Conoco Inc. v. Agrico Chemical Co., 99,469.

• Citation: 2004 OK 83,115 P.3d 829
• Decision Date: 09 November 2004
• Docket Number: No. 99,469.,99,469.
• Parties: CONOCO INC., a Delaware corporation, Appellant, v. AGRICO CHEMICAL COMPANY, a Delaware corporation; Freeport-McMoran Resource Partners, Limited Partnership, a Delaware limited partnership; Freeport-McMoran Inc., a Delaware corporation; IMC Global Inc., a Delaware corporation; IMC Global Operations Inc., a Delaware corporation; Phosphate Resource Partners Limited Partnership, a Delaware limited partnership; the Williams Companies, Inc., a Delaware corporation; and John Does, unknown defendants, Appellees.
• Court: Supreme Court of Oklahoma

Page 829

115 P.3d 829

2004 OK 83

CONOCO INC., a Delaware corporation, Appellant, v. AGRICO CHEMICAL COMPANY, a Delaware corporation; Freeport-McMoran Resource Partners, Limited Partnership, a Delaware limited partnership; Freeport-McMoran Inc., a Delaware corporation; IMC Global Inc., a Delaware corporation; IMC Global Operations Inc., a Delaware corporation; Phosphate Resource Partners Limited Partnership, a Delaware limited partnership; the Williams Companies, Inc., a Delaware corporation; and John Does, unknown defendants, Appellees.

No. 99,469.

Supreme Court of Oklahoma.

November 9, 2004.

As Corrected November 17, 2004.

Rehearing Denied June 27, 2005.

COPYRIGHT MATERIAL OMITTED

On Writ of Certiorari to the Court of Civil Appeals, Division No. 4.

¶ 0 Plaintiff, Conoco Inc., initiated this contract action in the district court in Oklahoma County seeking declaratory judgment and damages for breach of contract. Defendant, The Williams Companies, Inc., moved for dismissal based on the doctrine of forum non conveniens. The other defendants moved for dismissal for lack of in personam jurisdiction. The district judge, the Honorable Vicki Robertson, presiding, sustained the motions to dismiss. Plaintiff appealed. The Court of Civil Appeals affirmed. Appellant sought certiorari review. We previously granted the petition for writ of certiorari.

COURT OF CIVIL APPEALS OPINION VACATED; DISTRICT COURT ORDERS DISMISSING THE WILLIAMS COMPANIES, INC. AND AGRICO CHEMICAL COMPANY REVERSED; DISTRICT COURT ORDERS DISMISSING THE OTHER NONRESIDENT DEFENDANTS AFFIRMED; CAUSE REMANDED FOR FURTHER PROCEEDINGS.

John N. Hermes, Sheryl N. Young, McAfee & Taft, Oklahoma City, OK, for appellant.

Michael D. Graves, Ralph E. Seals, Jr., Michael E. Smith, Sharon T. Thomas, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Oklahoma City, OK, for The Williams Companies, Inc., appellee.

Thomas G. Wolfe, Ray E. Zschiesche, Phillips McFall McCaffrey, McVay & Murrah, Oklahoma City, appellees other than The Williams Companies, Inc.

TAYLOR, J.

¶ 1 The dispositive questions on certiorari are: 1) Did The Williams Companies, Inc. properly invoke the doctrine of interstate forum non conveniens? and 2) Did the nonresident defendants have sufficient contacts with this state to be subject to the jurisdiction of our state courts? As to the first question, we find The Williams Companies, Inc. failed to present evidence that supports application of the doctrine of interstate forum non conveniens. As to the second question, we find Agrico Chemical Company had sufficient contacts with this state to subject it to the jurisdiction of the district court, but the other nonresident defendants did not. We hold that the district court erred in dismissing this action against The Williams Companies, Inc. and Agrico Chemical Company and that the district court correctly dismissed this action against the other nonresident defendants for lack of in personam jurisdiction. Accordingly, we vacate the opinion of the Court of Civil Appeals, partially reverse the dismissal orders of the District Court and remand this cause for further proceedings.

I. The Facts and Proceedings Below

¶ 2 Conoco Inc., plaintiff/appellant (Conoco), initiated this contract action in the district court in Oklahoma County against Agrico Chemical Company, defendant/appellee (Agrico); Freeport-McMoran Resource Partners Limited Partnership, Freeport-McMoran Inc., IMC Global Inc., IMC Global Operations Inc., and Phosphate Resource Partners Limited Partnership, defendants/appellees (Agrico entities); and The Williams Companies, Inc., defendant/appellee (Williams). Conoco alleged that Agrico breached a 1972 purchase agreement whereby Conoco sold its fertilizer manufacturing business to Agrico and that Williams breached its guarantee of Agrico's performance under the 1972 purchase agreement. Conoco requested declaratory judgment as to the legal relationship of the parties under the 1972 purchase agreement and guaranty. Conoco also requested damages for the cost of ongoing environmental clean up at a fertilizer manufacturing plant in Charleston, South Carolina.

¶ 3 Basic facts about the parties are that all of them are Delaware corporations or partnerships. Williams is a corporate resident of Oklahoma while Agrico and the Agrico entities are Illinois residents. Conoco is a Texas resident. At the time of entering into the subject contract in 1972, both Agrico and Williams were residents of Oklahoma and Conoco was a New York resident. In 1972, Agrico was a wholly-owned subsidiary of Williams with its principal place of business in Oklahoma. Agrico is now a subsidiary of Phosphate Resource Partners Limited Partnership. Agrico's headquarters remained in Oklahoma until 1988, when it moved to Louisiana and then in 1997, it moved to Illinois. Conoco, Agrico and Williams have been registered to do business in Oklahoma and have done business in Oklahoma since 1972.

¶ 4 The undisputed facts and circumstances relevant to this controversy are that the 1972 purchase agreement was negotiated, at least partially, in Oklahoma at the offices of Agrico and Williams and/or their attorneys. Agrico executed the purchase agreement in Oklahoma. Williams executed the guaranty agreement in Oklahoma. Conoco executed the purchase agreement at its offices in New York. The assets of the fertilizer manufacturing business which Agrico purchased from Conoco were located in several states, including Arkansas, Florida, Kentucky, Illinois, Ohio, Nebraska and South Carolina. This controversy involves a fertilizer manufacturing plant in Charleston, South Carolina called the Ashepoo Site.

¶ 5 Some fifteen years after the 1972 transaction, in the late 1980's, the United States Environmental Protection Agency (EPA) began an investigation of the Ashepoo Site pursuant to the 1980 Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601, et seq. During its investigation, the EPA discovered lead contamination at the Ashepoo Site. In 1997, Conoco and Freeport-McMoran Inc., now IMC Global Inc., entered into a consent order with the EPA regarding the contamination and soil testing at the Ashepoo Site. The test results showed that environmental clean up would be necessary. Conoco and Agrico discussed sharing the cost of the lead contamination clean up but did not reach an agreement. In 1999, Conoco entered into a second consent order with the EPA for clean up of the lead contamination.

¶ 6 Conoco initiated this action to recover the costs of removal of the lead contamination at the Ashepoo Site. Conoco alleged that Agrico's refusal to reimburse it for the clean up costs breached the 1972 purchase agreement. Conoco contended that under the 1972 purchase agreement, Agrico assumed liability for all detriment attributable to the assets conveyed thereunder and agreed to indemnify and defend Conoco against all claims arising out of any act or omission of Agrico after February 1, 1972. Conoco further contended that Williams guaranteed Agrico's performance under the 1972 purchase agreement.

¶ 7 Williams responded with a motion to dismiss based on the doctrine of interstate forum non conveniens. Agrico and the Agrico entities responded with motions to dismiss for lack of in personam jurisdiction. The parties fully briefed and argued the motions to dismiss before the trial court.

¶ 8 The district court sustained the dismissal motions. Conoco timely filed a motion for new trial or reconsideration in accordance with 12 O.S.2001, § 990.2. The district court overruled the new trial motion. Conoco timely filed a petition in error appealing from the dismissal orders under 12 O.S.2001, §§ 990.2 and 990A. The Court of Civil Appeals affirmed. We previously granted Conoco's petition for writ of certiorari.

II. Standard of Review

¶ 9 The dispositive questions in this appeal concerning application of the doctrine of interstate forum non conveniens and in personam jurisdiction are questions of law. We review questions of law by a de novo standard, independent of and without deference to the lower court's legal rulings. Kluver v. Weatherford Hospital Authority, 1993 OK 85, ¶ 14, 859 P.2d 1081, 1083, and Dewey v. Firefighters Pension and Retirement, 2001 OK 40, ¶ 7, 28 P.3d 539, 544.

III. The Doctrine of Interstate Forum Non Conveniens

¶ 10 Generally, venue statutes allow the plaintiff a choice of forums in which to bring an action. 12 O.S.2001, §§ 134, et seq. The plaintiff's choice of forum will be disturbed only in exceptional cases. St. Louis-San Francisco Ry. Co. v. Superior Court, 1954 OK 223, ¶ 23, 276 P.2d 773, 778. However, a plaintiff may not vex or harass a defendant by the choice of a forum. In such a situation, the district court may determine that a forum in another state will be more appropriate and under the doctrine of interstate forum non conveniens, decline to exercise jurisdiction over the action. Id.

¶ 11 The doctrine of interstate forum non conveniens does not come into play unless there are at least two forums in which the defendant is amenable to process. Gulf Oil Corporation v. Gilbert, 330 U.S. 501, 507, 67 S.Ct. 839, 842, 91 L.Ed. 1055. The doctrine provides the criteria for the court to choose the appropriate forum from the forums that could secure service of process on the defendant. Id. The forum non conveniens criteria consider private and public interests. Gulf Oil Corporation v. Gilbert, 330 U.S. at 508, 67 S.Ct. at 843. The private interests to be considered include whether the forum 1) is convenient for witnesses, 2) may reach unwilling witnesses by compulsory process, 3) allows a view of the premises, 4) is near the sources of proof, and 5) serves to make trial of the case less burdensome and more convenient. Id. The public interests include the burden of jury duty on the community and the community interest in having local controversies decided at home. Id. Except where the balance...