STI Trucking, LLC v. Santa Rosa Operating, LLC

STI TRUCKING, LLC, d/b/a STONE TRUCKING COMPANY,, Plaintiff, v. SANTA ROSA OPERATING, LLC and SANTA ROSA DRILLING, LLC,, Defendants.

No. 20-cv-0073-JFH-CDL

United States District Court, N.D. Oklahoma

August 13, 2021

AMENDED OPINION AND ORDER

JOHN F. HEIL, III UNITED STATES DISTRICT JUDGE.

This matter is before the Court on the Motion to Dismiss for Lack of Personal Jurisdiction, filed by Defendant Santa Rosa Operating, LLC (“SRO”). Dkt. No. 13. For the reasons set forth below, the motion is granted.^[1]

I. BACKGROUND

This case arises from a contract dispute between Plaintiff, STI Trucking, LLC d/b/a Stone Trucking Company (“STI”) and Defendants SRO and Santa Rosa Drilling, LLC (“SRD”).^[2] See generally Dkt No. 8. STI is an oversize and heavy haul carrier. Id. at 2. SRO is an oil and gas exploration and operating company. Dkt. No. 8-2 at 5. SRO hired Advanced Hydrostatic Services, LLC (“Advanced”), a well service operation, to work on one of SRO's wells in Texas. Dkt. No. 13-1 at 4. Advanced used STI to transport equipment in connection with its well service operation on SRO's well. Id. Advanced requested that SRO pay STI directly for the transportation services to avoid Advanced having to re-bill the STI's invoices through its own invoicing to SRO. Id. On September 30, 2015, SRO submitted a credit application to STI in connection with services that STI would be providing for SRO. Id. at 3; Dkt. No. 8-2. The application was approved and STI created and maintained an “open account” for SRO whereby STI would deliver and provide oilfield goods and services on credit and SRO was to remit payment within thirty days of receiving STI's invoices. Dkt. No. 8-2; Dkt. No. 17-1 at 3; Dkt. No. 17-3. Under this arrangement, STI transported drilling rigs and related equipment for Advanced/SRO between September 2015 and June 2019.^[3] Id.

STI began transporting drilling rigs and related equipment for SRD in June 2017. Dkt. No. 17-1 at 3; Dkt. No. 17-4; Dkt 17-5; Dkt. No. 24 at 4. STI alleges that it did so at the request of SRO. Dkt. No. 17 at 8. STI understood that SRD was an affiliate of SRO and that it was providing services to SRD on credit under SRO's account.^[4] Dkt. No. 8 at 2-3; Dkt. No 17 at 8. STI transported drilling rigs and related equipment for SRD between June 2017 and May 2018. Dkt. No. 17-1 at 3; Dkt. No. 17-4; Dkt. 17-5; Dkt. No. 24 at 4.

STI initiated this action on January 22, 2020, in the District Court of Tulsa County. Dkt. No. 2-3 at 1-5. The case was removed to this Court on February 21, 2020. Dkt. No. 2. STI filed an amended complaint on February 27, 2020, alleging that, despite its demands, SRO and SRD have refused to pay fifteen invoices related to transportation services provided by STI and that the principal amount due on the invoices is $247, 037. Dkt. No. 8 at 4; Dkt. No. 8-1. STI asserts claims for: (1) breach of contract; (2) collection upon an open account; (3) unjust enrichment; and (4) negligent misrepresentation. Dkt. No. 8 at 5-9. STI contends that venue is mandatory in this Court due to a forum selection clause that appears on each of its invoices. Id. at 2. SRO seeks dismissal of the claims against it pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Dkt. No 13. SRO argues that the forum selection clause is unenforceable, and that SRO does not have sufficient minimum contacts with Oklahoma for the Court to exercise personal jurisdiction over it. Id. at 2-6; Dkt. No. 19 at 2-10.

II. STANDARD

Motions to dismiss under Rule 12(b)(2) test the plaintiff's theory of personal jurisdiction as well as the facts supporting personal jurisdiction. See Fed. R. Civ. P. 12(b)(2); Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 153-54 (2d Cir. 1999) (holding that the court “must determine whether the defendant in fact subjected itself to the court's jurisdiction”). “[W]hen the court's jurisdiction is contested, the plaintiff has the burden of proving jurisdiction exists.” Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir.1995). Where jurisdiction is “decided on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing” of facts that would support the assertion of jurisdiction. Id. “The allegations in the complaint must be taken as true to the extent they are uncontroverted by the defendant's affidavit.” Behagen v. Amateur Basketball Ass'n of U.S.A., 744 F.2d 731, 733 (10th Cir. 1984). However, upon a defendant's presentation of credible evidence through affidavits or other materials suggesting the lack of personal jurisdiction, the plaintiff must come forward with sufficient evidence to create a genuine dispute of material fact on the issue. See Doe v. Nat'l Med. Servs., 974 F.2d 143, 145 (10th Cir.1992). The Court will only weigh factual disputes in favor of the plaintiff if the plaintiff meets its burden of contesting the credible evidence presented by the defendant. See Wenz, 55 F.3d at 1505; Behagen, 744 F.2d at 733.

III. DISCUSSION

A. The Law Regarding Personal Jurisdiction 1. Burden of Proof

For a court to exercise personal jurisdiction over a nonresident defendant in a diversity action, the plaintiff must demonstrate the existence of every fact required to satisfy both the forum's long-arm statute and the Due Process Clause of the United States Constitution. See 12 O.S. § 2004(F); see Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir. 2011) (“The party seeking to establish personal jurisdiction over a foreign litigant must make two showings: first, that the exercise of jurisdiction is sanctioned by the state's long-arm statute; and second, that it comports with the due process requirements of the Fourteenth Amendment.”). “Because Oklahoma's long-arm statute permits the exercise of jurisdiction that is consistent with the United States Constitution, the personal jurisdiction inquiry under Oklahoma law collapses into the single due process inquiry.” Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (citing Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1416 (10th Cir. 1988)); Hough v. Leonard, 867 P.2d 438, 442 (Okla. 1993).

2. Due Process and Personal Jurisdiction

The personal jurisdiction due process analysis consists of two steps. First, the Court considers “whether the defendant has such minimum contacts with the forum state that he should reasonably anticipate being haled into court there.” Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159-60 (10th Cir. 2010) (internal quotation marks and citation omitted). A defendant may have minimum contacts with the forum state in one of two ways, providing in turn either general or specific personal jurisdiction. Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523, 1532-33 (10th Cir. 1996) (internal quotation marks and citations omitted). Second, the Court considers whether exercising personal jurisdiction over the defendant comports with “traditional notions of fair play and substantial justice.” Employers Mut. Cas. Co., 618 F.3d at 1160.

a. Step 1 - Minimum Contacts

A court may exercise general or specific personal jurisdiction depending on the character and extent of a defendant's contacts with the forum state. See Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984). “General jurisdiction is based on an out-of-state defendant's continuous and systematic contacts with the forum state, and does not require that the claim be related to those contacts.” Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1078 (10th Cir. 2008) (internal quotation marks and citation omitted).

STI does not argue that the Court has general jurisdiction over SRO, and the Court does not find that it could exercise general jurisdiction over SRO. To give rise to general jurisdiction, a defendant's contacts with the forum state must be so continuous and systematic that the defendant is “essentially at home in the State.” Xmission, L.C. v. Fluent LLC, 955 F.3d 833, 840 (10th Cir. 2020). STI has offered no evidence that SRO conducts business with any other Oklahoma entity and SRO does not maintain an office in Oklahoma. SRO is a foreign limited liability company, whose sole member is domiciled in Texas. Dkt. No. 8 at 1; Dkt. No. 13-1 at 1. STI does not dispute that SRO does not conduct business in Oklahoma and the Court finds that SRO's contacts with Oklahoma are not so systematic and continuous that it could generally expect to be sued in the state. Dkt. No. 17 at 13-15.

As the requirements of general jurisdiction are not met here, only the requirements of specific jurisdiction are at issue. Specific jurisdiction “is premised on something of a quid pro quo: in exchange for benefitting from some purposive conduct directed at the forum state, a party is deemed to consent to the exercise of jurisdiction for claims related to those contacts.” Id. (emphasis in original) (internal quotation marks and citation omitted). A court may assert specific jurisdiction “if the defendant has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal quotation marks and citation omitted). This inquiry involves a two-part test: “[f]irst ... the out-of-state defendant must have purposefully directed its activities at residents in the forum state, and second ... the plaintiff's injuries must arise out of defendant's forum-related activities.” Dudnikov, 514 F.3d at 1071.

In assessing minimum contacts in the context of contract disputes, the Court considers the parties' “prior negotiations and contemplated future consequences, along with the...