Amoco Oil Co. v. Phillipe Martin & Associes

• Decision Date: 27 January 1993
• Docket Number: Civ. A. No. G-92-296.
• Citation: 811 F. Supp. 253
• Parties: AMOCO OIL COMPANY v. PHILLIPE MARTIN & ASSOCIES and Colonia.
• Court: U.S. District Court — Southern District of Texas

811 F. Supp. 253

AMOCO OIL COMPANY v. PHILLIPE MARTIN & ASSOCIES and Colonia.

Civ. A. No. G-92-296.

United States District Court, S.D. Texas, Galveston Division.

January 27, 1993.

James B. Galbraith, McLeod, Alexander, Powell & Apffel, Galveston, TX, for plaintiff.

Harold K. Watson, Liddell, Sapp, Zivley, Hill & LaBoon, Houston, TX, for defendant.

ORDER

KENT, District Judge.

Before the Court is the Defendants' Motion to Dismiss for Lack of Personal Jurisdiction, and, Alternatively, to Dismiss for Forum Non Conveniens. For the reasons set forth below, the Court DENIES the Motion to Dismiss for Lack of Personal Jurisdiction and GRANTS the Motion to Dismiss for Forum Non Conveniens.

Facts

Amoco Oil Company ("Amoco") sold 200,000 barrels of naphtha to AOT and Astra Oil Company ("Astra"), which in turn sold the cargo to ICI Chemicals & Polymers Ltd. ("ICI"). As part of the contract between AOT, Astra, and ICI, AOT and Astra agreed to insure the naphtha during its shipment from Amoco's shore tank in Texas City to ICI's shore tank in Teeside, England. To that end, AOT and Astra issued to "Bearer" a certificate that triggered coverage of the shipment under an open cargo policy that AOT and Astra maintained with a group of primarily Belgian and French underwriters.

Although the naphtha was inspected before shipment and found to be within the contractually stipulated range of quality, i.e.: less than 25ppm of MTBE, tests in Teeside revealed that the cargo's MTBE level greatly exceeded this limit. Inspectors later determined that the naphtha was contaminated by the shore lines at Amoco's Texas City facility. ICI and Amoco subsequently entered a settlement agreement in which Amoco compensated ICI for its loss and ICI assigned to Amoco its right to coverage under the open cargo certificate.

As assignee, Amoco demanded reimbursement from Colonia, the lead underwriter of the group of underwriters that issued the open cargo policy to AOT and Astra. When Colonia refused to honor the claim, Amoco filed this suit against Colonia and Phillipe Martin & Associes, the French representative of the underwriters. Subsequent to the initiation of this action, Colonia served a Writ for negative declaratory relief as to its liability to Amoco in the High Court of Justice, Queen's Bench Division, Commercial Court.

Personal Jurisdiction

In the action before this Court, the Defendants claim that this Court lacks personal jurisdiction over the defendants. Two conditions must be met before a federal court can exercise jurisdiction over a non-resident defendant: (1) the long arm statute of the state in which the court resides authorizes the exercise of jurisdiction; and (2) the exercise of jurisdiction is consistent with federal constitutional guarantees. Rittenhouse v. Mabry, 832 F.2d 1380, 1383-84 (5th Cir.1987). Because the Texas long arm statute extends to the limit permitted by the due process clause, Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990), this determination necessarily only involves a determination of whether the exercise of jurisdiction is constitutional. See Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 1871-72, 80 L.Ed.2d 404 (1984); Rittenhouse, 832 F.2d at 1384.

To satisfy federal due process, a plaintiff must demonstrate that the defendant has established minimum contacts with the forum state and that the assertion of jurisdiction will comply with fair play and substantial justice. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528 (1985); Hall, 466 U.S. at 414, 104 S.Ct. at 1872; International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Under the minimum contacts analysis, a court must determine "whether the nonresident defendant has purposefully availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws." Burger King, 471 U.S. at 474-75, 105 S.Ct. at 2183. Although not an independent component of minimum contacts analysis, the concept of foreseeability is implicit in the requirement that there be a substantial connection between Texas and the nonresident defendant arising from the conduct purposefully directed by the defendant toward this state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). Foreseeability takes on added significance when the non-resident defendant is an insurance company. See Rossman v. State Farm Mutual Auto. Insurance Co., 832 F.2d 282, 286-87 (4th Cir.1987); Eli Lilly & Co. v. Home Insurance Co., 794 F.2d 710, 720-21 (D.C.Cir.1986), cert. denied, 479 U.S. 1060, 107 S.Ct. 940, 93 L.Ed.2d 990, 991 (1987); Commonwealth of Puerto Rico v. S.S. Zoe Colocotroni, 628 F.2d 652, 668-70 (1st Cir.1980), cert. denied, 450 U.S. 912, 101 S.Ct. 1350-67 L.Ed.2d 336 (1981).

In this case, the Court concludes that the Defendants did foresee the possibility that vessels that it insured would enter not only American territorial waters, but also waters within the Southern District of Texas. When Colonia and Phillipe Martin & Associes sold the open cargo policy to AOT and Astra, they certainly knew that those companies would issue certificates to vessels that sojourned to the United States. Further, in light of the overwhelming presence that the Ports of Houston and Galveston possess in this country's international trade, the Defendants also could have foreseen that these ships would come within reach of this state's long arm. The Defendant's claims to the contrary have a particularly hollow ring in light of the fact that Section 8.30 of the open cargo policy nominates Allegheny Marine Services, Inc., as the inspectors for the state of Texas. This fact alone demonstrates the Defendants' knowledge that ships which they insured would sail to Texas.

The Court takes guidance in this case from Commonwealth of Puerto Rico v. S.S. Zoe Colocotroni, supra. In that case the First Circuit upheld the district court's determination that the Commonwealth of Puerto Rico possessed jurisdiction over a European insurance company. One of the significant determining factors was the fact that the European company had nominated a local law firm to provide "services" to insured ships that called on Puerto Rico. Commonwealth of Puerto Rico, 628 F.2d at 667-68. The First Circuit stated:

While (the European company) was not engaged in selling insurance in Puerto Rico, its retention of the ... law firm to perform services for insured owners and vessels in Puerto Rico demonstrates that (the European company) plainly expected its worldwide business of insuring maritime risks to embrace the territorial waters of Puerto Rico with some regularity.

Id. at 668. The Court finds the similarity between the fact pattern in Commonwealth of Puerto Rico and the fact pattern in this case to be striking.

Having determined that the Defendants have minimum contacts with this state, the Court must decide whether the exercise of jurisdiction over these Defendants comports with fair play and substantial justice. The factors to be included in this analysis include: (1) the burden on the defendant; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most effective resolution of controversies; and (5) the shared interests of the several states in furthering fundamental substantive social policies. Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 113, 107 S.Ct. 1026, 1033, 94 L.Ed.2d 92 (1987). However, when minimum contacts have been established, the exercise of jurisdiction will only rarely fail to coincide with fair play and substantial justice. Burger King, 471 U.S. at 477-78, 105 S.Ct. at 2184-85. In fact, a defendant must present a compelling case that jurisdiction is unreasonable. Id. at 477, 105 S.Ct. at 2184.

Here, the Defendants fail to carry this burden. Of the factors listed above that relate to this action, the Defendants can point to no facts that convince the Court that fair play and substantial justice compel the Court to refrain from exercising jurisdiction. Indeed, in the Court's view, the burden on the Defendants in trying a lawsuit here would not be overwhelming and this state's interest in adjudicating this dispute, i.e. resolving whether companies that do business in this state are entitled to insurance compensation, is rather significant.

Therefore, because the Court has determined that the Defendants have established minimum contacts with the state of Texas and that the exercise of jurisdiction does not conflict with fair play and substantial justice, the Court concludes that it does possess personal jurisdiction over the Defendants. Consequently, the Court DENIES the Defendants' Motion to Dismiss for Lack of Personal Jurisdiction.

Forum Non Conveniens

The second motion extant before the Court is the Defendants' Motion to Dismiss for Forum Non Conveniens. When analyzing a motion to dismiss for forum non conveniens, a district court must first determine whether an available and adequate foreign forum exists. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n. 22, 102 S.Ct. 252, 265 n. 22, 70 L.Ed.2d 419 (1981); In re Air Crash Disaster Near New Orleans, La., 821 F.2d 1147, 1165 (5th Cir.1987). "A foreign forum is available when the entire case and all parties are within the jurisdiction of that forum." Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1549 (5th Cir.1991); see also Syndicate 420 at Lloyd's London v. Early American Insurance Co., 796 F.2d 821, 830 (5th Cir.1986); Pain v. United Technologies Corp., 637 F.2d 775, 784 (D.C.Cir. 1980).

In the instant case, there is no doubt that an alternate foreign forum is available. All parties to this action are also parties to an action in Great Britain concerning these same events....