Moncrief Oil Int'l Inc. v. Oao Gazprom, Gazprom Export, LLC

• Decision Date: 30 August 2013
• Docket Number: No. 11–0195.,11–0195.
• Citation: 56 Tex. Sup. Ct. J. 1023,414 S.W.3d 142
• Court: Texas Supreme Court
• Parties: MONCRIEF OIL INTERNATIONAL INC., Petitioner, v. OAO GAZPROM, Gazprom Export, LLC, and Gazprom Marketing & Trading, Ltd., Respondents.

414 S.W.3d 142

56 Tex. Sup. Ct. J. 1023

MONCRIEF OIL INTERNATIONAL INC., Petitioner,

v.OAO GAZPROM, Gazprom Export, LLC, and Gazprom Marketing & Trading, Ltd., Respondents.

No. 11–0195.

Supreme Court of Texas.

Argued Feb. 6, 2012.

Decided Aug. 30, 2013.

Clarence Andrew Weber, Kelly Hart & Hallman LLP, Harriet O'Neill, Law Office of Harriet O'Neill, PC, Austin, TX, John H. Cayce, Jr., Marshall M. Searcy, Jr., Michael Dana Anderson Kelly Hart & Hallman LLP, Fort Worth, TX, for Petitioner Moncrief Oil International, Inc.

Aaron M. Streett, Lauren Elizabeth Tanner, Michael S. Goldberg, Timothy Conway Shelby, Baker Botts, L.L.P., Houston, TX, Jerry D. Bullard, Neal W. Adams, Adams, Lynch & Loftin, P.C., Thomas R. Phillips, Baker Botts LLP, Austin TX, for Respondent OAO Gazprom, Gazprom Export, LLC, and Gazprom Marketing & Trading, Ltd.

George S. Christian, Austin, TX, for Amicus Curiae Texas Civil Justce League, Inc., Texas Oil & Gas Assoc., Texas Assoc. of Manufacturers, Assoc. of Electric Companies of Texas, and Texas Assoc., of Business

Justice GUZMAN delivered the opinion of the Court.

We have observed that the business contacts needed for specific personal jurisdiction over a nonresident defendant “are generally a matter of physical fact, while tort liability (especially misrepresentation cases) turns on what the parties thought, said, or intended. Far better that judges should limit their jurisdictional decisions to the former rather than involving themselves in trying the latter.” ¹ Here, nonresident defendants allegedly committed the tort of misappropriating purported trade secrets from a Texas company concerning a proposed Texas venture during two meetings in Texas. The defendants claim their intent in attending the meetings was to discuss an unrelated matter and that they informed the plaintiff of that intent at the meetings. But what the parties thought, said, or intended is generally irrelevant to their jurisdictional contacts. Regardless of the defendants' subjective intent, their Texas contacts are sufficient to confer specific jurisdiction over the defendants as to the trade secrets claim.

The nonresident defendants also face claims of tortious interference with the Texas corporation's relationship with a California corporation. But the tortious interference claims either arise from a meeting in California (which cannot support jurisdiction in Texas) or the formation of a competing enterprise in Texas by an entity not subject to jurisdiction in this proceeding. The trial court granted the special appearance, which the court of appeals affirmed. Because we hold there is jurisdiction over the trade secrets claim, but not over the tortious interference claims, we reverse in part and affirm in part the court of appeals' judgment and remand to the trial court for further proceedings.

I. Background

Moncrief Oil International, Inc. (Moncrief) is a Texas-based company that entered into a series of contracts in 1997 and 1998 with two subsidiaries of OAO Gazprom (Gazprom) regarding development of a Russian gas field known as the Y–R Field. Moncrief Oil Int'l Inc. v. OAO Gazprom, 481 F.3d 309, 310 (5th Cir.2007). Gazprom, a Russian company, is among the world's largest producers of natural gas. After assuring Moncrief it would honor the contractual obligations of its subsidiaries, Gazprom later contracted with German entities to develop the Y–R Field. Moncrief, 481 F.3d at 311.

In the fall of 2003, Gazprom announced its intention to sell liquified natural gas to the United States and contacted oil companies in the American market. When Moncrief asked Gazprom to recognize its claimed interest or sell it an interest in the Y–R Field, Gazprom replied that it was interested only in trading its resources for access to the American downstream market. Along those lines, Moncrief had developed alleged trade secret information regarding a proposed joint venture with California-based Occidental Petroleum Corporation to import liquified natural gas to a regasification facility to be built in Ingleside, Texas.

Moncrief and Gazprom engaged in a series of communications (including phone calls, emails, and in-person meetings) to discuss Moncrief's rights in the Y–R Field and the establishment of a consortium with Moncrief, Occidental, and Gazprom to import liquified natural gas to Texas. Gazprom Export, LLC (Gazprom Export)—the Gazprom subsidiary that exports natural gas to countries outside the former Soviet Union—also took part in the discussions.

These discussions began with a meeting in Moscow in September 2004, where Moncrief proposed that: (1) Gazprom would grant Moncrief an interest in the Y–R Field; (2) Moncrief would grant Gazprom an interest in the proposed Texas regasification facility; and (3) Moncrief would grant Occidental a share of its interest in the Y–R Field. At the meeting, Moncrief provided Gazprom alleged trade secrets concerning the Texas facility and marketing plan. Later that month, Moncrief and Gazprom met in Washington, D.C., where Moncrief again provided Gazprom the alleged trade secrets. The parties then exchanged a series of emails and phone calls regarding the proposal.

In February 2005, Gazprom informed Moncrief it would not accept Moncrief's proposal. In June 2005, Moncrief sued Gazprom and the two subsidiaries it dealt with regarding the Y–R Field in federal court in Texas over its interest in the Y–R Field. Moncrief, 481 F.3d at 311. Ultimately, the Fifth Circuit Court of Appeals affirmed the dismissal of Gazprom due to lack of personal jurisdiction but noted that “even without other contacts, jurisdiction would exist if Gazprom committed a tort while in the state.” Id. at 314–15.

In late 2005, the parties resumed in-person discussions, with meetings in Houston, Boston, and Fort Worth, where Moncrief provided updated versions of the alleged trade secrets to Gazprom. Gazprom representatives later met directly with Occidental representatives in California, and Occidental terminated the proposed venture with Moncrief after Gazprom refused to participate in the venture. A subsidiary of Gazprom Export (Gazprom Marketing & Trading, Ltd.) then established Gazprom Marketing & Trading USA, Inc. (GMT USA) in Houston to import Gazprom's liquified natural gas, regasify it, and sell it in the Unites States.

Moncrief sued Gazprom, Gazprom Export, and GMT USA in state court for tortious interference, trade-secret misappropriation, conspiracy to tortiously interfere, and conspiracy to misappropriate trade secrets. Gazprom and Gazprom Export (collectively the Gazprom Defendants) specially appeared, asserting that their contacts with Texas were random, not purposeful, and that Moncrief unilaterally disclosed the trade secrets. After a special appearance hearing with no live testimony, the trial court granted the Gazprom Defendants' special appearances. Findings of fact and conclusions of law were not requested or filed.

The court of appeals affirmed, holding that legally and factually sufficient evidence supported an implied finding that the location of the two Texas meetings was “merely random or fortuitous” as to Moncrief's trade secrets claim. 332 S.W.3d 1, 19–20. As to the tortious interference claims, the court held that the record conclusively established that any alleged tortious interference that might have occurred took place in California. Id. at 13–14. The court of appeals further held that the trial court did not abuse its discretion in refusing to allow Moncrief additional depositions.²Id. at 22–23.³

II. Discussion

A. Standard of Review

Texas courts may exercise personal jurisdiction over a nonresident if “(1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is consistent with federal and state constitutional due-process guarantees.” Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.2007). Under the Texas long-arm statute, the plaintiff bears the initial burden of pleading allegations sufficient to confer jurisdiction. Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex.2009). The long-arm statute allows the exercise of personal jurisdiction over a nonresident defendant who “commits a tort in whole or in part in this state.” Tex. Civ. Prac. & Rem.Code § 17.042(2). Although allegations that a tort was committed in Texas satisfy our long-arm statute, such allegations do not necessarily satisfy the U.S. Constitution. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 788 (Tex.2005). Here, Moncrief pled that the Gazprom Defendants committed torts in Texas by misappropriating Moncrief's alleged trade secrets at Texas meetings. Thus, Moncrief has met its initial burden of alleging a cause of action sufficient to confer jurisdiction under the long-arm statute. SeeTex. Civ. Prac. & Rem.Code § 17.042(2).

When the initial burden is met, the burden shifts to the defendant to negate all potential bases for personal jurisdiction the plaintiff pled. Retamco, 278 S.W.3d at 337. As Moncrief's sole allegation as to personal jurisdiction is that the Gazprom Defendants committed torts in Texas, the Gazprom Defendants must negate that basis. In response, the Gazprom Defendants argue that exercising jurisdiction over them would violate due process. Asserting personal jurisdiction comports with due process when (1) the nonresident defendant has minimum contacts with the forum state, and (2) asserting jurisdiction complies with traditional notions of fair play and substantial justice. Id. at 338. A defendant establishes minimum contacts with a forum when it “purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.” Id. (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)).

A nonresident's contacts can give rise to general or specific personal jurisdiction. Id. Continuous and...