IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 12-20291

JACK J. GRYNBERG; GRYNBERG PRODUCTION CORPORATION, a Texas

Corporation; PRICASPIAN DEVELOPMENT CORPORATION, a Texas

Corporation; GRYNBERG PRODUCTION CORPORATION, a Colorado

Corporation,

Plaintiffs - Appellants,

v.

BP, P.L.C., doing business as BP Corporation North America Inc.; BP

EXPLORATION OPERATINGCOMPANY,LIMITED; BP AMERICA;STATOIL

A.S.A.; JOHN BROWNE,

Defendants - Appellees.

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:11-CV-1731

Before REAVLEY, PRADO, and ELROD, Circuit Judges.

PER CURIAM:*

This case arises out of a decade-long dispute relating to the development

of an oil field in Kazakhstan. Plaintiffs–Appellants Jack J. Grynberg and

several related entities (collectively referred to as “Plaintiffs”) allege that the

Defendants–Appellees (collectively referred to as “Defendants”) committed

United States Court of Appeals

Fifth Circuit

F I L E D

June 7, 2013

Lyle W. Cayce

Clerk

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

 Case: 12-20291 Document: 00512266145 Page: 1 Date Filed: 06/07/2013
No. 12-20291

certain unlawful acts in violation of the Racketeer Influenced and Corrupt

Organizations Act (“RICO”), 18 U.S.C. § 1962 et. seq., causing Plaintiffs injury

(the “civil RICO claims”). Plaintiffs unsuccessfully advanced the same claims

in a prior arbitration proceeding. The district court dismissed Plaintiffs’ civil

RICO claims. We AFFIRM. 

I.

In 1989 and 1990, Jack Grynberg was instrumental in bringing

representatives of the Kazakh government together with various oil and gas

companies, including BP,

1

to discuss the potential development of the Greater

Kashagan Oil Field (“GKOF”). Eventually, a group of oil companies, including

BP, formed the Offshore Kazakhstan International Operating Company

(“OKIOC Consortium”). Plaintiffs, however, were not members of the OKIOC

Consortium. In the early 1990s, BP and Statoil entered into an alliance under

which BP retained two-thirds of its OKIOC Consortium interest and Statoil

took a one-third share of the interest. In 1997, the OKIOC Consortium

obtained Kazakh government approval to develop the GKOF.

Federal litigation, involving Plaintiffs’ claim that they were entitled to a

share of the proceeds from the GKOF based on their role in facilitating the

meetings that occurred in 1989 and 1990, ensued between Plaintiffs, BP, and

Statoil. Years of mediation and negotiation eventually resulted in two virtually

identical settlement agreements between Plaintiffs and BP and Plaintiffs and

Statoil (the “Settlement Agreements”). Under the Settlement Agreements, in

relevant part: (1) BP and Statoil agreed to pay Plaintiffs fifteen percent of net

profits from their GKOF interests, derived from either production or sale of the

interest; (2) the parties agreed to arbitrate any future disputes that might arise

1 The underlying complaint, as well as the parties’ briefing, refers to the three BP

entities—BP,P.L.C., BP Exploration Operating Company, Ltd., and BP America—collectively.

Because their separate roles in the underlying facts are not relevant to this appeal, we also

refer to each of the three entities collectively, and individually, as “BP.”

2

 Case: 12-20291 Document: 00512266145 Page: 2 Date Filed: 06/07/2013
No. 12-20291

from the Settlement Agreements; and (3) Plaintiffs released all other claims and

rights against Statoil and BP. In 2002, BP and Statoil sold their interests in

the GKOF and subsequently made timely payments to Plaintiffs based on the

sale price of their GKOF interests, net of certain costs.

A.

Within several weeks of BP and Statoil’s sale of their GKOF interests,

Plaintiffs commenced an arbitration proceeding (the “Arbitration”) against BP

and Statoil claiming, generally, that they were not being paid the appropriate

share of the actual value of the GKOF interests sold. While the Arbitration was

ongoing, Plaintiffs sued BP and Statoil in the United States District Court in

the District of Columbia. Plaintiffs’ claims were premised on an allegedly

unlawful scheme whereby BP and Statoil, along with other members of the

OKIOC Consortium, paid a $175 million bribe to Kazakh officials in the 1990s,

disguised as a “signature bonus,” to obtain the rights to develop the GKOF. BP

and Statoil moved to dismiss and compel arbitration on the basis that Plaintiffs

were obligated to arbitrate their claims because they arose out ofthe Settlement

Agreements. The district court granted the motions to dismiss and compel

arbitration. Grynberg v. BP P.L.C., 585 F. Supp. 2d 50, 54–56 (D.D.C. 2008). 

Following the district court’s dismissal of their claim, Plaintiffs filed the same

claim—the “DC Based RICO Claim”—in the Arbitration.

In February 2010, the arbitrator issued a final award (“Final Award”)

that resolved each of the claims Plaintiffs advanced in the Arbitration. In the

Final Award, the arbitrator dismissed Plaintiffs’ “DC Based RICO Claim” based

on its finding that Plaintiffs “did not suffer any damages as a result of

[Defendants’] alleged RICO violations.” The arbitrator also dismissed two

claims premised on allegations that BP and Statoil entered into side deals to

artificially lower the sale price of their GKOF interests and, consequently, lower

3

 Case: 12-20291 Document: 00512266145 Page: 3 Date Filed: 06/07/2013
No. 12-20291

Plaintiffs’ fifteen-percent share of the profits from the sales.2 The arbitrator

concluded thatthere was no evidence supporting Plaintiffs’ allegations that the

selling price of BP and Statoil’s GKOF interests were reduced pursuant to side

deals with the purchasing parties. 

The arbitrator also dismissed the Plaintiffs’ audit claims, which were

premised on allegations that the payment of the signature bonus should be

disallowed as a legitimate deduction from Plaintiffs’ fifteen-percent share of BP

and Statoil’s sale of their GKOF interests. Plaintiffs argued that the signature

bonus should not have been deducted from the sales proceeds because the

“payments were not bona fide payments to the Kazakh government for the right

to exploit the oil and gas reserves in the [GKOF] but were instead bribes paid

to Kazakh government officials in violation of the U.S. Foreign Corrupt

Practices Act.” The arbitrator, reasoning that it was irrelevant whether the

signature bonus was a bribe, dismissed the audit claims after concluding that

the independent auditors’ decision to deduct the signature bonus was not 

“arbitrary and capricious or clearly erroneous.” The arbitrator also imposed

monetary sanctions against the Plaintiffs.

B.

Following the arbitrator’s issuance ofthe Final Award, Defendants moved

to confirm the Final Award in the Supreme Court of the State of New York. 

Plaintiffs filed a cross-motion asking the court to vacate the sanctions entered

by the arbitrator and the arbitrator’s dismissal of the audit claims and the

Egypt-side-deal claim. Plaintiffs did not challenge any other aspect of the Final

Award, including the arbitrator’s dismissal of the “DC Based RICO Claim” and

2 Specifically, the Plaintiffs’ Egypt-side-deal claim involved an allegation that BP sold

its GKOF interest to Total, SA (“Total”) for a below-fair-market-value price in exchange for

a similar price reduction on an Egyptian property BP purchased from Total shortly thereafter.

The Norway-side-deal claim involved an allegation that Statoil sold its GKOF interest to Total

for a below-fair-market-value price in exchange for BP’s willingness to enter into a gas

contract with Statoil that overpaid Statoil over a period of years.

4

 Case: 12-20291 Document: 00512266145 Page: 4 Date Filed: 06/07/2013
No. 12-20291

Norway-side-deal claim. In December 2010, the court confirmed the Final

Award in all respects, with the exception of reversing the arbitrator’s order

imposing sanctions. Grynberg v. BP Exploration Operating Co., Index No.

116840/2004 (N.Y. Sup. Ct. Dec. 8, 2010), vacated by, in part, aff’d in part and

modified in part, 938 N.Y.S.2d 439 (N.Y. App. Div. 2012). Plaintiffs appealed

the court’s denial of their motion to vacate the two claims in the Final Award

and Defendants cross-appealed on the sanction issue.

In February 2012, the New York Appellate Division affirmed the lower

court’s judgment, with the exception of remanding one claim to the arbitrator

for further proceedings. Grynberg v. BP Exploration Operating Co., 938

N.Y.S.2d 439, 440 (N.Y. App. Div. 2012). Specifically, the court vacated the

arbitrator’s dismissal of Plaintiffs’ audit claims, explaining that:

The arbitrator’s failure to determine the nature of the disputed

payment warrants the vacatur of [the Award on the audit claims]. 

[Plaintiffs] claim that this payment constituted a bribe.

[Defendants] assert it was a bona fide cost of doing business. We

remand for the arbitrator to determine the nature of the payment. 

Contrary to the arbitrator’s finding, deducting a payment intended

to be a bribe to a public official is unenforceable as violative of

public policy . . . .

Id. The court remanded the case for the arbitrator to reconsider the audit

claims—reconsideration that requires the arbitrator to determine whether the

signature bonus was a bribe or a bona fide transaction.

3

 Id.

C.

In May 2011, Plaintiffs filed the instant complaint in the District Court

for the Southern District of Texas naming BP, Statoil, Browne, and Sutherland

as defendants. The complaint seeks monetary relief under 18 U.S.C. § 1964(c) 

based upon allegations that: (1) BP and Statoil procured their GKOF interests

by paying bribes to the Kazakh government; and (2) BP and Statoil entered into

3 The current status of the audit claim on remand is unclear from the record.

5

 Case: 12-20291 Document: 00512266145 Page: 5 Date Filed: 06/07/2013
No. 12-20291

side deals connected with their sale of their GKOF interests in an attempt to

decrease the amounts owed to Plaintiffs under the Settlement Agreements. 

These allegations are based on the same legal and factual theories underlying

the “DC Based RICO Claim,” the Egypt-side-deal claim, and the Norway-sidedeal claim that Plaintiffs advanced in the Arbitration.

Separate motions to dismiss were filed by BP, Statoil, Browne, and

Sutherland. The district court converted BP’s motion to dismiss into a motion

for summary judgment and granted each of the motions. Specifically, the

district court held that res judicata barred Plaintiffs’ civil RICO claims against

BP and Statoil. The district court also concluded that even if res judicata did

not bar the claims against Statoil, then Plaintiffs must submit their claims to

arbitration. Separately, the district court dismissed Plaintiffs’ complaint as to

Browne and Sutherland, concluding that general personal jurisdiction did not

exist over either defendant. Plaintiffs timely appealed the district court’s order

dismissing their claims against BP, Statoil, and Browne.

II.

We review a district court’s grant of summary judgment de novo. 

Amerisure Ins. Co. v. Navigators Ins. Co., 611 F.3d 299, 304 (5th Cir. 2010)

(citing Ford Motor Co. v. Tex. Dep’t of Transp., 264 F.3d 493, 498 (5th Cir.

2001)). “Summary judgment is proper when ‘the pleadings, the discovery and

disclosure materials on file, and any affidavits show that there is no genuine

issue as to any material fact and that the movant is entitled to judgment as a

matter of law.’” Id. (quoting Fed. R. Civ. P. 56(c)). “The res judicata effect of a

prior judgment is a question of law that we review de novo.” Davis v. Dallas

Area Rapid Transit, 383 F.3d 309, 313 (5th Cir. 2004) (citing Proctor & Gamble

Co. v. Amway Corp., 242 F.3d 539, 546 (5th Cir. 2001)).

Res judicata, or claim preclusion, “bars the litigation of claims that either

have been litigated or should have been raised in an earlier suit.” Test Masters

6

 Case: 12-20291 Document: 00512266145 Page: 6 Date Filed: 06/07/2013
No. 12-20291

Educ. Servs., Inc. v. Singh, 428 F.3d 559, 571 (5th Cir. 2005) (citation omitted). 

Res judicata, by preventing later suits from collaterally attacking a prior

judgment by a court of competent jurisdiction, “insures the finality of judgments

and thereby conserves judicial resources and protects litigants from multiple

lawsuits.” Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398, 401 (5th Cir. 2009)

(quoting United States v. Shanbaum, 10 F.3d 305, 310 (5th Cir. 1994)). Four

elements must be satisfied for res judicata to bar a claim: (1) the parties in the

subsequent action are identical to, or in privity with, the parties in the prior

action; (2) the prior judgment was rendered by a court of competent jurisdiction;

(3) the prior action concluded with a final judgment on the merits; and (4) the

same claim or cause of action is involved in both cases. Singh, 428 F.3d at 571

(citation omitted).

In the present case, the first and final elements of res judicata are not in

dispute.

4 The parties dispute, however, whether the second and third elements

of res judicata are satisfied. While it is undisputed that the arbitrator had the

power under the Settlement Agreements to render a final judgment on the

merits of Plaintiffs’ civil RICO claims, Plaintiffs contend that the arbitrator

mistakenly believed that it lacked power to decide one of the elements of the

“DC Based RICO Claim” and, therefore, did not exercise jurisdiction over that

claim.

5

 Based on our review of the entirety of the record, we disagree.

4 The first element is satisfied because the Plaintiffs, BP, and Statoil were parties to

the Arbitration and Browne, as Chief Executive Officer of one of the BP entities during the

underlying events, is in privity with BP. See Henry v. Farmer City State Bank, 808 F.2d 1228,

1235 n.6 (7th Cir. 1986) (holding that directors, officers, and employees of a company are in

privity with the company for purposes of res judicata). The fourth element is satisfied because

each of the claims advanced in the present case are identical to claims involved in the

Arbitration.

5 Plaintiffs are correct that a dismissal of a claim for lack of subject-matter jurisdiction

does not preclude a second action on the same claim because such a dismissal is not a final

judgment on the merits. Nilsen v. City of Moss Point, Miss., 674 F.2d 379, 382 (5th Cir. 1982)

(citation omitted). Even if the dismissal for lack of subject-matter jurisdiction was erroneous

because jurisdiction existed in the initial action, the dismissal does not preclude a second

7

 Case: 12-20291 Document: 00512266145 Page: 7 Date Filed: 06/07/2013
No. 12-20291

To successfully advance a claim under civil RICO, a plaintiff must

demonstrate: (1) that the defendant violated 18 U.S.C. § 1962, a statutory

provision that contains RICO’s prohibited activities; and (2) that the “RICO

predicate offense not only was a but for cause of his injury, but was the

proximate cause as well.” Hemi Grp., LLC v. City of New York, 130 S. Ct. 983,

989 (2010) (internal quotation marks omitted). A plaintiff advancing a claim

under civil RICO is not required to establish that the defendant was or will be

criminally convicted under RICO. See Sedima, S.P.R.L. v. Imrex Co., Inc., 473

U.S. 479, 488–89 (1985) (explaining that the use of the term “violation” in 18

U.S.C. § 1962 “does not imply a criminal conviction” but instead “refers only to

a failure to adhere to legal requirements”). Instead, a plaintiff is only required

to establish that the defendant’s activities are unlawful under 18 U.S.C. § 1962. 

See id. at 489 (“Section 1962 renders certain conduct ‘unlawful’; § 1963 and

§ 1964 impose consequences, criminal and civil, for ‘violations’ of § 1962.”).

The arbitrator dismissed Plaintiffs’ “DC Based RICO Claim” based on its

finding that Plaintiffs did not suffer an injury as a result of Defendants’ alleged

RICO violations. The arbitrator did not decide whether the Defendants’ actions

constituted a violation of § 1962. In addition to discussing the Plaintiffs’ failure

to prove damages, the arbitrator’s discussion of Plaintiffs’ “DC Based RICO

Claim” also included the following statement: “Although under the broad

arbitration provisions contained in the Settlement Agreements the undersigned

has the authority to decide civil RICO claims, neither an arbitrator nor an

independent auditor has the power or authority to decide whether [Defendants],

either directly or indirectly, committed a crime.” While this statement

action. See 18A Charles Alan Wright et al., Federal Practice and Procedure § 4436 (2d ed.

2002) (“The basic rule that dismissal for lack of subject-matter jurisdiction does not preclude

a second action” “applies even though the first court may have been wrong in determining that

it lacked jurisdiction”). Nevertheless, for the reasons discussed infra, these principles are not

applicable here.

8

 Case: 12-20291 Document: 00512266145 Page: 8 Date Filed: 06/07/2013
No. 12-20291

demonstrates that the arbitrator believed that it could not decide whether

Defendants were guilty of committing a crime, it does not suggest that the

arbitrator mistakenly believed that it could not decide whether Defendants’

actions constituted a violation of 18 U.S.C. § 1962, subjecting them to civil

consequences under 18 U.S.C. § 1964. We conclude that the arbitrator

exercised jurisdiction over the Plaintiffs’ “DC Based RICO Claim” and rendered

a final judgment on the merits. 

Accordingly, res judicata bars Plaintiffs’ civil RICO claims against

Defendants. Because we may affirm solely on the basis of res judicata, we do

not address the other grounds that may have supported the dismissal of

Plaintiffs’ claims against Defendants.6

III.

For the foregoing reasons, we AFFIRM the district court’s dismissal of

Plaintiffs’ civil RICO claims.

6 We note, however, that even if we concluded that res judicata were not applicable

here, we would remand Plaintiffs’ civil RICO claims to arbitration. Each of the claims arise

from the Settlement Agreements and, therefore, are required to be submitted to arbitration.

See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 628 (1985)

(“Having made the bargain to arbitrate, the party should be held to it . . . .”). We disagree with

Plaintiffs’ contention that arbitrating their “DC Based RICO Claim” proved to be an

impossibility. Plaintiffs were fully aware of their right to appeal the arbitrator’s dismissal of

their “DC Based RICO Claim” in New York state court. In fact, Plaintiffs successfully

obtained a New York Appellate Division order vacating the arbitrator’s dismissal oftheir audit

claims; because of this order, the arbitrator was required, on remand, to determine whether

the signature bonus was a bribe or a bona fide transaction. Plaintiffs’ “strategic” decision

declining to challenge the dismissal of their “DC Based RICO Claim” in the New York state

court appeal does not open the door to relitigate that claim in this forum.

9

 Case: 12-20291 Document: 00512266145 Page: 9 Date Filed: 06/07/2013