Choice Equipment Sales v. Captain Lee Towing, Civ.A. G-98-569.

• Decision Date: 30 March 1999
• Docket Number: No. Civ.A. G-98-569.,Civ.A. G-98-569.
• Citation: 43 F.Supp.2d 749
• Parties: CHOICE EQUIPMENT SALES, INC. and Oceanic Marine & Industrial Services, Inc. v. CAPTAIN LEE TOWING, L.L.C. and Conway Marine, Inc.
• Court: U.S. District Court — Southern District of Texas

43 F.Supp.2d 749

CHOICE EQUIPMENT SALES, INC. and Oceanic Marine & Industrial Services, Inc. v. CAPTAIN LEE TOWING, L.L.C. and Conway Marine, Inc.

No. Civ.A. G-98-569.

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

March 30, 1999.

COPYRIGHT MATERIAL OMITTED

Ronald L. White, Brown Sims Wise & White, Houston, TX, for Ron White, mediator.

Francis I. Spagnoletti, Spagnoletti & Assoc, Houston, TX, for Choice Equipment Sales, Inc., Oceanic Marine and Industrial Services, Inc., plaintiffs.

Laura Gail Steele, Angleton, TX, Robert Joseph Killeen, Jr., Killeen and Fierro, Houston, TX, for Fuad Name Govea, Luis Angel Santos Fernandez, intervenor-plaintiffs.

Elton Anthony Foster, Buckley & Hayes, New Orleans, LA, for Conway Marine Inc., Capt. Lee Towing, LLC, Conway Marine, Inc., defendants.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND MOTION TO TRANSFER VENUE

KENT, District Judge.

Plaintiffs, owners of two barges damaged while being towed from New Orleans, Louisiana to Venezuela, filed suit to recover damages for the loss. This Court has subject matter jurisdiction over the action under 28 U.S.C. § 1332. Now before the Court is the Motion of Defendant Captain Lee Towing ("Captain Lee") to Dismiss for Lack of Personal Jurisdiction or Transfer Venue. For the reasons set forth below, Defendant's Motion is DENIED.

I. FACTUAL SUMMARY

Defendant Captain Lee is a limited liability company based in Louisiana. The owner of Captain Lee, Mr. Lee Babin, purchased the M/V CAPTAIN LEE from a Houston broker. The CAPTAIN LEE is the only vessel owned by Defendant.

At some point after purchasing the CAPTAIN LEE, Defendant entered its first Texas contract, an agreement to tow the M/V MIRABELLE from Houston to Brownsville, Texas for a Brownsville company. After the completion of that voyage, Defendant engaged a Baytown, Texas company to act as its agent in order to collect outstanding towage. At this time, Defendant also procured P & I insurance from a Texas insurer.

In January 1998, Defendant entered into negotiations with the owner of Plaintiff Oceanic Marine & Industrial Services, Inc. to tow the barges BOBBY and CHUBBY from New Orleans to Venezuela. The negotiations involved Defendant's traveling to Houston on at least one occasion. During that time, the CAPTAIN LEE was undergoing repairs at a Houston shipyard, where Defendant met with Plaintiff to view the vessel. At that time, Plaintiff put a $10,000 down payment on a towage contract. Ultimately, the two parties entered an agreement by which Defendant would tow the BOBBY and CHUBBY to Venezuela. The contract included a forum selection clause, which stated that venue would be proper only in New Orleans, Louisiana.

The CAPTAIN LEE set out for Venezuela, the two barges in tow, on March 27, 1998. On April 4, the vessel lost its engines and began to drift in heavy seas. The barges sustained severe damage and were ultimately towed by a salvage tug to Cuba, where they remained at the filing of this lawsuit.

II. PERSONAL JURISDICTION

Defendant argues that it is not subject to the personal jurisdiction of this Court. In federal court, personal jurisdiction over a non-resident defendant is proper if: (1) the defendant is amenable to service of process under the forum state's long-arm statute; and (2) the exercise of personal jurisdiction over the defendant is consistent with due process. Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1067 (5th Cir.1992). The Texas long-arm statute authorizes service of process on a nonresident defendant if the defendant is determined to be "doing business" in Texas. Tex.Civ.Prac. & Rem. Code Ann. § 17.042. Because the phrase "doing business" has been interpreted to reach as far as the United States Constitution permits, the jurisdictional inquiry under the Texas long-arm statute collapses into a single due process inquiry. Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 418 (5th Cir.1993).

Whether the exercise of personal jurisdiction over Defendant is consistent with the Due Process Clause of the United States Constitution involves a two-pronged inquiry. First, the Court must conclude that Defendant has "minimum contacts" with Texas. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Second, the Court must determine that requiring Defendant to litigate in Texas does not offend "traditional notions of fair play and substantial justice." Id.; see also Wilson v. Belin, 20 F.3d 644, 647 (5th Cir.1994); Ruston, 9 F.3d at 418. The "minimum contacts" aspect of due process can be satisfied by conducting an analysis of either specific jurisdiction or general jurisdiction. Wilson, 20 F.3d at 647. If the conduct of a defendant that supports personal jurisdiction is related to a stated cause of action, personal jurisdiction is known as "specific jurisdiction." Ruston Gas Turbines, 9 F.3d at 418-19; Villar v. Crowley Maritime Corp., 990 F.2d 1489, 1496 (5th Cir.1993). The minimum contacts prong for specific jurisdiction can be satisfied by a single act if the nonresident defendant "purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefit and protection of its laws." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985) (holding that a defendant establishes minimum contacts by purposely engaging in conduct directed toward the forum state "such that [the defendant] should reasonably anticipate being haled into court there"); Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958); see also Bullion v. Gillespie, 895 F.2d 213, 216 ("It is well settled that specific jurisdiction may arise without the nonresident defendant's ever stepping foot upon the forum state's soil ..."). The single act of placing a product into the stream of commerce with the knowledge that it will be used in the forum state is sufficient to satisfy the specific jurisdiction minimum contacts standard. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980); Ruston Gas Turbines, 9 F.3d at 419-20.¹ Alternatively, if a defendant has insufficient contacts related to a stated cause of action to support specific jurisdiction, contacts unrelated to the cause of action may confer general jurisdiction. However, these contacts with the foreign state must be both "continuous and systematic" and "substantial." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 1873, 80 L.Ed.2d 404 (1984); Villar, 990 F.2d at 1496.

At the outset, the Court notes that although the burden is on Plaintiff, it need only make a prima facie showing of jurisdiction, and its allegations in that regard are to be taken as true unless controverted; moreover, any conflicts are to be resolved in its favor. See Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784, 785 (5th Cir. 1990). In this case, Plaintiff's claims against Defendant stem from Defendant's contacts with this forum, that is, the contractual relationship into which the two parties entered. Accordingly, the Court will perform a specific jurisdiction analysis.

Defendant Captain Lee is a Louisiana business with no physical presence in Texas. However, it is well settled that a nonresident defendant may be subject to this state's specific jurisdiction through a single contact with the state, see Schutze v. Springmeyer, 989 F.Supp. 833, 836 (S.D.Tex.1998), or even having never setting foot upon its soil, see Bullion, 895 F.2d at 216. In this case, Defendant came to Texas at least twice in negotiating its contract with Plaintiff and readying the barge for its voyage. During one of those meetings, at the Houston shipyard where Defendant was having the CAPTAIN LEE repaired, Plaintiff gave Defendant $10,000 as a down payment for the towage contract at issue. These contacts are sufficient to support the exercise of this Court's specific jurisdiction. See Polythane Systems, Inc. v. Marina Ventures International, Ltd., 993 F.2d 1201, 1205 (5th Cir.1993) (noting that receipt of payments in Texas supported specific jurisdiction over defendants in a contract claim).

Having addressed the question of Defendant's contacts with the forum state, the Court must determine whether requiring Defendant to defend this suit in Texas would satisfy "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316, 66 S.Ct. at 158. In determining this fundamental fairness issue, the Court must examine five factors: the defendant's burden; the forum state's interests; the plaintiff's interest in convenient and effective relief; the judicial system's interest in efficient resolution of controversies; and the state's shared interest in furthering fundamental social policies. Ruston Gas Turbines, 9 F.3d at 421.

As an initial matter, the Court notes that Defendant has offered no arguments that this Court's exercise of jurisdiction over it would offend traditional notions of fair play and substantial justice. The burden of showing that personal jurisdiction would be unreasonable lies squarely on Defendant. See Jones, 954 F.2d at 1068. In fact, it does not appear that such an exercise of jurisdiction would be unreasonable. Defendant is based in Louisiana. Given its ability and apparent willingness to travel to Texas to explore business opportunities and perform contracts, subjecting it to suit in this state would not appear to be unduly burdensome. Similarly, this state has a legitimate interest in seeing the resolution of a contractual dispute concerning a contract entered into here, as well as in ensuring that vessels operate safely in its waters. Finally, the interest of both Plaintiff and the interstate judicial system in the efficient resolution of this controversy would be advanced by litigation in this forum. Bench trial in this action is...