Grynberg Production Corp. v. British Gas, P.L.C.

867 F. Supp. 1278, 1994 U.S. Dist. LEXIS 16536, 1994 WL 651907
CourtDistrict Court, E.D. Texas
DecidedNovember 15, 1994
Docket1:94-cv-00485
StatusPublished

This text of 867 F. Supp. 1278 (Grynberg Production Corp. v. British Gas, P.L.C.) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grynberg Production Corp. v. British Gas, P.L.C., 867 F. Supp. 1278, 1994 U.S. Dist. LEXIS 16536, 1994 WL 651907 (E.D. Tex. 1994).

Opinion

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION TO REMAND

SCHELL, Chief Judge.

Before this court is Plaintiffs’ Motion to Remand, filed on September 8, 1994. After this court granted an agreed motion to seal the parties’ exhibits, Defendants’ response was timely filed on October 13, 1994. 1 A reply thereto was filed on November 3,1994, and a “counter-reply” was filed on November 14, 1994. Upon consideration of the motion, responses, and attached exhibits and memo-randa of law, the court is of the opinion that the motion should be GRANTED.

BACKGROUND

The case underlying this removal battle is an involved and complicated dispute between Western corporations over rights to develop mineral resources located in the Republic of Kazakhstan. The weapons in this removal fight are the mountains of briefs and affidavits. The ammunition includes fraudulent joinder, procedural hurdles for removal, Texas choice of law principles, Texas tort law, Kazakhi tort law (and translations thereof), federal question jurisdiction over state law claims presenting a federal issue, federal common law governing international relations, the “act of state doctrine,” and the Erie doctrine.

Grynberg Production Corp. v. British Gas, P.L.C., 817 F.Supp. 1338, 1341-42 (E.D.Tex.1993) (First Grynberg). The battle continues.

Plaintiffs, having lost the above-described skirmish, returned to the field shortly thereafter, with mixed results, in Grynberg Production Corp. v. British Gas, P.L.C., 149 F.R.D. 135 (E.D.Tex.1993) (Second Gryn-berg). Again denied remand in that decision, Plaintiffs chose to voluntarily dismiss their complaint without prejudice. Id. at 139.

There was not much peace in the valley:

This court has received four Grynberg cases [in two sets,] all based on the same facts. 1:93-CV-159 and 1:93-CV-195 were remanded.[ 2 ] 1:92-CV-496 and L93-CV-169 were successfully removed. [First Grynberg]. 1:92-CV-496 was voluntarily dismissed. [Second Grynberg ]. After seeking a series of continuances in 1:93— CV-169, the parties informed the court that they had settled that case. An agreed judgment ordering dismissal with preju *1280 dice was entered in 1:93-CV-169.[ 3 ] One week later, Plaintiffs amended their pleadings in the two state court actions (the former 1:93-CV-159 and 1:93-CV-195), disposing of the old claims and alleging in their place claims for breach of the settlement agreement.
The defendants removed again to this court. The alleged bases for removal jurisdiction are diversity jurisdiction and jurisdiction based on the court’s “inherent power” to enforce the judgment entered in 1:93-CV-169.

February, 1994 Memorandum Opinion Granting Plaintiffs’ Motion to Remand Cases 1:93— CV-561 and l:93-CV-562, at 1-2 (Third Grynberg) (attached hereto as Appendix “A”).

Like the proverbial “bad penny”, this dispute once again turns up in this court as Fourth Grynberg. Though military only through metaphor, the similarities continue— for, as during the pendency of any protracted campaign, the passage of time has allowed the fabrication of different and more sophisticated weapons. Defendants’ “heavy artillery” this time is the Convention on Recognition and Enforcement of Foreign Arbitral Awards, 21 U.S.T. 2517, reprinted at 9 U.S.C. § 201 et seq.

FACTS

Critical to the so-called “settlement” which the parties announced in conjunction with 1:93-CV-169 is a certain six-page “settlement communication” dated July 19, 1993, and' signed by Plaintiffs and British Gas (“BG”). Although the document has been placed under seal by this court, it may be fairly said that it is a multi-faceted agreement. Unlike some settlements — which consist of little more than a core promise to pay a sum certain buried within paragraphs of release-type legal boilerplate — the instant (single-spaced) agreement addresses a number of issues peculiar to the petroleum exploration and production industry.

The “settlement communication” is printed under Plaintiffs’ letterhead, 4 and reads in part:

Please acknowledge that this correctly reflects our entire agreement with respect to the subject matter hereof by signing this letter in the space provided below and returning a signed copy. Of course, if there are any changes you wish to discuss, please call me [Jack Grynberg] immediately or have your attorneys call ours. Meanwhile, your attorneys should commence drafting the necessary additional documents and submit them to our counsel for comment as soon as possible. We are hopeful that all the necessary paperwork can be completed and signed within the next thirty days.

“Settlement Communication” at 5. This agreement was indeed signed by the parties, and it is not disputed that there is no mention whatsoever of arbitration therein.

The first reference to arbitration appears in an unsigned revised “settlement communication” sent by BG to Plaintiffs on July 24, 1993. 5 This proposal adds to the previously agreed-to terms a suggestion that the following sentence be included: “All disputes arising under this letter agreement or the Settlement Agreement shall be settled by a mutually acceptable expert or submitted to arbitration.” Unsigned Proposed Revised Settlement Agreement dated July 24, 1993, at 6. In its response, Plaintiffs suggested that the parties concentrate on drafting a separate, global Final Settlement Agreement instead of attempting to amend the “settlement communication” in a piecemeal fashion. Plaintiffs also wrote that:

*1281 The arbitration idea is very sensible, although we’ll wish to explore venue and applicable rules in the definitive agreement drafting.

July 26, 1993 Letter from Plaintiffs’ counsel to BG counsel at 3.

By September 22,1993, there existed a 55-page proposed Settlement Agreement drafted by BG. Sections 10.02 and 10.04 of that agreement included a broad-form arbitration provision looking to UNCITRAL Arbitration Rules and envisioning a Stockholm, Sweden site and the use of Swedish substantive law. 6 Plaintiffs agreed to review the document and submit any proposed changes. During this time, however, notes of dissension began to ominously appear within the parties’ communications. 7

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867 F. Supp. 1278, 1994 U.S. Dist. LEXIS 16536, 1994 WL 651907, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grynberg-production-corp-v-british-gas-plc-txed-1994.