United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND OPINION
Rosenthal Chief United States District Judge
Oil Well Varco, L.P. alleges that three of its Dubai
employees perpetrated a kickback scheme that resulted in
significant financial losses. NOV sued Sadeesh Sadagopan,
Majed Hamdan, Khaled Zantout, and two Texas-based defendants
in Texas state court in 2016. The defendants timely removed
on the basis of diversity jurisdiction. (Docket Entry No. 1).
NOV dismissed its claims against the Texas defendants,
leaving the claims against the three Dubai individuals.
(Docket Entry Nos. 7 at 23). These defendants have moved to
dismiss, arguing that this court lacks personal jurisdiction
over them. In the alternative, they seek dismissal in favor
of adjudication in Dubai, invoking forum non
conveniens. (Docket Entry No. 45). NOV responded and the
defendants replied. (Docket Entry Nos. 53; 60; 63; 66). After
a hearing at which the parties presented oral argument, the
parties supplemented their briefs on the personal
jurisdiction issue. (Docket Entry Nos. 70, 72). Based on the
pleadings; the motions, responses, and replies; the arguments
of counsel; the record; and the applicable law, the court
denies the defendants' motion to dismiss. A scheduling
conference is set for July 28, 2017, at 10:00 a.m. The
reasons for this ruling are explained below.
employed Sadeesh Sadagopan, Majed Hamdan, and Khaled Zantout
in Dubai for over ten years before firing them in 2016.
(Docket Entry No. 7 at ¶¶ 15-17; 36). The
defendants had management duties that required them to review
and agree to comply with NOV's Business Ethics Policy and
Code of Conduct. (Id. at ¶¶18-20). The
three allegedly associated closely with a senior NOV officer,
referred to in the briefs as “FM, ” who
transferred to NOV's Houston office in 2010.
(Id. at ¶¶ 2; 21; 24).
2016, NOV received a whistleblower complaint informing it of
a potential conflict of interest involving certain NOV
employees and NOV equipment leases in the Middle East and
North Africa operating regions. (Id. at ¶ 25).
NOV investigated and discovered that the lease prices for
transactions for heavy equipment with Global Business Supply
in 2009 and 2010 were materially higher than other lease
prices in the region for the same or similar equipment.
(Id. at ¶ 26). NOV had paid Global Business
Supply over $1.7 million for leased equipment since 2009 or
2010. (Id.). NOV estimated that the equipment sales
value was less than $300, 000 when it was leased.
learned that Mr. Sadagopan had been responsible for
negotiating the terms of NOV's lease agreements with
Global Business Supply. (Id. at ¶ 28). Later in
the investigation, Mr. Sadagopan admitted that he and at
least one other NOV employee had financial interests in
Global Business Supply. (Id. at ¶ 29). NOV
discovered a spreadsheet created by Mr. Sadagopan in which he
tracked transactions for revenue and expenses between
September 2010 and March 2016. (Id. at ¶ 30).
Initials on the spreadsheet referred to FM, Mr. Hamdan, and
Mr. Zantout. (Id.). FM admitted to receiving
approximately $27, 000 in cash from Mr. Sadagopan.
(Id.). NOV believes, based on the spreadsheet, that
FM received a total of over $780, 000. (Id. at
evidence submitted and discussed during the hearing on
personal jurisdiction shows that Mr. Sadagopan, Mr. Hamdan,
and Mr. Zantout met with FM at a dinner in Houston in April
2012. (Docket Entry No. 63-4 at 2). Mr. Sadagopan's
spreadsheet indicates a $20, 000 withdrawal five days before
this dinner. (Docket Entry No. 53-3 at 2). The defendants do
not dispute that this meeting occurred, but they deny that
they gave FM cash at this dinner. (Docket Entry No. 72 at
alleges that Mr. Sadagopan, Mr. Hamdan, Mr. Zantout conspired
with each other and with a senior NOV officer to defraud NOV
and embezzle millions of dollars from it between 2009 and
March 2016. (Docket Entry No. 7 at ¶ 1). NOV asserts
claims for fraud, fraud by nondisclosure, conspiracy to
defraud, breach of contract, breach of fiduciary duty, and
aiding and abetting breach of fiduciary duty. (Id.).
Before those claims can be considered on the merits, the
court must determine whether it has personal jurisdiction
over the defendants and whether exercising that jurisdiction
would be proper.
federal court may exercise personal jurisdiction over a
nonresident defendant if the long-arm statute of the forum
state confers personal jurisdiction over that defendant and
exercising jurisdiction is consistent with due process.
See Delgado v. Reef Resort Ltd., 364 F.3d 642, 644
(5th Cir. 2004); Ham v. La Cienega Music Co., 4 F.3d
413, 415 (5th Cir. 1993). Because the Texas long-arm statute
confers jurisdiction to the limits of due process, “the
two-step inquiry collapses into one federal due process
analysis.” Johnston v. Multidata Sys. Int'l
Corp., 523 F.3d 602, 609 (5th Cir. 2008).
due process permits personal jurisdiction over a nonresident
defendant with “minimum contacts” with the forum
state, if exercising jurisdiction over that defendant does
not offend “traditional notions of fair play and
substantial justice.” Id. “Minimum
contacts” can “give rise to ‘specific'
personal jurisdiction” or “to ‘general'
personal jurisdiction.” Lewis v. Fresne, 252
F.3d 352, 358 (5th Cir. 2001). A court has general
jurisdiction over a nonresident defendant “to hear any
and all claims” against him when his contacts with the
state are so “‘continuous and systematic' as
to render [him] essentially at home in the forum.”
Daimler AG v. Bauman, 134 S.Ct. 746, 761 (2014)
(quoting Goodyear Dunlop Tires Operations v. Brown,
131 S.Ct. 2846, 2851 (2011)). “The ‘continuous
and systematic contacts test is a difficult one to meet,
requiring extensive contacts between a defendant and a
forum.'” Johnston, 523 F.3d at 609
(quoting Submersible Sys., Inc. v. Perforadora Cent.,
S.A., 249 F.3d 413, 419 (5th Cir. 2001)).
contrast to general, all-purpose jurisdiction, specific
jurisdiction is confined to adjudication of ‘issues
deriving from, or connected with, the very controversy that
establishes jurisdiction.'” Goodyear, 131
S.Ct. at 2851 (citation omitted). A court asks “whether
there was ‘some act by which the defendant purposefully
availed [himself] of the privilege of conducting activities
within the forum [s]tate, thus invoking the benefits and
protections of its laws.'” Id. at 2854
(quoting Hanson v. Denckla, 357 U.S. 235, 253
(1958)). Specific jurisdiction exists “when a
nonresident defendant has purposefully directed its
activities at the forum state and the litigation results from
alleged injuries that arise out of or relate to those
activities.” Walk Haydel & Assocs., Inc. v.
Coastal Power Prod. Co., 517 F.3d 235, 243 (5th Cir.
2008) (internal quotations marks omitted). Though the
defendant's contacts with the forum must be more than
“random, fortuitous, or attenuated, or of the
unilateral activity of another party or third person, ”
even “isolated or sporadic contacts” can support
specific jurisdiction “so long as the plaintiff's
claim relates to or arises out of those contacts.”
ITL Int'l, Inc. v. Constenla, S.A., 669 F.3d
493, 498-99 (5th Cir. 2012) (internal quotation marks
Rule 12(b)(2) of the Federal Rules of Civil Procedure, the
“plaintiff bears the burden of establishing a district
court's jurisdiction over a non-resident, but it need
only make a prima facie case” if the district court
does not conduct an evidentiary hearing. Johnston,
523 F.3d at 609 (citing Wilson v. Belin, 20 F.3d
644, 648 (5th Cir. 1994)). In deciding whether personal
jurisdiction exists, “the district court may receive
‘any combination of the recognized methods of
discovery, ' including affidavits, interrogatories, and
depositions to assist it in the jurisdictional
analysis.” Little v. SKF Sverige AB, No.
13-1760, 2014 WL 710941, at *3 (S.D. Tex. Feb. 24, 2014)
(quoting Walk Haydel, 517 F.3d at 241). “Proof
by a preponderance of the evidence is not required.”
Johnston, 523 F.3d at 609 (citing Bullion v.
Gillespie, 895 F.2d 213, 217 (5th Cir. 1990)).
“‘[O]n a motion to dismiss for lack of
jurisdiction, uncontroverted allegations in the
plaintiff's complaint must be taken as true, and
conflicts between the facts contained in the parties'
affidavits must be resolved in the plaintiff's favor for
purposes of determining whether a prima facie case for
personal jurisdiction exists.'” Id.
(quoting D.J. Invs., Inc. v. Metzeler Motorcycle Tire
Agent Gregg, Inc., 754 F.2d 542, 546 (5th Cir. 1985)).
“When the factual differences are found in favor of [a
plaintiff] at this motion phase in the litigation . . . [it]
has presented a prima facie case for personal
jurisdiction.” Id. In short, the “court
resolves all conflicts in the evidence in favor of the
plaintiff and accepts as true all of the plaintiff's
uncontroverted allegations.” Little, 2014 WL
710941, at *3 (citing Johnston, 523 F.3d at 609).
Because specific personal jurisdiction is a claim-specific
inquiry, a plaintiff bringing multiple claims must establish
specific jurisdiction for each claim if the claims
“arise out of different forum contacts of the
defendant.” Seiferth v. Helicopteros Atuneros,
Inc., 472 F.3d 266, 274 (5th Cir. 2006).
Forum Non Conveniens
principle of forum non conveniens is simply that a
court may resist imposition upon its jurisdiction even when
jurisdiction is authorized by the letter of a general venue
statute.” Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 507 (1947). “A court's authority to
effect foreign transfers through the doctrine of forum
non conveniens ‘derives from the court's
inherent power, under Article III of the Constitution, to
control the administration of the litigation before it and to
prevent its process from becoming an instrument of abuse,
injustice, or oppression.'” Baumgart v.
Fairchild Aircraft Corp., 981 F.2d 824, 828 (5th Cir.
1993) (citation omitted). “When an alternative forum
has jurisdiction to hear the case and when trial in the
plaintiff's chosen forum would ‘establish . . .
oppressiveness and vexation to a defendant . . . out of all
proportion to plaintiff's convenience, ' or when the
‘chosen forum [is] inappropriate because of
considerations affecting the court's own administrative
and legal problems, ' the court may, in exercise of its
sound discretion, dismiss the case.'” Kempe v.
Ocean Drilling & Exploration Co., 876 F.2d 1138,
1141 (5th Cir. 1989) (quoting Koster v. Lumbermens Mut.
Cas. Co., 330 U.S. 518, 524 (1947)).
forum non conveniens dismissal must be based on the
[court's] finding that, when weighed against
plaintiff's choice of forum, the relevant public and
private interests strongly favor a specific, adequate and
available forum.” Verba-Chemie A.G. v. M/V
Getafix, 711 F.2d 1243, 1245 (5th Cir. 1983). The movant
“bears the burden of invoking the doctrine and moving
to dismiss in favor of a foreign forum.” In re Air
Crash Disaster Near New Orleans, La. on July 9, 1982,
821 F.2d 1147, 1164 (5th Cir.1987), overturned on other
grounds, 490 U.S. 1032, 109 S.Ct. 1928, 104 L.Ed.2d 400
(1989). “This burden of persuasion runs to all the
elements of the forum non conveniens analysis.”
Id. The defendants must “demonstrate (1) the
existence of an available and adequate alternative forum and
(2) that the balance of relevant private and public interest
factors favors dismissal.” Vasquez v.
Bridgestone/Firestone, Inc., 325 F.3d 665, 671 (5th Cir.
2003). “In addition to the balancing of relevant
private interest factors, the court must give ‘the
relevant deference' to the plaintiff's choice of
forum.” Alpine View Co. v. Atlas Copco AB, 205
F.3d 208, 221-22 (5th Cir. 2000) (quoting In re Air
Crash, 821 F.2d at 1165). To meet this relatively high
burden, the remaining defendants “must supply the Court
with enough information for it to conduct a meaningful
inquiry and balance the parties' interests.”
Blum v. Gen. Elec. Co., 547 F.Supp.2d 717, 725 (W.D.
Tex. 2008) (citing Empresa Lineas Maritimas Argentinas,
S.A. v. Schichau-Unterweser, A.G., 955 F.2d 368, 371
(5th Cir. 1992)).