Grynberg v. Ivanhoe Energy, Inc.
| Citation | 666 F.Supp.2d 1218 |
| Decision Date | 30 September 2009 |
| Docket Number | Civil Action No. 08-cv-02528-WDM-BNB. |
| Parties | Jack J. GRYNBERG, et al., Plaintiffs, v. IVANHOE ENERGY, INC., et al., Defendants. |
| Court | U.S. District Court — District of Colorado |
George Hanks Brown, Karl L. Schock, Amy L. Benson, Brownstein Hyatt Farber Schreck, LLP, Denver, CO, Michael W. Coriden, Roger Allan Jatko, Grynberg Petroleum Company, Greenwood Village, CO, for Plaintiffs.
John D. Faught, Nancy Ann Kostro, Fognani & Faught, PLLC, Denver, CO, James A. Baker, IV, Rachel B. Cochran, Baker Botts, LLP, Washington, DC, Timothy S. Durst, Baker Botts, LLP, Dallas, TX, for Defendants.
ORDER ON VARIOUS MOTIONS
This matter is before me on Defendants' Amended Motion to Dismiss for Lack of Personal Jurisdiction (Docket No. 18); the parties' Joint Motion to Clarify Applicability of Motion to Dismiss Operative Complaint (Docket No. 52); Plaintiffs' Motion for Partial Summary Judgment on the General Personal Jurisdiction of Defendant Friedland (Docket No. 83); Plaintiffs' Appeal of Magistrate Judge Ruling (Docket No. 87); Defendants' Motion to Strike Plaintiffs' Motion for Partial Summary Judgment (Docket No. 88); and Plaintiffs' Motion to Transfer (Docket No. 96). I have considered the motions, related briefs, and Complaint and conclude that neither oral argument nor an evidentiary hearing is required.
This case surrounds the Pungarayacu Tar Sands Heavy Oil Deposit (the "Pungarayacu Field") in the Nation of Ecuador ("Ecuador"). According to Plaintiffs' Amended Complaint (Docket No. 40), Plaintiff Jack J. Grynberg ("Grynberg") and a partner formed the Ecuadorian company Cotundo Minerales S.A. ("Cotundo") in 2006.2 In March, April, and May of 2006, Ecuador granted Cotundo seventeen exclusive mining concessions to the Pungarayacu Field, which gave Cotundo the exclusive right to exploration and production of approximately 195,757.8 acres in the Pungarayacu Field for thirty years. After obtaining the licenses, Grynberg put together extensive technical data and analysis on the Pungarayacu Field including revised estimates of the amount of oil in the area. Previous estimates were that approximately seven billion barrels of heavy oil could be extracted from the area. By relying on an innovative process to extract the deposits (called "Ecumulsion" by Grynberg), however, Grynberg estimated fifteen billion barrels or more of recoverable hydrocarbons.
Grynberg then began seeking "the best heavy tar sand processing available." (Am. Compl., Docket No. 40 ¶ 22.) During this process, Grynberg learned of Ivanhoe Energy, Inc. ("Ivanhoe"), a Canadian corporation that had "a potential process utilizing the recovery and upgrading of hydrocarbons from tar sands." Id. According Defendants' Motion to Dismiss, Ivanhoe is a "independent, international heavy-oil development and production company focused on pursuing long-term growth in its reserves and production using advanced technologies." (Mtn. to Dismiss, Docket No. 18 at 7.) Ivanhoe is a Canadian corporation with its principal offices in Vancouver, Canada. The company is currently engaged in oil and gas projects in Canada, Asia, the Middle East, Latin American, and the United States in California and Texas. Ivanhoe Energy Latin America, Inc. ("IELA") is a wholly owned subsidiary of Ivanhoe and has its principal office in Bakersfield, California. Ivanhoe Energy Ecuador ("IEE") was formed as a wholly owned subsidiary of IELA in 2007 and has its principal office in Quito, Ecuador. According to the Amended Complaint, Defendant David Martin ("Martin") is Executive Co-Chairman of Ivanhoe and Executive Chairman of IELA and IEE. Martin is a resident of California. Defendant Robert M. Friedland ("Friedland"), is the Executive Chairman and CEO of Ivanhoe. Friedland resides in Singapore.
The Amended Complaint asserts that in August 2006, Grynberg contacted Martin at IELA's Bakersfield, California offices regarding the Pungarayacu Field. During this conversation, Martin allegedly requested information from Grynberg regarding the Pungarayacu Field. Grynberg emailed Martin information on Grynberg Petroleum and mailed Martin "a detailed proprietary and confidential report on the Pungarayacu Field, the Plaintiffs' government concessions and the project." (Am. Compl., Docket No. 40 ¶ 23.) This report contained details about the Ecumulsion method and Grynberg's revised estimates of the deposits at Pungarayacu Field. Subsequently, Martin informed Grynberg that Ivanhoe would be interested in entering into a joint venture with Cotundo with respect to the Pungarayacu Field. During further phone conversations, of which there were either one or two, the parties allegedly verbally agreed on twenty percent participation by Ivanhoe if the deal moved forward. Grynberg then attempted to visit Ivanhoe's pilot plant operation in Bakersfield, California, but was given the "run-around" and, therefore, never visited Bakersfield. Sensing that the deal would not move forward, Grynberg requested Martin return the confidential material to Grynberg. It is unclear if Martin complied with this request.
In March 2008, Plaintiffs became aware that representatives from Ivanhoe and/or its subsidiaries were in Quito, Ecuador for discussions with Ecuadorian officials regarding the Pungarayacu Field. Ecuadorian officials also made two trips to Bakersfield, California to visit Ivanhoe's pilot plant. On April 18, 2008, Ecuador approved the Mining Constitutional Mandate which provided that "[a]ll mining concessions in the exploration phase and that have not made any investment in developing the project up to December 31st, 2007, or which have not presented the corresponding environmental impact study or that have not completed the previous consultation process, even those pending administrative resolution, are declared expired without economic compensation." (April 28, 2008 letter to Cotundo, Docket No. 40-7 at 2.) It is unclear from the Amended Complaint whether Plaintiffs' concessions were eventually declared expired pursuant to this mandate3, but it is clear that Ivanhoe was subsequently awarded the concession to the Pungarayacu Field. Indeed, on October 8, 2008, Ivanhoe issued a press release announcing that IEE had "signed a contract with Ecuador state oil companies Petraecuador and Petraproduccion to explore and develop Ecuador's Pungarayacu heavy-oil field, utilizing Ivanhoe's HTL upgrading technology." (Press Release, Docket No. 40-9 at 2.) On October 28, 2008, Oil and Gas Journal reported the contract and also that Ivanhoe estimated that the Pungarayacu Field had fifteen to twenty billion barrels of oil—an estimate that Plaintiffs claim resulted solely from viewing their confidential materials. Plaintiffs allege that the only reason that Defendants were able to secure the contract for the Pungarayacu Field was that they unlawfully paid cash and valuable gifts to President Raphael Correa Delgado. Plaintiffs now bring claims against Defendants for fraud, intentional and tortious interference with prospective unique business advantages, unjust enrichment, civil conspiracy to commit fraud, and Racketeer Influenced and Corrupt Organizations ("RICO") violations.
On April 13, 2009, Plaintiffs filed an objection (Docket No. 87) to Magistrate Judge Boland's ruling denying limited jurisdictional discovery.4 As the objection deals with claimed jurisdictional discovery, it is appropriate to address Plaintiffs' objection to Magistrate Judge Boland's ruling prior to addressing the jurisdictional issues themselves. After a hearing on February 10, 2009, Magistrate Judge Boland stayed all discovery in this case pending my resolution of the motions to dismiss based on jurisdiction. (See Docket No. 44.) At that hearing Plaintiffs indicated that they did not think that jurisdictional discovery was necessary, but reserved the right to request such discovery after my ruling if that ruling should reveal a need for jurisdictional discovery. (Feb. 10, 2009 Hearing Tr., Docket No. 57 at 11:5-13; 19:1-20:25.) Subsequently, however, on March 16, 2009, Plaintiffs moved to lift the stay to allow for "limited jurisdictional discovery." (Docket No. 70.) Defendants opposed this action arguing that the motion was untimely made and that the discovery sought was not tailored to impact resolution of the jurisdictional issues. After a hearing on the motion, Plaintiffs indicated that although they had made the motion for limited jurisdictional discovery prior to my ruling on jurisdiction, they still believed that it would be possible to proceed as decided at the February 10, 2009 hearing, i.e., to await a jurisdictional ruling from me prior to requesting or engaging in any jurisdictional discovery. (Apr. 3, 2009 Hearing Tr., Docket No. 93 at 6:20-7:15.) Magistrate Judge Boland denied Plaintiffs motion (see Docket No. 84) stating at the hearing that the motion came too late, the "requested discovery appears to present a low probability of impacting the determination of the jurisdictional issue . . . [, t]he discovery sought would impose an extreme burden on the corporate defendants," and that the requests were largely irrelevant to the jurisdictional issues. (Apr. 3, 2009 Hearing Tr., Docket No. 93 at 22:10-23:11.)
Plaintiffs now appeal this ruling arguing that Magistrate Judge Boland "abused his discretion and made two clearly erroneous rulings." (Docket No. 87 ¶ 1.) Specifically, Plaintiffs contend that Magistrate Judge Boland was incorrect in denying their request to lift the stay when "to do so prejudiced Plaintiffs' ability to prove their case, but did not prejudice Defendants" and in refusing "to allow Plaintiffs' limited discovery...
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