International Energy Ventures Management, L.L.C. v. United Energy Group, Ltd.
2015 U.S. App. LEXIS 14773
| 5th Cir. | 2015Background
- IEVM, a Texas company, claims it performed consulting work to help UEG (a Bermuda company with HQ in Hong Kong) acquire BP’s Pakistan assets and alleges UEG owes fees (including a 6% finder’s fee) for pre-closing services.
- Mueller, a Texas-based broker, assisted by transmitting IEVM materials and drafting documents; IEVM sued both UEG and Mueller in Texas state court for breach of contract, promissory estoppel, quantum meruit, and fraud.
- After removal to federal court, Mueller moved to dismiss for failure to state a claim; UEG moved to dismiss for lack of personal jurisdiction; IEVM sought remand and leave to amend (without a proposed amended complaint).
- The district court dismissed Mueller for failure to state a claim and dismissed UEG for lack of personal jurisdiction and defective service; IEVM appealed.
- On appeal, the Fifth Circuit affirmed dismissal of Mueller (holding IEVM failed to plead viable claims under Texas and federal standards) but reversed the dismissal as to UEG, finding prima facie specific jurisdiction over UEG in Texas and remanding for further proceedings (including service issues).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether remand to state court was required (improper joinder of Mueller) | IEVM argued it stated state-law claims against Mueller, so joinder was proper and removal improper | Defendants argued Mueller was fraudulently/improperly joined to defeat diversity because no viable claim against him | Held: Mueller was improperly joined; remand denied because IEVM failed to plead Texas claims against Mueller under Texas fair-notice and federal standards |
| Whether IEVM stated claims against Mueller | IEVM asserted breach, promissory estoppel, quantum meruit, and fraud based on Mueller’s role in communications and documents | Mueller argued there was no contract, promise, or services rendered to him; fraud allegation was conclusory | Held: Dismissal affirmed — pleadings insufficient under Texas notice standard and FRCP (including Rule 9(b) for fraud) |
| Whether arbitration clause in later Indemnity & Release Agreement (IRA) subjects past (pre-IRA) claims to Texas jurisdiction | IEVM argued the IRA supplements the unwritten original agreement, so its Texas arbitration/forum terms apply to past claims | UEG argued the arbitration clause only governs compelling arbitration and does not consent to courts’ adjudicating pre-IRA claims | Held: Even if IRA were a supplement, an arbitration clause does not impliedly consent to Texas courts hearing the merits; it supports only jurisdiction to compel arbitration |
| Whether Texas courts have specific personal jurisdiction over UEG for past-fee claims | IEVM argued UEG purposefully directed activities to Texas (negotiations with BP’s Houston office, retained Texas advisors, paid IEVM in Texas, used Texas contacts) and its claims arise from those contacts | UEG contended it lacked offices/employees in Texas and that litigation in Hong Kong would be more convenient; challenged jurisdiction | Held: Reversed district court — IEVM made a prima facie showing of specific jurisdiction: nonrandom, purposeful contacts related to the dispute and fairness factors do not defeat jurisdiction |
Key Cases Cited
- Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568 (5th Cir.) (framework for improper joinder analysis)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (federal plausibility pleading standard)
- Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (limits on general jurisdiction)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts standard for due process)
- Pervasive Software, Inc. v. Lexware GMBH & Co. KG, 688 F.3d 214 (5th Cir.) (specific jurisdiction test articulation)
- McFadin v. Gerber, 587 F.3d 753 (5th Cir.) (plaintiff’s prima facie burden for establishing jurisdiction)