Bp Chemicals Ltd. v. Jiangsu Sopo Corp. (Group)

• Citation: 420 F.3d 810
• Decision Date: 25 August 2005
• Docket Number: No. 04-1814.,04-1814.
• Parties: BP CHEMICALS LTD., an English Corporation, Plaintiff-Appellee, v. JIANGSU SOPO CORPORATION (GROUP) LTD., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

420 F.3d 810

BP CHEMICALS LTD., an English Corporation, Plaintiff-Appellee, v. JIANGSU SOPO CORPORATION (GROUP) LTD., Defendant-Appellant.

No. 04-1814.

United States Court of Appeals, Eighth Circuit.

Submitted: January 10, 2005.

Filed: August 25, 2005.

Paul W. Cane, Jr., argued, San Francisco, CA (Katherine C. Huibonhoa and Julie A. Wilkinson, San Francisco, James W. Erwin, Michael D. O'Keefe, Kenton E. Knickmayer, St. Louis, on the brief), for appellant.

Daniel L. Brockett, argued, Cleveland, OH (James W. Satola and Jonathan B. Leiken, on the brief), for appellee.

Before WOLLMAN, FAGG, and BYE, Circuit Judges.

BYE, Circuit Judge.

This case, in which BP Chemicals (BP) alleges Jiangsu SOPO Corporation misappropriated its trade secrets, is before us a second time. In the first appeal, we held BP's pleadings survived a facial jurisdictional challenge brought by SOPO pursuant to the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1602-1611 &amp 1330. BP Chems., Ltd. v. Jiangsu SOPO Corp. (Group), 285 F.3d 677, 688 (8th Cir.2002). In this appeal, we must determine whether BP marshaled sufficient facts in support of its pleadings to survive SOPO's factual jurisdictional challenge under the FSIA, and whether SOPO had sufficient contacts with the State of Missouri for the district court¹ to exercise personal jurisdiction over it. We affirm the district court's denial of SOPO's motion to dismiss on both counts.

I

The factual background is important to our resolution of the issues before us, and more developed than it was when we first heard this case; we therefore delve into it in some detail, and caution the reader we may repeat facts set forth in our first opinion which we deem necessary to understand the background upon which this decision is to be decided.

This case involves the alleged misappropriation of trade secrets for a process used to manufacture acetic acid, a chemical component used in inks, plastics, resins, and fabrics. The process is known as the methanol carbonylation process, and was developed by Monsanto in the 1960s and 1970s. BP bought the process from Monsanto in 1986. Like Monsanto had done, BP licensed the process to third parties. For example, in the 1990s, BP licensed four acetic acid plants in Asia, including two in China. One of the Chinese plants was the Shanghai-Wujing Chemical plant, which acquired a license from BP in 1993. When BP bought the methanol carbonylation process from Monsanto, it also stepped into Monsanto's shoes with respect to existing license agreements Monsanto had with third parties. One of those licenses had been granted to a Taiwanese company known as China Petrochemical Development Corporation (CPDC).

In 1988, a business enterprise called the Shanghai Petrochemical Engineering Company (SPECO) was formed to engage in major chemical engineering projects in China. In 1990, the People's Republic of China (China) approved the building of a major acetic acid factory in Zhenjiang City. This project became known as the 921 project (the "92" signifying the year 1992, and the "1" signifying the month of January). In 1992, SOPO, a chemical company organized under the laws of China and wholly-owned by the Chinese government, contracted with SPECO for the latter to design and construct the 921 plant for SOPO as the ultimate end user and owner. SPECO thereafter contracted with a number of vendors in the United States to fabricate the specialized equipment needed for a methanol carbonylation acetic acid plant, supposedly utilizing "home-grown" technology, that is, technology developed by a Chinese chemical research institute for a low-pressure methanol carbonylation process.

The group of vendors who specialize in fabricating equipment needed for a methanol carbonylation acetic acid plant is relatively small. Monsanto and BP (and their licensees) had used these same vendors for all of their licensed plants worldwide. Thus, the vendors were familiar with the specifications they would regularly receive utilizing BP's trade secrets for its methanol carbonylation process.

At some point in 1995, BP learned some of the specialized vendors had received bid specification packages from SPECO for SOPO's 921 plant that were very similar to specifications used by Monsanto and BP in prior licensed projects, in particular the Shanghai-Wujing project and the CPDC project. In fact, the record now shows certain specifications for the 921 project were shameless copies of either CPDC or Shanghai-Wujing specs, in some cases replicating typographical errors made in the specs used on those projects. Appellee's App. at 1708-23.

In February 1999, BP filed this action in Missouri district court against SOPO, SPECO, and Nooter Corporation. Nooter was one of the American vendors, located in St. Louis, Missouri, who supplied the SOPO plant with nineteen key pieces of equipment consisting of: a drying column²; two reactors, one main reactor and one promoter reactor; five reboilers; four condensors; two coolers; one heater³; and zirconium and hastelloy material on three columns and one separator.

BP alleged, among other things, the parties misappropriated BP's trade secrets in violation of the Missouri Uniform Trade Secrets Act (MUTSA), Mo. Ann. Stat. §§ 417.450 through 417.467. BP obtained a default judgment of $16 million against SPECO, which is now defunct. Nooter eventually settled with BP for an undisclosed sum, and the terms of the settlement, in part, require Nooter to cooperate with BP in its action against SOPO. BP initially had trouble obtaining service against SOPO under the Hague Convention, but SOPO eventually appeared voluntarily in the action under the threat of a default judgment being entered against it.

SOPO brought a motion to dismiss the action for lack of subject matter jurisdiction alleging immunity from suit under the FSIA. SOPO contended the pleadings were insufficient on their face to fall within the "commercial activity carried on in the United States" exception to immunity under the FSIA. 28 U.S.C. § 1605(a)(2). The district court agreed and granted the motion, holding BP's suit against SOPO focused on the wrongful acquisition of BP's trade secrets, and SOPO did not acquire any of BP's trade secrets in the United States.

BP appealed. On appeal, we held BP's theory was based on more than just the wrongful acquisition of the trade secrets. BP also claimed SOPO "used" or "disclosed" the trade secrets in meetings with the American vendors which occurred in the United States, acting through its alleged agent, SPECO. See BP Chems., 285 F.3d at 683 (explaining these alternate forms of misappropriation under the MUTSA). Taking as true BP's allegation that SPECO was SOPO's agent, we held the allegations regarding SPECO's activities within the United States were sufficient to fall within the FSIA's commercial activity exception, and remanded the case to the district court for further proceedings. Id. at 687-88.

Back in the district court, with the benefit of additional discovery, BP realized it might not be able to muster sufficient facts to show SPECO acted as SOPO's agent when it met with American vendors. Significantly, discovery revealed the contracts between SOPO and SPECO left the design and construction of the 921 plant, including the selection of vendors and equipment, totally in the hands of SPECO without any control exercised by SOPO. BP then amended its complaint to add allegations of a civil conspiracy between SOPO and SPECO.

SOPO again moved to dismiss, this time raising a factual challenge to subject matter jurisdiction under the FSIA. SOPO contended the facts failed to show SPECO was its agent. SOPO also argued it had not conducted sufficient commercial activity within the United States on its own to fall within the commercial activity exception to FSIA immunity. SOPO also challenged the personal jurisdiction of the district court, arguing it did not have sufficient minimum contacts with the forum of Missouri to expect to be haled into court there.⁴

BP opposed the motion. With respect to the FSIA claims, BP argued SPECO was SOPO's agent, and thus SPECO's contacts with American vendors could be imputed to SOPO; SPECO and SOPO were co-conspirators; and SOPO's own activity in the United States was sufficient to show SOPO "used" or "disclosed" BP trade secrets. BP also opposed the motions to dismiss based on lack of personal jurisdiction.

After holding an evidentiary hearing, the district court found the facts presented by BP were insufficient to establish SPECO acted as SOPO's agent when it dealt with American vendors. The district court also rejected BP's conspiracy theory. The district court agreed with BP, however, that SOPO's own activity within the United States was sufficient for jurisdiction under the FSIA. The district court focused on a number of vendor meetings in which SOPO representatives directly participated. These vendors meetings can be broken into two main categories — the Nooter meetings, and the meetings with all other vendors.

A. The Nooter Meetings in Missouri

1) The Spring 1994 Meetings

The district court found "[i]n February or March of 1994, the President of SOPO, Mr. Song, was the Deputy Head of a delegation that visited Nooter. During this meeting, which lasted two days, preliminary technical issues were discussed, including sizing and thickness of the equipment that was specified on detailed documents previously provided to Nooter for the project." Addendum at 11-12. The record shows a second SOPO representative was also present during the Spring 1994 meeting, Mr. Lang, who is listed as the "Deputy Chief Engineer" of the 921 plant. Appellee's App. at 3083.

2) The June 1995 Inspection Visit

The district court found "[i]n June of 1995 SOPO's Vice Director [Mr. Zhao] visited Nooter to inspect the equipment being built for the project, and the SOPO representative participated in testing the equipment." Id. at 12.

3) The August...