Pet-Ja, S.A. v. Shell Compania Argentina De Petroleo, S.A.

Opinion Issued March 6, 2003 In The Court of Appeals For The First District of Texas NO. 01-02-00661-CV ____________ PET-JA, S.A., Appellant V. SHELL COMPAÑIA ARGENTINA DE PETROLEO, S.A., Appellee On Appeal from the 295th District Court Harris County, Texas Trial Court Cause No. 2000-30800 MEMORANDUM OPINION This is an interlocutory, accelerated appeal by appellant, Pet-JA, S.A. (Pet-JA), from the trial court’s granting of a special appearance filed by appellee, Shell Compañia Argentina de Petroleo, S.A. (Shell CAPSA). See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7) (Vernon Supp. 2003). In 12 issues, we determine whether the trial court erred by granting Shell CAPSA’s special appearance as to Pet-JA’s intervention in the suit between Reef Exploration, Inc. (Reef) and Shell CAPSA. We affirm. Background This case involves the sale of stock in a company that had rights to explore and produce hydrocarbons in Argentina. On February 28, 1995, Reef entered into a “Participation Agreement” with Hinton Production Company (Hinton), W.B. Hinton Drilling Co., Inc., Hinton Argentina, S.A., and Pet-JA to obtain a 100% working interest for the exploration and subsequent production of hydrocarbons on the Rio Colorado Block in Argentina. Reef, a Texas corporation, assigned its interest to Reef Argentina, S.A. (RASA), an Argentine subsidiary of Reef. All of the revenue interest was transferred to RASA. In October 1996, Compañia General de Combustibles, S.A. (CGC) entered into a joint venture with RASA in the Rio Colorado Block. On October 22, 1996, Pet-JA, Reef, RASA, CGC, and others amended the Participation Agreement, granting CGC a 45% working interest in the Rio Colorado Block. In May 1998, Pet-JA entered into an option agreement with CGC, whereby Pet-JA obtained the option to acquire 5% of CGC’s 45% participating interest in the Rio Colorado Block. In November 1997, CGC and RASA discussed bringing in additional parties to bear the substantial cost of developing the Rio Colorado Block. In December 1997, CGC informed Reef and RASA that Shell CAPSA was interested in the Rio Colorado Block. The parties decided to solicit offers from all interested companies. On March 23, 1998, Shell CAPSA submitted its initial, non-binding bid of $200 million for RASA’s 55% participating interest. Meanwhile, in early 1998, CGC was negotiating with Pet-JA to purchase Pet-JA’s option to buy 5% of CGC’s working interest in the Rio Colorado Block. On April 23, 1998, Pet-JA and CGC entered into an option purchase agreement granting CGC the option to purchase Pet-JA’s 5% option for “no less than” $750,000. The agreement provided that if any other company made an offer for Pet-JA’s option higher than $850,000, Pet-JA would receive an additional payment from CGC equal to 60% of the difference between $850,000 and the offer made. On May 29, 1998, Shell CAPSA submitted its final offer for a 55% participating interest in the Rio Colorado Block. In August 1998, CGC and Reef substituted CGC’s subsidiary, CGC Internacional Corp. (CGC-IC), a Panamanian corporation, as the purchaser of the RASA stock. On August 5, 1998, CGC-IC and Shell CAPSA executed a stock-purchase agreement. On August 14, 1998, CGC-IC exercised its option to purchase Reef’s shares in RASA. Reef transferred the shares and was paid the agreed price of $48.5 million. On August 20, 1998, CGC informed Reef that Shell CAPSA had purchased RASA’s stock from CGC-IC for $186 million. On August 24, 1998, CGC-IC and Shell CAPSA completed the transaction. Reef sued CGC and Shell CAPSA for fraud. Reef contended that CGC had made misrepresentations to Reef, inducing Reef to sell its stock for less than market value. Shell CAPSA contended that it was unaware of any fraud and that it purchased the shares from CGC-IC with the understanding that Reef had approved such a sale. In its original petition, Reef alleged that Shell CAPSA had done, and was continuing to do, business in Texas. Shell CAPSA filed a special appearance, claiming that the trial court had no personal jurisdiction over it. The trial court denied the special appearance, and Shell CAPSA timely filed its notice of interlocutory appeal. That appeal was assigned cause number 01-01-01008-CV. Pet-JA then filed a petition to intervene into the Reef/Shell CAPSA suit, which petition alleged claims of statutory fraud, common law fraud, aiding and abetting a breach of fiduciary duty, and conspiracy against Pet-JA. Pet-JA contended that Shell CAPSA had entered into a conspiracy with CGC whereby CGC had induced Pet-JA to sell its option at a less-than-favorable price so that Shell CAPSA and CGC could obtain exclusive control over the working interest in the Rio Colorado Block. In response, Shell CAPSA filed a special appearance, claiming that the trial court had no personal jurisdiction over it in relation to Pet-JA’s intervention claims. The trial court granted the special appearance, and this interlocutory, accelerated appeal ensued. The trial court issued findings of fact and conclusions of law in support of its granting of Shell CAPSA’s special appearance and incorporated all of its previous findings of fact from the first special appearance filed by Shell CAPSA with regard to Reef’s claims. On August 29, 2002, in appellate cause number 01-01-01008-CV, this Court reversed the trial court’s denial of Shell CAPSA’s special appearance in the Reef suit, holding that the trial court had no personal jurisdiction over Shell CAPSA and rendered a judgment dismissing the case against Shell CAPSA. See Shell Compañia Argentina de Petroleo, S.A. v. Reef Exploration, Inc., 84 S.W.3d 830 (Tex. App.—Houston [1st Dist.] 2002, pet. filed). Standard of Review and Burden of Proof The defendant must negate all possible grounds for personal jurisdiction in order to prevail on a plea to the jurisdiction. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002). Existence of personal jurisdiction is a question of law, but the resolution of underlying factual disputes must sometimes precede that determination. Preussag Aktiengesellschaft v. Coleman, 16 S.W.3d 110, 113 (Tex. App.—Houston [1st Dist.] 2000, pet. dism’d w.o.j.). If a trial court makes findings of fact and conclusions of law, we may review the fact findings for legal and factual sufficiency. BMC Software, 83 S.W.3d at 794. If there is more than a scintilla of evidence to support the finding, the no-evidence challenge fails. Id. at 795. We reverse the ruling for factual insufficiency of the evidence only if the ruling is so against the great weight and preponderance of the evidence as to be manifestly erroneous or unjust. Minucci v. Sogevalor, S.A., 14 S.W.3d 790, 794 (Tex. App.—Houston [1st Dist.] 2000, no pet.). We review de novo the trial court’s legal conclusions based on the findings of fact to determine their correctness. BMC Software, 83 S.W.3d at 794. Personal Jurisdiction A Texas court may assert personal jurisdiction over a non-resident defendant only if the requirements of both the United States Constitution and the Texas long-arm statute are satisfied. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 1872 (1984); CSR, Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. 1996). The Texas long-arm statute allows a Texas court to exercise personal jurisdiction over a non-resident defendant who does business in Texas. Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon 1997). The Texas long-arm statute reaches as far as the federal and state constitutional guarantees of due process allow. Garner v. Furmanite Australia Pty., Ltd., 966 S.W.2d 798, 802 (Tex. App.—Houston [1st Dist.] 1998, pet. denied). Therefore, “the requirements of the Texas long-arm statute are satisfied if the exercise of personal jurisdiction comports with federal due process limitations.” CSR, 925 S.W.2d at 594. The due process clause permits a state to exert personal jurisdiction over a non-resident defendant only if the defendant has some minimum, purposeful contacts with the state and the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice. Dawson-Austin v. Austin, 968 S.W.2d 319, 326 (Tex. 1998). A non-resident who has purposely availed himself of the privileges and benefits of conducting business in Texas has sufficient contacts with the forum to confer personal jurisdiction over it. CSR, 925 S.W.2d at 594; Garner, 966 S.W.2d at 803. However, a defendant should not be subject to the jurisdiction of a Texas court based upon random, fortuitous, or attenuated contacts. CSR, 925 S.W.2d at 595. A non-resident defendant must have purposely established such minimum contacts with the forum that it could reasonably anticipate being sued there. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76, 105 S. Ct. 2174, 2183-84 (1985). The “[m]inimum-contacts analysis is further divided into general and specific personal jurisdiction.” Coleman, 16 S.W.3d at 114. To negate general personal jurisdiction, a defendant must show its contacts in Texas were not continuous and systematic. Id. To support a finding of general personal jurisdiction, the defendant’s forum activities must have been “substantial,” which finding requires stronger evidence of contacts than for specific personal jurisdiction. Id. The minimum contacts analysis for specific personal jurisdiction focuses on the relationship between the defendant, the forum, and the litigation. Mem’l Hosp. Sys. v. Fisher Ins. Agency, Inc., 835 S.W.2d 645, 650 (Tex. App.—Houston [14th Dist.] 1992, no writ). Specific personal jurisdiction is established if the defendant’s alleged liability arises from, or is related to, an activity conducted within the forum. Guardian Royal Exch. Assurance Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 227 (Tex. 1991). The defendant’s contacts must have been “purposely directed” at the forum and must have had a “substantial connection” that resulted in the alleged injuries. Id. at 226 (citing Burger King, 471 U.S. at 462, 475-76, 105 S. Ct. at 2182, 2183-84) (Stevens, J. concurring); see also Brown v. Gen. Brick Sales Co., Inc., 39 S.W.3d 291, 294 (Tex. App.—Fort Worth 2001, no pet.); Mem’l Hosp. Sys., 835 S.W.2d at 650. “Although not a separate component, foreseeability is an important consideration in determining whether a non-resident’s ties to a forum create a substantial connection.” See MTIS Ltd. v. Corporacion Interamericana de Entretenemiento S.A. de C.V., 64 S.W.3d 62, 67 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (citing C-Loc Retention Sys., Inc. v. Hendrix, 993 S.W.2d 473, 477-78 (Tex. App.—Houston [14th Dist.] 1999, no pet.). Merely contracting with a Texas corporation does not satisfy the minimum contacts requirement. TeleVentures, Inc. v. Int’l Game Tech., 12 S.W.3d 900, 910 (Tex. App.—Austin 2000, pet. denied). Prior negotiations, contemplated future consequences, the terms of a contract, and the parties’ course of dealing must be considered in determining whether the defendant purposely established minimum contacts within the forum. Id. Special Appearance and Separate Jurisdictional Analysis In its first through ninth issues, Pet-JA contends that the trial court erred by conducting a separate jurisdictional analysis before granting Shell CAPSA’s special appearance as to Pet-JA’s intervention claims. A. Are Pet-JA’s Claims Severable? Pet-JA first argues that the trial court erred by conducting a separate jurisdictional analysis before granting Shell CAPSA’s special appearance because it claims there is no “legal authority authorizing or supporting the trial court’s separate jurisdiction evaluation over Shell CAPSA in connection with Reef’s claims.” Although Pet-JA does not mention this rule, we note that the Rules of Civil Procedure allow a party may make a special appearance as to an entire proceeding or as to any severable claim. See Tex. R. Civ. P. 120a(1). Shell CAPSA filed a separate special appearance as to Pet-JA’s intervention claims against Shell CAPSA. Therefore, before the trial court could grant Shell CAPSA’s special appearance with regard to Pet-JA’s claims, it implicitly had to conclude that those claims were severable. A claim is severable if (1) the controversy involves more than one cause of action, (2) the severed claim is one that would be the proper subject of the lawsuit if independently asserted, and (3) the severed claim is not so interwoven with the remaining action that it involved the same facts and issues. Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990). We review the trial court’s implied finding on severability for abuse of discretion. See id. The initial lawsuit involved Reef’s claims against Shell CAPSA relating to the stock-purchase transaction and Reef/RASA’s sale of their 55% participating interest in the Rio Colorado Block to CGC. Pet-JA intervened, asserting claims against Shell CAPSA of statutory fraud, common law fraud, aiding and abetting a breach of fiduciary duty, and conspiracy and arguing that Shell CAPSA had entered into a conspiracy with CGC to obtain exclusive control of the participating interest in the Rio Colorado Block. Pet-JA claims that it would not have sold its 5% option had it known of Shell CAPSA’s March 23, 1998 non-binding offer. Pet-JA’s claims were severable. First, Pet-JA and Reef asserted one or more claims separate and distinct from each other. Second, Pet-JA’s claims were the proper subject of an independently asserted lawsuit because its claims were capable of being brought as a separate suit with a separate final judgment. See Martinez v. Humble Sand & Gravel, Inc., 875 S.W.2d 311, 312 (Tex. 1994), aff’d sub nom, 974 S.W.2d 31 (Tex. 1998). Third, although Pet-JA’s claims against Shell CAPSA involved many of the same parties and the same hydrocarbon concession as were involved in the rest of the suit, Pet-JA’s claims were not so interwoven with Reef’s claims that they involved the same facts and issues. Reef’s suit alleged liability arising out of an option agreement between Reef and CGC under which CGC purchased Reef/RASA’s 55% working interest and later transferred this interest to Shell CAPSA. Pet-JA’s intervention involved claims relating to a separate option agreement between CGC and Pet-JA, under which agreement CGC purchased Pet-JA’s option to buy 5% of CGC’s 45% working interest. This 5% interest was not later transferred to Shell CAPSA, but was retained by CGC. Both option agreements were executed and exercised on different dates and involved separate and distinct facts, benefits, duties, and liabilities. See In re Hoover, Bax & Slovacek, L.L.P., 6 S.W.3d 646, 652 (Tex. App.—El Paso 1999, no pet.) (holding contract claims severable when separate, unrelated, and not controlled by same facts and issues); Nicor Exploration Co. v. Florida Gas Transmission Co., 911 S.W.2d 479, 482 (Tex. App.—Corpus Christi 1995, writ denied) (finding contract claims not severable when they are identical and involve same facts and issues). Therefore, we cannot say that the trial court abused its discretion by implicitly concluding as part of its rule 120a(1) analysis that Pet-JA’s claims were severable. B. Was the Trial Court Required to Follow Federal Law? Pet-JA also argues that the trial court should have looked to the federal courts for analogous guidance on whether to conduct a separate jurisdictional evaluation as to Pet-JA’s intervention. Pet-JA argues that, because federal law does not permit the trial court to separate the plaintiff’s and the intervenor’s claims against the same defendant in determining personal jurisdiction over the defendant, the trial court should not have conducted a separate jurisdictional evaluation. See 28 U.S.C. § 1367 (2002) (stating that supplemental jurisdiction does not permit a separate jurisdictional evaluation of an intervention); IUE AFL-CIO Pension Fund v. Hermann, 9 F.3d 1049, 1056 (2nd Cir. 1993) (holding that pendent jurisdiction does not require a separate jurisdictional evaluation of an intervention). Pet-JA, however, has offered no authority to support its argument that the trial court is bound by federal standards, particularly because there are no jurisdictional equivalents in Texas that correspond to the federal doctrines of supplemental and pendent jurisdiction upon which the relied-upon federal rule rests. We hold that the trial court did not err by conducting a separate jurisdictional analysis with regard to Pet-JA’s intervention claims before granting Shell CAPSA’s special appearance. We overrule Pet-JA’s first through ninth issues. Special Appearance and Factual SufficiencyIn its tenth through twelfth issues, Pet-JA contends that the trial court erred by finding that it did not have jurisdiction over Pet-JA’s intervention claims against Shell CAPSA. Pet-JA argues that there is factually insufficient evidence to support the trial court’s fact findings and legal conclusion that Shell CAPSA’s purchase of Reef’s 55% interest in the Rio Colorado Block was a transaction separate and distinct from the transaction in which CGC purchased Pet-JA’s option to buy 5% of CGC’s working interest in the Rio Colorado Block. Pet-JA also claims that the trial court’s fact findings one through eight establish that Shell CAPSA’s contacts with Texas relating to its purchase of Reef’s 55% interest were part of a larger conspiracy by Shell CAPSA to obtain exclusive ownership of the working interest in the Rio Colorado Block. For this reason, Pet-JA argues that the trial court had both specific and general personal jurisdiction over Shell CAPSA as to Pet-JA’s intervention claims. A. Specific Personal Jurisdiction To support its argument that the trial court had specific personal jurisdiction over Shell CAPSA, Pet-JA relied on (1) the February 28, 1995 Participation Agreement and the October 22, 1996 Amendment and Clarification of the Participation Agreement, both of which included a Texas choice-of-law provision; (2) the August 18, 1998 CGC/Shell CAPSA stock-purchase agreement and due diligence relating to that transaction; and (3) CGC and Shell CAPSA’s alleged conspiracy to obtain exclusive ownership of the participating interest in the Rio Colorado Block. 1. Participation Agreement and Amendment to the Participation Agreement Pet-JA first argues that specific personal jurisdiction was supported by the February 28, 1995 Participation Agreement between Pet-JA and Reef and the October 22, 1996 Amendment and Clarification of Participation Agreement, which gave CGC a 45% participating interest in the Rio Colorado Block, and both of which included a Texas choice-of-law provision. Pet-JA argues that because Shell CAPSA was the assignee, or successor-in-interest, of these agreements, these agreements subject Shell CAPSA to personal jurisdiction in Texas. However, this agreement is not related to Pet-JA’s sale of its 5% option, which is the basis of Pet-JA’s intervention claims against Shell CAPSA. Further, Shell CAPSA’s status as assignee of these agreements is not sufficient to establish specific personal jurisdiction as to Pet-JA’s intervention claims. See Old Kent Leasing Serv. Corp. v. McEwan, 38 S.W.3d 220, 230 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (holding that lease assignee’s contacts with plaintiff were insufficient to subject assignee to personal jurisdiction because assignee was not Texas resident and nothing in lease required assignee to provide any Texas-based goods or services). Therefore, Pet-JA could not rely on either of these agreements to support specific personal jurisdiction. 2. CGC/Shell CAPSA Stock-Purchase Agreement and Related Due Diligence Pet-JA next argues that specific personal jurisdiction was supported by the August 18, 1998 CGC/Shell CAPSA stock-purchase agreement, which involved the sale of CGC’s 55% participating interest to Shell CAPSA, and the due diligence relating to this agreement. However, like the participation agreement and amendment to the participation agreement, this transaction was not related to Pet-JA’s sale of its 5% option, which was the basis of its intervention. Therefore, Pet-JA could not rely on the stock-purchase agreement or related due diligence to support specific personal jurisdiction. 3. Alleged Conspiracy Between CGC and Shell CAPSA Finally, Pet-JA argues that specific personal jurisdiction was supported by an alleged conspiracy between CGC and Shell CAPSA to obtain exclusive ownership of the participating interest in the Rio Colorado Block. Pet-JA claims that CGC and Shell CAPSA entered into a scheme called “Project Gold,” in which CGC and Shell CAPSA conspired together to obtain exclusive ownership of the participating interest in the Rio Colorado Block. Texas courts have declined to recognize the assertion of personal jurisdiction over a non-resident defendant based solely upon the effects or consequences of an alleged conspiracy with a resident in the forum state. Nat’l Indus. Sand Assoc. v. Gibson, 897 S.W.2d 769, 773 (Tex. 1995); see Schroeder v. Valdez, 941 S.W.2d 312, 314-15 (Tex. App.—Corpus Christi 1997, no writ). The acts of an alleged conspirator cannot be imputed to its co-conspirator so as to render the co-conspirator amenable to suit in Texas. Id. Instead, we must restrict our inquiry to whether Shell CAPSA itself purposefully established minimum contacts such as would satisfy due process. See Gibson, 897 S.W.2d at 773. To establish specific personal jurisdiction, Pet-JA relied on a letter from CGC to Shell CAPSA dated May 7, 1998, discussing CGC’s purchase of Reef’s participating interest in the Rio Colorado Block. In this letter, Mark Patterson, CGC’s Chief Executive Officer, wrote, “Assuming that CGC and Shell go forward with the above described joint venture, we consider the optimal configuration of the Rio Colorado consortium to be one of CGC and Shell, exclusively.” (Emphasis added.) Further, Pet-JA relied on documents obtained from CGC’s investment advisors, Violy, Byorum & Parters Holding, L.L.C. (Violy), allegedly showing that Violy conceived of a plan dubbed “Project Gold” on behalf of CGC and Shell to facilitate CGC and Shell CAPSA’s obtaining exclusive ownership of the participating interest in the Rio Colorado Block. However, none of these communications was made by Shell CAPSA or its agents. Pet-JA did not produce evidence of any action committed in or purposely directed at Texas by Shell CAPSA—as opposed to Shell—in furtherance of an alleged conspiracy with CGC to obtain exclusive control over the participating interest in the Rio Colorado Block. Further, Pet-JA admitted that Shell CAPSA and its agents had made no misrepresentations to Pet-JA in Texas. Therefore, we hold that the trial court did not err by concluding that Shell CAPSA did not have sufficient contacts with Texas to establish specific personal jurisdiction as to Pet-JA’s intervention claims. B. General Personal Jurisdiction To support its argument that the trial court had general personal jurisdiction over Shell CAPSA with regard to Pet-JA’s intervention claims, Pet-JA argues that Shell CAPSA’s contacts with Texas were continuous and systematic because (1) Shell CAPSA had purchased certain goods and services in Texas, including petrochemical and other industrial products, as well as stevedoring and shipping services and (2) Shell CAPSA had retained and paid for legal services of Texas law firms for matters unrelated to the defense of this lawsuit. “[M]ere purchases, even if occurring at regular intervals, are not enough to warrant a [s]tate’s assertion of in personam jurisdiction over a non-resident corporation in a cause of action not related to those purchase transactions.” Hall, 466 U.S. at 418, 104 S.Ct. at 1874; Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 808 (Tex. 2002) (quoting Hall, 466 U.S. at 418, 104 S.Ct. At 1874). Therefore, Pet-JA could not rely on Shell CAPSA’s purchases in Texas as the basis of general personal jurisdiction because these purchases were not related to this lawsuit. Further, Shell CAPSA’s retention of Texas law firms for matters unrelated to the defense of this lawsuit did not amount to substantial or systematic and continuous contact with Texas. See Preussag, 16 S.W.3d at 126 (concluding that defendant’s retention of Houston law firm did not establish general personal jurisdiction in Texas). Therefore, we hold that the trial court did not err in concluding that Shell CAPSA did not have a substantial connection with Texas so as to establish general personal jurisdiction. We hold that the trial court’s fact findings and legal conclusions that it ad no personal jurisdiction over Shell CAPSA was not so against the great weight and preponderance of the evidence as to be manifestly erroneous or unjust. We overrule Pet-JA’s tenth through twelfth issues. Conclusion We affirm the trial court’s order granting Shell CAPSA’s plea to the jurisdiction. /s/ Tim Taft Justice Panel consists of Justices Taft, Nuchia, and Higley.