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

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 Drilling, LLC (“SRD”). Dkt. No. 56. For the reasons set forth below, the motion is granted.

I. BACKGROUND

This case arises from a contract dispute between Plaintiff, STI Trucking, LLC d/b/a Stone Trucking Company (“STI”) and Defendants Santa Rosa Operating (“SRO”) and SRD.^[1] 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 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.^[2]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.^[3] 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 asserted claims for: (1) breach of contract; (2) collection upon an open account; (3) unjust enrichment; and (4) negligent misrepresentation.^[4] 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.

On March 20, 2020, SRO moved to dismiss the claims against it for lack of personal jurisdiction. Dkt. No. 13. The Court granted SRO’s motion on February 1, 2021 and set a scheduling conference for February 22, 2021. Dkt. No. 36; Dkt. No. 37. During the scheduling conference, counsel for SRD indicated that it intended to pursue a personal jurisdiction defense. The Court permitted briefing on the issue of whether the defense was waived since SRD had not sought a decision on the merits earlier. Dkt. No. 40; Dkt. No. 42; Dkt. No. 43; Dkt. No. 44. Ultimately SRD was permitted to file its motion to dismiss for lack of personal jurisdiction, which is now before the Court. Dkt. No. 56.

II. DISCUSSION

A. Waiver of a Personal Jurisdiction Defense

For a court to exercise personal jurisdiction over a nonresident defendant in a diversity action, the “plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.” Hunger U.S. Special Hydraulics Cylinders Corp. v. Hardie-Tynes Mfg. Co., 203 F.3d 835 (10th Cir. 2000) (internal quotation marks and citation omitted).

Because the requirement of personal jurisdiction represents “an individual right, it can, like other such rights, be waived.” Insurance Corp. of Ireland, Ltd., v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982). Rule 12(h)(1) of the Federal Rules of Civil Procedure provides that a defense based on lack of personal jurisdiction is waived if not made by motion or included in a responsive pleading. See Fed. R. Civ. P. 12(h)(1). This rule “sets only the outer limits of waiver; it does not preclude waiver by implication.” Hunger, 203 F.3d 835 at *2 (internal quotation marks and citation omitted). “Asserting a jurisdictional defect in the answer [does] not preserve the defense in perpetuity. This defense may be lost by failure to assert it seasonably, by formal submission in a cause, or by submission through conduct.” Id. (alteration in original) (internal quotation marks and citation omitted). In this case neither party disputes that SRD timely asserted the defense by raising the issue in its answer [Dkt. No. 24 at 9].

A personal jurisdiction challenge may also be waived where a defendant substantially participates in the litigation without actively pursuing a Rule 12(b)(2) defense. See Hunger, 203 F.3d 835 at *2. Under those conditions, courts have generally determined that a defendant abandons any objection to personal jurisdiction after lengthy participation in litigation. See, e.g., id. (concluding that the defendant waived an objection to personal jurisdiction by waiting more than three years to file a Rule 12(b)(2) motion); Rates Technology Inc. v. Nortel Networks Corp., 399 F.3d 1302, 1309 (Fed. Cir. 2005) (observing that “a party may consent to personal jurisdiction by extensively participating in the litigation without timely seeking dismissal”); Hamilton v. Atlas Turner, Inc., 197 F.3d 58, 59 (2d Cir. 1999) (reasoning that the defendant “forfeited its defense of lack of personal jurisdiction by participating in extensive pretrial proceedings and forgoing numerous opportunities to move to dismiss during the four-year interval that followed its inclusion of the defense in its answer”).

In determining whether a defendant has waived its personal jurisdiction defense, courts consider all of the relevant circumstances. Hamilton, 197 F.3d at 61. The length of time between a defendant’s initial assertion of the defense and the time the defendant seeks a ruling on the merits may be a relevant factor, however, is not determinative. See Id. (“Although the passage of time alone is generally not sufficient to indicate [waiver of the defense], the time period provides the context in which to assess the significance of the defendant’s conduct.”).

Waiver is typically found where the defendant’s conduct throughout the course of litigation “manifests an intent to submit to the court’s jurisdiction.” Yeldell v. Tutt, 913 F.2d 533, 539 (8th Cir. 1990); see Hamilton, 197 F.3d at 62 (holding that the defendant forfeited its personal jurisdiction defense by actively participating in pretrial proceedings and failing to move for dismissal for lack of personal jurisdiction “despite several clear opportunities to do so during the four-year interval after filing its answer.”); Cont’l Bank, N.A. v. Meyer, 10 F.3d 1293, 1297 (7th Cir. 1993) (holding that the defendants waived their personal jurisdiction defense where they engaged in lengthy discovery and filed numerous motions over the course of two-and-a-half years without actively contesting personal jurisdiction); Hunger, 203 F.3d 835 at *2-3 (holding that the defendant waived its personal jurisdiction defense where it actively participated in the litigation, sought affirmative relief, and did not pursue a ruling on its personal jurisdiction defense for three years, by which time most of the claims in the case had been resolved or dismissed).

Courts place particular weight on whether a defendant has requested any form of affirmative relief from the court. See Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 443-44 (3d Cir. 1999) (holding that the defendants submitted themselves to the district court’s jurisdiction by seeking affirmative relief in the form of summary judgment “before securing a determination on their personal jurisdiction defenses.”); Yeldell, 913 F.2d at 539 (holding that the defendants’ conduct manifested an intent to submit to the district court’s jurisdiction where the defendants raised the issue of personal jurisdiction on appeal after having “participated in discovery, filed various motions, participated in a five-day trial, filed post-trial motions, all without raising the issue of personal jurisdiction or requesting a ruling on it.”); Ramos v. Foam Am., Inc., No. CV 15-980 CG/KRS, 2018 WL 987243, at *5-6 (D.N.M. Feb. 20, 2018) (finding that the defendant did not waive its personal jurisdiction defense despite having participated in discovery and waiting nearly one year to pursue the defense, because the defendant had not sought affirmative relief from the court); Qassas v. Daylight Donut Flour Co., LLC, No. 09-CV-0663-CVE-PJC, 2010 WL 1816403, at *3 (N.D. Okla. May 3, 2010) (finding that the defendant did not waive its personal jurisdiction despite having participated in some discovery, where the defendant raised the defense in its initial pleading and did not seek any other relief from the court); Media Res., Inc. v. Glob. Paper 3834875 Canada, Inc., No. CIV-05-1038-C, 2006 WL 8436512, at *1 (W.D. Okla. May 12, 2006) (fin...