Buckles ex rel. Heirs of Buckles v. Cont'l Res., Inc.

• Decision Date: 21 September 2017
• Docket Number: DA 16-0659.
• Citation: 402 P.3d 1213,388 Mont. 517,2017 MT 235
• Parties: Zachary Scott BUCKLES, deceased, BY AND THROUGH his personal representative Nicole R. BUCKLES, and Nicole R. Buckles, personal representative, on behalf of the heirs of Zachary Scott Buckles, Petitioners and Appellants, v. CONTINENTAL RESOURCES, INC., an Oklahoma Corporation, BH Flowtest, Inc., a Montana Corporation, Black Rock Testing, Inc., a Montana Corporation, Janson Palmer, d/b/a Black Gold Testing, and John Does 1-V, Respondents and Appellees.
• Court: Montana Supreme Court

388 Mont. 517

402 P.3d 1213

2017 MT 235

Zachary Scott BUCKLES, deceased, BY AND THROUGH his personal representative Nicole R. BUCKLES, and Nicole R. Buckles, personal representative, on behalf of the heirs of Zachary Scott Buckles, Petitioners and Appellants,

v.CONTINENTAL RESOURCES, INC., an Oklahoma Corporation, BH Flowtest, Inc., a Montana Corporation, Black Rock Testing, Inc., a Montana Corporation, Janson Palmer, d/b/a Black Gold Testing, and John Does 1-V, Respondents and Appellees.

DA 16-0659.

Supreme Court of Montana.

Submitted on Briefs: April 19, 2017

Decided: September 21, 2017

For Appellants: A. Clifford Edwards, Roger W. Frickle, Jared C. B. Frickle, Edwards, Frickle & Culver, Billings, Montana, Robert J. Savage, Savage Law Firm, Sidney, Montana

For Appellees: W. Scott Mitchell, Michael P. Manning, Holland & Hart LLP, Billings, Montana (Attorneys for Continental Resources, Inc.)

Justice James Jeremiah Shea delivered the Opinion of the Court.

¶ 1 Nicole R. Buckles ("Buckles"), as the personal representative of the estate of Zachary Scott Buckles ("Zachary"), appeals the August 19, 2016 order of the Seventh Judicial District Court, Richland County, granting Continental Resources, Inc.'s ("Continental") motion to dismiss. We address the following issue:

Whether the District Court erred by dismissing Buckles' Complaint on grounds that Continental Resources, Inc., is not subject to personal jurisdiction in Montana.

¶ 2 We reverse and remand to the District Court for further proceedings.

PROCEDURAL AND FACTUAL BACKGROUND

¶ 3 On April 28, 2014, Zachary died of exposure to high levels of hydrocarbon vapors while manually gauging crude oil production tanks on Continental's Columbus Federal 2-16H well site near Alexander, North Dakota. The Columbus Federal 2-16H well site is a tank battery consisting of twenty tanks that support five production oil wells, including the Tallahassee 2-16H tank number three and Tallahassee 3-16H tank number one. These wells are located on the Bakken Reservoir. Continental oversees operation of the Columbus Federal 2-16H well site from its corporate office in Sidney, Montana.

¶ 4 Around April 17, 2014, Zachary was dispatched by his employer, Janson Palmer, doing business as Black Gold Testing ("Black Gold"), to perform manual tank gauging of the crude oil production tanks on Continental's Columbus Federal 2-16H well site. Black Gold was contracted to perform manual tank gauging activities for Continental pursuant to Continental's Master Service Contract with BH Flowtest, Inc., who subcontracted with Black Rock Testing, Inc., who, in turn, subcontracted with Black Gold. BH Flowtest, Black Rock, and Black Gold are all Montana business entities named as Co-Defendants with Continental in this action.

¶ 5 Continental is an Oklahoma corporation authorized to do business in Montana since 1990. Continental has significant operations in Montana, North Dakota, South Dakota, and Oklahoma, with field offices in Montana, North Dakota, South Dakota, Oklahoma, and Texas. The Company owns an interest in 508 oil and gas wells in Montana and operates 348 oil and gas wells in Montana. Continental owns 119 motor vehicles that are licensed and registered in the State. The Company also owns real property in multiple Montana counties, including in Richland County where this case is venued. Continental maintains two Montana field offices in Baker and Sidney and three North Dakota field offices in Killdeer, Rhame, and Tioga.

¶ 6 On March 2, 2015, Buckles filed suit in the Montana Seventh Judicial District Court, Richland County, alleging that Continental and the other Defendants are liable for Zachary's death. The complaint alleged that Continental and the other Defendants had a legal duty under state and federal law to maintain a safe and secure oil well site, and that Continental and the other Defendants breached their duty by allowing an inherently dangerous and unsafe well site to be operated without adequate or appropriate air monitoring equipment in place for the tank gauging activities.

¶ 7 Buckles argued the Montana Safe Place to Work Act and federal Occupational Safety and Health Act required the Defendants to properly train and adequately equip Zachary, which they failed to do. Following jurisdictional discovery, Buckles cited an affidavit by Continental's Area Production Manager of Bakken Operations and an Excel spreadsheet produced by Black Gold containing flow data for Continental's Columbus Federal 1-16H, Tallahassee 2-16H, and Tallahassee 3-16H well sites that denotes Continental's Sidney, Montana office was responsible for oversight of the well site where Zachary died.

¶ 8 On April 17, 2015, Continental filed a motion to dismiss for lack of personal jurisdiction. The parties fully briefed and submitted the issue to the District Court. On August 19, 2016, the District Court granted Continental's motion to dismiss. The District Court did not hold an evidentiary hearing. The District Court's Order did not make any factual findings regarding personal jurisdiction, did not address Buckles' allegations concerning personal jurisdiction made in her Complaint, and did not note whether it considered those allegations in the light most favorable to Buckles. The Order contained only a paragraph setting forth the procedural history of the case and concluded that the motion was being granted "[f]or the reasons argued by Continental."

STANDARDS OF REVIEW

¶ 9 "We review de novo a district court's decision on a motion to dismiss for lack of personal jurisdiction, construing the complaint ‘in the light most favorable to the plaintiff.’ " Milky Whey, Inc. v. Dairy Partners, LLC , 2015 MT 18, ¶ 7, 378 Mont. 75, 342 P.3d 13 (quoting Grizzly Sec. Armored Express, Inc. v. Armored Grp., LLC , 2011 MT 128, ¶ 12, 360 Mont. 517, 255 P.3d 143 ). Motions to dismiss are construed in a light most favorable to the nonmoving party and should not be granted unless, taking all well-pled allegations of fact as true, it appears beyond doubt that the plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Threlkeld v. Colorado , 2000 MT 369, ¶ 7, 303 Mont. 432, 16 P.3d 359. We review a district court's findings of fact and conclusions of law regarding personal jurisdiction to determine whether the findings are clearly erroneous and whether the conclusions are correct. Nolan v. River S tone Health Care , 2017 MT 63, ¶ 9, 387 Mont. 97, 391 P.3d 95.

DISCUSSION

¶ 10 Whether the District Court erred in holding that Continental Resources, Inc., is not subject to personal jurisdiction in Montana.

¶ 11 This Court applies a two-part analysis to determine whether a Montana court may exercise personal jurisdiction over a nonresident defendant. First, we determine whether personal jurisdiction exists pursuant to M. R. Civ. P. 4(b)(1). Threlkeld , ¶ 9. Second, if personal jurisdiction exists pursuant to M. R. Civ. P. 4(b)(1), we then determine whether exercising personal jurisdiction comports with traditional notions of fair play and substantial justice embodied in the Due Process Clause of the Fourteenth Amendment. Threlkeld , ¶ 9. In that regard, the United States Supreme Court has recently addressed the constitutional parameters of state courts exercising personal jurisdiction of nonresident defendants. See Bristol-Myers Squibb Co. v. Superior Court , ––– U.S. ––––, 137 S.Ct. 1773, 198 L.Ed.2d 395 (2017) ; BNSF Ry. v. Tyrrell , ––– U.S. ––––, 137 S.Ct. 1549, 198 L.Ed.2d 36 (2017) ; see also Daimler AG v. Bauman , 571 U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) ; Goodyear Dunlop Tires Operations, S. A. v. Brown , 564 U.S. 915, 918, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). "[A] state court may exercise personal jurisdiction over an out-of-state defendant who has certain minimum contacts with [the State] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Tyrrell , ––– U.S. ––––, 137 S.Ct. at 1558(citing International Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) ) (internal quotation marks omitted).

¶ 12 Personal jurisdiction can be either general or specific. Buckles argues that both are present in this case. We address each in turn.

A. General Personal Jurisdiction

¶ 13 In Tyrrell , the U.S. Supreme Court reviewed this Court's exercise of general personal jurisdiction over BNSF Railway Company ("BNSF") in a Federal Employers' Liability Act suit brought in Montana by two non-resident plaintiffs that sustained injuries outside the State. In light of the peculiar statutory nuances of the FELA, we held that general jurisdiction existed. The U.S. Supreme Court reversed. The Court stated that "the Fourteenth Amendment's Due Process Clause does not permit a State to hale an out-of-state corporation before its courts when the corporation is not ‘at home’ in the State and the episode-in-suit occurred elsewhere." Tyrrell , ––– U.S. ––––, 137 S.Ct. at 1554 (citing Da i mler , 571 U.S. at ––––, 134 S.Ct. at 753-54 ) (emphasis in the original). The Court concluded:

BNSF [is not] so heavily engaged in activity in Montana "as to render [it] essentially at home" in that State. See Daimler , 571 U.S., at ––––, 134 S.Ct. 746, 761, 187 L.Ed.2d 624, 633 (internal quotation marks omitted). As earlier noted, BNSF has over 2,000 miles of railroad track and more than 2,000 employees in Montana. But, as we observed in Daimler , "the general jurisdiction inquiry does not focus solely on the magnitude of the defendant's in-state contacts." Id. , at ––––, n. 20, 134 S.Ct. 746, 762 n. 20, 187 L.Ed.2d 624, 641 (internal quotation marks and alterations omitted). Rather, the inquiry "calls for an appraisal of a corporation's activities in their entirety"; "[a] corporation that operates in many places can scarcely be deemed at home in all of them." Ibid . In short, the business BNSF does in Montana is sufficient to subject the railroad to

...