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Blue Racer Midstream, LLC v. Kelchner, Inc.

United States District Court, N.D. Texas, Dallas Division

February 21, 2018

BLUE RACER MIDSTREAM, LLC, Plaintiff,
v.
KELCHNER, INC., Defendant/Third-Party Plaintiff,
v.
PROFOAM, LLC Third-Party Defendant.

          MEMORANDUM OPINION AND ORDER

          ED KINKEADE UNITED STATES DISTRICT JUDGE.

         Before the Court is the Motion to Dismiss for Lack of Personal Jurisdiction Pursuant to Rule 12(b)(2) by Third-Party Defendant ProFoam, LLC (Doc. No. 24). Since the motion to dismiss was filed, the Court ordered Third-Party Plaintiff Kelchner, Inc. to amend its Third-Party Complaint only as to the citizenship of Third-Party Defendant ProFoam, LLC's sole member. Because the amended complaint does not change or affect the legal issues presented in the motion to dismiss for lack of personal jurisdiction, the Court will construe the motion to dismiss the original third-party complaint as a motion to dismiss the first amended third-party complaint. After reviewing the motion, the response, the reply, and the appropriate law, the Court GRANTS Third-Party Defendant ProFoam, LLC's motion to dismiss. Because ProFoam, LLC does not have continuous and systematic contacts with the forum state such that it is at home in Texas, the Court has no personal jurisdiction over ProFoam, LLC and must dismiss it from this case.

         I. Background

         On October 28, 2014, a pipeline explosion occurred in Monroe County, Ohio. As a result of this explosion, Blue Racer Midstream, LLC (“Blue Racer”) filed suit against Kelchner, Inc. (“Kelchner”), alleging Kelchner and ProFoam, LLC caused the explosion by improperly applying polyurethane foam. Blue Racer filed this suit in Texas pursuant to a forum selection clause in the contract between Blue Racer and Kelchner. Originally, Blue Racer sued the wrong “ProFoam” entity and then dismissed its claims against that entity. Kelchner filed its Third-Party Complaint against the allegedly correct ProFoam entity, ProFoam, LLC (“ProFoam”). On the Court's order, Kelchner amended its complaint to clarify ProFoam's citizenship. In Kelchner, Inc's First Amended Third-Party Complaint (“Third-Party Complaint”), Kelchner states ProFoam's sole member is a citizen of Louisiana.

         ProFoam is a Louisiana limited liability company because its sole member is an individual who is a citizen of Louisiana. Kelchner did not state in its Third-Party Complaint any facts indicating Texas courts have personal jurisdiction over ProFoam. ProFoam has alleged it is not subject to personal jurisdiction in Texas. ProFoam alleges it does not maintain any offices or employees in Texas, does not own or lease property in Texas, and has no registered agent in Texas. ProFoam alleges the only connections it has to Texas are two pipeline projects in 2008-2009 that ProFoam worked on and that ProFoam receives requests for bids from Texas contractors for projects outside of Texas. Kelchner alleges ProFoam has entered into contracts with a Texas based company to perform projects in Ohio and Pennsylvania and has hired a Texas company to work on a ProFoam vehicle.

         Because ProFoam argues it has very few contacts with Texas, ProFoam filed this motion to dismiss for lack of personal jurisdiction.

         II. Personal Jurisdiction

         The Texas long-arm statute applies in this case. As the Texas long-arm statute has the same scope as the U.S. Constitution, this Court may only exercise jurisdiction over the Defendant if jurisdiction is consistent with the Due Process Clause. See Alpine View Co. v. Atlas Copco A.B., 205 F.3d 208, 214 (5th Cir. 2000). The Due Process Clause permits the exercise of personal jurisdiction over a nonresident defendant “when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing ‘minimum contacts' with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend ‘traditional notions of fair play and substantial justice.'” Id. at 214-15 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

         “Minimum contacts” can be established through either specific jurisdiction or general jurisdiction. See Alpine View, 205 F.3d at 215. Specific jurisdiction over a nonresident corporation exists when that corporation has purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise from or relate to those activities. See id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). General jurisdiction exists when the nonresident defendant's contacts with the forum state are so substantial, continuous, and systematic “as to render it essentially at home in the forum state.” Daimler AG v. Bauman, 134 S.Ct. 746, 761 (2014). Contacts which are random, fortuitous, or attenuated do not count in the minimum contacts analysis. See Johnston v. Multidata Sys. Intern. Corp., 523 F.3d 602, 610 (5th Cir. 2008).

         Once the defendant presents a motion to dismiss for lack of personal jurisdiction, the plaintiff has the burden of establishing the Court's jurisdiction over the defendant. See Gundle Lining Constr. v. Adams Cty. Asphalt, Inc., 85 F.3d 201, 204 (5th Cir. 1996); see Fed. R. Civ. P. 12(b)(2). In its response to a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff cannot stand on its pleadings, but must, through affidavits or otherwise, set forth specific facts demonstrating that the Court has jurisdiction. See Revell v. Linov, 317 F.3d 467, 469 (5th Cir. 2002).

         When the Court does not conduct an evidentiary hearing, the party seeking to assert jurisdiction must present facts sufficient to make out a prima facie case supporting personal jurisdiction. See Alpine View, 205 F.3d at 215. The Court accepts as true that party's uncontroverted allegations, resolving in its favor all conflicts between the facts contained in the parties' affidavits and other documentation. See id. However, the Court is not required to give credit to conclusory allegations, even if they are uncontroverted. See Panda v. Brandywine Corp. v. Potomac Elec. Power Comp., 253 F.3d 865, 868-69 (5th Cir. 2001).

         A. The Parties Agree the Court Does Not Have Specific Jurisdiction Over ProFoam.

         Kelchner concedes that ProFoam is not subject to specific jurisdiction in Texas given that ProFoam's sole member is a citizen of Louisiana and all the activity in this case occurred in Ohio or Louisiana.

         B. Kelchner Failed to Establish ProFoam Is at Home in Texas And So the Court Has No. ...


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