Celanese Corporation v. Clariant Corporation et al

Filing 74

MEMORANDUM OPINION AND ORDER: Plaintiff's Motion for Reconsideration [Docket Entry # 27 ] and Motion for Leave to File First Amended Complaint [Docket Entry # 31 ] are DENIED. (Ordered by Judge Barbara M.G. Lynn on 3/7/2016) (sss)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CELANESE CORPORATION,
Plaintiff,
v.
CLARIANT CORPORATION,
Defendant.

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No. 3:14-cv-04165-M

MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiff’s Motion for Reconsideration [Docket Entry #27] and
Motion for Leave to File First Amended Complaint [Docket Entry #31]. For the reasons stated
below, both Motions are DENIED.
I.

BACKGROUND

Plaintiff Celanese is a Delaware corporation that develops and manufactures materials for
consumer products. It previously operated as Hoechst Celanese Corporation (“Hoechst”), and
has maintained its principal place of business in Dallas County since 2005. Defendant Clariant
AG is a Swiss corporation, with its principal place of business in Switzerland.
In 1997, Hoechst, a New Jersey domiciliary, and Clariant AG entered into an Asset
Purchase Agreement (“APA”), by which Hoechst conveyed to Clariant AG its specialty
chemicals business, which had assets throughout the United States, including property,
operations, and employees in Texas. The APA contained a choice of law provision, stating that
it would be governed by Swiss law, and an arbitration provision, stating that all disputes under it
would be resolved in Germany.

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Celanese alleges here that the APA obligates Clariant AG, and its United States
subsidiary, Clariant Corporation, to indemnify Celanese from liability arising out of toxic tort
lawsuits in New Jersey and California. Celanese pled that Clariant AG “neither maintains a
regular place of business nor a designated agent for service of process in Texas,” and “has ceded
management, liability and control of all North American business operations under the name
‘Clariant’ to Clariant US” (otherwise known as Clariant Corporation). Pet. [Docket Entry 1-3] at
¶¶ 4–5.
Clariant AG moved to dismiss the claims against it for lack of personal jurisdiction, and
the Court granted the motion. Order [Docket Entry #24]. Celanese sought reconsideration of
that Order, and asked for permission to file an amended complaint against Clariant AG to: 1)
assert an alter-ego theory and otherwise clarify allegations relevant to personal jurisdiction; 2)
allege that Clariant Corporation has admitted it is responsible for the APA’s indemnification
obligations pursuant to an Assignment and Assumption Agreement; 3) make various other
modest changes.
II.

PLAINTIFF’S MOTION FOR RECONSIDERATION
a. Legal Standard

Plaintiff seeks relief under Rule 54(b) and Rule 60(b). Under Rule 54(b), a court may
revise any order “at any time before entry of a judgment adjudicating all the claims and all the
parties’ rights and liabilities.” Fed. R. Civ. P. 54(b). Under Rule 60(b), a court may relieve a
party from a final order based on “mistake, inadvertence, surprise, or excusable neglect,” or “any
other reason that justifies relief.” Fed. R. Civ. P. 60(b).
Plaintiff’s Motion fails under either rule. Although the standard for reconsideration
under Rule 54(b) “appear[s] to be less exacting” than that under Rule 60(b), a court’s analysis

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under both rules is similar. Dos Santos v. Bell Helicopter Textron, Inc. Dist., 651 F. Supp. 2d
550, 553 (N.D. Tex. 2009) (Means, J.). “[W]hether to grant [a motion for reconsideration] rests
within the broad discretion of the court.” Id. (applying Rule 54(b)); see also Carter v. Fenner,
136 F.3d 1000, 1005 (5th Cir. 1998) (applying Rule 60(b)); Calpetco 1981 v. Marshall
Exploration, Inc., 989 F.2d 1408, 1414-15 (5th Cir. 1993). Motions for reconsideration “have a
narrow purpose and are only appropriate to allow a party to correct manifest errors of law or fact
or to present newly discovered evidence.” Choice Hotels Intern., Inc. v. Goldmark Hospitality,
LLC, 2014 WL 642738, at *1 (N.D. Tex. Feb. 19, 2014) (Fitzwater, C.J.) (quotation omitted).
They are not a “proper vehicle for rehashing old arguments or advancing theories of the case that
could have been presented earlier.” Id.
b. Discussion
Celanese argues that the Court erred by finding: 1) that Clariant AG does not do business
or have a physical presence in Texas; and 2) that Clariant AG’s indemnity obligations to
Celanese under the APA were not sufficient to subject Clariant AG to suit in Texas.
Celanese has not shown that this Court manifestly erred in concluding that Celanese did
not establish personal jurisdiction over Clariant AG. As the party who sought to invoke the
jurisdiction of the district court, Celanese bore the burden of “present[ing] facts sufficient to
constitute a prima facie case of personal jurisdiction.” WNS, Inc. v. Farrow, 884 F.2d 200, 203
(5th Cir. 1989). Because the Court did not hold an evidentiary hearing, it was required to take
“uncontroverted allegations in the plaintiff’s complaint . . . as true,” and resolve “conflicts
between the facts contained in the parties’ affidavits . . . in the plaintiff’s favor for purposes of
determining whether a prima facie case for personal jurisdiction exists.” WNS, Inc. v. Farrow,
884 F.2d 200, 203 (5th Cir. 1989) (quoting D.J. Investments, 754 F.2d at 545–46).

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Celanese maintains that the Court relied too heavily on the concession in its Petition that
Clariant AG does not maintain a regular place of business in Texas, and that the Court did not
address Celanese’s position that the business purchased by Defendants pursuant to the APA
included assets in Texas.1 The Court did consider such allegations. See, e.g., Order [Docket
Entry #24] at 7 (recognizing that “the APA involved the sale of some Texas assets”). To the
extent that, by claiming that the purchased business does business and has employees in Texas,
Plaintiff alleged that Clariant AG regularly conducts business or maintains an office in Texas,
that allegation was controverted by a sworn affidavit of Alfred Münch, General Counsel of
Clariant AG, stating that Clariant AG, as opposed to its subsidiaries, does not systematically do
business in Texas or maintain a business location here. Def. App. [Docket Entry #18], Ex. 1, at ¶
6. The APA does not conflict with that evidence. That a company once purchased a business
with operations in Texas does not necessarily mean the buyer is thereafter doing business in
Texas. See Daimler AG v. Bauman, 134 S. Ct. 746, 759–60 (2014).
Celanese further objects that the Court did not consider evidence that “Clariant” operates
in Texas. Mot. [Docket Entry #27] at 4. In fact, Celanese alleged that the American entity
Clariant Corporation manages and controls “all North American business operations under the
name ‘Clariant.’” See Pet. [Docket Entry 1-3] at ¶¶ 4–5. The exhibits Celanese points to do not
show that Clariant AG operates in Texas. See [Docket Entry #22], Ex. D–E at 64 – 67 (referring

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 The APA transferred a business defined as: “[Hoechst’s] specialty chemicals business

consisting of the activities (including all assets and liabilities whether on the balance sheet or
not) of its Business Units Auxiliaries and Surfactants, Pigments, Fine Chemicals,
Polymerisates/Alkylose, Additives and its business groups Paper Chemicals and Monochloro
Acetic Acid but excluding the Business Units and activities respectively of Food Ingredients,
Separation Products, textile dyestuffs and bulk pharmaceuticals.” Pl. App. [Docket Entry #22] at
95. At the time the parties entered into the APA, the specialty chemicals business operated in
approximately half the states in the United States. Id. at 140.
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to a “Clariant” facility in Texas as associated with “Clariant North America ICS”); Ex. F–G at
68–73 (listing advertised job opportunities at “Clariant” in Texas); Ex. H at 75–85 (promoting a
global headquarters for Oil & Mining Services in Texas but not specifying whether Clariant AG
or a subsidiary owns and operates the facility). Celanese thus has not made a prima facie case
that Clariant AG regularly conducts business or has a physical location in Texas, and certainly
has not shown the kind of continuous and systematic connections with Texas necessary to
establish general jurisdiction. See Daimler, 134 S. Ct. at 2851.
Even if the evidence Celanese produced had referred to Clariant AG, Celanese has not
shown that the current suit is sufficiently related to Clariant AG’s alleged Texas connections for
the Court to have specific jurisdiction over Clariant AG. See Burger King Corp. v. Rudzewicz,
471 U.S. 462, 472 (1985). As the Court originally found, the indemnification provision in the
APA does not subject Clariant AG to personal jurisdiction in Texas merely because the acquired
business had operations there. Op. [Docket Entry #24] at 6–7. Clariant AG could not
“reasonably anticipate being haled into court” in Texas based merely on this provision,
especially since the APA states that all disputes arising out of it are to be governed by Swiss law,
and arbitrated in Germany. Id.
The Motion for Reconsideration does not identify a manifest error of law or fact nor
present newly discovered evidence. It is therefore DENIED.
III.

PLAINTIFF’S MOTION FOR LEAVE TO FILE AMENDED
COMPLAINT

Because the deadline for amending pleadings has expired, under Rule 16, Celanese is
required to show good cause to amend. Fed. R. Civ. P. 16. On September 30, 2015, when
Celanese filed its Motion for Leave, the deadline for filing amended pleadings under the

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Scheduling Order was April 1, 2015 [Docket Entry #9]. The Amended Scheduling Order did not
reopen the deadline for amending pleadings [Docket Entry #58].
In determining if good cause exists, courts consider: 1) the explanation for the failure to
timely move for leave to amend; 2) the importance of the amendment; 3) potential prejudice in
allowing the amendment; and 4) the availability of a continuance to cure such prejudice. S&W
Enterprises, L.L.C. v. SouthTrust Bank of Alabama, NA, 315 F.3d 533, 536 (5th Cir. 2003)
Celanese claims it needs to amend in order to: 1) assert an alter-ego theory and clarify its
allegations relevant to personal jurisdiction; 2) allege that Clariant Corporation has admitted that,
pursuant to an Assignment and Assumption Agreement, it is responsible for indemnification
obligations in the APA; and 3) make other modest clarifying changes.
The Court finds that Celanese has not shown good cause. In particular, Celanese has
failed to adequately explain its failure to move in a timely manner. Until the Court dismissed
Clariant AG for lack of personal jurisdiction, Celanese argues, it did not think it needed to add an
alter-ego theory or clarify its jurisdictional allegations to retain jurisdiction. This is not sufficient
to demonstrate good cause.
Celanese maintains that it reasonably chose not to pursue an alter-ego theory earlier,
because Clariant AG did not challenge personal jurisdiction until May of 2015, after the deadline
for amendments had passed. However, Celanese did not attempt to amend for approximately
four months after Clariant AG challenged jurisdiction, months in which the Court considered and
resolved the issue. Celanese also claims recently discovered evidence supports its alter-ego
theory, but it does not explain when the alleged evidence was discovered or why Celanese did
not attempt to discover it sooner (other than the insufficient reason that Celanese mistakenly
believed it had already made a prima facie case). Indeed, Celanese’s evidence comes from

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publicly available documents. Celanese has not sufficiently explained why it did not present
argument and evidence supporting an alter-ego theory or otherwise clarify its jurisdictional
allegations in a timely manner.
Additionally, allowing Celanese to try once again to establish jurisdiction over Clariant
AG would prejudice Defendants, who have already briefed the issue of personal jurisdiction
twice—through their Motion to Dismiss and Celanese’s Motion for Reconsideration.
Celanese similarly fails to explain why it delayed in adding allegations regarding Clariant
Corporation’s responsibility for indemnification obligations under the APA pursuant to the
Assignment and Assumption Agreement. Celanese maintains that Clariant Corporation made an
admission of such responsibility in a response to a request for admission in August 2015.
However, Celanese does not dispute that its predecessor Hoechst was a party to the Assignment
and Assumption Agreement, executed in 1997, and thus cannot express reasonable surprise about
it as a basis for Clariant Corporation’s liability. Celanese has always proceeded in this case on
the theory that Clariant Corporation is liable under the APA. See Pet. [Docket Entry 1-3] at ¶¶
4–5 (alleging that Clariant Corporation manages and controls “all North American business
operations under the name ‘Clariant’”); id at ¶ 28 (“Clariant US is the only entity to participate in
any post-Closing Date communication with Celanese concerning the APA.”); id. at ¶¶ 31, 38
(asking for a declaratory judgment that “Defendants are obligated to pay Celanese the full
amount of Celanese’ losses”) (emphasis added); id. at ¶¶ 35, 42 (arguing that Defendants
breached contractual obligations under the APA). Thus, if Celanese thought it was important to
obtain an admission regarding Clariant Corporation’s obligations under the APA as a predicate
to amending its complaint, Celanese was not reasonably diligent in seeking such an admission.

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Celanese also has not explained why it is important that it file an amended complaint to
specify that Clariant Corporation admitted responsibility for the obligations under the APA.
Document Entry #31, at 8. Although Clariant Corporation’s admission may be important, the
Court is not persuaded that it must be alleged in the complaint. Finally, Celanese does not show
good cause to make the other changes it proposes.
For all these reasons, the Court does not find good cause for allowing Celanese to file an
untimely amended complaint, and Celanese’s Motion is DENIED.
IV.

CONCLUSION

Plaintiff’s Motion for Reconsideration [Docket Entry #27] and Motion for Leave to File
First Amended Complaint [Docket Entry #31] are DENIED.
SO ORDERED.
March 7, 2016.

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BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS

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