Chappell v. Precision Drilling Corporation et al

Filing 29

MEMORANDUM (Order to follow as separate docket entry) re 3 MOTION to Dismiss for Lack of Jurisdiction filed by Precision Drilling Corporation Signed by Honorable Julia K Munley on 6/3/24. (sm)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
JUSTINA CHAPPELL as
Administer of the ESTATE OF
DEL YLE WALTER CHAPPELL,
Deceased,
Plaintiff

No. 3:23cv604
(Judge Munley)

V.

PRECISION DRILLING
CORPORATION; PRECISION
DRILLING COMPANY, LP; CABOT
OIL & GAS CORPORATION;
COTERRA ENERGY, INC. f/k/a
CABOT OIL & GAS CORPORATION;
and FORUM ENERGY
TECHNOLOGIES,
Defendants
MEMORANDUM

Before the court is Defendant Precision Drilling Corporation's motion to
dismiss for lack of personal jurisdiction filed pursuant to Federal Rule of Civil
Procedure 12(b )(2). Having been fully briefed, this matter is ripe for disposition.
Background

This is a negligence and products liability action arising out of the death of
Delyle Walter Chappell at a Marcellus Shale natural gas drilling site near
Montrose, Pennsylvania. (See Doc. 1-1 , State Court Campi.). As alleged,
Chappell died on April 21, 2021 at approximately 1:30 AM while working at the

drilling site after he was struck by 40-foot-long pipe when a piece of heavy
equipment malfunctioned. (~

,m 54-64).

Per plaintiff, Defendants Cabot Oil & Gas Corporation and Coterra Energy,
Inc. (collectively "Coterra") constructed and owned the drilling site and contracted
with Defendants Precision Drilling Corporation and Precision Drilling Company ,
LP for those defendants to be the "drilling manager, construction manager, prime
contractor and/or general contractor" for the site, including the work being
performed by Chappell. (~

,m 30-31 ).

Plaintiff's complaint refers to Precision

Drilling Corporation and Precision Drilling Company, LP collectively as "Precision
Drill ing. " (~ ,I 31 ). Plaintiff avers that the operator of the equipment transporting
the pipe did so under the direction and control of Coterra and Precision Drilling.

(~ ,I 64).
On March 10, 2023, Chappell 's widow and administrator of his estate,
Plaintiff Justine Chappell , filed suit in the Lackawanna County Court of Common
Pleas. Defendants Precision Drilling Corporation and Precision Drilling Company,
LP then removed this matter on April 10, 2023 , based on the parties' diversity of
citizenship and because the amount in controversy exceeds $75,000. (Doc. 1).
On April 17, 2023, Precision Drilling Corporation filed the instant motion to

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dismiss for lack of personal jurisdiction.

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(Doc. 3). This matter is ripe for a

decision.
Legal Standard

Precision Drilling Corporation challenges personal jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2) and moves to dismiss all claims brought
against it. "To survive a motion to dismiss for lack of personal jurisdiction , a
plaintiff bears the burden of establishing the court's jurisdiction over the moving
defendants. " Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.
2004)(citing Pinker v. Roche Holdings Ltd ., 292 F.3d 361 , 368 (3d Cir. 2002)).
Under circumstances where the court does not conduct an evidentiary hearing on
the motion, "the plaintiff need only establish a prima facie case of personal
jurisdiction and the plaintiff is entitled to have [her] allegations taken as true and
all factual disputes drawn in [her] favor. " ~ (further citation omitted).
On the other hand , a Rule 12(b)(2) motion "is inherently a matter which
requires resolution of factual issues outside the pleadings, i.e. whether in
personam jurisdiction actually lies." Time Share Vacation Club v. Atlantic
Resorts, Ltd. , 735 F.2d 61 , 67 n. 9 (3d Cir. 1984). Once a defendant raises the

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That same date, April 17, 2023, Precision Drilling Company, LP filed an answer. (Doc. 4) .
Defendants Forum Energy Technologies , Inc. and Forum Energy Services Inc. (collectively
"Forum Energy") later filed crossclaims against Precision Drilling Corporation and Precision
Drilling Company, LP , (Doc. 22), and Precision Drilling Corporation and Precision Drilling
Company, LP collectively filed an answer to those crossclaims , (Doc. 24) .

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issue of personal jurisdiction , "then the plaintiff must sustain its burden of proof in
establishing jurisdictional facts through sworn affidavits or other competent
evidence. " ~

"[T]herefore, at no point may a plaintiff rely on the bare pleadings

alone .. .[;] once the motion is made, plaintiff must respond with actual proofs , not
mere allegations."~
But "[a] Rule 12(b )(2) motion cannot be treated as one for summary
judgment. " Patterson by Patterson v. F.B.I. , 893 F.2d 595 , 604 (3d Cir. 1990).
"When plaintiff responds with affidavits or other evidence in support of [her]
position . . .the court is bound to accept these representations and defer final
determination as to the merits of the allegations until a pretrial hearing or the time
of trial. " In re Chocolate Confectionary Antitrust Litig. , 602 F. Supp. 2d 538 , 557
(M.D. Pa. 2009)(citing Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 &
n. 1 (3d Cir. 1992)("plaintiff need only plead [a] prima facie case to survive the
initial [Rule 12(b )(2)] motion , but must eventually establish jurisdiction by a
preponderance of the evidence"). Plaintiff's burden is thus "relatively light[.]"
Darien Rowayton Bank v. McGregor, 668 F. Supp. 3d 324, 329 & n. 26 (M .D. Pa.
2023)(citing Carteret Sav. Bank, F.A., 954 F.2d at 142 & n. 1)).
Discussion

Turning now to the substance of Precision Drilling Corporation's motion, a
district court "typically exercises personal jurisdiction according to the law of the
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state where it sits. " O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d
Cir. 2007)(citing Fed. R. Civ. P. 4(k)(1 )(A)). The court thus applies
Pennsylvania's long-arm statute, which confers several bases of personal
jurisdiction. See 42 PA. CONS. STAT. § 5322(a)-(b).
Pennsylvania's long-arm statute "authorizes the exercise of personal
jurisdiction over nonresidents 'to the fullest extent allowed under the Constitution
of the United States ... based on the most minimum contact with this
Commonwealth allowed under the Constitution of the United States.'" Dayhoff
Inc. v. H.J. Heinz Co ., 86 F.3d 1287, 1302 (3d Cir. 1996)(quoting 42 PA. CONS .
STAT. § 5322(b)). The long-arm statute also sets forth "a variety of examples of
sufficient contact[,]" see&, including, among other things: 1) transacting any
business; 2) contracting to supply services or things ; 3) causing harm or tortious
injury by act or omission inside or outside the Commonwealth; 4) making
application to any government unit for licensing or permitting; and 5) committing
any violation within the Commonwealth of any statute, rule , or regulation
promulgated thereunder by any government unit, see 42 PA. CONS. STAT. §
5322(a)(1)-(4) , (a)(9)-(10). But because Section 5322(b) " 'further expands the
potential bases for jurisdiction' to the limits of the U.S. Constitution ... the list of
examples of sufficient contact in [Section] 5322(a) cannot be considered
exhaustive. " Pennzoil Prod. Co. v. Colelli & Assocs., Inc., 149 F.3d 197, 201 n. 2
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(3d Cir. 1998)(quoting Dayhoff Inc. , 86 F.3d at 1302). This court thus may
exercise personal jurisdiction to the extent permitted by the Due Process Clause
after considering whether the "the defendant has certain minimum contacts with
.. . [Pennsylvania] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice." O'Connor, 496 F.3d at
316- 17 (citing International Shoe Co . v. Washington , 326 U.S. 310, 316
(1945)(internal quotation marks omitted).
The Due Process Clause to lerates more than two types of personal
jurisdiction over a corporate defendant, but, in the absence of Precision Drilling
Corporation 's express or implied consent to jurisdiction , the court travels the welltrodden paths of general (all-purpose) jurisdiction and specific (case-linked)
jurisdiction. See Mallory v. Norfolk S. Ry. Co. , 600 U.S. 122, 137- 140
(2023)( discussing International Shoe and subsequent jurisprudence); BristolMyers Squibb Co. v. Superior Ct. of California, San Francisco Cnty., 582 U.S.
255 , 262 (2017). And plaintiff concedes that she cannot meet the requirements
to establish general jurisdiction over Precision Drilling Corporation at th is time.
(See Doc. 11 , Pl. Br. in Opp., at 3) . Accord ingly, this memorandum only
addresses specific jurisdiction .
The specific jurisdiction inquiry has three parts. O'Connor, 496 F.3d at 317.
The first consideration is "purposeful availment," i.e., whether the defendant itself
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purposefully directed its activities at the forum state or created continuing
obligations between itself and the forum . See id ; see also Burger King Corp. v.
Rudzewicz, 471 U.S. 462 , 475-76 (1985)(citations omitted). The second
consideration is whether the controversy is related to or arises out of a
defendant's contacts with the forum . O'Connor, 496 F.3d at 317; see also
Helicopteros Nacionales de Colombia, S.A. v. Hall , 466 U.S. 408, 414,
(1984)(citation omitted). When these two considerations are met, the court must
also consider whether the exercise of jurisdiction otherwise comports with the
concerns of "fair play and substantial justice. " O'Connor, 496 F.3d at 317 ; see
also Burger King Corp., 471 U.S. at 477 (citing International Shoe, supra), 478
(citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).
In this matter, Precision Drilling Corporation has submitted a declaration by
Mike Skuce, an employee of co-defendant Precision Drilling Company, LP. (Doc.
3-1 ,I 2). Skuce indicates that Precision Drilling Corporation is the ultimate parent
company of Precision Drilling Company , LP . (~ at ,I 3). Per Skuce's declaration ,
Precision Drilling Corporation is a Canadian corporation with a principal place of
business in Canada with no offices in Pennsylvania and no employees, in
Pennsylvania, Canada , or otherwise. (~ ,I,I 3-4 ). Furthermore , according to
Skuce, Precision Drilling Company, LP was "[t]he Precision entity on site on the
day of the [Chappell] incident[.)" (~ ,I 5) .
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Precision Drilling Corporation argues that this parent-subsidiary relationship
alone does not subject Precision Drilling Corporation to the court's jurisdiction.
Plaintiff counters that the court has specific jurisdiction because Precision Drilling
Corporation issued corporate policies and procedures, including safety policies
and procedures, that were in place at the time of the fatal incident. (Pl. Br. in
Opp., Doc. 11 at 7 (citing Doc. 1-1 , Campi. at ,I 38)). As an alternative to her
arguments in support of denying the motion , plaintiff requests leave to conduct
jurisdictional discovery.
In support of her position , plaintiff relies on documents from an
Occupational Safety and Health Administration ("OSHA") investigation into
Chappell's death. 2 The OSHA investigation identifies the establishment as
"Precision Drilling Corporation. " (Pl. Br. in Opp. , Doc. 11 at 9). Other inspection
data identifies "Precision Drilling (US) Corporation. " (~) Plaintiff further argues
that entities related to Precision Drilling Corporation all use the common name
"Precision Drilling" and a common corporate logo as is reflected on a Precision
Drilling Corporation website, employees' Linkedln pages, and on Lock-Out-TagOut policies and procedures supplied to OSHA relative to this incident. (~ at 79).

2

The documents relied upon by plaintiff are screen captures pasted into her brief in opposition
and not actually attached as exhibits or accompanied by an affidavit or declaration.

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The court also notes that Precision Drilling Corporation has been involved
in extensive litigation in the Middle District of Pennsylvania regarding alleged Fair
Labor Standards Act violations related to Pennsylvania employees donning and
doffing personal protective equipment ("PPE") at drilling sites. See Tyger v.
Precision Drilling Corp. , 4: 11cv1913. The Supreme Court of the United States
recently denied a petition for writ of certiorari in that matter. Precision Drilling
Corp. v. Tyger, --- S.Ct. ----, 2024 WL 2805756 (U.S. June 3, 2024). In Tyger, as
part of an early motion to challenge service of process , a Precision Drilling
Company, LP employee filed a declaration indicating that a particular individual
"was employed by Precision Drilling Corporation through a temporary staffing
agency and was assigned to work as a front desk receptionist in December
2011. " (4: 11cv1913, Doc. 5-2 , Dec. of B. Lindemann).
Consequently, there is more than a possibility that plaintiff can establish the
requisite contacts between Precision Drilling Company and Pennsylvania to
establish personal jurisdiction. It is clear to the court, however, that discovery is
needed to address this issue.

Plaintiff seeks to explore items such as: (1) the

contracts between Precision Drilling Corporation and the other parties to this suit;
(2) Precision Drilling Corporation 's policies and procedures related to drilling
operations; (3) whether such policies were in effect at the drilling site; (4) the
revenues generated to Precision Drilling Corporation from this and other drilling
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sites in Pennsylvania ; and (5) whether Precision Drilling Company, LP was
bound by and/or implemented corporate policies and procedures of Precision
Drilling Corporation . (See Pl. Br. in Opp., Doc. 11 at 15-16). Plaintiff has also
requested a case management conference pursuant to Federal Rule of Civil
Procedure 16. (Doc. 26).
"Although the plaintiff bears the burden of demonstrating facts that support
personal jurisdiction . . .courts are to assist the plaintiff by allowing jurisdictional
discovery unless the plaintiff's claim is 'clearly frivolous. ' " Toys "R" Us, Inc. v.
Step Two, S.A., 318 F.3d 446 , 456 (3d Cir. 2003)(citation omitted). The failure
to afford a plaintiff jurisdictional discovery into business-related information is
potentially an abuse of discretion . See Rocke v. Pebble Beach Co. , 541 F. App'x
208 , 213 (3d Cir. 2013). This action also appears to involve levels of co rporate
entities leading back to Precision Drilling Corporation , "with numerous corporate
forms , and operations wide in scope." See Marchionda v. Embassy Suites, Inc. ,
122 F. Supp. 3d 208 , 211 (D .N.J. 2015).
Under the circumstances before the court, plaintiff's request for
jurisdictional discovery is non-frivolous . Leave to conduct jurisdictional discovery
will be granted to explore Precision Drilling Company's contacts with
Pennsylvania. Such discovery shall include the areas requested by plaintiff, as
well as the relationships between the parent company "Precision Drilling
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Corporation ," the subsidiary "Precision Drilling Company, LP ," and the other
entity included in the OSHA inspection , "Precision Drilling (US) Corporation."
The motion to dismiss will thus be dismissed without prejudice for Precision
Drilling Corporation to refile after the discovery period .
Conclusion

For the reasons set forth above, Defendant Precision Drilling Corporation's
motion to dismiss will be dismissed without prejudice with the right to refile upon
completion of jurisdictional discovery. This matter will be scheduled for a case
management conference to set appropriate limits and a deadline for jurisdictional
discovery to be completed . An appropriate order follows.

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