UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 96-20361
MARATHON OIL COMPANY, MARATHON
INTERNATIONAL OIL COMPANY, and
MARATHON PETROLEUM NORGE A/S,
Plaintiffs-Appellants/Cross-Appellees,
versus
A.G. RUHRGAS,
Defendant-Appellee/Cross-Appellant.
Appeals from the United States District Court
for the Southern District of Texas
July 21, 1999
ON REMAND FROM THE
SUPREME COURT OF THE UNITED STATES
Before POLITZ, WIENER, and STEWART, Circuit Judges.
POLITZ, Circuit Judge:
This lengthy procedural dispute is before us on remand from the United
States Supreme Court. For the reasons assigned, we affirm the district court’s
dismissal for lack of personal jurisdiction.1
BACKGROUND
The facts surrounding this case have been discussed in detail in three prior
appellate opinions, necessitating that we here provide only a brief review of the
factual background of this dispute. In 1976, Marathon Oil Company and Marathon
International Oil Company acquired Marathon Petroleum Norge (“Norge”) and
Marathon Petroleum Company (Norway) (“MPN”). Norge assigned to MPN a
license it held to produce gas in Heimdal Field in the North Sea. MPN entered into
an agreement with Ruhrgas AG, a German gas supplier, and other European buyers
to sell 70% of its share of the Heimdal gas production at a “premium” price. This
agreement, the Heimdal Gas Sales Agreement, was to be construed under
Norwegian law and any dispute arising thereunder was subject to arbitration in
Sweden.
Marathon (which includes Marathon Oil Company, Marathon International
Oil Company, and Norge) sued Ruhrgas in Texas state court, alleging that Ruhrgas
and the European buyers induced them with false promises of premium prices and
guaranteed pipeline transportation tariffs, and that the Ruhrgas monopolization of
1
Marathon’s motion to expedite the appeal and to decide the case on
existing briefs is GRANTED.
2
the Heimdal gas diminished the value of the license Norge assigned to MPN.2
Marathon alleged that Ruhrgas effectuated the fraud by conducting three meetings
in Houston, Texas and by sending a great deal of correspondence to Marathon in
Texas.
Ruhrgas removed the case to federal court, asserting diversity of citizenship
jurisdiction, federal question jurisdiction, and jurisdiction under 9 U.S.C. § 205,
relating to international arbitration agreements. The district court denied its motion
for a stay pending arbitration. Ruhrgas then moved to dismiss for lack of personal
jurisdiction and for forum non conveniens, while Marathon moved to remand for
lack of subject matter jurisdiction. The district court found that it had the authority
to decide personal jurisdiction before determining whether subject matter
jurisdiction existed and granted the Ruhrgas motion to dismiss for lack of personal
jurisdiction, denying all other motions as moot.
The district court’s dismissal for lack of personal jurisdiction was based on
its conclusion that there were not sufficient contacts linking the alleged fraudulent
actions of Ruhrgas with the State of Texas. Specifically, the district court found
that the three meetings in Houston were not adequate to base personal jurisdiction
2
Marathon brought claims for fraud, tortious interference with prospective
business relations, participation in breach of fiduciary duty, and civil conspiracy.
3
because there was no evidence that false statements were made at those meetings,
and because Ruhrgas attended them for discussions concerning the Heimdal
Agreement. Because the agreement specifically provided for arbitration in
Sweden, the district court determined that Ruhrgas could not reasonably have
expected to be haled into Texas courts. Additionally, the trial court concluded that
Ruhrgas was not subject to general jurisdiction in Texas because of a lack of
systematic and continuous contacts with the state.3
On appeal, this panel held that the district court first should have examined
the subject matter jurisdiction question and ordered the case remanded to state
court because there was no basis for federal jurisdiction.4 The United States
Supreme Court denied certiorari on the question of whether subject matter
jurisdiction existed.5 The en banc court then vacated the panel opinion but
ultimately reinstated the panel’s ruling that in removed cases district courts first
must decide questions of subject matter jurisdiction before addressing questions of
3
Marathon Oil Co. v. Ruhrgas, A.G., No. H-95-4176 (S.D. Tex. Mar. 29,
1996).
4
Marathon Oil Co. v. Ruhrgas, A.G., 115 F.3d 315 (5th Cir. 1997).
5
Ruhrgas, A.G. v. Marathon Oil Co., 118 S. Ct. 413 (1997).
4
personal jurisdiction.6
The Supreme Court granted certiorari and reversed, stating that although
questions of subject matter jurisdiction ordinarily should be resolved first, there are
appropriate instances, such as the present case, in which straightforward personal
jurisdictional issues initially may be resolved.7 Upon remand from the Supreme
Court, the en banc court returned this case to the panel for further consideration on
the merits of the appeal in light of the Supreme Court’s ruling. 8
ANALYSIS
When the facts are undisputed, we review de novo the district court’s
determination that personal jurisdiction is lacking.9
We must determine the existence of personal jurisdiction over a nonresident
defendant by reference to the state’s long-arm statute and the due process clause
of the fourteenth amendment. Because Texas’ long-arm statute extends to the
6
Marathon Oil Co. v. A.G. Ruhrgas, 145 F.3d 211 (5th Cir. 1998) (en
banc).
7
Ruhrgas AG v. Marathon Oil Co., 119 S. Ct. 1563 (1999).
8
Marathon Oil Co. v. A.G. Ruhrgas, No. 96-20361, 1999 WL 427615 (5th
Cir. June 25, 1999) (en banc).
9
Wilson v. Belin, 20 F.3d 644 (5th Cir. 1994).
5
fullest constitutional limits, this process is conflated into one decision. 10
Exercise of personal jurisdiction over nonresident defendants satisfies due
process when two requirements are met. First, the nonresident defendant “must
have purposefully availed himself of the benefits and protections of the forum state
by establishing ‘minimum contacts’ with that forum state.”11 The defendant’s
connection with the forum state should be such that he reasonably should anticipate
being haled into court there.12 Second, the exercise of personal jurisdiction over the
nonresident defendant cannot offend “‘traditional notions of fair play and
substantial justice.’”13
10
Id. at 647; Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199 (Tex.
1985).
11
Wilson, 20 F.3d at 647 (quoting International Shoe Co. v. Washington,
326 U.S. 310 (1945)).
12
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980).
13
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 105 (1987)
(quoting International Shoe, 326 U.S. at 316). The factors considered in the
“fairness” inquiry include:
(1) the burden upon the nonresident defendant; (2) the interests of the
forum state; (3) the plaintiff’s interest in securing relief; (4) the
interstate judicial system’s interest in obtaining the most efficient
resolution of controversies; and (5) the shared interest of the several
States in furthering fundamental substantive social policies.
Bullion v. Gillespie, 895 F.2d 213, 216 n.5 (5th Cir. 1990) (quotations omitted).
6
The “minimum contacts” prong can be subdivided into contacts that give rise
to “specific” personal jurisdiction and those that give rise to “general” personal
jurisdiction.14 Exercise of specific jurisdiction is only appropriate when the
nonresident’s contacts with the forum state arise from or are directly related to the
cause of action.15 General personal jurisdiction is found when the nonresident
defendant’s contacts with the forum state, even if unrelated to the cause of action,
are continuous, systematic, and substantial.16
In the case at bar, we agree with the district court’s conclusion that there was
neither specific nor general personal jurisdiction over Ruhrgas in the Texas courts.
Its mere presence at the three meetings in Houston, together with the noted
correspondence and phone calls, is not sufficient to establish the requisite minimum
contacts because the record is devoid of evidence that Ruhrgas made false
statements at the meetings or that the alleged tortious conduct was aimed at
activities in Texas. Further, Ruhrgas could not reasonably have expected to be
brought into Texas courts because of its presence at the meetings inasmuch as the
14
Gundle Lining Constr. Corp. v. Adams County Asphalt, Inc., 85 F.3d 201
(5th Cir. 1996).
15
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984).
16
Id. at 415; Wilson, 20 F.3d at 649.
7
meetings and related communications dealt with the Heimdal Agreement, a
contract governed by Norwegian law and providing specifically for Swedish
arbitration.
Further, the involvement of Ruhrgas in the Tenneco Energy Resources
Corporation is not the kind of activity that constitutes “continuous” and
“systematic” contacts for general personal jurisdiction. The same is true for
Ruhrgas’ other contacts unrelated to this cause of action. In sum, the record
reflects no basis for personal jurisdiction over Ruhrgas in Texas. Because we
affirm dismissal of this case on personal jurisdiction grounds, we reach neither the
subject matter jurisdiction issue discussed in the original panel opinion nor the
issue presented in the cross-appeal of Ruhrgas, i.e., whether the district court erred
in refusing to stay the action pending arbitration.
The judgment appealed is therefore AFFIRMED.
8