United Nuclear Corp. v. General Atomic Co.
| Decision Date | 18 October 1977 |
| Docket Number | Nos. 11265,11336,s. 11265 |
| Parties | UNITED NUCLEAR CORPORATION, a Delaware Corporation, Plaintiff-Appellee, v. GENERAL ATOMIC COMPANY, a partnership composed of Gulf Oil Corporation and Scallop Nuclear, Inc., Defendant-Appellee, The Detroit Edison Company, a New Mexico and Michigan Corporation, Defendant-Appellant, and Indiana and Michigan Electric Company, an Indiana Corp., Defendant-Appellee. |
| Court | New Mexico Supreme Court |
On December 31, 1975 suit was brought in the District Court of Santa Fe County by United Nuclear Corporation (UNC) against General Atomic Company (GAC). (For background on the issues in the case see, United Nuclear Corp. v. General Atomic Co., 90 N.M. 97, 560 P.2d 161 (1976)). On December 9, 1976 GAC moved to join The Detroit Edison Company (Detroit) as a party. Detroit made a special appearance to contest the in personam jurisdiction. We joined Detroit. After being served with process, Detroit moved to quash service. The district court granted Detroit an interlocutory appeal pursuant to § 21-10-3, N.M.S.A., 1953 (Supp.1975).
We have previously set forth New Mexico's position on the issue of long-arm jurisdiction and the minimum contacts necessary to meet constitutional standards. United Nuclear Corp. v. General Atomic Co., supra; Telephonic, Inc. v. Rosenblum, 88 N.M. 532, 543 P.2d 825 (1975). New Mexico has extended its in personam jurisdiction as far as constitutionally permissible. United Nuclear Corp. v. General Atomic Co., supra, discussed the authorities and rationale behind the application of the long-arm statute and the due process test as set forth in the leading cases of Internat. Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). We do not propose to reiterate that decision. Instead, those principles must be applied to the facts in the instant appeal.
Detroit is a public utility generating and selling electric power and steam to the southeastern portion of Michigan. Detroit is involved in this controversy by virtue of the fact that it has a contract with GAC whereby GAC agreed to supply Detroit the uranium it needed for the nuclear reactor it was in the process of constructing. In 1968 when Detroit decided to enter the nuclear power system field, Detroit and UNC, a Delaware corporation engaged in the mining and milling of uranium, began discussions about obtaining a supply of uranium fuel for the reactor. Negotiations proceeded for several months and in September 1969 Detroit entered into a letter of intent setting forth some terms concerning a future supply contract. Before a formal contract was signed, UNC entered into a partnership with Gulf Oil Corporation (Gulf) and formed Gulf United Nuclear Fuels Corporation (GUNFC). In June 1971 UNC requested Detroit to agree to an assignment of the letter of intent to GUNFC. After some investigations by Detroit and after Gulf and UNC guaranteed GUNFC's performance of the uranium agreement, Detroit consented to the assignment. In 1972 a fuel agreement was entered into. In 1973 Gulf purchased UNC's interest in that partnership, and another partnership was created, GAC. The uranium supply agreement was then assigned to GAC, again with Detroit's agreement.
Meanwhile, pursuant to the terms of the contract, UNC was mining and storing the uranium which was to be sold to Detroit. Detroit was not prepared to take delivery of the first load of uranium called for in the contract, and so a trust agreement was created whereby the Trust paid UNC the purchase price for the uranium and UNC stored the uranium in Grants, and the Trust (for Detroit) paid "deferral charges," for not accepting delivery. The amount of the stored inventory was verified by a national accounting firm through its Albuquerque office. There was also a discussion concerning an agreement whereby UNC could borrow from the stockpile and replace the uranium at a future date, and negotiations concerning the reduction of the deferral charges. An amendment to the 1972 fuel agreement was made between GAC and Detroit in 1974.
In 1974 the Trust accepted delivery of the uranium and shipped it to the conversion facility. In early 1975 Detroit sold the first batch of the uranium to a German utility, GKN. Detroit also at this time was negotiating with other uranium suppliers in New Mexico, and had contracted with a New Mexico corporation to supply uranium. GAC and Detroit also agreed that Detroit could negotiate directly with UNC to supply uranium pursuant to the amended fuel agreement subject to GAC's interest.
Detroit also had some unrelated meteorological and consulting work done in New Mexico by local firms or local divisions of national firms.
The above is a very brief sketch of the series of complex business activities related to the controversy over the supply of uranium, but it is sufficient to point out that Detroit was an active participant in the purchase and sale of one of New Mexico's natural resources. The most relevant contacts are:
1. Detroit intended to engage a corporation, UNC (whose mines were located in New Mexico) to supply uranium by entering into a letter of intent.
2. Detroit extensively investigated the resources and qualifications not only of UNC but of all subsequent assignees before contracting.
3. Tremendous amounts of uranium were mined, milled and stored in New Mexico for Detroit's benefit, for which millions of dollars were paid, even though title was held by the Trust.
4. Detroit at...
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