United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
KEITH P. ELLISON UNITED STATES DISTRICT JUDGE.
an action for breach of an insurance contract. The Court
previously denied Defendant's Motion to Stay Pending
Arbitration. There are two remaining grounds for dismissal of
this case: personal jurisdiction and venue. The Court holds
that there is no personal jurisdiction over the defendant and
therefore, the Motion to Dismiss must be granted.
following facts are not in dispute.
November 2012, Plaintiff Halliburton Energy Services, Inc.
(“HESI”) and non-party Statoil ASA
(“Statoil”) entered into the Onshore Master
Services Agreement (the “MSA”). Pursuant to the
MSA, HESI conducted fracking operations at the Eisenbarth
Well Pad, a crude petroleum and natural gas facility operated
by Statoil in Ohio. An explosion occurred there in June 2014,
which caused significant environmental damage. The
environmental liability costs to Statoil exceeded $25
million. Statoil sued Defendant Ironshore Specialty Insurance
Company (“Ironshore”) and other insurers in Texas
state court to recover under various insurance policies (the
Texas Action, Statoil claimed that Ironshore owed
reimbursement to Statoil pursuant to the Site Pollution Legal
Liability Select Policy (the “Insurance Policy”)
that Ironshore had issued to Statoil in May 2014. The
Insurance Policy was procured by a surplus lines broker in
Tulsa, Oklahoma. Ironshore underwrote the Insurance Policy in
Louisiana. Ironshore negotiated the terms primarily in Tulsa,
Oklahoma. The Insurance Policy provides for the application
of New York law and for dispute resolution in New York.
Texas counsel, Ironshore defended itself in the Texas Action
and filed counterclaims against other insurers. In so doing,
Ironshore served two Texas subpoenas on HESI (one for
documents and the other for corporate designee testimony)
with which HESI complied.
litigation between Statoil and its insurers was resolved in a
confidential settlement agreement. As part of that agreement,
Ironshore paid Statoil almost $12 million. While the
settlement agreement resolved Statoil's claims against
its insurers, the agreement reserved the insurers' claims
against each other and required that disputes concerning the
reallocation of contributions be resolved in Texas under
Texas Action (consisting of insurer-versus-insurer disputes)
was ongoing in November 2016, when Ironshore wrote to HESI
and claimed that Ironshore was legally subrogated to
Statoil's interests. In that letter, Ironshore requested
that HESI join the Texas Action in order to streamline
resolution and minimize counsel fees. HESI declined in a
response letter. HESI's response letter also informed
Ironshore that Ironshore's demand for subrogation
constituted a breach of the Insurance Policy, which waived
subrogation against HESI. HESI's letter further asserted
that HESI was named as an additional insured in the Insurance
Policy, which meant that Ironshore was obligated to defend
and indemnify HESI from and against Ironshore's own
purported subrogation claim. Ironshore wrote a reply letter,
which reasserted that Ironshore was Statoil's subrogee
and as such, Ironshore was owed indemnification from HESI.
Ironshore's reply letter also declared that HESI had
failed to comply with the MSA dispute resolution procedure
such that Ironshore, pursuant to the MSA, was free to
commence arbitration proceedings against HESI (which, under
the MSA, would have occurred in Texas).
summarize the parties' arguments, HESI contends that
Ironshore breached the Insurance Policy when it asserted an
indemnity claim against HESI, because the Insurance Policy
waived subrogation against HESI and in fact required
Ironshore to defend HESI from such claims because HESI was
named as an “additional insured.” Ironshore
argues that its actions were proper because, through the
Insurance Policy, Ironshore became subrogated to
Statoil's rights under the MSA, and HESI agreed to
indemnify Statoil for losses and damages from the accident;
according to Ironshore, the Texas Action settlement with
Statoil triggered those rights. HESI disagrees with
Ironshore's interpretation of the MSA, and seeks a
declaratory judgment as to whether Ironshore waived
subrogation rights against HESI and whether HESI is an
additional insured under the Insurance Policy.
arguments are expressed as the following claims:
• Count I (declaratory judgment): HESI
seeks a declaratory judgment that Ironshore waived
subrogation against HESI for amounts that Ironshore paid to
Statoil under the Insurance Policy.
• Count II (breach of contract): HESI
seeks damages for Ironshore's breach of the Insurance
Policy, which consisted of asserting a barred subrogation
• Count III (declaratory judgment):
HESI seeks a declaratory judgment establishing
Ironshore's obligation under the Insurance Policy to
defend and indemnify HESI from and against the claims that
Ironshore itself asserted against HESI.
• Count IV (breach of contract): HESI
seeks damages for Ironshore's breach of the Insurance
Policy, which consisted of failing to defend and indemnify
moved to dismiss all of HESI's claims on three grounds:
(1) because the issues were arbitrable pursuant to the
arbitration clause of the MSA, (2) lack of personal
jurisdiction, and (3) improper venue.
Motion to Dismiss, Ironshore requested that this Court decide
the arbitrability question before the other grounds for
dismissal. The Court did, and determined that there was no
valid arbitration agreement between the parties. In making
that determination, the Court found that Ironshore had waived
subrogation. Ironshore appealed. The appeal is pending.
Court now addresses personal jurisdiction.
STANDARD OF REVIEW
personal jurisdiction constitutes grounds for dismissal.
Fed.R.Civ.P. 12(b)(2). “Federal courts sitting in
diversity may exercise personal jurisdiction over a
non-resident where the state long-arm statute grants
jurisdiction and the exercise of jurisdiction is consistent
with federal due process.” Delgado v. Reef Resort
Ltd., 364 F.3d 642, 644 (5th Cir. 2004). “Because
the Texas long-arm statute extends to the limits of federal
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).
“Obtaining personal jurisdiction over a non-resident is
constitutionally permissible if: 1) the non-resident
purposely availed himself of the benefits and protections of
the forum state by establishing minimum contacts with the
state; and 2) the exercise of jurisdiction does not offend
‘traditional notions of fair play and substantial
justice.'” Lewis v. Fresne, 252 F.3d 352,
358 (5th Cir. 2001). “Once a plaintiff establishes
minimum contacts between the defendant and the forum state,
the burden of proof shifts to the defendant to show that the
assertion of jurisdiction is unfair and unreasonable.”
Sangha v. Navig8 ShipManagement Private Ltd., 882
F.3d 96, 101 (5th Cir. 2018).
contacts” can give rise to either specific jurisdiction
or general jurisdiction. Lewis v. Fresne, 252 F.3d
352, 358 (5th Cir. 2001). Specific jurisdiction may exist
“over a nonresident defendant whose contacts with the
forum state are singular or sporadic only if the cause of
action asserted arises out of or is related to those
contacts.” Int'l Energy Ventures Mgmt., L.L.C.
v. United Energy Grp., Ltd., 818 F.3d 193, 212 (5th Cir.
2016) (citing McFadin v. Gerber, 587 F.3d 753, 759
(5th Cir. 2009)). In other words, such 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 quotation marks omitted). “A court may
assert general jurisdiction over [non-resident defendants] to
hear any and all claims against them when their affiliations
with the State are so continuous and systematic as to render
them essentially at home in the forum State.”
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 919 (2011) (internal quotation omitted).
Establishing general jurisdiction is “difficult”
and requires “extensive contacts between a defendant
and a forum.” Johnston, 523 F.3d at 609.
maintains that Texas does not have personal jurisdiction
because there is no general jurisdiction over Ironshore, nor
are there sufficient minimum contacts related to this case to
establish specific jurisdiction over Ironshore. (Doc. No. 12
at 13-18.) HESI counters that there is general jurisdiction,
and that Ironshore purposefully availed itself of the Texas
forum by virtue of its behavior in the Texas Action and by
seeking indemnification from HESI. (Doc. No. 23 at 9-14.)
respect to general jurisdiction, there is no dispute that
Ironshore is not incorporated in Texas nor does it have its
principal place of business in Texas. Ironshore emphasizes
that it “is not licensed to sell insurance in Texas,
has no Texas office, does not own property in Texas, has no
Texas employees, and has no financial accounts in
Texas.” (Doc. No. 24 at 5.) HESI has pleaded no
additional facts suggesting that Ironshore has contacts
“so substantial and of such a nature as to render [it]
at home” in Texas. Daimler AG v. Bauman, 134
S.Ct. 746, 761 (2014). In a footnote, HESI avers that
Ironshore provides loss control services to Texas insureds
and has possibly been involved in the Texas federal courts on
13 other occasions. (Doc. No. 23 at 14.) Such contacts would
be insufficient for general jurisdiction under
Daimler. Therefore, there is no general
jurisdiction . . . depends on an affiliation between the
forum and the underlying controversy, principally, activity
or an occurrence that takes place in the forum State and is
therefore subject to the State's regulation.”
Goodyear, 564 U.S. at 919. “[W]here the
defendant deliberately has engaged in significant activities
within a State, or has created continuing obligations between
himself and residents of the forum, he manifestly has availed
himself of the privilege of conducting business there, and
because his activities are shielded by the benefits and
protections of the forum's laws it is presumptively not
unreasonable to require him to submit to the burdens of
litigation in that forum as well.” Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 475-76 (1985)
(internal quotations omitted).
order to assess specific jurisdiction, the Court must first
determine which of Ironshore's ...