Pliler v. Asiatic Petroleum Company (Texas), Ltd., Civ. A. No. 12041.

• Decision Date: 14 July 1961
• Docket Number: Civ. A. No. 12041.
• Citation: 197 F. Supp. 212
• Parties: Verletta Maie PLILER et al., Plaintiffs, v. ASIATIC PETROLEUM COMPANY (TEXAS), LTD., et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

197 F. Supp. 212

Verletta Maie PLILER et al., Plaintiffs, v. ASIATIC PETROLEUM COMPANY (TEXAS), LTD., et al., Defendants.

Civ. A. No. 12041.

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

July 14, 1961.

Hill, Brown, Kronzer & Abraham, W. James Kronzer, Houston, Tex., for plaintiffs.

Baker, Botts, Andrews & Shepherd, William C. Harvin, Houston, Tex., for defendant Compania Shell de Venezuela.

INGRAHAM, District Judge.

This is an action in tort in which plaintiffs seek an "in personam" judgment for damages for the death of two men in an oil field accident in Venezuela, South America. The action was originally filed in the District Court of Harris County, Texas, against five different defendants. Three defendants, Asiatic Petroleum Company (Texas) Ltd. (hereinafter "Asiatic of Texas"), Shell Oil Company and Shell Development Company, were subject to service in Texas and were served. The other two defendants, Shell Caribbean Petroleum Corporation and Compania Shell de Venezuela (hereinafter "CSV"), were not present in Texas, were not served, and did not appear. Shell Oil Company and Shell Development Company removed the action in its entirety to this court pursuant to 28 U.S.C.A. § 1441 et seq.

Following removal, the three defendants who had appeared, Shell Oil Company, Shell Development Company and Asiatic of Texas, were dismissed by order of this court on April 13, 1960. While plaintiffs have not entered an order of dismissal as to Shell Caribbean Petroleum Corporation, they now state that relief is sought only against CSV (letter of Mr. Kronzer of May 16, 1961, page 1). As to CSV, plaintiffs now move for default judgment (pursuant to Fed. Rule Civ.Proc. 55, 28 U.S.C.A.), or alternatively for issuance of new process (pursuant to Art. 2031b, Vernon's Texas Civil Statutes)¹, or remand (pursuant to 28 U.S.C.A. § 1447(c)).² Appearing specially to contest jurisdiction, CSV moves to dismiss this cause for lack of personal jurisdiction (pursuant to Fed. Rule Civ.Proc. 12(b)).

These facts appear established by the pleadings, affidavits and depositions. Plaintiffs' decedents, Messrs. Pliler and Frayard, were working in South America as employees of a drilling contractor, C. A. Anaco Well Service (hereafter "Anaco"), a Venezuelan corporation, at the time of the fatal accident. Anaco has no corporate connection with CSV. CSV, a Canadian corporation, is an oil producing company operating solely in Venezuela; it has neither office nor assets in Texas (see depositions of Messrs. Whilden and Wirtensohn and various affidavits supporting CSV's motion). Anaco had contracted to drill a well for CSV and was so engaged when decedents were injured. Anaco appears to have been an independent contractor by virtue of its contract with CSV. Plaintiffs' decedents had no contractual relations with CSV.

After the accident, CSV undertook to assist Anaco in returning the men to their Texas homes. CSV engaged Asiatic Petroleum Corporation, a Delaware corporation with its principal office in New York (hereafter "Asiatic of Delaware"), to take appropriate action to make these men comfortable upon their arrival in this country. Asiatic of Delaware then engaged Asiatic of Texas to perform these services in its behalf. This was done by one Wirtensohn, employee of Asiatic of Texas, at the request of and supervision of Asiatic of Texas. CSV did not direct the manner in which this assistance was rendered.

CSV's additional links with Texas may be summarized as follows. At intervals CSV has needed additional employees in its oil operations in Venezuela. Some employees are drawn occasionally from American applicants. Under an operating arrangement with CSV, Asiatic of Delaware is paid a fee for securing applicants, investigating, interviewing and screening them and filing a report with CSV in Venezuela; CSV then accepts or rejects the applicants on the basis of the information thus supplied. CSV exercises no control over the manner of performance by Asiatic of Delaware. When the need arises to interview or screen Texas applicants, Asiatic of Delaware utilizes an operating agreement with Asiatic of Texas, a Texas corporation which maintains an office in Houston, Texas. Under this arrangement, for an agreed fee, Asiatic of Texas has on occasion located applicants, investigated, interviewed and screened them and filed a report thereon with Asiatic of Delaware. In doing so, Asiatic of Texas has had no direct contact with CSV.

Asiatic of Texas is a wholly owned subsidiary of Asiatic of Delaware. Asiatic of Texas has its own offices and operations separate from its parent. Neither CSV nor Asiatic of Delaware has any control over the means of performance of Asiatic of Texas. Asiatic of Texas has performed its services only for companies in the Royal Dutch Shell family. Asiatic of Texas performed these additional services for Asiatic of Delaware: (1) arranged physical examinations for prospective employees; (2) arranged transportation for such prospects; (3) kept abreast of technical developments in the industry; and (4) determined the value of certain new equipment in the oil field. The cause of action in tort alleged against CSV does not arise out of these activities or services performed by Asiatic of Texas for Asiatic of Delaware within Texas. CSV has no office in Texas. CSV has no agents or employees working within Texas.

The motions now before the court present these questions: (1) is CSV "doing business" in Texas within the meaning of Art. 2031b, Vernon's Texas Civil Statutes; (2) may Texas constitutionally subject CSV to "in personam" jurisdiction; and (3) if it appears Texas is without personal jurisdiction over CSV, ought the federal court to remand or dismiss.

I now summarize the arguments of the parties. Plaintiffs contend this court has personal jurisdiction over CSV for these reasons: (1) Asiatic of Texas, being wholly owned by Asiatic of Delaware, was an "acting corporation" or agent of CSV in Texas; (2) the providing of such services as screening personnel, checking equipment, etc., by Asiatic of Texas for Asiatic of Delaware (which had contracted with CSV to perform same) constituted "doing business" in Texas on the part of CSV; (3) sufficient jurisdictional contacts are found in the activity of CSV in arranging for decedents' return to Texas after the accident; and (4) process served on Wirtensohn at the Houston office of Asiatic of Texas would almost assuredly reach CSV via Asiatic of Delaware. CSV argues as follows: (1) its sole contact with Texas is that some employees have been selected from applicants who were Texas residents; (2) this one contact does not constitute "doing business" in the Texas statutory sense; (3) CSV's activities in Texas are insufficient to meet due process standards of "minimum contacts"; and (4) since the court lacks personal jurisdiction, the case must be dismissed rather than remanded to state court.

For reasons hereinafter stated, I find CSV is not "doing business" in Texas within the meaning of Art. 2031b, Vernon's Texas Civil Statutes, and applicable Texas case law. Therefore, the court need not express an opinion as to the constitutionality of Art. 2031b, which was enacted in 1959. Plaintiffs seem to argue Art. 2031b merely clarified or refined Texas law on the point. Perhaps this statute was intended by the Texas Legislature to expand prior concepts of "doing business" in Texas. Irrespective of whether Art. 2031b simply restated Texas law or moved to the very limits of "minimum contacts" permitted by the Fourteenth Amendment, CSV's tenuous links to Texas are insufficient to give this court personal jurisdiction.

Assuming with plaintiffs that Art. 2031b effected no expansion of Texas law, relevant case law clearly says no personal jurisdiction here. Two cases from this district are in point. Nielsen v. Arabian American Oil Co., C.A.5909, S. D.Tex.1952, 5 Cir., 1953, 206 F.2d 391, was a suit by a Texas resident for breach of employment contract against a defendant who was engaged in oil production in Saudi Arabia. Defendant maintained an employment office in Houston wherein interviews were conducted. This office was staffed by defendant's own employees. Service upon the Secretary of State of Texas was quashed by Judge Connally. Such activities were not "doing business". In two respects Nielsen was a much stronger case for plaintiff than the one at bar: (1) the cause of action in Nielsen arose out of the very acts of "doing business" relied upon by plaintiff, i. e., employment contracts, while here a tort in Venezuela has no connection with alleged solicitation of employees by CSV in Texas; and (2) in Nielsen defendant maintained an office in Texas staffed by its own employees, while CSV obtained Texas recruits via Asiatic of Texas via Asiatic of Delaware, both being separate entities not controlled by CSV. Despite these links to Texas, defendant in Nielsen was dismissed.

L. P. Cowart v. Columbian Petroleum Co., C.A.11,420 (S.D.Tex.1958), raised anew the question of the extent to which a foreign corporation may be subjected to personal jurisdiction in Texas because of employment contracts solicited here. In Cowart, defendant, a foreign corporation, was engaged in oil and gas production in Columbia, South America. Defendant had neither agents, assets nor business in Texas. It had an operating arrangement with Magnolia whereby Magnolia's Houston employees interviewed and processed prospective employees for overseas employment with defendant. One employee hired through Magnolia was injured as a result of defendant's alleged negligence in an oil field accident in South America. Employee brought suit in this district, alleging defendant was "doing business" in Texas. Judge Connally quashed the summons and dismissed for lack of personal jurisdiction. This case seems to be an even stronger one for denying jurisdiction than Cowart. While defendant dealt directly with Magnolia in Texas,...