ACCEPTED 01-14-00892-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 3/23/2015 7:04:01 PM CHRISTOPHER PRINE CLERK
No. 01-14-00892-CV FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS In the Court of Appeals 3/23/2015 7:04:01 PM For the First Judicial District CHRISTOPHER A. PRINE Houston, Texas Clerk
ADELAIDA SALAZAR BAUTISTA A/K/A ADELAIDA ALVARADO, INDIVIDUALLY AND AS NEXT FRIEND OF MARIA JENNIFER AIDE A/K/A MARIA JENNIFER ALVARADO, A. A. A. A., I. S. A., M. A., AND E. A., MINORS; AND IRINEO ALVARADO AND MARIA ANA MOCTEZUMA
Appellants,
v.
TRINIDAD DRILLING LIMITED,
Appellee.
On Appeal from the 270th Judicial District Court of Harris County
APPELLEE TRINIDAD DRILLING LIMITED’S BRIEF
Sean Higgins Texas Bar No. 24001220 Wilson, Elser, Moskowitz, Edelman & Dicker, LLP 909 Fannin Street, Ste. 3300 Houston, Texas 77010 (713) 353-2000 (713) 785-7780 (Fax) Sean.Higgins@wilsonelser.com ATTORNEY FOR APPELLEE
213232v.1 IDENTITY OF PARTIES AND COUNSEL
1. Appellants:
a. Adelaida Salazar Bautista a/k/a Adelaida Alvarado, Individually, and as next friend of Maria Jennifer Aide a/k/a Maria Jennifer Alvarado, Aurelia Alvarado, Alejandra Alvarado, Ivan Salazar Alvarado, Marian Alvarado and Eduardo Alvarado, Minors
Represented by:
Geoffrey E. Schorr geoff@schorrfirm.com Texas Bar No. 24029828 A. Jared Aldinger Texas Bar No. 24068456 jared@schorrfirm.com SCHORR LAW FIRM, PC 328 W. Interstate 30, Suite 2 Garland, TX 75043 Tel. (972) 226-8860 Fax (972) 226-9787
Andrew P. McCormick Texas Bar No. 3457100 amccormick@mlm-lawfirm.com McCORMICK, LANZA & McNEEL, LLP 4950 Bissonnet Street Bellaire,TX 77401 Tel. (713) 523-0400 Fax (713) 523-0408
b. Irineo Alvarado and Maria Ana Moctezuma
Justin K. Hall Texas Bar No. 90001828 jkhall@justinkhall.com The Law Offices of Justin K. Hall, P.C.
ii
213232v.1 328 W Interstate 30, Suite 2 Garland, Texas 75043 Tel. (972) 226-1999 Fax (972) 226-2221
Andrew P. McCormick Texas Bar No. 3457100 amccormick@mlm-lawfirm.com McCORMICK, LANZA & McNEEL, LLP 4950 Bissonnet Street Bellaire, TX 77401 Tel. (713) 523-0400 Fax (713) 523-0408
2. Appellee:
Trinidad Drilling, Ltd. Represented by:
Sean Higgins Texas Bar No. 24001220 (Appellate Counsel) Michael Beckelman Texas Bar No. 24042401 (Trial Counsel) michael.beckelman@wilsonelser.com WILSON ELSER MOSKOWITZ EDELMAN & DICKER, LLP 909 Fannin Street, Ste. 3300 Houston, TX 77010 Tel. (713) 353-2000 Fax (713) 785-7780
iii
213232v.1 TABLE OF CONTENTS
TABLE OF AUTHORITIES ..................................................................................................... VI
STATEMENT REGARDING ORAL ARGUMENTERROR! BOOKMARK NOT DEFINED.ERROR! BOO
STATEMENT OF THE CASEERROR! BOOKMARK NOT DEFINED.ERROR! BOOKMARK NOT DEFIN
STATEMENT OF ISSUES PRESENTED ............................................................................... IX
I. Whether the trial court correctly determined that Trinidad Ltd., a Canadian corporation with its principal place of business in Canada, is not subject to specific personal jurisdiction, where:................................................................... ix
A. Plaintiffs alleged that Trinidad Ltd. was negligent but did not allege the existence of Texas contacts giving rise to their claim against Trinidad Ltd; .............................................................................................. ix
B. Trinidad Ltd. controverted Plaintiff’s the any jurisdictional allegations through affidavit testimony; and................................................................ ix
C. Plaintiffs did not present evidence of relevant jurisdictional contacts between Trinidad Ltd. and Texas............................................................... ix
II. Whether the trial court correctly determined that Trinidad Ltd, a Canadian corporation headquartered in Canada, is not subject to general personal jurisdiction in Texas where .................................................................................. ix
A. Trinidad Ltd. presented affidavit testimony controverting the existence of general personal jurisdiction;..................................................................... ix
B. Plaintiffs did not allege –and specifically disavowed- any claim that the Court should fuse Trinidad Ltd. with its indirect subsidiary, Trinidad Drilling Limited Partnership (“Trinidad LP”) for the purpose of determining jurisdiction; and .......................................................................x
C. Uncontroverted evidence shows that Trinidad LP is in fact a separate entity from Trinidad Ltd. .............................................................................x
STATEMENT OF FACTS............................................................................................................1
A. The lawsuit. .............................................................................................................1
B. Trinidad Ltd. is a Canadian corporation headquartered in Canada that does not conduct business in Texas. .....................................................................................1
iv
213232v.1 C. Trinidad Ltd, and Trinidad LP are separate entities. ............................................2
D. Plaintiffs’ allegations against Trinidad Ltd...........................................................3
E. Trinidad Ltd’s special appearance. ........................................................................4
SUMMARY OF ARGUMENT.....................................................................................................5
STANDARD OF REVIEW ...........................................................................................................6
ARGUMENT..................................................................................................................................8
I. Trinidad Ltd. is not subject to specific personal jurisdiction. ...............................8
A. Plaintiffs’ allegations do not establish specific personal jurisdiction..........9
1. Plaintiffs’ have the burden of proving parental control. ................. 9
2. Plaintiffs only allege negligence, and not Texas contacts. ........... 11
B. Trinidad Ltd. controverted Plaintiffs’ allegations......................................14
C. The evidence does not support the existence of specific personal jurisdiction. ................................................................................................15
1. Trinidad Ltd. has an employee with the job title, “top drive rig superintendent.” ............................................................................ 15
2. The “remedial action” email. ........................................................ 16
3. Rodney Forman............................................................................. 18
4. Trips to Texas & knowledge of Trinidad LP. ............................... 18
II. Trinidad Ltd. is not subject to general personal jurisdiction. .............................19
REQUEST FOR RELIEF ...........................................................................................................21
v
213232v.1 TABLE OF AUTHORITIES
CASE
11327 Reeder Road, Inc., 2013 WL 4478202 *5 (Tex. App. –Dal. 2013)..................................... 9
American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801 (Tex. 2002)........................................................................................................ 9
BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002)............................................................................... 6, 10, 11, 18, 19
Kelly v. Gen’l Interior Construction, Inc., 301 S.W.3d 653 (Tex. 2010 ....................................................................................................... 9
Knight Corp. v. Knight, 367 S.W.3d 715 (Tex. App. –Hou [14th Dist.] 2012) ............................................................. 19
Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005).............................................................................. 8, 11, 12, 13, 18
Moncrief Oil Int’. Inc. v. OSO Gazprom, 414 S.W.3d 142 (Tex. 2013)................................................................................................ 8, 16
PHC-Minden, LP v. Kimberly Clark Corp., 235 S.W.3d 163 (Tex. 2007).................................................................................................... 18
Tex. Civ. Prac. & Rem. Code §51.014(a)(7). ............................................................................... vii
Texas Labor Code § 408.001. ......................................................................................................... 1
RULES AND REGULATIONS Tex. R. Civ. P. 120a.3..................................................................................................................... 7
vi
213232v.1 STATEMENT REGARDING ORAL ARGUMENT
The facts and the law are clear. Oral argument will not assist the Court in deciding
this case.
vii
213232v.1 STATEMENT OF THE CASE
This is an interlocutory appeal of an order granting a special appearance
pursuant to Tex. Civ. Prac. & Rem. Code §51.014(a)(7).
The Appellants, Adelaida Salazar Batista et al. (“Plaintiffs”) sued Appellee
Trinidad Drilling Ltd. (“Trinidad Ltd.”) and several other defendants for the
wrongful death of Nabor Alvarado in the 170th Judicial District Court of Harris
County Texas, the Hon. Brent Gamble presiding.
Trinidad Ltd., a Canadian corporation headquartered in Canada, filed a
special appearance which the trial court granted on October 13, 2014 . CR 128.
Plaintiffs appeal that order.
viii
213232v.1 STATEMENT OF ISSUES PRESENTED I. Whether the trial court correctly determined that Trinidad Ltd., a
Canadian corporation with its principal place of business in Canada, is
not subject to specific personal jurisdiction, where:
A. Plaintiffs alleged that Trinidad Ltd. was negligent but did not
allege the existence of Texas contacts giving rise to their claim against
Trinidad Ltd.;
B. Trinidad Ltd. controverted Plaintiff’s jurisdictional allegations
through affidavit testimony; and
C. Plaintiffs did not present evidence of relevant jurisdictional
contacts between Trinidad Ltd. and Texas.
II. Whether the trial court correctly determined that Trinidad Ltd., a
Canadian corporation headquartered in Canada, is not subject to
general personal jurisdiction in Texas where:
A. Trinidad Ltd. presented controverted the existence of general
personal jurisdiction through affidavit testimony.
ix
213232v.1 B. Plaintiffs did not allege –and specifically disavow - any claim
that the Court should fuse Trinidad Ltd. with its indirect subsidiary,
Trinidad Drilling Limited Partnership (“Trinidad LP”) for the purpose
of determining jurisdiction; and
C. Uncontroverted evidence shows that Trinidad LP is in fact a
separate entity from Trinidad Ltd.
x
213232v.1 STATEMENT OF FACTS
A. The lawsuit.
Nabor Alvarado (“Alvarado”) died in an accident while working on a gas rig
owned by his employer, Trinidad LP. CR 35-38. At the time of the accident,
Alvarado was in the course and scope of his employment with Trinidad LP.
Trinidad LP is a subscriber under the Texas Worker’s Compensation Act. CR 37.
Plaintiffs sued Trinidad LP for exemplary damages based on gross
negligence pursuant to Texas Labor Code § 408.001. CR 36-37. Plaintiffs also
sued the manufacturers of the rig and rig equipment for product liability and
negligence. CR 36-39. Through their Second Amended Petition, Plaintiffs sued
Trinidad Ltd. for negligence. SCR 151-68.1
B. Trinidad Ltd. is a Canadian corporation headquartered in Canada that does not conduct business in Texas. Trinidad Ltd. is a Canadian corporation that is organized in Alberta, Canada.
Lane Aff. 2, CR 28. Trinidad Ltd. is not a direct owner of Alvarado’s employer,
1 Supplemental Clerk’s Record
213232v.1 Trinidad LP or its general or limited partners.2 CR 28-29 & 31. Trinidad Ltd. and
Trinidad LP are separated by a chain of four entities. Id.
Trinidad Ltd. does not conduct business in Texas. SCR 353. It does not
own property in Texas, does not have its own bank accounts in Texas, and does not
have a place of business in Texas. CR 29.
Trinidad Ltd. has established and invested in separate entities that conduct
business in the United States and South America. SCR 353-54. Trinidad LP is
one of these entities. Id.
C. Trinidad Ltd., and Trinidad LP are separate entities.
Trinidad LP and Trinidad Ltd. are separate and distinct entitites. CR29-30,
SCR 353-54. Each has its own directors, management and employees. Each entity
pays its own employees, taxes and expenses. Id. Trinidad Ltd. and Trinidad LP do
not commingle their funds. SCR 353-54. Transactions between Trinidad Ltd. and
Trinidad LP are documented. SCR 354.
Trinidad LP has its own assets. One such asset is the rig involved in the
accident. SCR 356. Trinidad LP purchased this rig directly from the manufacturer
2 Trinidad Drilling LLC, a Delaware Limited Liability Company, is the general partner of Trinidad LP. Trinidad Drilling USA Ltd., a Delaware corporation, is the limited partner.
213232v.1 in order to perform a drilling contract between it and Chesapeake Operating Co.
Id. This drilling contract is in evidence. Id. SCR 444-57. Under the contract,
Chesapeake agreed to pay Trinidad LP for its services and reimburse it for its
expenses in performing the contract, including the cost of transporting the rig to
Texas. Id. Trinidad LP financed its purchase of the rig through an inter-company
loan from Trinidad Ltd. CR 356.
D. Plaintiffs’ allegations against Trinidad Ltd.
Plaintiffs joined Trinidad Drilling Ltd in their Second Amended Petition.
They alleged only generally that Trinidad Ltd. conducts business in Texas. SCR
153.
In their third amended petition -the live petition at the time of judgment-
Plaintiffs alleged that Trinidad Ltd. was Trinidad LP’s parent and “exercised
ownership, control and took responsibility for overseeing safety policies and
procedures for the crews and on the drilling rigs” of Trinidad LP. 3rd Am. Pet.
¶4.07, CR 38. They alleged that Trinidad Ltd. knew of five incidents similar to the
one involving Alvarado. Id. at ¶4.08. And they alleged that Trinidad Ltd. was
“negligent in failing to properly oversee, instruct, train and/or supervise the safe
operation of rigging up the drilling rig.” Id. at ¶4.09.
213232v.1 E. Trinidad Ltd.’s special appearance.
Trinidad Ltd. filed a special appearance and negated the existence of
jurisdiction through two affidavits by Gavin Lane, its vice president for finance.
CR 14-31. SCR 353-58. Lane testified that Trinidad Ltd. lacks business contacts
with Texas: that it is not registered or authorized to conduct business in Texas,
does not have property or employees in Texas, does not maintain an office in
Texas, and does not directly market to the state. Id. Lane testified trips to Texas
by Trinidad Ltd. employees were made for the purpose of overseeing Trinidad
Ltd.’s startup and investment in Trinidad LP. Id. He also testified that Trinidad
Ltd. and Trinidad LP are separate and distinct entities.
The court granted Trinidad Ltd.’s special appearance through an order
signed on October 13, 2014. CR128-29.
213232v.1 SUMMARY OF ARGUMENT
The trial court correctly granted Trinidad Ltd.’s special appearance.
Plaintiffs argue that the trial court erred because they established limited
personal jurisdiction by alleging that Trinidad Ltd. negligently controlled and
oversaw Trinidad LP’s drilling operations. This is a thinly disguised attempt at
jurisdictional veil piercing. Plaintiffs did not present any evidence that Trinidad
LP is Trinidad Ltd.’s alter ego.
Nor did Plaintiffs allege (or prove) the existence of purposeful contacts
between Trinidad Ltd. and Texas that give rise to their claims. They allege only
that Trinidad Ltd. was negligent, and that this negligence caused an injury in
Texas. These allegations, without more, do not support specific personal
jurisdiction.
With Plaintiffs failing to make allegations that establish specific jurisdiction,
it was not Trinidad Ltd.’s burden to present evidence controverting the existence of
jurisdiction. Trinidad Ltd., nevertheless, did so. And Plaintiffs failed to present
evidence supporting the existence of specific personal jurisdiction.
213232v.1 Trinidad Ltd. is not subject to general personal jurisdiction in Texas.
Trinidad Ltd. negated the existence of general jurisdiction. And there is no
evidence that Trinidad Ltd. has a continuous and systematic presence in Texas.
For these reasons, this Court should affirm the trial court’s judgment.
STANDARD OF REVIEW
The applicable standard for reviewing the grant or denial of a special
appearance is well established. The appellate court conducts de novo review of the
trial court’s legal conclusions, and reviews findings of fact for legal and factual
sufficiency. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794
(Tex. 2002).
Plaintiffs urge the Court to depart from this standard by reviewing the trial
court’s implied factual findings de novo, drawing all inferences in favor of
jurisdiction. They argue that this standard should apply whenever the trial court
decides a special appearance without live testimony. This is both irrelevant and
incorrect.
First, it is irrelevant because it makes no difference in the outcome of this
case. None of the evidence cited by Plaintiffs supports an inference in favor of
213232v.1 Second, it is incorrect. Reviewing findings of fact de novo would strip the
trial court of its fact finding function in determining personal jurisdiction. Rule
120a contemplates that trial courts will determine special appearances primarily on
the basis of a paper record. The rule states: “the court shall determine the special
appearance on the basis of the pleadings, any stipulations . . . such affidavits and
attachments as may be filed by the parties, the results of discovery processes and
any oral testimony.” Tex. R. Civ. P. 120a.3.
Most special appearances are decided on the basis of a paper record. This is
because a defendant who is challenging the court’s authority to require his
appearance is unlikely to travel to Texas to testify in person at the special
appearance hearing. Hence, adopting Plaintiffs’ standard would mean that
appellate courts must re-determine the facts every time a special appearance is
appealed.
When the trial court decides a special appearance, it makes the threshold
determination of whether the defendant is subject to the court’s jurisdiction. This
is not a summary judgment on the merits. The standard of review urged by
Plaintiffs is incorrect.
213232v.1 ARGUMENT
I. Trinidad Ltd. is not subject to specific personal jurisdiction.
Purposeful availment is the “touch stone” for personal jurisdiction. This
means that personal jurisdiction only arises when there is “some act by which the
defendant purposefully avails itself of the privilege of conducting activities within
the forum state.” Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777,
778 (Tex. 2005) [hereinafter, Michiana].
Stated differently, the defendant must seek “some benefit, advantage or
profit by availing itself of the jurisdiction.” Id. A defendant’s mere knowledge
that the effects of its conduct -“the brunt of the injury-” might be felt in Texas is
not purposeful availment. Id. at 788.
Where the question is specific personal jurisdiction, purposeful contacts
alone are not enough. The plaintiff’s claims must arise from the defendant’s
purposeful contacts. Moncrief Oil Int’. Inc. v. OSO Gazprom, 414 S.W.3d 142,
156 (Tex. 2013).
Purposeful availment is a form of consent to suit within the state. Hence, a
nonresident who “purposefully structure[s] its transactions to avoid the benefits
and protections of the forum’s laws” may avoid submitting to jurisdiction.
213232v.1 American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 808 (Tex.
2002). One way for a party to accomplish this objective is to “use separate . . .
entities to conduct business in Texas.” Guarino v. 11327 Reeder Road, Inc., 2013
WL 4478202 *5 (Tex. App. –Dal. 2013, no pet.) (Mem. Op.)
Plaintiffs bore the initial burden of pleading allegations that, taken as true,
establish the existence of specific personal jurisdiction. Plaintiffs did not meet
their initial burden. Kelly v. Gen’l Interior Construction, Inc. 301 S.W.3d 653, 658
(Tex. 2010)
Nevertheless, Trinidad Ltd. did controvert the existence of personal
jurisdiction. And Plaintiffs evidence does not support specific personal
The trial court’s judgment, therefore, should be affirmed.
A. Plaintiffs allegations do not establish specific personal jurisdiction.
1. Plaintiffs’ have the burden of proving parental control.
Plaintiffs allege that Trinidad Ltd. controlled Trinidad LP’s activities and did
this in a negligent manner. They argue that these allegations alone establish
specific personal jurisdiction.
213232v.1 Plaintiffs deny that they are attempting to establish jurisdiction through veil
piercing. Yet this is precisely what they are attempting to accomplish. Plaintiffs’
allegations do not bring Trinidad Ltd. within the Court’s jurisdiction.
Texas law presumes that separate entities are indeed separate. Hence, a
party who attempts to establish jurisdiction by challenging the distinct existence of
a business entity must go beyond pleading and present evidence. BMC Software
Belgium, BV v. Marchand, 83 S.W.3d 789, 798 (Tex. 2002). [herinafter BMC
Software]. The plaintiff has the burden of showing that “the parent controls the
internal business operations and affairs of the subsidiary.” Id. at 799.
In an effort to avoid this presumption, Plaintiffs characterize their claim as
one for direct negligence by a corporate parent. This is a distinction without a
difference. Plaintiffs are still challenging Trinidad LP’s independence from
Trinidad Ltd. The presumption of independence should apply whether the
plaintiffs expressly challenge all aspects of independence or just one.
Accepting Plaintiffs’ gambit would allow parties to routinely circumvent the
presumption of corporate independence. A plaintiff would be able to hail a
corporate parent into Texas simply by alleging that the parent exercised improper
corporate control in a negligent manner.
213232v.1 Furthermore the purpose of jurisdictional veil piercing is to prevent fraud or
injustice. BMC Software, 83 S.W.3d at 799. There is no fraud or injustice in this
case.
Trinidad Ltd. exercised its right to structure its transactions to avoid
purposefully availing itself of the protections of Texas law. It accomplished this
objective by establishing a separate entity, Trinidad LP, that conducts business in
Texas. Trinidad LP employed Alvarado. Trinidad LP is answerable to Plaintiffs
in Texas. Indeed, according to Plaintiffs’ petition, Trinidad LP supplied Alvarado
with workers’ compensation insurance, thereby guaranteeing Plaintiffs a remedy.
CR 36-37.
2. Plaintiffs do not allege relevant Texas contacts.
Despite this, Plaintiffs would have the court impose jurisdiction based solely
on their allegation that Trinidad Ltd. committed negligence that caused an injury in
Texas. But specific personal jurisdiction does not arise from an allegation that the
effects of a defendant’s negligence are felt in Texas. Specific personal jurisdiction
arises from actual contacts between the defendant and Texas. Michiana, 168
S.W.3d at 791-92.
Plaintiffs do not allege the existence of a single contact between Trinidad
Ltd. and the state of Texas that gives rise to their claims. They argue instead that 11
213232v.1 they have supplied the required contacts by alleging that Trinidad Ltd.’s
negligence caused Alvarado’s death. Michiana demonstrates that Plaintiffs are
In Michiana, a Texas plaintiff attempted to establish personal jurisdiction
over an Indiana RV dealer by alleging that the dealer made misrepresentations over
the telephone. Michiana, 168 S.W.3d at 784. The Supreme Court categorically
rejected the attempt.
The Court held that personal jurisdiction only arises from the defendant’s
contacts with the state, and that state contacts are different from the commission of
a tort. The Texas contacts of a nonresident defendant are matters “of physical
fact,” the Court explained, whereas the commission of a tort turns on “what the
parties thought, said or intended.” Id. at 791.
The Court further explained that a rule permitting personal jurisdiction to
arise solely from a tort causes an injury in Texas incorrectly ties personal
jurisdiction to the merits of the plaintiff’s claim. Id. at 792. This approach
requires a nonresident who challenges jurisdiction to prove that he is not liable to
plaintiff. Id. This is not the correct focus of the jurisdictional inquiry, which turns
on the defendant’s contacts with the state:
213232v.1 Michiana . . . rightly focused its jurisdictional affidavits on a lack of contacts rather than lack of culpability. Jurisdiction cannot turn on whether a defendant denies wrongdoing –as virtually all will. Nor can it turn on whether a plaintiff merely alleges wrongdoing –again as virtually all will. If committing a tort establishes jurisdiction, our colleagues will have to decide who is correct –and then the Texas jurisdictional rule will be: guilty residents can be sued here, innocent ones cannot.
Id. at 791.
Plaintiffs advance the very argument that the Supreme Court rejected in
Michiana. They have not alleged the existence of a single contact between
Trinidad Ltd. and Texas that give rises to their claim.3 They argue instead that
their allegation that Trinidad Ltd. was negligent and supplies the state contacts.
Indeed, Plaintiff argue that the trial court was required to find jurisdiction
because they alleged that Trinidad Ltd. was negligent and “there can be no dispute
as to the merits of Plaintiffs’ claims at this stage of the proceeding.” Pls. Brief at
15. This is the precise opposite of what Michiana requires. In Michiana, the Court
placed the merits off limits because jurisdiction must arise from the defendant’s
Texas contacts, not from an alleged tort that causes an injury in Texas.
3 Plaintiffs made only the barest of allegations concerning Trinidad Ltd.’s presence in Texas, pleading only that Trinidad Ltd. “is a foreign corporation who has engaged in business in the State of Texas.” 3rd Am. Pet. ¶1.09, CR 34. Trinidad Ltd. controverted these allegations through Gavin Lane’s affidavits, filed in support of its Special Appearance. CR 14-31; SCR 3523-58.
213232v.1 Plaintiffs’ allegations do not support the existence of specific personal
jurisdiction over Trinidad Ltd. The trial court’s judgment should be affirmed.
B. Trinidad Ltd. controverted Plaintiffs’ allegations.
Plaintiffs’ allegations did not establish the existence of personal jurisdiction,
therefore Trinidad Ltd. was not required to controvert those allegations. But if the
Court disagrees, Trinidad Ltd. controverted any jurisdictional allegations by
presenting two affidavits from its vice president of finance, Gavin Lane. CR 14-
31, SCR 353-58.
Lane testified that Trinidad Ltd. and Trinidad LP are separate and distinct
entities and are operated as such. CR 28-30. The two entities do not share office
space, do not commingle funds or share bank accounts, file separate tax returns and
maintain separate accounting records. CR 29.
Lane explained that Trinidad Ltd. and Trinidad LP each have separate
boards, management and policies. SCR 354. He testified that Trinidad LP owns
the rig in question, having purchased it to perform a contract between it and
Chesapeake Oil. SCR 354.
213232v.1 Lane testified that Trinidad LP has its own employees, and pays those
employees. SCR 357. He testified that Trinidad LP has its own policies. SCR
357.
To the extent it was required to do so, Trinidad Ltd. met its burden of
controverting the existence of personal jurisdiction.
C. The evidence does not support the existence of specific personal jurisdiction. Because Plaintiffs failed to meet their initial pleading burden, the Court
should not need to reach Plaintiffs’ argument that the “great weight” of the
evidence supports jurisdiction. In actuality, Plaintiffs did not present any evidence
of jurisdiction. Each piece of evidence that Plaintiffs cite is discussed in turn.
1. Trinidad Ltd. has an employee with the job title, “top drive rig superintendent.” Plaintiffs cite two emails that identify an employee with the job title of “top
drive rig superintendent.” Pls. Brief at 18-19. They then leap to the conclusion
that “Trinidad Ltd. was involved in the oversight of Trinidad LP’s drilling
operations” and that Trinidad Ltd. had prior knowledge of similar accidents. Pls.
Brief at 19.
The existence of a “top drive rig superintendent” is not evidence of oversight
and knowledge. Plaintiffs present no evidence of this individual’s job 15
213232v.1 responsibilities, or that this individual controlled Trinidad LP’s activities. But
even if this was evidence of oversight and knowledge, Plaintiffs do not explain
how this would establish jurisdiction. See PHC Minden, L.P. v. Kimberly-Clark
Corp., 235 S.W.3d 163, 175-76.
Nor is the email referencing incidents of derrick strikes evidence of contacts
between Trinidad Ltd. and Texas. Even if evidence of prior knowledge were
relevant, the email is not such evidence. The email does not state when Trinidad
Ltd. acquired knowledge of the strikes, nor does it establish similarity to Plaintiffs’
accident.
2. The “remedial action” email.
Plaintiffs next cite Rodney Forman’s July 21, 2010 email concerning
remedial action plans. CR 79. They claim that this email somehow shows that
Trinidad Ltd. controlled “operational details of drilling operations and crews.”
This is not proof of such control. It is simply a report of Forman’s investigation
into the incident. Forman is Trinidad LP’s HSE manager, and he conducted the
investigation in that capacity. SCR 357-58. He then travelled to Canada and
shared his findings with Trinidad Ltd. Id.
Nor is the email evidence of contacts between Trinidad Ltd. and Texas. The
email post dates the accident. By definition it does not evidence Texas contacts 16
213232v.1 that give rise to Plaintiffs’ claims. Moncrief Oil Int’l, Inc. v. OSO Gazprom, 414
S.W.3d 142, 156 (Tex. 2013).
213232v.1 3. Rodney Forman.
Plaintiffs argue that Rodney Forman somehow subjects Trinidad Ltd. to
specific personal jurisdiction. This is incorrect.
Forman was employed by Trinidad LP, not by Trinidad Ltd. SCR 357.
And even if Trinidad Ltd. employed Forman, this still would not support specific
personal jurisdiction. There is no allegation or evidence that Forman’s acts or
negligence gives rise to Plaintiffs’ claims.
4. Trips to Texas & knowledge of Trinidad LP.
Finally, Plaintiffs cite trips to Texas by Trinidad Ltd. employees, and they
argue that Trinidad Ltd. knew about and supported Trinidad LP’s drilling
operations. This is an interesting argument given that Plaintiffs disavow an
attempt to establish jurisdiction through veil piercing. In any event, this is not
evidence of specific personal jurisdiction.
First, Plaintiffs’ claims did not arise from trips to Texas by Trinidad Ltd.
employees. There is no evidence or allegation that any trip touched on Alvarado or
the accident. Rather, the undisputed evidence shows that the trips were made for
the purpose of starting up and investing in Trinidad LP. SCR 357
213232v.1 Nor does Trinidad Ltd.’s purported “knowledge and support” of Trinidad
LP’s activities support limited personal jurisdiction. Personal jurisdiction requires
purposeful availment. Purposeful availment does not arise from mere knowledge.
Michiana, 168 S.W.3d at 784-85.
Trinidad Ltd. is not subject to specific personal jurisdiction. The trial
court’s judgment should be affirmed.
II. Trinidad Ltd. is not subject to general personal jurisdiction.
Nor is there general personal jurisdiction.
General jurisdiction exists only if the defendant’s contacts with Texas are
“continuous and systematic so that the forum may exercise personal jurisdiction
even if the lawsuit does not arise from or relate to activities conducted within the
forum state.” BMC Software 83 S.W.3d at 796. For general jurisdiction to arise,
the “defendant must be engaged in longstanding business in the forum state, such
as marketing or shipping products, or performing services or maintaining one or
more offices there.” PHC-Minden, LP v. Kimberly Clark Corp., 235 S.W.3d 163,
168 (Tex. 2007). Activities that are “less extensive” than this do not give rise to
general personal jurisdiction. Id.
213232v.1 Stated differently: “For a corporation, the paradigm forum for the exercise
of general jurisdiction is the place in which the corporation is fairly regarded as at
home.” Knight Corp. v. Knight, 367 S.W.3d 715, 727 (Tex. App. –Hou [14th Dist.]
2012, no pet.). Trinidad Ltd. is not at home in Texas.
Plaintiffs suggest that Trinidad Ltd. is subject to general jurisdiction in
Texas because it exercised control over Trinidad LP. Pls. Br. At 31-32. Plaintiffs,
in other words, seek to impute Trinidad LP’s jurisdictional contacts to Trinidad
Ltd. Plaintiffs did not plead jurisdictional veil piercing. Nor have they proved that
Trinidad Ltd., and Trinidad LP “cease to be separate so that the corporate fiction
should be disregarded to prevent fraud or injustice.” BMC Software, 83 S.W.3d at
799.
If it needs to be repeated, the evidence shows that the entities are separate.
The two entities have separate books and records, file separate tax returns, have
separate boards of directors, officers and employees, and have their own assets.
Nor is there fraud or injustice. Alvarado was employed by Trinidad LP.
Trinidad LP supplied him with worker’s compensation insurance. And Trinidad
LP is answerable to Plaintiffs in Texas.
None of the other evidence cited by Plaintiffs supports general personal
jurisdiction. Rodney Foreman is not employed by Trinidad Ltd.; he is employed 20
213232v.1 by Trinidad LP. SCR 357. And Trinidad Ltd. does not have a bank account in
Texas. The Texas Wells Fargo account that Plaintiffs cite is owned by Trinidad
LP. CR 356.
The evidence does not support existence of general jurisdiction. The trial
REQUEST FOR RELIEF
For the foregoing reasons, Trinidad Drilling Ltd. requests the Court to affirm
the trial court’s judgment and grant it all other relief to which it may be entitled.
/s/ Sean Higgins Sean Higgins Texas Bar No. 24001220 909 Fannin Street, Suite 3300 Houston, Texas 77010 Telephone (713) 353-2000 Facsimile (713) 785-7780
ATTORNEY FOR APPELLEE TRINIDAD DRILLING, LTD.
CERTIFICATE OF COMPLIANCE This document complies with the typeface requirements of Tex. R. App. P. 9.4(e) because it has been prepared in a conventional typeface no smaller than 14- point for text and 12-point for footnotes. This document also complies with the word-count limitations of Tex. R. App. P. 9.4(i), if applicable, because it contains 6,766 words, excluding any parts exempted by Tex. R. App. P. 9.4(i)(1). 21
213232v.1 /s/ Sean Higgins Sean Higgins
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document has been served via certified mail, return receipt requested on all counsel of record in compliance with the Texas Rules of Appellate Procedure on this 23rd day of March, 2015.
Geoffrey E. Shorr geoff@schorrfirm.com Texas Bar No. 24029828 A. Jared Aldinger Texas Bar No. 24068456 jared@schorrfirm.com SCHORR LAW FIRM, PC 328 W. Interstate 30, Suite 2 Garland, TX 75043 Tel. (972) 226-8860 Fax (972) 226-9787
Andrew P. McCormick Texas Bar No. 3457100 amccormick@mlm-lawfirm.com McCORMICK, LANZA & McNEEL, LLP 4950 Bissonnet Street Bellaire, TX 77401 Tel. (713) 523-0400 Fax (713) 523-0408
Justin K. Hall Texas Bar No. 90001828 jkhall@justinkhall.com The Law Offices of Justin K. Hall, P.C. 22
213232v.1 328 W. Interstate 30, Suite 2 Garland, TX 75043 Tel. (972) 226-1999 Fax (972) 226-2221
/s/ Sean Higgins Sean Higgins
213232v.1