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Sea Eagle Ford, LLC v. Texas Quality Well Service, LLC

United States District Court, D. Colorado

September 12, 2018




         This matter is before the Court on defendant's Motion to Dismiss for Lack of Personal Jurisdiction or in the Alternative to Transfer Venue to Texas [Docket No. 17]. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

         I. BACKGROUND[1]

         This dispute arises from an oil drilling project in Texas. Plaintiff Sea Eagle Ford, LLC operates oil and gas wells in Texas, including the Shannon 4H well in McMullen County, Texas. Docket No. 7 at 1-2, ¶¶ 1, 6. Plaintiff is organized under Texas law but has its principal place of business in Colorado. Id. at 1, ¶ 1; Docket No. 39-1.[2]

         On July 6, 2016, plaintiff entered into a contract with defendant Texas Quality Well Service, LLC under which defendant agreed to provide services at plaintiff's wells. Docket No. 7 at 3, ¶ 14; Docket No. 7-1. During the negotiations of the contract, plaintiff sent the proposed contract to defendant in Texas, where defendant signed it and sent it back to plaintiff. Docket No. 35-2 at 4-7. The contract is governed by Colorado law. Docket No. 7-1 at 2. Defendant sent its invoices for work done under the contract to plaintiff in Colorado. Docket No. 7-3 at 3-7.

         On March 21, 2017, while defendant was performing an operation on the Shannon 4H well to improve its performance, defendant dropped a string of casing and associated tools into the well, which became stuck. Docket No. 7 at 2-3, ¶¶ 7-8. It took more than two months and cost more than one million dollars to fish the materials out of the well. Id. at 3, ¶ 9. Defendant communicated with plaintiff's representatives in Colorado in the aftermath of the well incident, and third parties involved in the removal operation sent invoices to plaintiff in Colorado. Docket No. 35-3 at 2, ¶ 5. Defendant also sent letters to plaintiff in Colorado demanding that plaintiff pay the expenses related to the removal operations and stating that it would place liens on plaintiff's Texas wells if its invoices were not paid. Docket Nos. 7-2, 7-3.

         On September 6, 2017, plaintiff filed a complaint against defendant in this Court. Docket No. 1. Plaintiff alleges Colorado state law claims for negligence, breach of contract, fraud, and declaratory judgment. Docket No. 7 at 3-9. On November 3, 2017, defendant filed its motion to dismiss or to transfer the case to Texas on the ground that the Court lacks personal jurisdiction over defendant. Docket No. 17.


         The purpose of a motion to dismiss under Rule 12(b)(2) is to determine whether the Court has personal jurisdiction over a defendant. The plaintiff bears the burden of establishing personal jurisdiction. Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1417 (10th Cir. 1988). The plaintiff can satisfy its burden by making a prima facie showing. Dudnikov, 514 F.3d at 1070. The Court will accept the well-pleaded allegations of the complaint as true in determining whether plaintiff has made a prima facie showing that personal jurisdiction exists. AST Sports Sci., Inc. v. CLF Distribution Ltd., 514 F.3d 1054, 1057 (10th Cir. 2008). If the presence or absence of personal jurisdiction can be established by reference to the complaint, the Court need not look further. Id. The plaintiff, however, may also make this prima facie showing by putting forth evidence that, if proven to be true, would support jurisdiction over the defendant. Dudnikov, 514 F.3d at 1070. “[A]ny factual disputes in the parties' affidavits must be resolved in plaintiffs' favor.” Id.

         If the Court finds it has jurisdiction, defendant's alternate request, the transfer of this lawsuit to the Southern District of Texas, is governed by 28 U.S.C. § 1404(a), which provides, in pertinent part: “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” Section 1404(a) is “intended to place discretion in the district court to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (citation and quotation omitted). To warrant a transfer, the moving party must establish that: “(1) the action could have been brought in the alternate forum; (2) the existing forum is inconvenient; and (3) the interests of justice are better served in the alternate forum.” Wolf v. Gerhard Interiors, Ltd., 399 F.Supp.2d 1164, 1166 (D. Colo. 2005) (citing Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991)).

         III. ANALYSIS

         A. Personal Jurisdiction

         “In determining whether a federal court has personal jurisdiction over a defendant, the court must determine (1) whether the applicable statute potentially confers jurisdiction by authorizing service of process on the defendant and (2) whether the exercise of jurisdiction comports with due process.” Trujillo v. Williams, 465 F.3d 1210, 1217 (10th Cir. 2006) (quoting Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000)). The Colorado long-arm statute, Colo. Rev. Stat. § 13-1-124, has been construed to extend jurisdiction to the full extent permitted by the Constitution, so the jurisdictional analysis here reduces to a single inquiry of whether jurisdiction offends due process. See Pro Axess, Inc. v. Orlux Distrib., Inc., 428 F.3d 1270, 1276 (10th Cir. 2005); Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1193 (Colo. 2005). Personal jurisdiction comports with due process where a defendant has minimum contacts with the forum state and where those contacts are such that assuming jurisdiction does not offend “traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945). Minimum contacts may be established under the doctrines of general jurisdiction or specific jurisdiction. Where general jurisdiction is asserted over a nonresident defendant who has not consented to suit in the forum, minimum contacts exist if the plaintiff demonstrates that the defendant maintains “continuous and systematic general business contacts” in the state. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). Plaintiff does not argue that defendant is subject to general jurisdiction in Colorado. See Docket No. 35 at 5. Therefore, the Court limits its discussion to this issue of specific jurisdiction.

         Specific jurisdiction is present where the defendant has purposefully directed its activities at the residents of the forum and the litigation results from injuries that arise out of or relate to those activities. Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1298 (10th Cir. 1999). The specific jurisdiction analysis is two-fold. First, the Court must determine whether a defendant has such minimum contacts with Colorado that the defendant “should reasonably anticipate being haled into court” here. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Within this inquiry, the Court must determine whether the defendant purposefully directed its activities at residents of the forum, Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985), and whether plaintiff's claim arises out of or results from “actions by . . . defendant . . . that create a substantial connection with the forum State.” Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 109 (1987) (internal quotations omitted). Second, if defendant's actions create sufficient minimum contacts, the Court must consider whether the exercise of personal ...

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