Grynberg Production Corp. v. British Gas, PLC
Decision Date | 19 March 1993 |
Docket Number | No. 1: 92 CV 496.,1: 92 CV 496. |
Citation | 817 F. Supp. 1338 |
Parties | GRYNBERG PRODUCTION CORPORATION v. BRITISH GAS, P.L.C., British Petroleum Exploration Operating Company, Ltd., Jack L. Gregory, Atlantic Richfield Company, Inc., and TransWorld Resources Corporation. |
Court | U.S. District Court — Eastern District of Texas |
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Stephen D. Susman, Susman Godfrey, F. Eric Fryar, Neal S. Manne, Houston, TX, for plaintiff.
William Robert Pakalka, Layne Edwin Kruse, Rufus Wallingford, Fulbright & Jaworski, Houston, TX, Gilbert Irvine Low, Orgain Bell & Tucker, Beaumont, TX, for defendants British Gas, p.l.c. and Jack L. Gregory.
D. Allan Jones, Orgain Bell & Tucker, Beaumont, TX, for defendant Atlantic Richfield Co., Inc.
James William Mehaffy, Jr., Beaumont, TX, for defendant TransWorld Resources Corp.
CAME ON TO BE CONSIDERED plaintiff Grynberg Production Corporation's ("Grynberg") Motion to Remand, and the court, after reviewing the Motion, the responses in opposition and the pleadings of record, is of the opinion that this Motion should be DENIED.
The case underlying this removal battle is an involved and complicated dispute between Western corporations over rights to develop mineral resources located in the Republic of Kazakhstan. The weapons in this removal fight are the mountains of briefs and affidavits. The ammunition includes fraudulent joinder, procedural hurdles for removal, Texas choice of law principles, Texas tort law, Kazakhi tort law (and translations thereof), federal question jurisdiction over state law claims presenting a federal issue, federal common law governing international relations, the and the Erie doctrine. When the smoke clears and the dust settles, the court finds that the valid presence of a Texas defendant bars diversity removal, but the presence of several issues of the federal common law of international relations in the well-pleaded complaint allows federal question removal.
a. The alleged failure to satisfy Fed.R.Civ.P. 9(b) will not prevent consideration of the fraud claim
b. Grynberg's Original Petition satisfies Fed.R.Civ.P. 9(b)
4. Texas law permits recovery against Gregory individually for fraud
a. In Texas, agents are individually liable for the torts they commit
b. Grynberg's claim is not merely an estoppel claim
5. Even if Kazakhi law absolutely precludes recovery against Gregory, the chance that Texas law could apply makes joinder nonfraudulent
a. Under Texas choice of law principles, Kazakhstan law is likely to govern this transaction
b. The possibility that Texas law applies to the issue of employee tortfeasor liability makes joinder nonfraudulent
i. Which law governs is an ambiguous question of law
ii. The significance of the Texas contacts to the issue of employee tortfeasor liability could realistically outweigh the significance of the Kazakhstan contacts
6. Even if Kazakhi law necessarily applies, British Gas and Gregory have failed to establish that there is no possibility of recovery
i. To state a claim for injunction in Texas, a well-pleaded petition must negative all reasonably inferable hypotheses which could prevent relief
ii. Unequivocally, Texas state law alone determines what is and what is not necessary to state a claim for purposes of the "well-pleaded complaint" rule
iii. To negative all reasonable inferences and hypotheses which might be fatal to injunctive relief, Grynberg's Original Petition must raise three substantial issues of international law
3. Grynberg's well-pleaded conversion claim must allege issues of federal law governing international relations
a. Conversion requires "unlawful and unauthorized" dominion over personal property in which Grynberg had an interest
b. To establish an "unlawful and unauthorized" dominion, Grynberg must allege issues of federal international relations law
c. Grynberg must allege questions of international law to allege that it has an interest in the converted property
Grynberg Production Company, plaintiff, is a corporation incorporated in Colorado and with a principal place of business in Colorado. Jack Grynberg and Celeste Grynberg are its board of directors. Jack Grynberg is its principal shareholder.
TransWorld Resources Corporation ("TransWorld"), defendant, is a Colorado corporation with its principal place of business in Colorado. Coincidentally, Jack Grynberg and Celeste Grynberg are its board of directors. Jack Grynberg is its principal shareholder. It shares a business office with Grynberg Production Company.
British Gas, defendant, is a British corporation with its principal place of business in Britain.
Jack L. Gregory, defendant, is a citizen of Texas. He is an employee of British Gas.
British Petroleum Exploration Operating Company ("BP"), defendant, is a British corporation with its principal place of business in Britain.
Atlantic Richfield Company ("ARCO"), defendant, is a Delaware corporation with its principal place of business in California.
This case involves a dispute between oil and gas exploration firms over rights to develop promising oil and gas fields in the Republic of Kazakhstan. Grynberg's Original Petition alleges the following facts. Grynberg is a small oil and gas exploration and production firm located in Colorado. During the 1980s, Grynberg recognized that the long term control over mineral resources in the Soviet Union would eventually devolve from the central Soviet government in Moscow and toward the individual republics. Grynberg began to develop business and political contacts within the republics in anticipation that the republics would ultimately hold the keys to the rich, proven, but as yet untapped hydrocarbon reserves. In particular, Grynberg developed contacts within the Soviet Republic of Kazakhstan.
At the end of 1989 and beginning of 1990, Grynberg focused its efforts on obtaining concessions in the Pricaspian Basin in northwestern Kazakhstan, and persuading other oil and gas exploration firms to form a consortium to jointly develop the hydrocarbon potential of the Pricaspian Basin. According to Grynberg, in April of 1990, the president of Kazakhstan privately told Jack Grynberg, the company's president, that he was assured of a major hydrocarbon award. Consequently, Grynberg intensified its efforts to form a consortium. Grynberg's intent was to have each participating company sign separate agreements with Grynberg that would define the Kazakhi portion of the Pricaspian Basin as an Area of Mutual Interest ("AMI"), give each company a right to participate in any opportunity in the AMI, and require that each company contribute a pro rata share to finance Grynberg's capital contribution....
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