Moncrief Oil International, Inc. v. OAO Gazprom Gazprom Export, LLC And Gazprom Marketing & Trading, Ltd.

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 2-09-00336-CV

MONCRIEF OIL INTERNATIONAL, INC. APPELLANT

V.

OAO GAZPROM; GAZPROM APPELLEES
EXPORT, LLC; AND GAZPROM
MARKETING & TRADING, LTD.

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FROM THE 17TH DISTRICT COURT OF TARRANT COUNTY

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OPINION

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I. INTRODUCTION

This is an interlocutory special appearance appeal. Appellant Moncrief Oil

International, Inc. appeals the trial court’s order granting the special appearances

filed by Appellees OAO Gazprom (Gazprom); Gazprom Export, LLC; and Gazprom
Marketing & Trading, Ltd.1 In its first, second, and fourth issues, Moncrief Oil

contends that these three Appellees failed to negate all bases of personal

jurisdiction. In a fifth issue, Moncrief Oil argues that the trial court abused its

discretion by refusing to compel the depositions of two key representatives of

Appellees. For the reasons set forth below, we hold that the trial court lacks general

jurisdiction over Gazprom; that Gazprom Marketing & Trading, Ltd. is not, for

jurisdictional purposes, fused with GMT USA;2 and that the trial court lacks specific

jurisdiction over Moncrief Oil’s tortious interference with a business relationship

claims and Moncrief Oil’s misappropriation of trade secrets claims, both asserted

against Gazprom and Gazprom Export. Consequently, we will affirm the trial court’s

order granting Appellees’ special appearances.

II. F ACTUAL B ACKGROUND O VERVIEW

The jursidictional facts presented to the trial court were disputed. Essentially,

Moncrief Oil, a Fort W orth, Texas-based independent oil and gas company, asserts

that it reached an agreement in 2004 with Occidental Petroleum Corporation for a

Texas-based joint venture to focus on the importation of liquefied natural gas (LNG)

1
 Moncrief Oil also appealed the special appearance granted for OAO
Gazprombank but subsequently filed a motion to dismiss OAO Gazprombank from
this appeal. W e granted the motion, and OAO Gazprombank is no longer a party
to this appeal. Thus, we need not address Moncrief Oil’s third issue challenging the
special appearance granted for OAO Gazprombank.
2
 GMT USA is a defendant in the underlying suit but did not file a special
appearance.

2
and the development of a regasification facility in Ingleside, Texas. Moncrief Oil

alleges that in the course of its business, it developed confidential trade secret

information relating to the marketing of Russian natural gas and LNG in the United

States.3 Moncrief Oil alleges that it offered Gazprom the opportunity to participate

in the joint venture with Occidental and that, during negotiations concerning the joint

venture, Gazprom and Gazprom Export learned trade secrets belonging to Moncrief

Oil concerning the marketing, sales, and distribution in the United States of LNG.

Moncrief Oil alleges that Gazprom and Gazprom Export misappropriated these trade

secrets and used them for themselves—in fact setting up for themselves in Houston,

Texas, the type of LNG regasification facility proposed by Moncrief Oil to be utilized

in the joint venture—and that Gazprom and Gazprom Export tortiously interfered with

the Occidental joint venture. Moncrief Oil filed suit against Appellees asserting these

causes of action, as well as causes of action for conspiracy to tortiously interfere with

the Occidental joint venture and for conspiracy to misappropriate trade secrets.

Appellees point out that Moncrief Oil had previously filed a lawsuit against

them in federal court for breach of contract and negligent misrepresentation relating

to Moncrief Oil’s claimed interest in the Yuzhno-Russkoye Field, an oil field located

in Russia. Judge Terry Means dismissed that lawsuit, concluding that “personal

3
 The trial court ordered various documents sealed. W e have reviewed
those records in our disposition of this appeal.

3
jurisdiction cannot constitutionally be exercised over the Gazprom Defendants.”4

Appellees claim that the present litigation is simply a second attempt by Moncrief Oil

to pursue the same litigation that was dismissed by Judge Means. Moncrief Oil,

however, points out that a Moncrief Oil affiliate is pursuing the Yuzhno-Russkoye

Field related litigation in a German court and argues that the present litigation is

separate from its prior suit.

Appellees filed special appearances, and the trial court granted them.

Moncrief Oil perfected this interlocutory appeal.

III. S TANDARD OF R EVIEW AND B URDENS OF P ROOF

The standard of review and the burdens of proof that we apply in reviewing a

trial court’s ruling on a special appearance are recited extensively in the case law.

Under the Texas long-arm statute, the plaintiff has the initial burden to plead

sufficient allegations to confer jurisdiction. Retamco Operating, Inc. v. Republic

Drilling Co., 278 S.W .3d 333, 337 (Tex. 2009). This minimal pleading requirement

is satisfied by an allegation that the nonresident defendant is doing business in

Texas. See Assurances Generales Banque Nationale v. Dhalla, 282 S.W .3d 688,

695 (Tex. App.—Dallas 2009, no pet.). The nonresident defendant has the burden

of negating all bases of jurisdiction alleged in the plaintiff’s petition. Moki Mac River

Expeditions v. Drugg, 221 S.W .3d 569, 574 (Tex. 2007); Am. Type Culture

4
 Judge Means’s ruling was affirmed by the Fifth Circuit. See Moncrief Oil
Int’l, Inc. v. OAO Gazprom, 481 F.3d 309, 310–11 (5th Cir. 2007).

4
Collection, Inc. v. Coleman, 83 S.W .3d 801, 807 (Tex. 2002), cert. denied, 537 U.S.

1191 (2003).

In determining whether or not a defendant has negated all potential bases for

jurisdiction, the trial court frequently must resolve questions of fact. See BMC

Software Belg., N.V. v. Marchand, 83 S.W .3d 789, 794 (Tex. 2002). And when the

trial court does not make findings of fact and conclusions of law in support of its

ruling on a defendant’s special appearance, all facts necessary to support the ruling

that are supported by the evidence are implied. See Retamco Operating, Inc., 278

S.W .3d at 337. These implied findings are not conclusive, however, when the

appellate record includes the reporter’s and clerk’s records; in this situation, the

implied findings may be challenged for legal and factual sufficiency in the

appropriate appellate court. BMC Software Belg., N.V., 83 S.W .3d at 795.

W e review a trial court’s conclusions of law as a legal question. Id. The

conclusion that personal jurisdiction exists over a defendant is a conclusion of law

that we review de novo. Retamco Operating, Inc., 278 S.W .3d at 337.

The special appearance hearing conducted by the trial court here was

nonevidentiary in the sense that no witnesses testified and no evidence was

introduced at the hearing; counsel made Power Point presentations to the trial

court.5 All parties relied on affidavits, exhibits, and deposition excerpts attached to

5
 The Power Point slides have been made part of our record, and a
reporter’s record of counsel’s arguments at the special appearance hearing was filed
with this court.

5
their special appearances or responses. The trial court made no findings of fact or

conclusions of law. On our own motion, we requested supplemental briefing from

the parties on the issue of whether the nonevidentiary nature of the special

appearance hearing in the trial court altered our standard of review in any way. W e

questioned how we could review a trial court’s implied findings of fact for legal or

factual sufficiency when no evidence was offered or introduced before the trial court

at the special appearance hearing and the affidavits, exhibits, and deposition

excerpts filed by the parties contained factual conflicts. That is, if in order to decide

the special appearances, the trial court merely reviewed affidavits, exhibits, and

deposition excerpts filed with it and made no credibility determinations, then we are

in the same position as the trial court and implying all facts supported by the

evidence in favor of the trial court’s ruling seems inappropriate. See Villagomez v.

Rockwood Specialties, Inc., 210 S.W .3d 720, 726–27 (Tex. App.—Corpus Christi

2006, pet. denied) (expressing similar concerns).

The parties filed supplemental briefs addressing our standard-of-review

concerns, and based on the supplemental briefing, we conclude that although the

special appearance hearing was nonevidentiary and despite our concerns, we must

nonetheless defer to all implied findings of fact that support the trial court’s grant of

Appellees’ special appearances so long as legally and factually sufficient

6
evidence—i.e., factual statements set forth in the affidavits, exhibits, and deposition

excerpts filed with the trial court—exists supporting them.6

IV. T HE L AW C ONCERNING P ERSONAL J URISDICTION

Texas courts may assert in personam jurisdiction over a nonresident if (1) the

Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise

of jurisdiction is consistent with federal and state constitutional due-process

guarantees. Moki Mac River Expeditions, 221 S.W .3d at 574.

A. Personal Jurisdiction Under the Texas Long-Arm Statute

The Texas long-arm statute sets out a nonexclusive list of activities that

constitute doing business in Texas. See Tex. Civ. Prac. & Rem. Code Ann. § 17.042

(Vernon 2008); PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W .3d 163, 166

(Tex. 2007); Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C.,

815 S.W .2d 223, 226 (Tex. 1991). The broad language of section 17.042 extends

Texas courts’ personal jurisdiction “as far as the federal constitutional requirements

of due process will permit.” PHC-Minden, L.P., 235 S.W .3d at 166; Moki Mac River

Expeditions, 221 S.W .3d at 575.

6
 In its supplemental briefing, Gazprom points out two fairly recent Texas
Supreme Court cases in which the special appearance hearings in the trial courts
were nonevidentiary and the supreme court nonetheless recited that the proper
standard of review required the appellate court to imply all fact findings supported
by the evidence in favor of the trial court’s ruling. See Kelly v. Gen. Interior Constr.,
Inc., 301 S.W .3d 653, 657 (Tex. 2010); BMC Software Belg., N.V., 83 S.W .3d at
795.

7
 B. The Limits of Personal Jurisdiction
Under the Guarantees of Due Process

In addition to the long-arm statute, the exercise of in personam jurisdiction

over a nonresident defendant must satisfy federal due process requirements. See

Int’l Shoe Co. v. W ashington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945);

PHC-Minden L.P., 235 S.W .3d at 166; Moki Mac River Expeditions, 221 S.W .3d at

575. The exercise of personal jurisdiction over a nonresident defendant satisfies the

due process requirements of the Fourteenth Amendment only when (a) the

nonresident defendant has established minimum contacts with the forum state and

(b) the exercise of jurisdiction comports with traditional notions of fair play and

substantial justice. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76, 105

S. Ct. 2174, 2183–85 (1985); PHC-Minden, L.P., 235 S.W .3d at 166; Moki Mac

River Expeditions, 221 S.W .3d at 575.

1. Due Process Minimum Contacts Analysis

The focus of a due process, minimum contacts analysis is on the nonresident

defendant’s activities and expectations. Michiana Easy Livin’ Country, Inc. v. Holten,

168 S.W .3d 777, 790 (Tex. 2005); Am. Type Culture Collection, Inc., 83 S.W .3d at

806. A nonresident defendant’s contacts with a forum state can give rise to (a)

general jurisdiction or (b) specific jurisdiction. See PHC-Minden, L.P., 235 S.W .3d

at 166; Moki Mac River Expeditions, 221 S.W .3d at 575–76.

8
 a. General Jurisdiction

General jurisdiction refers to personal jurisdiction over a nonresident

defendant in a lawsuit in which the cause of action does not arise out of or relate to

the nonresident defendant’s contacts with the forum state. See, e.g., PHC-Minden,

L.P., 235 S.W .3d at 168. General jurisdiction is present when the nonresident

defendant’s contacts in a forum state are continuous and systematic. Id. at 167–69.

Usually, to be subject to general jurisdiction of the forum state, the nonresident

defendant must be engaged in longstanding business there, such as marketing,

shipping products, performing services, or maintaining one or more offices there.

Id. at 168.

b. Specific Jurisdiction

Specific jurisdiction refers to personal jurisdiction over a nonresident

defendant in a lawsuit that arises out of or is related to the nonresident defendant’s

contacts with the forum state. Spir Star AG v. Kimich, 310 S.W .3d 868, 873 (Tex.

2010); Moki Mac River Expeditions, 221 S.W .3d at 576. W hen specific jurisdiction

is asserted, the minimum contacts analysis focuses on the relationship between the

nonresident defendant, the forum state, and the litigation. Moki Mac River

Expeditions, 221 S.W .3d at 575–76; Guardian Royal Exch. Assurance, Ltd., 815

S.W .2d at 226. For a court to exercise specific jurisdiction over a nonresident

defendant, two requirements must be met: (1) the nonresident defendant’s contacts

with the forum state must be purposeful; and (2) the cause of action must arise from

9
or relate to those contacts. See Burger King Corp., 471 U.S. at 473–76, 105 S. Ct.

at 2182–84; Spir Star AG, 310 S.W .3d at 873; Moki Mac River Expeditions, 221

S.W .3d at 579; BMC Software Belg., N.V., 83 S.W .3d at 796.

Purposeful contacts are key to a jurisdictional due process analysis. See

Michiana Easy Livin’ Country, Inc., 168 S.W .3d at 784; Guardian Royal Exch.

Assurance, Ltd., 815 S.W .2d at 226–27. There are three parts to a purposeful

availment inquiry: (1) only the nonresident defendant’s contacts with the forum are

relevant, not the unilateral activity of another party or a third person; (2) the contacts

relied on must be purposeful rather than random, fortuitous, or attenuated; and (3)

the nonresident defendant must seek some benefit, advantage, or profit by availing

itself of the jurisdiction. See Moki Mac River Expeditions, 221 S.W .3d at 575;

Michiana Easy Livin’ Country, Inc., 168 S.W .3d at 784–85.

Specific jurisdiction is established only when the nonresident defendant’s

alleged liability arises from or is related to activity conducted within the forum. Moki

Mac River Expeditions, 221 S.W .3d at 576; BMC Software Belg., N.V., 83 S.W .3d

at 796. The “arises from or relates to” requirement lies at the heart of specific

jurisdiction by defining the required nexus between the nonresident defendant, the

litigation, and the forum state. Moki Mac River Expeditions, 221 S.W .3d at 579. In

order for a nonresident defendant’s contacts in a forum state to support an exercise

of specific jurisdiction, there must be a substantial connection between those

contacts and the operative facts of the litigation. Id. at 585.

10
 2. Traditional Notions of Fair Play and Substantial Justice

Finally, in addition to the requirement of minimum contacts with the forum

state, the exercise of personal jurisdiction over a nonresident defendant must

comport with traditional notions of fair play and substantial justice. See Burger King

Corp., 471 U.S. at 476, 105 S. Ct. at 2184; BMC Software Belg., N.V., 83 S.W .3d

at 795. These terms gain meaning when viewed in light of the minimum contacts a

defendant has had with the forum; when a nonresident defendant has purposefully

availed itself of the privilege of conducting business in a foreign jurisdiction, only in

the very rare case will the exercise of jurisdiction over that defendant not comport

with traditional notions of fair play and substantial justice. See Spir Star AG, 310

S.W .3d at 878; Guardian Royal Exch. Assurance, Ltd., 815 S.W .2d at 231.

V. J URISDICTIONAL ANALYSIS

In determining whether the record before us establishes personal jurisdiction,

we examine individually each Appellee’s contacts with Texas and each of Moncrief

Oil’s claims against each Appellee. See, e.g., Kelly, 301 S.W .3d at 659–60

(analyzing claim for violation of Texas Trust Act and claim for fraud separately for

jurisdictional purposes); Michiana Easy Livin’ Country, Inc., 168 S.W .3d at 785

(explaining that only the defendant’s contacts with the forum count, not the unilateral

activity of another party or third person); see also Seiferth v. Helicopteros Atuneros,

Inc., 472 F.3d 266, 274–75 (5th Cir. 2006) (recognizing that specific jurisdiction is

a claim-specific inquiry).

11
 A. Moncrief Oil’s Jurisdictional Allegations

As to each Appellee, Moncrief Oil pleaded, “[Appellee] has done business in

Texas (as defined in Texas Civil Practice & Remedies Code § 17.042). It is

therefore subject to personal jurisdiction in this State.” Moncrief Oil’s live pleading

then sets forth thirty-five paragraphs of factual statements, including allegations that

during settlement negotiations in Fort W orth, Texas, relating to Moncrief Oil’s federal

lawsuit against Gazprom, Moncrief Oil shared “confidential information with Timothy

Sutherland and Alexander Medvedev” (who were acting on behalf of Gazprom and

Gazprom Export) based on representations by those individuals that they would

keep the information confidential. Moncrief Oil alleged that the confidential

information included “confidential details of Moncrief’s joint venture with Occidental,

in-depth market analysis of the North American midstream/pipeline market, and in-

depth studies and assessments of existing and proposed re-gasification facilities

located in North America and in the Gulf Coast area of the United States.” Moncrief

Oil further alleged that Gazprom scheduled a meeting with Occidental in California

and threatened Occidental if it did not pressure Moncrief Oil to settle or end its

federal litigation against Gazprom. And finally, Moncrief Oil alleged that Appellees

used the confidential information obtained from Moncrief Oil to open their own LNG

regasification facility in Houston, Texas, via an entity named GMT USA.

Based on these facts, Moncrief Oil pleaded causes of action for tortious

interference with its Occidental joint venture, misappropriation of trade secrets, and

12
conspiracy to tortiously interfere and to misappropriate trade secrets 7 by Appellees.

Moncrief Oil also pleaded that Gazprom Marketing & Trading, Ltd. was the alter ego

of or fused with GMT USA. Moncrief Oil claims that the trial court possesses general

and specific jurisdiction over Gazprom and specific jurisdiction over Gazprom Export

and Gazprom Marketing & Trading, Ltd.

B. Time Line

The affidavits, deposition excerpts, and documentary evidence submitted to

the trial court establish the following time line of Appellees’ contacts with Moncrief

Oil and with Texas. W hile the subject of the meetings and the conversations that

occurred at the meetings are disputed, the fact that these contacts occurred is not

disputed.

July 2004

Moncrief Oil’s CEO, Richard Moncrief, meets with the Chairman of Gazprom’s
Management Board, Alexey Miller,8 in Moscow, Russia. The purpose of this
meeting was to discuss a proposed joint venture between Moncrief Oil,
Occidental, and Gazprom involving a regasification plant in Ingleside, Texas.

7
 Appellees correctly point out that Moncrief Oil’s conspiracy claims are
based on the alleged torts of interference with the Occidental joint venture and
misappropriation of trade secrets and that, accordingly, because no factually distinct
basis exists for Moncrief Oil’s conspiracy claims, they add nothing to our
jurisdictional analysis. See Guidry v. U.S.Tobacco Co., 188 F.3d 619, 625 (5th Cir.
1999) (holding plaintiff must establish personal jurisdiction over a defendant
individually and not as part of a conspiracy). Accordingly, we do not further address
Moncrief Oil’s conspiracy claims in our jurisdictional analysis.
8
 W e use the spelling “Alexey” found in the Affidavit of Richard W . Moncrief.
W e note that at other places in the record the name is spelled “Alexi.”

13
2004 through early 2005

Moncrief Oil’s Jeff Miller and Andrey Konstantinovitch Krivorotov, Advisor to
the Deputy Head of the Management Board of Gazprom, exchange over fifty
communications (emails and phone calls). These communications were to
and from Moncrief Oil’s Fort W orth office.

September 2004

Moncrief Oil’s Jeff Miller and Moncrief Oil’s CFO, David Maconchy, meet Ivan
Zolotov, special assistant to Alexey Miller, in Moscow, Russia. Moncrief Oil
discloses confidential trade secret information to facilitate the joint venture
between Moncrief Oil, Occidental, and Gazprom.

September 22, 2004

Richard Moncrief meets Gazprom’s Alexander Ryazanov in Washington, D.C.,
to further discuss the joint venture. Moncrief Oil’s trade secret information is
again presented.

June 7, 2005

Moncrief Oil files a federal lawsuit against Gazprom and other defendants.

October and November 2005

Three meetings occur:

1. Houston, Texas: Richard Moncrief meets Alexander Medvedev,9 and
Gazprom Export’s Timothy Sutherland. Moncrief disclosed updated
confidential information concerning the Ingleside, Texas, regasification facility;
the importation of LNG into the North American market; potential marketing
partners; and the marketing of regasified LNG. Medvedev and Sutherland
agreed to maintain the confidentiality of the information and to not use or
disclose it to any third parties.
2. Boston, Massachusetts: Richard Moncrief meets with Medvedev and
Sutherland. They continue discussions concerning the Ingleside

9
 The Gazprom Defendants have overlapping boards, officers, and directors.
Alexander Medvedev served as Deputy Chairman of Gazprom, as Director General
of Gazprom Export, and as a director of Gazprom Marketing & Trading, Ltd.

14
 regasification facility. Moncrief claims that he again reminded Medvedev and
Sutherland of the confidential nature of the information he was providing and
that they both agreed to keep the information confidential and to not use or
disclose it.

3. Fort W orth, Texas: Richard Moncrief, Miller, and Maconchy meet with
Sutherland. Sutherland claims to be acting on behalf of Gazprom and
Gazprom Export. They continue discussions relating to the Ingleside facility
and Moncrief Oil’s competitive assessment of the North American mid and
downstream natural gas markets. Moncrief claims that he again emphasized
the confidential nature of the information and that Sutherland again promised
to keep the information confidential and to not use or disclose it.

February 2006

Sutherland and Boris Ivanov acting on behalf of Gazprom meet with
Occidental’s Todd Stevens and Casey Olson in California.

July 2006

GMT USA opens in Houston, Texas, for the regasification of LNG.

April 3, 2008

Moncrief Oil files the present lawsuit.

C. OAO Gazprom

Gazprom is a Russian company with its principal place of business in Russia.

Gazprom’s special appearance alleges that it is not a citizen nor a resident of Texas;

does not maintain a registered agent in Texas; does not maintain a place of

business in Texas; has no employees, servants, or agents in Texas; did not commit

any statutory violation, breach of contract, or tort, in whole or in part, in Texas; has

had no continuous or systematic contacts with Texas; and did not commit any acts

that would put it on notice that it was subject to the jurisdiction of a Texas court.

15
Gazprom’s special appearance is verified by Krivorotov, Advisor to the Deputy Head

of the Management Board of Gazprom.

1. General Jurisdiction

As set forth above, Gazprom’s contacts with Texas include extensive phone

calls and emails to Moncrief Oil’s Texas office concerning a proposed, but never

consummated, business deal and meetings in October and November 2005 in Fort

W orth and Houston, Texas, at which Richard Moncrief disclosed confidential

information to Gazprom. Negotiating by phone and email with a single Texas

resident about the possibility of doing business in Texas cannot itself constitute

doing business in Texas for purposes of general jurisdiction. See, e.g., PHC-Minden

L..P., 235 S.W .3d at 170–71 (holding contacts with Texas would not support general

jurisdiction).10 Traveling to Texas twice in two months for meetings that did not result

in a signed contract or venture with a Texas resident likewise is not the type of

longstanding, continuous, and systematic contact required for the exercise of

general jurisdiction over Gazprom to satisfy federal due process. See PHC-Minden

L..P., 235 S.W .3d at 170 (explaining that two trips to Texas by PHC-Minden L.P.

employees were insufficient to support the exercise of general jurisdiction over PHC-

10
 Even entering into a contract with a Texas resident does not alone satisfy
the federal due process minimum contacts requirement for purposes of general
jurisdiction. See, e.g., Burger King Corp., 471 U.S. at 478, 105 S. Ct. at 2185 (“If the
question is whether an individual’s contract with an out-of-state party alone can
automatically establish sufficient minimum contacts in the other party’s home forum,
we believe the answer clearly is that it cannot.”).

16
Minden L.P.). Thus, these three instances of contacts by Gazprom with Texas do

not, as a matter of law, rise to the level of minimum contacts necessary to subject

Gazprom to general jurisdiction in a Texas state court. See id. at 167–69 (quoting

the holding in Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408,

416–17, 104 S. Ct. 1868, 1873 (1984), that sending CEO to Texas for contract

negotiation session, accepting checks drawn on Texas bank, purchasing products

from Texas, and sending personnel to Texas for training did not constitute

continuous, systematic contacts that would satisfy federal due process requirement).

Thus, we hold that the trial court properly determined that it could not, consistently

with federal due process guarantees, exercise general personal jurisdiction over

Gazprom.

W e overrule the portion of Moncrief Oil’s second issue contending that general

jurisdiction exists over Gazprom in Texas state courts.

2. Specific Jurisdiction

W e next address whether the Texas long-arm statute authorizes Texas

jurisdiction over Moncrief Oil’s claims against Gazprom for tortious interference with

the Occidental joint venture and for misappropriation of trade secrets,

whether—focusing on the relationship between Gazprom, Texas, and the

litigation—Gazprom’s contacts with Texas were purposeful and whether Moncrief

Oil’s alleged causes of action arise from or relate to those contacts. See Moki Mac

River Expeditions, 221 S.W .3d at 579; BMC Software Belg., N.V., 83 S.W .3d at 796.

17
 a. Tortious Interference With Joint Venture

Concerning Moncrief Oil’s tortious interference claim, the special appearance

record conclusively establishes that any tortious interference with Moncrief Oil’s

Occidental joint venture that may have occurred happened in California. The

meeting between Gazprom and Occidental’s Todd Stevens at which Gazprom

allegedly made threats that interfered with the business relationship existing between

Occidental and Moncrief Oil occurred in California. Because the elements of this

alleged tort purportedly occurred in California, not Texas, specific jurisdiction over

this claim does not exist in Texas. See BMC Software Belg., N.V., 83 S.W .3d at

796–97 (holding specific jurisdiction did not exist in Texas for fraud and negligent

misrepresentation claims when based on conversations and negotiations that

occurred outside of Texas).

Moncrief Oil nonetheless points out that Gazprom’s tortious interference with

its Occidental joint venture was “directed toward” Texas and claims that it suffered

damages in Texas. The Texas Supreme Court in Michiana Easy Livin’ Country, Inc.

rejected the “directed-a-tort-at-Texas” specific jurisdiction analysis. 168 S.W .3d at

790–92; see also Kelly, 301 S.W .3d at 661 (reversing court of appeals for applying

directed-a-tort-at-Texas analysis and explaining, “we rejected the concept of

directed-a-tort jurisdiction in Michiana.”). The supreme court in Michiana Easy Livin’

Country, Inc. noted that the directed-a-tort-at-Texas analysis shifted the focus from

the relationship between the defendant, the forum, and the litigation to a focus on the

18
plaintiff, the forum, and the litigation. 168 S.W .3d at 790. The supreme court noted

that this analysis also confused the roles of judges and juries by equating the

jurisdictional inquiry with the underlying merits; that is, under the directed-a-tort-at-

Texas analysis, a defendant may defeat personal jurisdiction by proving the

merits—that no tort occurred. Id. The supreme court explained that “[b]usiness

contacts are generally a matter of physical fact, while tort liability (especially

misrepresentation cases) turns on what the parties thought, said, or intended. Far

better that judges should limit their jurisdictional decisions to the former rather than

involving themselves in trying the latter.” Id. at 791. Thus, that Gazprom’s alleged

tortious interference with the Moncrief Oil-Occidental joint venture was “directed at”

Texas–to the extent that Moncrief Oil is a Texas resident or because Moncrief Oil as

a Texas resident alleges it suffered damages in Texas–is insufficient to confer

specific jurisdiction on Texas courts over this claim. See id. at 789–90 (explaining

that it is the extent of the defendant’s conduct and connection with the forum that is

the critical focus, not simply the residence of the plaintiff).11

11
 Moncrief Oil also cites Retamco Operating, Inc. for the proposition that the
tort of tortious interference with the joint venture occurred at least partially in Texas
because the resulting injury occurred in Texas. 278 S.W .3d at 340–41. But the
Retamco Operating, Inc. facts are distinguishable from the facts here; in Retamco
Operating, Inc., the nonresident defendant purchased oil and gas interests in Texas.
Id. at 339. The Texas Supreme Court noted that oil and gas interests are real
property interests and explained that “[u]nlike personal property, [the nonresident’s]
real property will always be in Texas, which leaves no doubt of the continuing
relationship that this ownership creates.” Id. Here, Moncrief Oil’s alleged injury
occurred in Texas not because of Gazprom’s connection to or ownership of Texas
real property, but only because Moncrief Oil is a Texas resident.

19
 The cases relied upon by Moncrief Oil in support of its directed-a-tort-at-Texas

jurisdictional analysis were either decided before Michiana Easy Livin’ Country, Inc.

or are distinguishable on their facts. See, e.g., Retamco Operating, Inc., 278 S.W .3d

at 333; see also Cent. Freight Lines Inc. v. APA Transp. Corp., 322 F.3d 376 (5th

Cir. 2003); Union Carbide Corp. v. UGI Corp., 731 F.2d 1186 (5th Cir. 1984). Thus,

we hold that the trial court properly granted Gazprom’s special appearance

concerning Moncrief Oil’s tortious interference claim.

W e overrule the portion of Moncrief Oil’s second issue contending that the trial

court possesses specific jurisdiction over Gazprom based on Moncrief Oil’s tortious

interference with a business relationship claim.

b. Misappropriation of Trade Secrets

W e next address whether specific jurisdiction exists over Gazprom concerning

Moncrief Oil’s misappropriation of trade secrets claim. The elements of

misappropriation of trade secrets are (1) existence of a trade secret, (2) breach of

a confidential relationship or improper discovery of a trade secret, (3) use of the

trade secret, and (4) damages. IBP, Inc. v. Klumpe, 101 S.W .3d 461, 467 (Tex.

App.—Amarillo 2001, pet. denied).

Gazprom claims that the information that Richard Moncrief disclosed at the

meetings was not confidential and did not constitute trade secrets. But neither the

trial court nor this court is permitted to determine the merits of Moncrief Oil’s claims

in making a jurisdictional determination. See Michiana Easy Livin’ Country, Inc., 168

20
S.W .3d at 790–91. Moncrief Oil alleged in its petition and Richard Moncrief asserted

in his affidavit that Moncrief Oil provided confidential trade secret information to

Gazprom at various meetings with Gazprom, including the meetings in Houston and

Fort W orth, Texas. These allegations and sworn assertions sufficiently allege that

the commission of a part of the tort of misappropriation of trade secrets occurred in

Texas to authorize personal jurisdiction under the Texas long-arm statute and to shift

the burden to Gazprom to negate this basis of personal jurisdiction. See Tex. Civ.

Prac. & Rem. Code Ann. § 17.042(2) (providing that a nonresident does business

in Texas when he commits a tort in whole or in part in Texas); see also Pulmosan

Safety Equip. Corp. v. Lamb, 273 S.W .3d 829, 839 (Tex. App.—Houston [14th Dist.]

2008, pet. denied) (holding plaintiff was not required to prove he actually used a

Pulmosan hood because that was a merits-based question; instead, allegation of

use of a Pulmosan hood in Texas was sufficient to shift burden to defendant to

negate jurisdiction).

Gazprom claims that it factually negated specific jurisdiction over Moncrief

Oil’s alleged misappropriation of trade secrets claim by proving that Moncrief Oil

disclosed its alleged trade secret information to the U.S. Department of Energy and

through Todd Stevens’s testimony that a major oil company with the right

connections could discover from public sources all of the information that Moncrief

Oil claims constitutes trade secrets. These arguments by Gazprom are waiver

arguments—that Moncrief Oil waived the allegedly secret nature of the information.

21
W aiver is an affirmative defense. Tex. R. Civ. P. 94 (stating waiver is an affirmative

defense); In re EPIC Holdings, Inc., 985 S.W .2d 41, 57 (Tex. 1998) (orig.

proceeding) (“W aiver is an affirmative defense.”). An affirmative defense does not

tend to rebut factual propositions asserted by a plaintiff, but rather it seeks to

establish an independent reason why the plaintiff should not recover. Gorman v. Life

Ins. Co. of N. Am., 811 S.W .2d 542, 546 (Tex.), cert. denied, 502 U.S. 824 (1991).

Here, Gazprom claims that even if the information disclosed to it by Moncrief Oil

does constitute trade secret information, Moncrief Oil nonetheless waived the

privileged nature of the information because it disclosed the information to the U.S.

Department of Energy and because the right inquiries to the right public entities

could allegedly result in the discovery of the same information.12 Because these

arguments by Gazprom—whether correct or not—assert its right to prevail on the

merits of Moncrief Oil’s misappropriation of trade secrets claim based on the

affirmative defense of waiver, we are not to address them in our jurisdictional

analysis. See Michiana Easy Livin’ Country, Inc., 168 S.W .3d at 790–91

12
 Stevens testified, in part:

Q. But you would expect that any – and I’ll limit this not to people on
the street, but any sophisticated gas company would be able to obtain
any of the information that’s in Exhibit No. 3 through their own efforts
in the public domain. W ould you agree with that?

....

A. If they had the right resources, they could - - they could probably do
it.

22
(recognizing fallacy of nonresident defendant’s attempt to defeat jurisdiction on basis

of merits of claim); see also In re BP Prods. N. Am. Inc., 263 S.W .3d 106, 115–17

(Tex. App.—Houston [1st Dist.] 2006, orig. proceeding) (holding disclosure of

reserve figure to SEC did not waive privilege).

Moncrief Oil’s pleading and Richard Moncrief’s affidavit and deposition

testimony allege that Gazprom “used” the trade secret information (the third element

of Moncrief Oil’s misappropriation of trade secrets cause of action) it obtained in

Texas by setting up GMT USA in Houston, Texas, an entity that Moncrief Oil alleges

engages in the very business proposed by Moncrief Oil to Occidental and Gazprom

via the Ingleside, Texas, regasification facility. Gazprom, however, points to

excerpts from Richard Moncrief’s deposition testimony as jurisdictional evidence

factually negating this alleged basis for specific personal jurisdiction. Viewed in

context, the testimony Gazprom points to does not negate Gazprom’s alleged “use”

of Moncrief Oil’s trade secret information in Texas.13 Thus, Gazprom has not, for

13
 Gazprom quotes Richard Moncrief’s deposition testimony that he would
be speculating as to how Gazprom used Moncrief Oil’s trade secrets, but the entirety
of his testimony on the issue was as follows:

Q. And so can you identify for us anything that Gazprom has done to
use Moncrief’s confidential trade secrets?

A. I can’t be specific about it until we get a chance to examine their
records.

Q. In paragraph 24, sir, that first sentence, it says, in 2007, after the
Gazprom/Pace meeting with Occidental and after Defendant Gazprom
Marketing & Trading USA, Inc. began operations using Moncrief’s trade

23
jurisdictional purposes, factually negated either that Moncrief Oil disclosed trade

secret information to Gazprom in Texas or that Gazprom used Moncrief Oil’s trade

secret information in Texas.

Having determined that the Texas long-arm statute authorizes the trial court’s

exercise of jurisdiction over Gazprom concerning Moncrief Oil’s misappropriation of

trade secrets claim and that Gazprom has not factually negated Moncrief Oil’s

allegations of specific jurisdiction concerning this claim, we next address whether

this exercise of jurisdiction by the trial court would be consistent with federal

constitutional due-process guarantees. See Moki Mac River Expeditions, 221

S.W .3d at 574. As previously stated, the focus of a due process, minimum contacts

analysis is on the nonresident defendant’s activities and expectations. Michiana

Easy Livin’ Country, Inc., 168 S.W .3d at 790. There are three parts to a purposeful

secrets - - I’m going to stop the sentence there. It continues, sir.

Now, my question for you is, how did Defendant Gazprom
Marketing and Trading USA, Inc. begin operations using Moncrief’s
trade secrets?

A. W e can’t document that until we’ve had a chance to look at the
records.

Q. Can you –

A. It’s our belief.

Q. Can you identify for us, sir, anything that Gazprom Marketing and
Trading USA, Inc. did to use Moncrief’s confidential trade secrets, sir?

A. I would be speculating right now.

24
availment inquiry: (1) only the nonresident defendant’s contacts with the forum are

relevant, not the unilateral activity of another party or a third person; (2) the contacts

relied on must be purposeful rather than random, fortuitous, or attenuated; and (3)

the nonresident defendant must seek some benefit, advantage, or profit by availing

itself of the jurisdiction. See Moki Mac River Expeditions, 221 S.W .3d at 575;

Michiana Easy Livin’ Country, Inc., 168 S.W .3d at 784–85.

Focusing on the relationship between Gazprom, Texas, and the litigation, we

examine whether the contacts relied upon by Moncrief Oil are attributable to

Gazprom, whether the contacts were purposeful, and whether Moncrief Oil’s claim

for misappropriation of trade secrets arises from or relates to those contacts. See

Moki Mac River Expeditions, 221 S.W .3d at 579; BMC Software Belg., N.V., 83

S.W .3d at 796. As set forth above, the contacts Moncrief Oil alleges concerning its

misappropriation of trade secrets claim are Gazprom’s emails and phone calls to

Moncrief Oil’s Fort W orth, Texas, office and two trips by Gazprom to Texas for

meetings with Moncrief Oil. Moncrief Oil alleges that confidential trade secrets were

provided to Gazprom during the emails, phone calls,14 and at the Texas meetings

14
 Moncrief Oil’s Jeff Miller testified by affidavit:

I spoke almost daily with Gazprom’s Krivorotov over the telephone from
July 2004 through January 2005. I estimate that I had at least 50
telephone conversations with Mr. Krivorotov during that time period. . . .
I discussed in detail Moncrief’s proposal to Gazprom concerning access
to Texas-based LNG facilities, participation in the United States gas
and power marketing, and a competitive assessment of the North
American mid and downstream natural gas markets. From the outset,

25
based on Gazprom’s continued promise to keep the information confidential and to

not use or disclose it. No dispute exists that these contacts are attributable to

Gazprom or that Moncrief Oil’s claim for misappropriation of trade secrets arises

from or relates to these alleged contacts. Thus, we address the second prong of the

due process purposeful availment inquiry, that is, whether these contacts by

Gazprom with Texas were purposeful rather than random, fortuitous, or attenuated.

See Moki Mac River Expeditions, 221 S.W .3d at 574.

Gazprom contends that its trips to Texas were for the purpose of discussing

settlement of Moncrief Oil’s federal lawsuit and thus were merely fortuitous and

cannot as a matter of law be considered purposeful contacts with Texas.15 Gazprom

has not cited, and we have not located, any Texas cases holding that business

meetings conducted by a nonresident defendant while in Texas for a settlement

conference or a mediation automatically cannot constitute a contact with Texas.

. . . I reiterated that the information disclosed during our discussions
was confidential and should not be used or disclosed to any third party
without Moncrief’s permission.
15
 Gazprom cites several cases in support of this argument. See CEM Corp.
v. Pers. Chemistry, AB, 55 F. App’x 621, 625 (4th Cir. 2003); Nationwide Mut. Ins.
Co. v. Tryg Int’l Ins. Co., 91 F.3d 790, 796 (6th Cir. 1996); Digi-tel Holdings, Inc. v.
Proteq Telecomms. (PTE), Ltd., 89 F.3d 519, 524 (8th Cir. 1996); N. Am. Catholic
Educ. Programming Found., Inc. v. Cardinale, 536 F. Supp. 2d 181, 191 (D.R.I.
2008), vacated in part on other grounds, 567 F.3d 8 (1st Cir. 2009); Conwed Corp.
v. Nortene, S.A., 404 F. Supp. 497, 504–05, 507 n.6 (D. Minn. 1975). Unlike
Moncrief Oil’s allegations here, however, the plaintiffs in the above cited cases did
not allege that any portion of a tort cause of action occurred while the defendant was
in Texas for settlement negotiations. Consequently, these cases are factually
distinguishable.

26
Logic dictates that a nonresident coming to Texas for a settlement conference would

piggyback other business or negotiations in Texas to that trip. W e cannot agree that

all conduct of a nonresident defendant while in Texas for a settlement conference

is somehow insulated and may not be considered a contact with Texas for purposes

of a jurisdictional analysis.

Gazprom also argues that the alleged trade secret information disclosed by

Moncrief Oil in Texas had been previously disclosed to Gazprom in Moscow and in

W ashington, D.C., and was only redisclosed unilaterally by Moncrief Oil in the Texas

settlement conferences. Consequently, Gazprom argues that even if somehow a

tort claim for misappropriation of trade secrets exists, no element of it initially

occurred in Texas. W e have located no authority for the proposition that in analyzing

specific jurisdiction of a forum over a nonresident defendant for misappropriation of

trade secrets, only the forum of the initial disclosure of trade secrets counts as a

contact. The parties cite cases in which the initial disclosure of trade secret

information did occur in the forum state, but these cases did not involve an allegation

like Moncrief Oil’s allegation here that the disclosure was ongoing “during the course

of their ongoing discussions.” See, e.g., Miller Yacht Sales, Inc. v. Smith, 384 F.3d

93, 97 (3rd Cir. 2004); S & D Trading Acad., LLC v. AAFIS, Inc., 494 F. Supp. 2d

558, 567 (S.D. Tex. 2007); Delta Brands, Inc. v. Rautaruukki Steel, 118 S.W .3d 506,

511–12 (Tex. App.—Dallas 2003, pet. denied). Thus, the fact that Moncrief Oil’s

alleged disclosure of confidential trade secret information to Gazprom was repeated,

27
was updated, and had occurred at different meetings in different locations does not

defeat our consideration of the Texas disclosures in our minimum contacts analysis.

Nonetheless, Gazprom is correct that its contacts with Texas must be

purposeful and not merely random or fortuitous. See Michiana Easy Livin’ Country,

Inc., 168 S.W .3d at 784; Guardian Royal Exch. Assurance, Ltd., 815 S.W .2d at

226–27. Although we have rejected Gazprom’s claims that its trips to Texas were

fortuitous as a matter of law simply because settlement negotiations occurred in

Texas and that its phone calls and emails to Texas were fortuitous as a matter of law

simply because alleged trade secret information was repeated in Texas rather than

initially disclosed in Texas, our rejection of these arguments that would render

Gazprom’s contacts fortuitous does not mean that there is no evidence or insufficient

evidence that Gazprom’s contacts were purposeful.

Gazprom argues that its contacts with Moncrief Oil were not purposeful

because its communications with a single Texas resident that did not result in a

venture, a contract, or any kind of business deal cannot constitute a purposeful

contact with Texas. That is, Gazprom argues that negotiating to possibly do

business with a single Texas resident and deciding not to do business with that

resident cannot constitute doing business. Moncrief Oil counters that many courts

have premised specific jurisdiction on a nonresident’s contacts via phone and email

when those contacts are combined with visits to the forum and when the plaintiff’s

claims arose from or related to those contacts. Moncrief Oil relies on Glencoe

28
Capital Partners II, LP v. Gernsbacher, 269 S.W .3d 157, 165 (Tex. App.—Fort W orth

2008, no pet.), Fish v. Tandy Corp., 948 S.W .2d 886, 895 (Tex. App.—Fort W orth

1997, writ denied), and Citrin Holdings, LLC v. Minnis, 305 S.W .3d 269, 282–83

(Tex. App.—Houston [14th Dist.] 2009, no pet.).

The Texas Supreme Court in Michiana Easy Livin’ Country, Inc. limited the

viability of phone calls to a forum as constituting purposeful contacts with that forum.

168 S.W .3d at 791. The supreme court explained in Michiana Easy Livin’ Country,

Inc. that “changes in technology have made reliance on phone calls obsolete as

proof of purposeful availment.” Id. W hile Moncrief Oil is correct that courts have

nonetheless continued in some circumstances to consider phone calls in a

jurisdictional minimum contacts analysis, the facts of the cases cited by Moncrief Oil

are distinguishable from the facts here for two main reasons. First, in Glencoe, Fish,

and Citrin Holdings, the trial courts denied the nonresident defendants’ special

appearances. Because no findings of fact or conclusions of law were filed in

Glencoe, Fish, or Citrin Holdings, the appellate courts in those cases implied all

findings necessary to support the trial courts’ denial of each nonresident’s special

appearance if such findings were supported by the record. But here, the trial court

granted Appellees’ special appearances; because no findings of fact or conclusions

of law were filed, we must imply all fact findings that are supported by the record in

favor of Appellees. Second, in Fish and Citrin Holdings, the nonresident defendants

executed contracts with Texas residents, and in Glencoe, the nonresident

29
defendants participated in telephonic board meetings with Texas residents

concerning a Texas-based corporation. See Citrin Holdings, 305 S.W .3d at 281 (“It

is reasonable to subject a nonresident defendant to personal jurisdiction in Texas in

connection with litigation arising from a contract specifically designed to benefit from

the skills of a Texas resident who performs contractual obligations in Texas.”);

Glencoe, 269 S.W .3d at 164–67 (holding that nonresident defendants’ telephonic

participation over two-year span along with Texas resident board members in board

meetings of corporation located in Texas constituted purposeful availment); Fish,

948 S.W .2d at 894–95 (“He [Fish] negotiated and contracted with Tandy, a Texas

Corporation based in Fort W orth, for distributorships in Russia.”). Here, it is

undisputed that Gazprom did not enter into a contract with Moncrief Oil as did the

nonresident defendants in Fish and in Citrin Holdings, nor did Gazprom participate

telephonically in board meetings of a corporation based in Texas as did the

nonresident defendants in Glencoe. Thus, in Glencoe, Fish, and Citron Holdings,

the trial courts’ denials of the special appearances and the appellate courts’

affirmances of those denials did not rely solely on phone calls and emails to find

purposeful availment; instead, purposeful availment included contacts in addition to

phone calls–entering into a contract or participating in a board meeting of a Texas-

based corporation.

Moncrief Oil contends in its reply brief that the facts of this case are strikingly

similar to the facts in Quantum Catalitics, LLC v. Vantage Point Venture Partners,

30
No. H-07-2619, 2008 W L 5245298, at *4 (S.D. Tex. Dec. 15, 2008). The plaintiff in

Quantum Catalitics alleged misappropriation of trade secrets by a nonresident

defendant. The plaintiff pleaded that the nonresident defendant had “feigned an

interest in investing in TSI” but “actually contacted TSI ‘for the purpose of wrongfully

acquiring Plaintiffs’ Trade Secrets.’” Id. at *4. In holding that it possessed specific

jurisdiction over the nonresident defendant, the trial court noted that the nonresident

defendant “essentially concedes as much by not challenging personal jurisdiction

with regard to the state law claims,” which included the misappropriation of trade

secrets claim. Id. The trial court noted that the nonresident defendant’s request for

summary judgment on the state law claims was “an implicit admission of the court’s

jurisdictional authority” and “also a waiver of Defendant’s due-process objection to

the court’s assertion of personal jurisdiction.” Id. at *4 n.35. Because the

nonresident defendant in Quantum Catalitics implicitly admitted that the trial court

possessed jurisdiction over it for purposes of the misappropriation of trade secrets

claim and also waived any due process objection to the trial court’s assertion of

personal jurisdiction over it, that case is distinguishable from the present case in

which Appellees have not made such an admission or waiver.

Moncrief Oil points to the two meetings Gazprom attended in Texas as

constituting contacts in addition to Gazprom’s telephone and email contacts with

Texas. The affidavits, exhibits, and deposition excerpts attached to the special

appearances and responses filed with the trial court contain conflicting statements

31
on whether the purpose of Gazprom’s trips to Texas was primarily to discuss

settlement of the federal lawsuit or was also for the dual purpose of furthering a

scheme to obtain trade secrets from Moncrief Oil to utilize in the opening of GMT

USA. If Gazprom traveled to Texas primarily for the purpose of settlement

negotiations in the federal lawsuit, then given Gazprom’s activities and expectations,

the location of Texas as the place for the meeting was simply random or fortuitous.

See Michiana Easy Livin’ Country, Inc., 168 S.W .3d at 785. The affidavits, exhibits,

and deposition excerpts contain facts legally and factually supporting the trial court’s

implied finding that the location of these two meetings in Texas was merely random

or fortuitous, not purposeful. See Asshauer v. Farallon Capital Partners, L.P., 319

S.W .3d 1, 16 (Tex. App.—Dallas 2008, no pet.). These facts include that other

similar meetings were held outside of Texas, that a federal lawsuit against Gazprom

was pending in Texas, and that Moncrief Oil could and, according to Moncrief Oil,

did disclose, update, or further explain trade secret information to Gazprom in other

locations, such as Boston, Massachusetts. Deferring as we must to the trial court’s

implied findings of fact, the affidavits, exhibits, and deposition excerpts before us

contain legally and factually sufficient statements of fact to support the trial court’s

implied findings that the two meetings Gazprom attended in Texas—even when

combined with the phone conversations and emails between Gazprom and Moncrief

Oil—did not constitute purposeful availment. Moreover, deferring to this implied

32
finding, we cannot say that the facts opposing it are so overwhelming as to render

it clearly wrong and manifestly unjust. See id.

Gazprom also argues that it did not seek any benefit, advantage, or profit by

twice meeting with Moncrief Oil in Texas. Gazprom argues that it did not enjoy any

benefit by “merely exchanging communications concerning a proposed Texas-based

joint venture that Gazprom refused to join.” Because we have upheld the trial court’s

implied finding of fact that Gazprom’s contacts with Texas were not purposeful as

required under the second prong of the purposeful availment analysis, we need not

reach this argument by Gazprom, challenging the third prong of the purposeful

availment analysis.

W e overrule the remaining portion of Moncrief Oil’s second issue contending

that the trial court possesses specific jurisdiction over Gazprom based on Moncrief

Oil’s misappropriation of trade secrets claim.

D. Gazprom Export, LLC

Gazprom Export is a subsidiary of Gazprom with the exclusive right to export

Russian natural gas outside the Russian Federation. It is a Russian company with

its principal place of business in Russia. Moncrief Oil pleaded the same causes of

action, specific jurisdiction facts, and contacts with Texas concerning Gazprom

Export that it asserted concerning Gazprom. Gazprom Export admits that Timothy

Sutherland was acting on its behalf at the Texas meetings where Moncrief Oil

alleges that it disclosed trade secrets. Thus, our specific jurisdiction analysis

33
concerning Gazprom is the same for Gazprom Export, and we adopt it and

incorporate it here. For the same reasons that we held the trial court did not

possess specific jurisdiction over Gazprom for purposes of Moncrief Oil’s tortious

interference claim and Moncrief Oil’s misappropriation of trade secrets claim, we

likewise hold the same for Gazprom Export. W e overrule Moncrief Oil’s first issue.

E. Gazprom Marketing & Trading, Ltd.

Gazprom Marketing & Trading, Ltd. is a United Kingdom corporation that

markets natural gas for the Gazprom group of companies. W hile generally only the

defendant’s contacts with the forum are relevant, not the unilateral activity of another

party or a third person,16 Moncrief Oil alleges that Gazprom Marketing & Trading,

Ltd. is the alter ego of or is fused with GMT USA, a Delaware corporation having its

principal place of business in Houston, Texas. Moncrief Oil contends that, therefore,

GMT USA’s business in Houston, Texas, and its contacts with Texas establish

general jurisdiction over Gazprom Marketing & Trading, Ltd.

Texas law presumes that two separate corporations are indeed distinct

entities. BMC Software Belg., N.V., 83 S.W .3d at 798. For a parent company and

its subsidiary to be fused for jurisdictional purposes, the plaintiffs must prove the

parent company controls the internal business operations and affairs of the

subsidiary. PHC-Minden L..P., 235 S.W .3d at 175. The degree of control the parent

company exercises must be greater than that normally associated with common

16
 Moki Mac River Expeditions, 221 S.W .3d at 575.

34
ownership and directorship; the evidence must show that the two entities cease to

be separate so that the corporate fiction should be disregarded to prevent fraud or

injustice. Id.

Moncrief Oil bore the burden of proving its allegation that Gazprom Marketing

& Trading, Ltd. is the alter ego of or is fused with GMT USA. See, e.g., Capital

Tech. Info. Servs., Inc. v. Arias & Arias Consultores, 270 S.W .3d 741, 749 (Tex.

App.—Dallas 2008, pet. denied) (“The party seeking to ascribe one corporation’s

actions to another by disregarding their distinct corporate entities must prove this

allegation.”); Ramirez v. Hariri, 165 S.W .3d 912, 915 (Tex. App.—Dallas 2005, no

pet.) (same). To meet this burden, Moncrief Oil points to the deposition testimony

of John Hattenberger, the president of GMT USA. Hattenberger testified that GMT

USA is funded solely by Gazprom Marketing & Trading, Ltd.; that Gazprom

Marketing & Trading, Ltd. pays all salaries, business expenses, and overhead for

GMT USA; and that GMT USA is essentially an “asset-less” company comprised of

some furniture, computers, and cash loaned to it by Gazprom Marketing & Trading,

Ltd. Gazprom Marketing & Trading, Ltd. points out that Hattenberger also testified

that Gazprom Marketing & Trading, Ltd. did not exercise day-to-day control over the

operations of GMT USA and that Keith Martin of GMT USA testified that GMT USA

is an independent entity. Gazprom Marketing & Trading, Ltd. also argues that to the

extent it did provide financial aid to GMT USA, it did so only during the start-up

35
operations of GMT USA. Gazprom Marketing & Trading, Ltd. alleges that GMT USA

is now operating and generating its own revenues.

In determining whether Hattenberger’s deposition testimony pointed to by

Moncrief Oil satisfied its burden of rebutting the presumption that Gazprom

Marketing & Trading, Ltd. and GMT USA are separate entities, we look to whether

they observed corporate formalities. See PHC-Minden L.P., 235 S.W .3d at 175.

That is, we consider whether GMT USA’s books and Gazprom Marketing & Trading

Ltd.’s books are kept separate and whether transactions between the two are

represented by appropriate entries in their respective books in the same way as if

the two were wholly independent corporations. See PHC-Minden L.P., 235 S.W .3d

at 172 (quoting and discussing the Supreme Court case of Cannon Mfg. Co. v.

Cudahy Packing Co., 267 U.S. 333, 335, 45 S. Ct. 250, 251 (1925), and its holding

that, although the nonresident defendant had dominated its subsidiary, immediately

and completely, and had exerted control commercially and financially over the

subsidiary, because the books of each corporation were maintained separately, “the

corporate separation, though perhaps merely formal, was real”). So long as the two

corporations maintain a degree of corporate separation that is more than superficial

and the policy-making authority held and exercised by the parent is no more than

that appropriate for a sole shareholder of a corporation, this exercise of control is not

enough to warrant jurisdiction over the nonresident corporation through the resident

corporation. See PHC-Minden L.P., 235 S.W .3d at 172 (discussing Hargrave v.

Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir. 1983)). A subsidiary corporation

36
will not be regarded as the alter ego of its parent merely because of stock

ownership, a duplication of some or all of the directors or officers, or an exercise of

the control that stock ownership gives to stockholders. Id. at 175 (quoting Gentry v.

Credit Plan Corp. of Houston, 528 S.W .2d 571, 573 (Tex. 1975)); cf. Capital Tech.

Info. Servs., Inc., 270 S.W .3d at 754–55 (listing five disregard-of-corporate-

formalities type facts that rendered entities fused for jurisdictional purposes).

The record before us contains no evidence of the corporate formalities existing

between Gazprom Marketing & Trading, Ltd. and GMT USA. The facts pointed to

by Moncrief Oil–that GMT USA was initially funded solely by Gazprom Marketing &

Trading, Ltd.; that Gazprom Marketing & Trading, Ltd. paid all salaries, business

expenses, and overhead for GMT USA; and that GMT USA was essentially an

“asset-less” company comprised of some furniture, computers, and cash loaned to

it by Gazprom Marketing & Trading, Ltd.–do not necessarily mean that these two

entities have disregarded corporate formalities existing between two separate

entities. See PHC-Minden L.P., 235 S.W .3d at 172 (discussing the importance of

a complete disregard of corporate formalities in the determination of whether two

entities are fused for jurisdictional purposes); accord Ramirez, 165 S.W .3d at

916–17 (holding that inadequate capitalization of corporation is not sufficient, in and

of itself, to justify piercing the corporate veil and asserting personal jurisdiction over

shareholders). In light of the lack of this type of evidence in the record, we hold that

the trial court did not err by refusing to impute the contacts of GMT USA to Gazprom

Marketing & Trading, Ltd.

37
 W e overrule Moncrief Oil’s fourth issue.

VI. R EFUSAL TO C OMPEL M EDVEDEV’S AND IVANOV’S D EPOSITIONS

Moncrief Oil claims, alternatively, in its fifth issue that the trial court abused its

discretion by denying Moncrief Oil’s motion to compel the depositions of Alexander

Medvedev and Boris Ivanov. Appellees contend that Medvedev’s and Ivanov’s

depositions are unnecessary because Moncrief Oil has had ample time to conduct

jurisdictional discovery and has deposed six persons—including every individual

making a special appearance affidavit for Appellees and a representative of each

Appellee. Appellees point out that the record before this court is over 1,700 pages

and argue that Moncrief Oil has failed to demonstrate that any additional testimony

from these two men would be material to the jurisdictional issue before the court.

W e review a trial court’s decision to deny jurisdictional discovery under an

abuse of discretion standard. See Barron v. Vanier, 190 S.W .3d 841, 847 (Tex.

App.—Fort W orth 2006, no pet.); see also Lamar v. Poncon, 305 S.W .3d 130, 139

(Tex. App.—Houston [1st Dist.] 2009, pet. denied). In determining whether the

denial of jurisdictional discovery constituted an abuse of discretion, we consider as

nonexclusive factors the length of time the case has been on file, the materiality and

purpose of the discovery sought, and whether the party seeking the discovery has

exercised due diligence to obtain it. Barron, 190 S.W .3d at 847.

Moncrief Oil alleges that Medvedev’s and Ivanov’s depositions are material.

Moncrief Oil contends that Medvedev initiated the Texas meetings with Moncrief Oil

and “lulled Moncrief [Oil] into the false assurance that it was safe [for Moncrief Oil]

38
to share the information [with him].” Moncrief Oil’s motion to compel these

depositions alleged that Medvedev would provide testimony that Ivanov and

Sutherland were acting on behalf of Gazprom in the California meeting and that

Sutherland was acting on behalf of Gazprom at the meeting in Fort W orth. Moncrief

Oil’s motion alleged that Ivanov would provide testimony regarding his meeting with

Occidental, “including the threat he made to Occidental and his proposal to eliminate

Moncrief Oil from its joint venture with Occidental.” Moncrief Oil alleges in its

appellate brief that Ivanov was “at the center of the events in California that flowed

from the tortious acts in Texas, the combination of which ultimately culminated in the

destruction of Moncrief Oil’s Texas-based joint venture with Occidental.”

But Appellees point out that the jurisdictional evidence before the trial court

already establishes that Medvedev attended the Texas meetings, that he attended

on behalf of Gazprom and Gazprom Export, and that Ivanov attended the California

meeting at the direction of Medvedev and on behalf of Gazprom. Appellees likewise

point out that Moncrief Oil deposed other individuals present at these meetings–

including Sutherland, Stevens, and Olson–and that Richard Moncrief attended the

Texas meetings.

W e hold that the trial court did not abuse its discretion by refusing to compel

Medvedev’s and Ivanov’s depositions. Moncrief Oil does not allege or contend that

the depositions of these two men would lead to the discovery of additional contacts

with Texas. Instead, as set forth above, Moncrief Oil contends that the depositions

are material because they would show the intentional, tortious nature of Appellees’

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Texas contacts. Moncrief Oil’s contentions in this regard are fully set forth in the

record before us, and the trial court could reasonably have concluded that

Medvedev’s and Ivanov’s testimony on these issues—for jurisdictional

purposes—would simply be cumulative. See, e.g., BMC Software Belg., N.V., 83

S.W .3d at 800–01 (holding trial court did not abuse its discretion by denying motion

for continuance to permit more discovery before special appearance hearing); In re

Weir, 166 S.W .3d 861, 864 (Tex. App.—Beaumont 2005, orig. proceeding)

(explaining that trial court possesses discretion to limit scope of discovery to protect

against cumulative or duplicative discovery).

W e therefore overrule Moncrief Oil’s fifth issue.

VII. C ONCLUSION

Having overruled Moncrief Oil’s four issues and having determined that we

need not address Moncrief Oil’s issue challenging the special appearance granted

for OAO Gazprombank, we affirm the trial court’s special appearance rulings.

SUE W ALKER
JUSTICE

PANEL: GARDNER and W ALKER, JJ.; and W ILLIAM BRIGHAM (Senior Justice,
Retired, Sitting by Assignment).

DELIVERED: November 24, 2010

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