Navarro v. Sedco, Inc.

• Decision Date: 28 April 1978
• Docket Number: Civ. A. No. 75-H-1604 to 75-H-1606.
• Citation: 449 F. Supp. 1355
• Parties: Maria de Los Angeles Quintana NAVARRO, Individually and as next friend of her minor children, Jose Manuel Suarez Quintana, Maria de la Soledad Suarez Quintana, Angel Gabriel Suarez Quintana and Maria del Mar Suarez Quintana v. SEDCO, INC., et al. Beatriz Candelaria Godoy PERDOMO, Individually and as next friend of her minor children, Beatriz Eugenia Diaz Godoy, Maria Aurora Diaz Godoy and Juan Ramon Diaz Godoy v. SEDCO, INC. Angelina Suarez GUERRA, Individually and as next friend of her minor children, Teresa Eloina Ojeda Suarez and Epifania Maria Ojeda Suarez v. SEDCO, INC.
• Court: U.S. District Court — Southern District of Texas

449 F. Supp. 1355

Maria de Los Angeles Quintana NAVARRO, Individually and as next friend of her minor children, Jose Manuel Suarez Quintana, Maria de la Soledad Suarez Quintana, Angel Gabriel Suarez Quintana and Maria del Mar Suarez Quintana v. SEDCO, INC., et al.

Beatriz Candelaria Godoy PERDOMO, Individually and as next friend of her minor children, Beatriz Eugenia Diaz Godoy, Maria Aurora Diaz Godoy and Juan Ramon Diaz Godoy v. SEDCO, INC.

Angelina Suarez GUERRA, Individually and as next friend of her minor children, Teresa Eloina Ojeda Suarez and Epifania Maria Ojeda Suarez v. SEDCO, INC.

Civ. A. Nos. 75-H-1604 to 75-H-1606.

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

April 28, 1978.

COPYRIGHT MATERIAL OMITTED

Hubert L. Stone, Jr., Corpus Christi, Tex., for plaintiffs.

Dixie Smith, Fulbright & Jaworski, Houston, Tex., for Sedco, Inc.

Alan S. Dale, Eastham, Watson, Dale & Forney, Houston, Tex., for Okanagan Helicopters.

Joseph D. Cheavens, Baker & Botts, Houston, Tex., for Shell Inter. & Shell Deep Water.

Memorandum and Order

SINGLETON, District Judge.

The above-styled-and-numbered cause is an action brought under Title 46 U.S.C. § 688 and § 761 et seq. ("Jones Act" and "Death on the High Seas Act," respectively) by the personal representatives of several Spanish nationals who met death in a helicopter crash in connection with their employment on a drilling rig operating off the coast of West Africa. In addition to bringing this action against two business entities and their subsidiaries that were directly involved in the drilling operations ("Sedco" and "Shell"), plaintiffs are seeking recovery from Okanagan Helicopters Limited ("Okanagan").

The complaint states that Okanagan is a Canadian corporation, whose address is 439 Agar Drive, Vancouver International Airport, Vancouver, Canada; that Okanagan "is doing business in the State of Texas and in the United States and is directly involved in Defendants' operations under the `Sedco-Shell' contract, and therefore this Court has jurisdiction over Defendant Okanagan Helicopters Limited"; that Okanagan "owned and operated the helicopter `CK-OKH' appurtenant to the drilling vessel `Sedco 445' under contracts with Defendants for the transportation of Defendants' employees to and from said drilling vessel"; and that the crash of the helicopter was a cause of the death of plaintiffs' decedents.

Okanagan has filed a motion to quash service and to dismiss for want of personal jurisdiction. Okanagan received service in this case through the Secretary of State pursuant to the Texas long-arm statute, Tex.Rev.Civ.Stat.Ann. art. 2031b (1964). To prevail over Okanagan's motion, plaintiffs have the dual burden to prove that Okanagan is amenable to process under article 2031b, and that the assertion of jurisdiction over Okanagan under article 2031b complies with due process. Jetco Electronic Industries v. Gardiner, 473 F.2d 1228 (5th Cir. 1973).¹

Plaintiffs rely on the following activities of Okanagan to support the assertion of personal jurisdiction over it in this forum:

(1) Okanagan has directly contracted to and has sent a helicopter and Okanagan employees to work as an integral part of the equipment of the U.S. based operations of the "Sedco 445". This helicopter and crew have no other work to do.

They are dedicated to the "Sedco 445" and they or their replacement will remain on the "Sedco 445" as long as the "Sedco 445" is operating in that locality. The "Sedco 445" cannot operate without the Okanagan helicopter and crew.

(2) Okanagan is presently purchasing goods and services from 45 United States companies and is presently doing business with five Texas companies including a current leasing of a helicopter from Bell Helicopter. The American companies from whom Okanagan is making purchases are so numerous that it was impractical for Okanagan to give the dates of each contract or to attach copies of the contract documents to answers to interrogatories. It is clear that there is a continuing flow of purchases of goods and services on an extremely large scale between Okanagan and companies in the United States.

(3) Okanagan has employees actually present in the United States on a continuing and frequent basis as shown by the agreements attached to Okanagan's answers to interrogatories where delivery of helicopters is made to Okanagan from Sikorsky at Stratford, Connecticut, U.S.A. Other helicopters are delivered to Okanagan by delivery at F.A.F. Grand Praire sic, Texas.

Plaintiffs' "Memorandum of Authorities in Opposition to Motion of Defendant, Okanagan Helicopters Limited to Quash Service of Process and Dismiss Complaints," at 4.

From Okanagan's answers to plaintiffs' Interrogatories it is revealed that the contract (referred to in paragraph one above) was entered into between Okanagan and Defendant Shell Deepwater Drilling Company Ltd., a London, England Corporation; that the five Texas companies with which Okanagan is doing business (referred to in paragraph two above) are ones from which Okanagan is continuously purchasing goods and services by issuing purchase orders signed by Okanagan at its office in Vancouver; that Okanagan is currently leasing a helicopter which is being used outside the United States from Bell Helicopters, Fort Worth, Texas; and that Okanagan traded two helicopters to Texas corporations against the purchase price of four other helicopters in 1975 and 1976 for which Okanagan took delivery at the seller's plant and flew them to Canada (referred to in paragraph three, above).

An affidavit of Verne D. Pecho, Vice President and Finance and Secretary Treasurer of Okanagan states that Okanagan has never operated aircraft in the United States, except for purposes of taking delivery of purchased helicopters at suppliers' plants and flying such helicopters to Canada; that the helicopter involved in the accident on which this cause is based was purchased in Connecticut; that no contracts or operations with regard to such helicopter were undertaken in Texas or the rest of the United States; and that Okanagan does not maintain an agent, employee, office or other property or telephone listing in Texas.

I.

Section four of article 2031b provides:

Sec. 4. For the purpose of this Act, and without including other acts that may constitute doing business, any foreign corporation, joint stock company, association, partnership, or non-resident natural person shall be deemed doing business in this State by entering into contract by mail or otherwise with a resident of Texas to be performed in whole or in part by either party in this State, or the committing of any tort in whole or in part in this State.

Okanagan is "doing business" in this state under article 2031b through its admittedly numerous purchases of goods and services from Texas companies; its contract with Bell Helicopters of Ft. Worth, Texas, for the lease of one helicopter; and its contract with a Texas corporation by which two helicopters were traded against the purchase price of four other helicopters which were accepted by an employee of Okanagan in Texas.

The court finds no merit in defendant's contention that in order to be amenable to service article 2031b plaintiff's cause of action must arise directly out of defendant's contacts with Texas. First, the Fifth Circuit and the Texas Supreme Court have construed article 2031b as going to the limits of due process, Product Promotions Inc. v. Cousteau, 495 F.2d 483 (5th Cir. 1974); U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977); and the due process clause has never been interpreted as requiring in all cases that the plaintiff's cause of action arise directly from defendant's contacts with the forum. International Shoe Co. v. Washington, 326 U.S. 310, 318, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Perkins v. Benguet Mining Co., 342 U.S. 437, 446, 72 S.Ct. 413, 96 L.Ed. 485 (1952). Second, in several decisions upholding a defendant's amenability to service pursuant to article 2031b, the Fifth Circuit has relied on defendant's activities unrelated to the cause of action involved in each case. See Eyerly Aircraft Co. v. Killian, 414 F.2d 591 (5th Cir. 1969); Wilkerson v. Fortuna Corp., 554 F.2d 745 (5th Cir.), cert. denied, 434 U.S. 939, 98 S.Ct. 430, 54 L.Ed.2d 299 (1977); Black v. Acme Markets, Inc., 564 F.2d 681 (5th Cir. 1977). Third, in Eyerly, supra, the Fifth Circuit expressly rejected the contention (made by Okanagan in this case) that the Texas Supreme Court has interpreted article 2031b to require that the cause of action sued upon arise directly from the defendant's activities in the forum. See Eyerly, supra, at 599, footnote 12. Fourth, the court is aware of no Texas decision holding article 2031b inapplicable to causes of action not arising directly from the defendant's activities with the forum.² Fifth and finally, the recent decision of the Texas Supreme Court in U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977), appears to the court to foreclose any argument that article 2031b should be read in the restrictive fashion urged by Okanagan. The court stated as follows at 762:

We let stand the statement in Hoppenfeld v. Crook, 498 S.W.2d 52 (Tex.Civ. App. — Austin 1973, writ ref'd n. r. e.) "that the reach of art. 2031b is limited only by the United States Constitution." See also National Truckers Service, Inc. v. Aero Systems, Inc., 480 S.W.2d 455 (Tex.Civ.App. — Fort Worth 1972, writ ref'd. n. r. e.). The Federal Courts have similarly construed article 2031b. See Product Promotions, Inc. v. Cousteau, 495 F.2d 483 (5th Cir. 1974), and the cases there cited. Furthermore, such a construction is desirable in that it allows the courts to focus on the constitutional limitations of due process rather than to engage in technical and abstruse attempts to consistently define "doing business."

For these reasons, the court now proceeds to focus on the constitutional aspect of the jurisdictional...