contends it has suffered the following damages: 1) $30,000,000.00 for the Amoco lawsuit, plus interests and costs paid on the judgment; 2) attorney fees and expenses paid in the Amoco lawsuit; 3) all costs incurred by IMC in enforcing its rights under the Operating Agreement; and 4) judicial interest from the date of judicial demand herein.
In the instant motion, the defendants seek to dismiss Chevron Corporation ("Chevron") and ChevronTexaco Corporation ("ChevronTexaco") for lack of personal jurisdiction, and to dismiss the action for improper venue.
Discussion
1. Motion to Dismiss Chevron and ChevronTexaco for Lack of Personal Jurisdiction
In their motion to dismiss for lack of personal jurisdiction, the defendants maintain that this Court cannot assert either specific or general personal jurisdiction over Chevron or ChevronTexaco. First, defendants argue that this Court does not have specific jurisdiction because IMC's lawsuit does not arise out of Chevron or ChevronTexaco's contacts with Louisiana. Second, defendants argue that this Court does not have general jurisdiction because Chevron and ChevronTexaco's contacts with the state of Louisiana are not substantial, continuous, and systematic. Defendants further argue that Chevron has no contacts with Louisiana other than through ChevronTexaco. Further, ChevronTexaco is not a citizen of Louisiana, not authorized to do business in Louisiana, does not maintain an office in Louisiana, does not have employees in Louisiana, does not own property here, and does not have any mineral leases in Louisiana.
In opposition to defendants' motion to dismiss, IMC argues that the defendants have improperly applied the law applicable to parent and subsidiary corporations, and instead should apply the law applicable to corporations that are successors by merger. Under this law, IMC argues that Chevron and ChevronTexaco are subject to jurisdiction wherever its predecessor, Texaco, was subject to jurisdiction. Therefore, since it is not disputed that Texaco is subject to the jurisdiction of this court, so too are Chevron and ChevronTexaco, according to IMC.
In response, Texaco argues that Chevron and ChevronTexaco are not successors by merger to Texaco. Rather, defendants cite to the affidavit of Walker C. Taylor, Assistant Secretary for ChevronTexaco Corporation, in which he avers that Texaco, Inc. survived as a separate corporate entity following the merger of Chevron and Texaco. Rec. Doc. 20, Exh. A. Thus, Texaco maintains that Texaco, Inc. exists today as a wholly-owned subsidiary of Chevron Asiatic, Ltd., which is a wholly-owned subsidiary of ChevronTexaco. As a result, Texaco maintains that the parent-subsidiary cases apply and that this Court does not have personal jurisdiction over Chevron and ChevronTexaco. In response, IMC argues that Chevron and ChevronTexaco have availed themselves of this Court's jurisdiction in past lawsuits and cannot now deny that this Court does not have personal jurisdiction over them.
Having considered the record, the applicable law, and the memoranda of the parties, the Court finds that this Court may not exercise personal jurisdiction over either Chevron or ChevronTexaco. Since Chevron Corporation is a non-existent entity, it cannot be subject to the jurisdiction of this Court. As for ChevronTexaco, the affidavits of Walker C. Taylor state that ChevronTexaco is not incorporated in Louisiana, does not have its principal place of business in Louisiana, is not authorized to do or doing business in the state of Louisiana, and is not a successor by merger to Texaco, Inc. Rather, it appears that ChevronTexaco and Texaco, Inc. are merely in the same corporate family.
The ChevronTexaco "family" is as follows: ChevronTexaco Corporation owns all the stock in ChevronTexaco Overseas Petroleum, Inc., which in turn owns all the stock in Chevron Asiatic, Ltd. Chevron Asiatic, Ltd. owns all the stock of Texaco, Inc., which in turn owns all the stock of Texaco Exploration and Production Holdings, Inc., which in turn owns all the stock in Texaco Exploration and Production, Inc. Finally, Texaco, Inc. and Texaco Exploration and Production, Inc. own all of the stock in Chevron, U.S.A. Thus, ChevronTexaco is merely the highest parent in a parent-subsidiary relationship tier that exists among the Chevron and Texaco entities.
Parent-subsidiary corporations are presumed to be independent of one another for purposes of determining whether one corporation's contacts with a forum can form the basis of a related corporation's contacts for purposes of the personal jurisdiction inquiry. Dickson Marine, Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir. 1999). While this presumption can be overcome by clear evidence that one corporation is the alter ego of another, the party alleging the alter ego relationship bears the burden of proving it. Id.
In this case, IMC has not pointed to any evidence which would controvert, nor seriously argued the invalidity of, Walker Taylor's averments of the independence of ChevronTexaco from the other defendants in this case. Accordingly, this Court may not exercise personal jurisdiction over Chevron and Chevron-Texaco absent some other basis for finding personal jurisdiction, because the parent-subsidiary relationship of the defendants does not provide it.
IMC attempts to argue that ChevronTexaco is precluded from arguing that this Court does not have personal jurisdiction over it because it has submitted to the jurisdiction of this Court in the past. In essence, IMC makes a collateral estoppel (issue preclusion) argument that ChevronTexaco's prior submission to this Court's jurisdiction bars ChevronTexaco from now contesting it. The Fifth Circuit has identified three elements required for collateral estoppel to apply: "(1) the issue at stake must be identical to the one involved in the prior action; (2) the issue must have been actually litigated in the prior action; and (3) the determination of the issue in the prior action must have been a necessary part of the judgment in that earlier action." Next Level Communications LP v. DSC Communications Corp., 179 F.3d 244, 250 (5th Cir. 1999) (internal quotations and citations omitted).
In the cases pointed to by plaintiff, it is not clear that the personal jurisdiction question was identical (that is, they may have involved situations in which specific jurisdiction was present based on the unique facts of those cases, while plaintiff suggests that general jurisdiction is applicable here); the issue of personal jurisdiction was not actually litigated; and no final judgment has been entered. The mere fact that in certain isolated instances ChevronTexaco may have consented to personal jurisdiction in this Court, or acknowledged that specific jurisdiction was appropriate over it for an isolated case, does not have preclusive effect here. See, e.g., Davis v. Gleneagle Ship Mgt. Co., Inc., 1997 WL 829963, *4 (E.D. La. 1997) (where question of personal jurisdiction was not actually litigated and no final judgment on the issue was rendered, the fact that the issue of personal jurisdiction over the defendant had previously been decided in favor of plaintiff had no preclusive effect).
While the Court acknowledges that this result is counterintuitive, given the imposing ChevronTexaco building around the corner and given the cases that ChevronTexaco has litigated in this Court, on the record before it, it appears that there is no basis for the exercise of personal jurisdiction over that defendant (or the non-existent Chevron Corporation). Therefore, the motion to dismiss for lack of personal jurisdiction as to these two defendants must be granted.
2. Motion to Dismiss for Improper Venue
The defendants also argue that the Western District of Louisiana is the sole proper venue for this suit, and thus that venue does not lie in this district. In so arguing, defendants rely on 28 U.S.C. 1391(a), which states that venue is proper only in the district: 1) where any defendant resides, if all reside in the same state; 2) where a substantial part of the events or omissions giving rise to the claim occurred; or 3) where, if there is no other district in which the case can be brought, where any defendant is subject to personal jurisdiction at the time the case is commenced. Defendants note that they do not all reside in Louisiana, and contend that a substantial part of the events giving rise to the claim — namely, the issuance of the state court judgment that resulted in damages to IMC, and the fact that the mineral leases are located in the Western District of Louisiana — took place in the Western District of Louisiana. Thus, defendants argue that the Western District is the sole proper venue.
While the facts emphasized by the defendants in their analysis are undisputed, IMC has countered that the omissions by the defendants occurred in the Eastern District of Louisiana. Specifically, IMC argues that the failure of Texaco to notify Amoco about the releases is what ultimately led to the instant suit, and that Texaco's failure to notify Amoco occurred in New Orleans at Texaco's office. The Court agrees with IMC that a substantial part of the omissions giving rise to the claim occurred in this district. If Texaco had the sole responsibility to notify Amoco of the releases, then it failed to do so from its office in New Orleans. These are the events that gave rise to the claim, and thus venue is proper here (as well as in the Western District). Where multiple venues are proper for a plaintiff's claim, the plaintiff is entitled to choose the forum. Peteet v. Down Chemical Co., 868 F.2d 1428, 1436 (5th Cir. 1989). IMC chose to file suit in the Eastern District of Louisiana and since this district is a proper venue, plaintiff's choice of venue should not be disturbed. Accordingly,
IT IS ORDERED that defendants' Motion to Dismiss for Lack of Personal Jurisdiction and for Improper Venue should be and is hereby GRANTED in part, and plaintiff's claims against Chevron Corporation and ChevronTexaco Corporation are DISMISSED without prejudice for lack of personal jurisdiction; in all other respects, the motion is DENIED.