*1 can never almost hurdle jurisdictional [or day likely hold never, some the Court will by a court.” or waived be ‘harmless’
—] 2409 n. 3. Id., n. summary judgment
Accordingly, appeal affirmed.
against May is is dismissed for
imposition of sanctions
want PART AND AF- IN
DISMISSED
FIRMED IN PART. SERVICES,
GULF CONSOLIDATED
INC., Plaintiff-Appellee, PIPEWORKS, S.A.,
CORINTH
Defendant-Appellant.
No. 89-2451. Appeals, Court of
United States
Fifth Circuit.
April
GEE, Judge: Circuit presents case Today’s casing manufac- oil field whether Greek organiza- turer, licensed a Texas-based manufacturer to war- allows the tion which standards, set conformity certain rant court in Texas to properly haled into was its failed answer a claim that Because the standards. conform to those that its expectation manufacturer had Texas, hav- used products would be being required to its ing determined that unfair, we suit Texas was defend per- court’s exercise of affirm the district sonal
I. Facts
Con-
plaintiff-appellee,
nominal
Gulf
The
Services,
(“Gulf”) is a Texas
solidated
principal
corporation with its
office
insurer,
Houston,
party
the real
Texas. Its
action, is
prosecuted this
in interest who
Company
Insurance
American Motorists
(“AMI”), an
Illinois
place
Illinois.
principal
of business
Pipeworks,
defendant-appellant, Corinth
princi-
S.A.,
corporation with its
is a Greek
Athens,
Greece.
pal office
Gulf,
name of
In 1980
Interna-
under
(“IMS”),
Co.
tional Materials & Services
importing
engaged
the business
year,
selling pipe. In
of that
October
field
1,260joints of steel oil
purchased
IMS
casing from
Corinth warranted
Corinth.
ac-
casings were manufactured in
Insti-
Petroleum
cordance with American
(“API”) standards.
tute
Houston,
casings arrived
After the
threading
pipe
they
sent to
were
Following threading, 66
company.
joints
Eastham, Watson,
Newton,
Dale
Joseph
casings
then sold
IMS to
Houston, Tex.,
defendant-ap-
for
Forney,
(“United”) in Mid-
Pipe
Supply
&
United
&
pellant.
land,
subsequently sold the
Texas. United
Buchanan. The 66
Wayman
one
King, Funderburk & Funder-
Howard
well,
Mr. Buchanan’s oil
joints were sent to
Tex.,
burk, Houston,
plaintiff-appellee.
County, Texas.
Neely
in Wheeler
No.
well,
operations on the
During drilling
separate loca-
in seven
failed
tions,
increasing the cost of
well
$433,587.81.
joints of the
unused
GEE, REAVLEY,
Two
Before
were taken
Failure
sent
to the site
GARWOOD,
Judges.
Circuit
Houston,
being
where
as to avoid
haled into Texas. Corinth
Associates
Analysis
following
maintains that the
facts demon-
indi-
Metallurgical tests and examinations
strate its successful avoidance of minimum
casings contained weld
the two
cated that
present
contacts with Texas
transac-
demonstrated
defects. These defects
seam
*3
Corinth,
tion:
a Greek
with its
casings inspected were not manu-
Greece,
factory
reg-
and
in
offices
specifica-
API
in
with
factured
accordance
in
istered to do business Texas or
other
Mr.
reimbursed
Buchanan
tions. United
States;
it
location
United
maintains
drilling expenses in-
the additional
for
office,
agent,
no
or assets
the United
reimbursed,
curred;
and United was
States;
negotiated
IMS and Corinth
turn, by AMI.
by telegram;
transaction
the actual sale
trial,
Following a
the district court
bench
Greece;
place
opened
took
IMS
its letter
of an ex-
liable for breach
found Corinth
Athens;
of credit at a Greek bank
under
casing would meet
press warranty sale, performance
the terms of the
was
and for breach of the
specifications
API
complete
it
delivered the
merchantability
and
implied warranties
Greece,
the ocean carrier
the risk of loss
particular purpose.
The court
fitness for
transferring
plaintiff
at that time.
$433,587.88,
damages
actual
awarded
Corinth also notes that all of its sales of
in the amount of
prejudgment
pipe to United
customers had
States
been
$394,640.62, attorneys’
in the amount
fees
on similar terms.
$6,960.20.
$55,050.18 and costs of
can,
Although party
through
its
actions,
being
foreign
avoid
haled into a
II. Discussion
jurisdiction,
simple
fact that a sales
A. Jurisdiction
transaction is consummated outside that
challenge its amenabili-
Corinth does not
prevent
does not
the sale from
Long-Arm
the Texas
Stat-
ty to suit under
forming
the basis of
Oswalt
ute,
contends that it lacked sufficient
but
Inc.,
Scripto,
F.2d
v.
197 n. 8
subject to
contacts with Texas for it to be
(1980)(“jurisdiction
depend
on the
personal
jurisdiction of the district
passes”).
technicalities of when title
Nor
court.
jurisdiction always successfully evaded
merely because the defendant has avoided
satisfy
process,
the demands of due
To
physical
Burger
contact with the forum.
requirements must
met before a
two
be
Rudzewicz,
King Corp. v.
471 U.S.
defendant can
amenable to
non-resident
2174, 2184,
ment between Corinth and a Dallas- organization. B. of Law agreement Choice based It is this that allows Corinth to service Texas cus the district court maintains that seeking casings meeting tomers API stan law instead of applying erred in *5 dards. The district court found that this law, plaintiffs under which Greek agreement gave “significant a Texas Al- have been time-barred. claim would relationship sufficient” with the warranties close, hold that though question is we Corinth, made such that Texas law application of Texas law the district court’s applied. proper. to have been that as the ultimate Corinth contends A court must follow the choice- federal economic loss incurred as a result of the it sits. rules of the state which of-law AMI, casing upon fell an Illinois failures significant adopted Texas has the ‘most corporation, Texas has lost interest it relationship’ test of the Restatement may present have had lawsuit. We (1971) (Second) for section 6 of Conflicts disagree. say that Texas’s interest in To determining applicable law in con- begins and ends with the econom- this case cases, in which tracts other than those plaintiff ic loss suffered the nominal parties agreed have to a choice economic, any general ignores environmen- ‘the most The law of the state with law. tal, public safety interest Texas relationship particular significant drilling operation per- a failed govern the dis- substantive issue’ shall Moreover, the formed within its borders. pute. present case does not warranty made Mutual Insurance Co. v. Truck Atlantic Between represent an isolated occurrence. Exchange, 797 F.2d 1291 Insurance through as we note years 1978 (citations omitted). (5th Cir.1986) The Tex- above, 42 sales of API stan- Corinth made Court, applying “signifi- million, totalling goods, $73 dard tubular test, looked to the con- relationship” cant is Corinth’s customers in Texas. Texas litigation with the two fo- tacts the had goods. In API standard market for Co., rums. v. Cessna Duncan Aircraft circumstances, found Texas could be these (Tex.1984). 421 665 S.W.2d ensuring interest to have a substantial established, the these contacts are Once manufacturer, products are a whose that apply law question of state’s will in reliance purchased by customers Moreover, the number of is of law. one they conform to the upon warranty a that particular contacts with a state organization, standards of a Texas are more determinative. Some contacts for its escape responsibility allowed to they through im- important warranty than others because a six- of that breach express- underlying par- plicate policies statute of limitations which state month tolling period. Consequently, prediscovery ly issue. disallows ticular substantive 554, depends Greek Civil Code applicable law selection of sold; joints has sub- the time the 66 were as the acknowledge that Greece We joints may previous ship- have come from a protecting its citizens stantial ment, the breach statute limitations for considers time-barred. from lawsuits it warranty may have Nevertheless, run. agree district we contacts with the the Texas court trial, Curry, president the vice At Blaine litigation sufficiently are of sub- present testified purchasing IMS mandate the use Texas stantial nature to that, light practices of IMS’s and the law in its resolution. in question, conditions at the time market kept inventory would have been no there Findings of Fact C. not, however, Onyx yard. He could by the of factual determinations Review with assurance the wheth- answer “clearly limited previous shipment 24- district court er the 8% pound casing Onyx entirely of Fed.R.Civ.P. had erroneous” standard been recognizes 52(a). joints shipped. This limited review sold out when the district opportunity of the unique testimony Curry, along of Mr. credibility to make choices resolve documentary with the evidence admitted ‘ conflicts the evidence. “[U]nless trial, support finding is sufficient to is left the ‘definite appellate court casing shipped the district court form that a mistake conviction Neely No. was same that was committed,’ accept trial been must Al shipped aboard the M/V Jennie S. ’ findings.” court’s in its though Corinth is correct assertion States, F.2d Ayers v. United possi that Gulf has failed foreclose the (5th Cir.1985) (quoting Inwood Laborato bility pre the 66 were from *6 ries, Laboratories, Inc., v. 456 Inc. Ives IMS, upon vious sale from Corinth to 2182, U.S. run, might the statute of limitation have (1982)). L.Ed.2d prove on the the burden falls defendant to claim that a is time-barred. See Woods challenges two of the district Corinth Mercer, Inc., M. William S.W.2d First, findings fact. court’s of Corinth (Tex.1988). failed trial to Corinth at challenges finding the district court’s that produce any casings evidence that the Neely casings the which failed in No. shipment a previous were from casings part shipped of the were aboard proof no and made offer of as to when in May the M/Y JENNIE S of 1981. Sec- previous shipments place. took As Corinth ond, challenges district Corinth court’s possi no more demonstrated than mere finding manufacturing that defects were time-barred, it bility that the action was casing the cause of the failures. proof required failed to meet its burden by this defense. origin casing 1. The of the failed trial, documentary ev- At Gulf introduced casualty 2. The cause of the demonstrating casings idence that the off- find- contends district court’s from S were sent loaded the M/Y JENNIE casing ing that failures were due to by Onyx Pipe for IMS to Threaders thread- manufacturing clearly defects errone- ing casing joints shipped that the 66 supported evidence. Be- by ous or Neely No. 1 taken from IMS’s were casing the actual which failed was cause casing Onyx. batch of Corinth does not well, subsequently cemented none dispute casing shipped Onyx that from it As a inspected could be after the events. Neely No. 1 was manufactured Co- result, no direct evidence was introduced at warranty rinth and sold with the that the demonstrating casualty was trial complied casing with API standards. Co- casing’s failing to API caused meet contends, however, rinth that evidence standards. possibility did that IMS not foreclose produced had at trial demonstrated casing have unsold left over from Evidence casing previous Onyx yard splits the seven occurred shipment at the string; failures 24-pound casing dealing no There no Texas case in the law easing explicitly 32-pound prejudgment with the issue of discovered subrogees, it. Evi- interest above and below awards but the which was used lan guage two unused used also introduced that Court in dence was 24-pound casings Quality casings, part Parking, of the 66 Cavnar Control well, (1985), had weld seam and 696 S.W.2d 554-55 delivered to is instruc imperfections which rendered tive: occlusion by API standards. Gulf
them defective A plaintiff is not entitled to pre- recover testimony demonstrating expert introduced judgment damages interest on until present when the the defects were damages actually those been sus- and that sim- left the manufacturer time, tained. plaintiff Until that the cause of the downhole ilar defects were not lost the use of money he ulti- testimony failures. Corinth countered this mately receives from the defendant. expert testified that the with its own who system litigants Yet which would force likely casing cause of the first failure was precisely to determine when each ele- likely mishandling and that the cause plaintiff’s damage ment of a award was the other six failures was from wear on impose incurred would an onerous bur- string during drilling easing by the drill den on both the trial bench and bar. operations. The resolution of the issue of what jurisdictions recovery A pre- few allow required failures the dis caused judgment interest as of the date the judgment trict court to make a approach, cause of action accrues. This credibility testimony given relative however, preserve integrity experts, light evaluated in by the two principle prejudgment of the interest supporting opinion. each the direct evidence punish is not meant to defendant’s misbe- province within the Such choices are havior, compensation full achieve court, sitting jury, subject without a Rather, plaintiffs. overcompen- clearly only to the erroneous standard. plaintiff by awarding sates the States, Ayers 750 F.2d v. United yet on losses not incurred. *7 (5th Cir.1985). court’s As the district Allowing prejudgment Id. at 554-55. inter- opinion to credit the of determination AMI, payment by est the time of from expert cannot be characterized as Gulf’s case, subrogee the in this effectuates the erroneous, clearly finding that the court’s Cavnar, expressed by intent the court as manufacturing defects caused the down- complete recovery in a will result in this hole failures will not be disturbed overcompensate AMI it. and not See also appeal. (1953). Subrogation the 83 C.J.S. As payment of AMI’s to United does not date Prejudgment D. Interest us, appear appro- in the record before it is the When Mr. Buchanan suffered loss priate prejudgment the for us to remand failures, casing he received reim- due to the interest to the district court to allow award United, turn, from United. bursement concerning AMI’s for evidence to be taken against claim Gulf. The loss was made a recal- payment date of to United and for AMI, ultimately paid Gulf’s insurer. prejudgment interest from that culation of prejudg- of The court calculated its award date. paid date United ment interest from the III. Conclusion that, contends Mr. Buchanan. Corinth judgment of the district any loss until it reim- We AFFIRM the AMI did not suffer damages, United, court and its of actual prejudgment bursed interest should award fees, attorneys’ expenses and costs to payment. accrue until the date of that not court’s maintains, however, plaintiff; the district that the date the we VACATE Gulf RE- prejudgment interest and should have award of cause of action accrued been hearing the issue of AMI’s calculating MAND for a on prejudgment utilized in interest. appro- is jurisdiction of A exercise court’s for a recal- to United payment of date ‘purposefully if “the defendant priate award. prejudgment of the culation of at residents his activities directed’ dissenting: Judge, REAVLEY, al- Circuit from litigation results forum, and the to’ of or relate ‘arise out injuries that leged Pipe- that Corinth convinced I am not Corp., 471 King Burger those activities.” of minimum type established works 2182, 85 L.Ed.2d U.S. at justify sub- Texas that with contacts omitted). (citations jurisdiction in court’s a Texas it to jecting that, I also believe action. contract the district majority concludes minimum established had if Corinth even jurisdiction be- properly exercised juris- the exercise with contacts its oil well delivered cause Corinth this case the circumstances diction under with of commerce” “stream into the disagree I Because was unreasonable. in Texas. used would be expectation that it the dis- majority’s conclusion reliance on majority’s I believe over jurisdiction exercise trict court’s inappropri- is rationale of commerce stream requirements complied with explained Supreme Court has ate. The clause, I dissent. process the due doctrine. jurisdictional of that applicability of a manufac- product of a sale [I]f Contacts I. Minimum simply an ... or distributor turer jur- exercise may premise A court occurrence, arises isolated defendant a nonresident over isdiction or distribu- manufacturer efforts general aor specific either indirectly, the directly or to serve tor case, the “constitution- In either analysis. States, it other product in for its market inquiry is process the due touchstone” al subject it to suit is not unreasonable estab- purposefully defendant “whether allegedly if its defec- of those States one in the forum contacts’ lished ‘minimum been has there merchandise tive Rudzewicz, Corp. v. Burger King State.” toor others. to its owner injury source 2174, 2183, 85 pow- its exceed State The forum omitted). We (citation (1985) L.Ed.2d if it Clause the Due Process ers under minimum object of the explained cor- over a personal asserts following terms: analysis in the contacts into delivers poration that there has whether look see must We expec- of commerce the stream the nonresident act been some purchased they will be tation “ privi- itself of avails ‘purposefully State. forum consumers within the activities conducting lege of Corp. Volkswagen Wood World-Wide invoking benefits thus 297-98, son, 444 U.S. *8 The defen- its laws.’ protection excerpt (1980). As this 567, L.Ed.2d 490 62 connection conduct dant’s recognized, courts have other suggests and should such must be [it] state rationale devel commerce the stream being haled into anticipate reasonably injured by for consumers a means oped as state.” in the forum jurisdiction acquire products to defective 1185, 1190 F.2d 772 Spademan, v. Stuart prod in manufacturers products’ over the omitted). (citations Cir.1985) (5th Daetwyler Max liability actions. See ucts 290, (3d Specific Jurisdiction A. 298 762 F.2d Meyer, Corp. v. R. 980, 106 S.Ct. denied, Cir.), 474 U.S. cert. case, a court jurisdiction specific In a (1985); Atl. 383, L.Ed.2d 336 88 relationship Pacific analysis on should focus Express, 758 Main v. M/V Trading Co. forum, and the defendant, the between Cir.1985); (9th Nelson 1325, 1 1330 n. F.2d de Co Nacionales Helicopteros litigation. 1120, 1124 Indus., Inc., 717 F.2d Park 8, v. 408, n. 414 & Hall, 466 U.S. v. lombia 1024, denied, 465 U.S. Cir.1983), (7th cert. 404 8, L.Ed.2d 1868, n. 80 1872 & 104 S.Ct. (1984), 465 1277, 682 79 L.Ed.2d Inves Corp. v. (1984); Southmark Life 1278, 682 L.Ed.2d 1024, 79 Cir.1988). U.S. (5th 763, 772 tors, Inc., F.2d 851
1079
Carriers,
therefore,
(1984);
Magnificence
is not whether
placed
DeJames
Corinth
280,
(3d Cir.),
654 F.2d
285
cert. de
the oil well
into the stream of com-
1085,
642,
nied,
merce,
102
70
454 U.S.
S.Ct.
respect
but whether with
to the
(1981).
Supreme
L.Ed.2d 620
contract of
sale Corinth purposefully
that,
has concluded
when manufacturer
availed itself of the
protec-
benefits and
attempted
exploit the
in a
has
to
market
tions
Texas law and thus could reason-
injured
of its
state and one
ably anticipate being haled into court in a
consumer
manufacturer
dispute
Stuart,
over that contract. See
subject
that it
should foresee
will be
1194; Loumar,
Smith,
772 F.2d at
Inc. v.
jurisdiction
that state’s courts in a suit
(5th
759,
Cir.1983).
698 F.2d
by the consumer.
It is
“merely contracting
well-settled that
justify
The considerations that
reliance with a resident of the forum state is insuf
on the stream of commerce rationale
subject
ficient to
the nonresident to the
circumstances, however,
justify
such
do not
jurisdiction.”
forum’s
Holt Oil & Gas
jurisdiction
the exercise of
in all cases.
773,
Corp.
Harvey,
(5th
801 F.2d
Bearry
Cory.,
v. Beech
Aircraft
Cir.1986),
denied,
cert.
(5th Cir.1987);
Daetwyler
F.2d
Max
(1987);
S.Ct.
1080 some casing the creates kind deliver casing in its fac- sel to manufactured Corinth Indeed, the with Texas. cases passed contact Greece, the risk of loss of and tory in shipment the mere casing indicate that was above when cited Consolidated to Gulf Corinth, justify not in Port of the forum does ship goods to onto a of loaded trans- case it is jurisdiction. made and the In this Payment was of exercise Greece. upon when Corinth drew there is resulted completed what contact action clear that opened Gulf previously activity of any purposeful of credit Corinth a letter not from Bank of the National fortuity at that Consolidated from the mere Gulf rather Co- The connection in Athens. Greece and is a resident thus Texas Consolidated exchange of was its Texas rinth had with deliv- casing specified that and Consolidated Dietze, telexes Gulf Texas. Patterson ered to See casing, at Gulf Consolidat- shipment of the Cir.1985). (5th Inc., 1147 764 F.2d direction, These contacts Texas. to ed’s contemplate not at issue did contract The justify exercise are insufficient continuing ob- relationship with long-term by a court. Corinth jurisdiction over instead involved isolated ligations but 1193; Loumar, Stuart, F.2d See Although it has casing. of oil well sale 763; Cigarette Charia F.2d knew its that Corinth shown (5th Team, F.2d 188-89 Racing shipped to Gulf Consol- be would Cir.1978). not shown Corinth “reached idated char- suggests Corinth majority The Texas such created contacts with out” and the oil well that delivered the vessel tered specific justify an exercise as would significant this is and that casing to Texas dispute. contract this The contract purposes. jurisdictional re- and Gulf Consolidated between B. General Jurisdiction and pay shipping costs quired Corinth case, a general aIn casing. There is delivery of the arrange total analysis on the sum focus its should some- testimony in record that Corinth with the forum defendant’s contacts of the pipe to deliver its vessels times chartered1 determine whether defendant state arrange required it contract when the presence in the general has established gave who this testi- delivery. The witness sufficiently “continuous If there are state. however, not indicated that was mony, he systematic between State contacts aspect of Corinth’s busi- in this involved foreign corporation,” Bearry, not certain about how that he was ness and omitted), (emphasis F.2d at 374 More- were made. shipping arrangements sued in that state's testimony absolutely no over, there was specific jurisdiction though courts even delivery arrangements for Corinth’s about support a court’s exer- analysis subject casing above, As discussed cise of Assuming case. in this contract involved the nonresident remains whether issue char- correct that Corinth majority established mini- purposefully defendant casing, that delivered the the vessel tered state, there- contacts with the mum jurisdiction- bearing on the fact has no protections invoking the benefits and record analysis. evidence al making it foreseeable laws the state’s shipping that, regardless of the indicates haled into court party would be obligations under arrangements, Corinth’s Stuart, F.2d at 1191. there. complete and risk the contract were notes that between Consolidated Gulf passed to Consolidated loss Gulf forty-two made and 1985 Corinth the vessel Greece onto was loaded million, to Texas pipe, worth lading. $73 It sales received bill and Corinth that each of buyers. The record indicates misleading to appear somewhat thus would the same terms was made sales of a ves- these chartering mere suggest that the *10 simply meant that testimony exactly is that the witness record how clear from the 1. It is not company paid shipping to deliver using examining attorney Corinth casing and him witness designated port. interpretation to the One term "charter.” subject carefully negotiated that is the of this Texas the transaction dealers dispute. previously, Kansas, noted there is delivery goods As was of all accept- that Corinth advertised or so- no evidence ed in Kansas.
licited business
Texas
otherwise Bearry,
minimal interests Lewis, Nona Aisha Erisa Kironda Lew “Great care plaintiff or the forum State. is, Lewis, Jamal William Benita Lesh and reserve should be exercised Lewis, awn Lewis and Jeriel Nicole juris- personal notions of extending our Plaintiff, field.” into the international diction 1034-35, 94 L.Ed.2d Id. v. First Nat’l (quoting States United GLENDEL DRILLING COMPANY and Corporation, Bank, Pioneer Production
City J., Defendants. (1965) (Harlan, dis- 13 L.Ed.2d senting)). heavy burden on Co- Given SERVICES, INC., Defendant, ANTI AV efforts defend in Corinth’s rinth to Party Defendant, Third juris- avoid the its relations to to structure Cross-Defendant, Appellant, courts,2 minimal inter- of Texas diction providing a forum for the est of Texas GLENDEL DRILLING COMPANY di- litigation, and the Court’s Highlands Company, Insurance Defen subjecting rection to exercise caution dants, Cross-Plaintiffs, Appellees, courts’ alien defendants United States I conclude the district court’s jurisdiction, (as Mesa Successors to Pioneer Produc- jurisdiction was unreasonable. exercise of tion), Plaintiff, Party Third minimum did not have sufficient Cross-Defendant, Appellee. justify Texas to an exercise contacts with No. 88-4934. specific general jurisdiction. of either Appeals, United States Court of minimum con- if did establish Even Corinth Fifth Circuit.
tacts, juris- court’s exercise of the district under the was unreasonable facts diction April jurisdic- the exercise of this case. Because permissible under the due tion was not clause,
process judgment favor Consolidated should be vacated
Gulf cause dismissed. majority suggests Corinth’s actions that Corinth’s "brisk ac- To the extent 2. reasonableness, evaluating goods significant I tivity” shipping are to Texas made the corpora- place greater emphasis on the court’s exercise of reason- district however, unlikely, its activities in Greece I think it that connec- tion’s efforts center able. sought to Texas businesses that with a forum that are insufficient to estab- than on sales tions significant foreign corporation purchase its minimum contacts would be out lish determining goods. the reasonableness of an exercise