Red Rocks Resources LLC v. Trident Steel Corporation

Filing 68

ORDER granting 40 Laguna Tubular Products Corporation's Motion to Dismiss North American Interpipe, Inc.'s Crossclaim; granting 39 Laguna Tubular Products Corporation's Motion to Dismiss Trident Steel Corporation's Third-Party Complaint; Laguna Tubular Products Corporation (third pty dft) and Laguna Tubular Products Corporation (Cross dft) terminated.. Signed by Honorable Robin J. Cauthron on 11/9/15. (lg)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
RED ROCKS RESOURCES L.L.C.,
d/b/a Red Rocks Oil and Gas
Operating, a Colorado Limited
Liability Company,
Plaintiff,
vs.
TRIDENT STEEL CORPORATION,
a Missouri corporation,
Defendant/Third-Party Plaintiff,
v.
LAGUNA TUBULAR PRODUCTS
CORPORATION, and NORTH
AMERICAN INTERPIPE, INC.,
Third-Party Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

Case No. CIV-14-0948-C

MEMORANDUM OPINION AND ORDER
Plaintiff sued Defendant Trident Steel Corporation (“Trident”) for an alleged failure
of oil field pipe. According to Plaintiff, after placing pipe purchased from Trident in a well,
the pipe failed and thereby caused harm to Plaintiff. In response to Plaintiff’s action, Trident
sued North American Interpipe, Inc. (“North American”) and Laguna Tubular Products
Corporation (“Laguna”) for their alleged roles in the pipe failure. North American then filed
a cross-claim against Laguna seeking indemnity. Laguna’s role in the matter was to accept
pipe that North American had purchased elsewhere, heat-treat it, inspect and thread it, and
then return it to North American. This process, as well as Laguna’s interaction with North

American, all occurred within the state of Texas. After being brought into the present action,
Laguna filed a Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(2), arguing the Court
lacks personal jurisdiction over it. After an initial round of briefing, the Court determined
that additional discovery was warranted and granted the parties additional time to conduct
that discovery.

The parties have completed their jurisdictional discovery and filed

supplemental briefs.
A court may exercise personal jurisdiction over a non-resident defendant only where
“minimum contacts” exist between the defendant and the forum state. See Benton v. Cameco
Corp., 375 F.3d 1070, 1075 (10th Cir. 2004). Personal jurisdiction may then be exercised
under either specific jurisdiction or general jurisdiction. General jurisdiction permits an
action against a defendant for any cause of action after a determination that the defendant’s
conduct in connection with the state was such that, despite any lack of physical presence, the
state’s exercise of sovereignty over it can be described as fair and just. Dudnikov v. Chalk
& Vermillion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008). On the other hand,
specific jurisdiction permits jurisdiction over a defendant specifically related to its activities
within the forum state.
Here, Trident and North American seek to impose personal jurisdiction over Laguna
under both theories. However, after examining the facts presented by these parties, the Court
finds that jurisdiction is not proper under either theory.
Before general jurisdiction exists, the plaintiff must make a prima facie showing that
the defendant is “essentially at home” in the forum state. Daimler AG v. Bauman, ___ U.S.
2

___, 134 S.Ct. 746, 760-61 (2014). In determining whether general jurisdiction exists, the
court considers (1) local office or agents, (2) regular sales trips to the forum state,
(3) advertisements, listings, or bank accounts in the forum state, and (4) the volume of
business conducted in the state. Kuenzel v. HTM Sport-Und Freizeitgerate AG, 102 F.3d
453, 457 (10th Cir. 1996). In seeking to meet these requirements, Trident asserts three facts
learned during jurisdictional discovery. First, Laguna has a business relationship and solicits
business from customers located in the state of Oklahoma; second, Laguna representatives
have traveled to Oklahoma to solicit business from customers in Oklahoma; and finally
Laguna has knowledge that its products are sold and used in Oklahoma. Trident’s arguments
overstate the reach of the supporting evidence. The evidence demonstrates that Laguna does
not have a local office or agent in Oklahoma and does not conduct regular sales trips to
Oklahoma. Rather, there have been two occasions in a four-year period during which
Laguna employees visited Oklahoma, and that was to visit the satellite of a Texas-based
prospective client regarding services or products to be provided in Texas. Laguna has never
sold a single product or service to an Oklahoma resident and does not advertise in this state.
While it has responded to unsolicited requests from certain potential customers seeking price
quotes, no sales occurred as a result of these e-mails or price quotes.
In Monge v. RG Petro-Mach. (Grp.) Co. Ltd., 701 F.3d 598, 620 (10th Cir. 2012), the
Tenth Circuit rejected a finding of general jurisdiction under facts more compelling than exist
here. In Monge, there was evidence of sales of at least four and possibly twelve rigs, eight
e-mails regarding those sales, and an e-mail from two other prospective clients in Oklahoma,
3

as well as sales trips to Oklahoma City to visit those prospective clients. The Tenth Circuit
found that those contacts were not sufficient to be continuous and systematic and thereby
support general personal jurisdiction. In accord with the reasoning applied in Monge, the
Court finds that neither Trident nor North American has established a prima facie showing
that general jurisdiction is appropriate in this case.
Laguna is also not subject to specific jurisdiction in Oklahoma. The Tenth Circuit has
specifically rejected allowing specific jurisdiction to be based upon contacts with the forum
state without a causal connection to the claim and the alleged injuries at issue. See
Dudnikov, 514 F.3d at 1078-79. Here, there is no evidence that the alleged injuries by Red
Rocks or to the well operated by Red Rocks which gave rise to this litigation arose from
actions Laguna took in the state of Oklahoma or directed at the state of Oklahoma. Rather,
the evidence clearly establishes that Laguna’s involvement arose from North American’s
request in the state of Texas to process pipe in the state of Texas and the subsequent redelivery of that pipe to North American in the state of Texas. Thus, any harm allegedly
caused by Laguna’s activities occurred within the state of Texas. Thus, the Court cannot
exercise specific personal jurisdiction over Laguna.
For the reasons set forth herein, Laguna Tubular Products Corporation’s Motion to
Dismiss Trident Steel Corporation’s Third-Party Complaint (Dkt. No. 39) and Laguna
Tubular Products Corporation’s Motion to Dismiss North American Interpipe, Inc.’s
Crossclaim (Dkt. No. 40) are GRANTED.

4

IT IS SO ORDERED this 9th day of November, 2015.

5