National Union Fire Ins. Co. of Pitts. v. Bp Amoco

• Decision Date: 30 January 2004
• Docket Number: No. 03 Civ. 0200(GEL).,03 Civ. 0200(GEL).
• Citation: 319 F.Supp.2d 352
• Parties: NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH, PA, and Associated Electric & Gas Insurance Services Ltd., Plaintiffs, v. BP AMOCO P.L.C., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

319 F.Supp.2d 352

NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH, PA, and Associated Electric & Gas Insurance Services Ltd., Plaintiffs, v. BP AMOCO P.L.C., et al., Defendants.

No. 03 Civ. 0200(GEL).

United States District Court, S.D. New York.

January 30, 2004.

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Michael J. Carcich, Nicoletti Hornig Campise Sweeney & Paige, New York City (Robert A. Novak, on the brief), for Plaintiffs.

Heather M. Zona, Heller Ehrman White & McAuliffe LLP, New York City (Edward M. Joyce, David B. Goodwin, Esta L. Brand, on the brief), for Certain Foreign BP Defendants, Certain Non-BP Defendants, Wrongly Named Defendants, and Svenska Petroleum Exploration AS.

Esta L. Brand, Heller Ehrman White & McAuliffe LLP, San Francisco, CA (Edward M. Joyce, David B. Goodwin, Heather M. Zona, on the brief), for Defendants Vietnam Oil and Gas Corp. (Petrovietnam), Allseas USA, Inc., Allseas Subsea Contractors, S.A., and Allseas U.K., Ltd.

Edward M. Joyce, Heller Ehrman White & McAuliffe LLP, New York City (Heather M. Zona, on the brief), for Defendant Statoil Vietnam AS.

John A. Borek, Fried, Frank, Harris, Shriver & Jacobson, New York City (Elliot E. Polebaum, Daniel E. Loeb, Steven C. Parker, on the brief), for Defendants Total E & P Norge SA, Total E & P U.K. PLC, Elf Exploration U.K. PLC, and Fina Exploration Ltd.

Clifford Thau, Vinson & Elkins, LLP, New York City (Gregory Zimmer, on the brief), for Defendants Saipem S.p.A., Saipem Inc., Saipem U.K. Ltd., and European Marine Contractors Ltd.

Richard L. Lewis, Anderson Kill & Olick, P.C., New York City (John N. Ellison, on the brief), for Defendants ConocoPhillips Vietnam AS, ConocoPhillips (U.K.) Ltd., and ConocoPhillips Ltd.

OPINION AND ORDER

LYNCH, District Judge.

Plaintiffs National Union Fire Insurance Company of Pittsburgh, PA ("National Union"), and Associated Electric & Gas Insurance Services Ltd. ("AEGIS") seek a declaratory judgment either finding certain insurance contracts void ab initio, because defendants misrepresented their eligibility for coverage, or finding claims made under them not covered. Defendants removed this action from Supreme Court, New York County, pursuant to 28 U.S.C. § 1441(a), and the Court denied plaintiffs' motion to remand. Nat'l Union Fire Ins. Co. v. BP Amoco P.L.C., 03 Civ. 0200, 2003 WL 1618534 (S.D.N.Y. Mar. 27, 2003) ("Nat'l Union I"). Defendants then moved to dismiss based on forum non conveniens, which the Court also denied. Nat'l Union Fire Ins. Co. v. BP Amoco P.L.C., No. 03 Civ. 0200, 2003 WL 21180421 (S.D.N.Y. May 20, 2003) ("Nat'l Union II"). Various subcategories of defendants now bring a number of motions to dismiss for lack of personal or subject matter jurisdiction pursuant to Rules 12(b)(2) and 12(b)(1), respectively, of the Federal Rules of Civil Procedure. For the reasons that follow, the motion of the self-styled "Wrongly Named Defendants" to dismiss for lack of subject matter jurisdiction will be granted and the other motions denied.

BACKGROUND

Nat'l Union II sets forth most of the relevant facts, see 2003 WL 21180421, at *1-3, and they will be recited here only to the extent necessary to the disposition of this motion. In 1998, BP¹ devised an "Open Cover" insurance policy for itself, its subsidiaries, affiliates, joint-venture partners, and associated entities involved in oil and gas projects worldwide. Id. at *1. (Carcich Aff., Ex. 2 at 2 ¶ 4.) The Open Cover allowed BP to "declare" certain projects that BP selected for coverage within a specified period of time.² Id. It covered, as "Principal Insureds," BP, its subsidiaries, affiliates, associates, and "interrelated companies of every tier," as well as, at BP's option but subject to the filing of the proper declaration, joint-venturers, project managers, and financiers. (Carcich Aff., Ex. 2 at 000116.) The Open Cover also gave BP the right to extend its coverage to contractors, architects, engineers, consultants, suppliers, agents, manufacturers, vendors, and licensors, again provided that BP named such entities in the underlying declarations at the time it made those declarations. (Id.) Under the Open Cover, BP declared about thirty projects worldwide. (Wrongly Named Ds. Br. 1.)

BP enlisted "Aon Risk Services (`Aon'), an insurance broker with offices in London and the United States, to identify insurers willing to participate in the Open Cover and to coordinate project declaration and claims processing." Nat'l Union II, 2003 WL 21180421, at *1. BP gave Aon information about the projects BP wanted to declare, and employees of Aon then solicited insurers to participate in the Open Cover. According to plaintiffs, "Aon solicited National Union in New York, and all negotiations for the National Union policy were conducted with National Union in New York, either in person, via e-mail, telefax or over the phone with National Union's New York office"; and "National Union's underwriters executed and issued the policy in New York and delivered the policy to Aon either by hand in New York or by mail from National Union's New York office to Aon in Chicago." (Ps. Br. in Opp. to P.J. Mots. 4.) Moreover, BP's employee William Siebenaler, who bears responsibility for administering the Open Cover, met with National Union representatives in New York on at least one occasion. (Siebenaler Aff. ¶ 5.)

National Union and AEGIS, two of the fifteen insurers that comprise the international consortium that subscribed to the Open Cover (Foreign BP Ds. Br. 3), allege that certain projects declared by defendants-an assortment of BP subsidiaries, affiliates, joint-venturers, and entities unaffiliated with BP except through their alleged work on BP-affiliated oil and gas projects-do not qualify for coverage because of misrepresentations in certain declarations filed by BP. In the alternative, plaintiffs allege that certain claims, even if arising out of valid, covered projects, do not fall within the scope of the Open Cover policy. Nat'l Union II, 2003 WL 21180421, at *2.

For purposes of the present motions, defendants fall into three principal categories: (1) BP subsidiaries and affiliates ("the Foreign BP Defendants"), (2) non-BP joint-venturers or co-owners of projects declared for coverage by BP ("the Non-BP Defendants"), and (3) present and former BP entities and other business entities allegedly related to BP, but which claim no interest, either as participant or owner, in any declared project and do not claim to be insured by the Open Cover ("the Wrongly Named Defendants").³ The former two categories of defendants move to dismiss for lack of personal jurisdiction, arguing that New York's long-arm statute does not reach them, and in the alternative, that even if it does, to exercise personal jurisdiction over them under the circumstances would violate the Due Process Clause. The latter category of defendants move to dismiss for lack of subject matter jurisdiction, arguing that, as between them and plaintiffs, no case or controversy exists.

DISCUSSION

I. The Motions to Dismiss for Lack of Personal Jurisdiction

A. Standard on a Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(2)

On a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), the plaintiff bears the burden to establish jurisdiction. In re Magnetic Audiotape Antitrust Litigation, 334 F.3d 204, 206 (2d Cir.2003). Where no jurisdictional discovery has been conducted, allegations of jurisdictional fact must be construed in the light most favorable to the plaintiff, CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir.1986), and the motion must be denied if those allegations suffice as a matter of law. In re Magnetic Audiotape, 334 F.3d at 206; PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir.1997) ("A plaintiff facing a Fed.R.Civ.P. 12(b)(2) motion to dismiss made before any discovery need only allege facts constituting a prima facie showing of personal jurisdiction[,]" and courts must "construe the pleadings and affidavits in plaintiff's favor at this early stage."); see also Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir.1996).

B. Requirements to Exercise Personal Jurisdiction

A federal court sitting in diversity may exercise jurisdiction over a foreign defendant if, first, the defendant is amenable to process under the law of the forum state, Omni Capital Int'l Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 105, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987); Metro. Life Ins. Co., 84 F.3d at 567, and second, the exercise of personal jurisdiction comports with due process under International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny. See Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir.1963) (en banc) ("[T]he amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state where the court sits with `federal law' entering the picture only for the purpose of deciding whether a state's assertion of jurisdiction contravenes a constitutional guarantee."); see also Clarendon Nat'l Ins. Co. v. Lan, 152 F.Supp.2d 506, 515 (S.D.N.Y.2001).

C. The Foreign BP Defendants' Motion

The motion to dismiss for lack of personal jurisdiction of the Foreign BP Defendants sets forth the basic argument of which the other motions are minor variations: Because defendants did not directly negotiate, agree to, or execute the Open Cover with National Union, but only acquired an interest subsequently in certain projects or claims (allegedly) subject to its coverage, plaintiffs' causes of action do not "aris[e] from" business transactions by defendants within New York. See N.Y. C.P.L.R. § 302(a)(1); Agency Rent A Car Sys., Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir.1996). (Foreign BP Ds. Br. 13.) For similar reasons, defendants argue, the absence of sufficient contacts between them and the State of New York would make any assertion...