Court Opinion

ID: 4580537
Source: CourtListenerOpinion
Date Created: 2020-10-26 18:00:19.985327+00
Date Added: 2024-06-11T13:43:38.913229
License: Public Domain

Case: 20-30121     Document: 00515614951         Page: 1     Date Filed: 10/26/2020

           United States Court of Appeals
                for the Fifth Circuit                            United States Court of Appeals
                                                                          Fifth Circuit

                                                                        FILED
                                                                  October 26, 2020
                                  No. 20-30121                     Lyle W. Cayce
                                                                        Clerk

   Julie Romero Libersat; Charles E. Scarbrough,
   Testamentary Executor of Succession of Gerald D.
   Libersat,

                                                           Plaintiffs—Appellants,

                                      versus

   Sundance Energy, Incorporated; SEA Eagle Ford,
   L.L.C.; Noble Energy, Incorporated,

                                                        Defendants—Appellees.

                  Appeal from the United States District Court
                     for the Western District of Louisiana
                            USDC No. 6:19-CV-421

   Before Smith, Clement, and Oldham, Circuit Judges.
   Edith Brown Clement, Circuit Judge:
         Plaintiffs Gerald Libersat and Julie Romero Libersat (jointly,
   “Libersat”) sued Sundance Energy, Inc., SEA Eagle Ford, L.L.C., and Noble
   Energy, Inc., among others, for royalties pursuant to a Texas mineral lease.
   Libersat alleges that the defendants negligently calculated royalty
   distributions and attempted to coerce Libersat to sign an indemnity
   agreement when the error was brought to their attention. The district court
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   dismissed all claims against Sundance, SEA Eagle, and Noble without
   prejudice for lack of personal jurisdiction. We AFFIRM.
                            I. Facts and Proceedings
           In 1984 Clayton Williams, Jr., leased the mineral rights to property in
   McMullen County, Texas, owned by the Libersat family, who lived in
   Louisiana. Williams then assigned his rights to Clayton Williams Energy, Inc.
   Some of those rights (the portion at issue here) were assigned to Eagle Ford
   Shale Exploration, LLC, which, in turn, assigned them to SEA Eagle in 2014.
   In 2017, Noble acquired Clayton Williams Energy. Sundance is SEA Eagle’s
   sole member and administers royalty payments for SEA Eagle, but has no
   direct interest in the lease.
           In 2018 Sundance transmitted division orders proposing an allocation
   of royalties based on an allegedly faulty mineral title opinion. The division
   order allegedly allocated to Libersat only a 1/3 interest—based on faulty
   assumptions about how original lessor May Libersat’s estate had been passed
   down—when Libersat should have been allocated a 2/3 interest. The other
   1/3 was incorrectly allocated to third parties, who allegedly ratified and
   collected royalties based on the erroneous division orders.1
           Libersat alleges that when he alerted Sundance to its error, Sundance
   responded by sending a corrected division order containing an indemnity
   clause that would have prevented Libersat from recovering several months’
   worth of misallocated royalties. When Libersat refused to sign this order,
   Sundance allegedly ceased all royalty payments as leverage to force Libersat
   to sign the indemnifying division order.

           1
            SEA Eagle has sued Mark Libersat and Roxanne Marie Gilton—the third parties
   who allegedly collected the royalties to which Libersat is entitled—in Texas state court to
   recover the erroneous payments.

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          Libersat sued in Louisiana state court. SEA Eagle and Sundance
   removed the case to the Federal District Court for the Western District of
   Louisiana, then moved to dismiss for lack of personal jurisdiction, lack of
   subject matter jurisdiction, and improper venue. Shortly thereafter, Noble
   also moved to dismiss on similar grounds.
          The district court found that none of the three defendants were
   sufficiently “at home” in Louisiana to justify general personal jurisdiction,
   nor did any have sufficient minimum contacts related to the cause of action
   to justify specific personal jurisdiction. So the district court dismissed
   without prejudice. The district court considered but declined to rule on the
   defendants’ argument that the local action rule precluded subject matter
   jurisdiction. Libersat timely appealed.
                           II. Standard of Review
          We review a district court’s decision to dismiss for lack of personal
   jurisdiction de novo. Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins.
   Co., 921 F.3d 522, 539 (5th Cir. 2019). Although the plaintiffs bear the burden
   of establishing jurisdiction over the defendants, the plaintiffs are only
   required to make a prima facie showing because the district court did not hold
   an evidentiary hearing. Johnston v. Multidata Sys. Int’l. Corp., 523 F.3d 602,
   609 (5th Cir. 2008). We will accept as true the uncontroverted allegations in
   the complaint and resolve factual conflicts in favor of the plaintiffs.
   Halliburton Energy Servs., 921 F.3d at 539.
                                 III. Discussion
          “A ‘federal court sitting in diversity may assert jurisdiction if (1) the
   state’s long-arm statute’ allows it; and (2) exercising jurisdiction would not
   violate the Due Process Clause of the Fourteenth Amendment.” Halliburton
   Energy Servs., 921 F.3d at 539 (quoting Cycles, Ltd. v. W.J. Digby, Inc., 889
F.2d 612, 616 (5th Cir. 1989)). Because “[t]he limits of the Louisiana Long-

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   arm Statute and the limits of constitutional due process are” effectively
   “coextensive,” Petroleum Helicopters, Inc. v. Avco Corp., 513 So. 2d 1188, 1192
   (La. 1987), the sole inquiry is whether exercising jurisdiction would violate
   the Due Process Clause, see Walk Haydel & Assocs., Inc. v. Coastal Power Prod.
   Co., 517 F.3d 235, 242–43 (5th Cir. 2008).
          A court may exercise personal jurisdiction based on specific or general
   jurisdiction. Although Libersat argued to the district court that Louisiana
   courts could exercise personal jurisdiction based on either theory, he has
   since abandoned the general jurisdiction argument. This is wise, as Noble is
   a Delaware corporation with its principal place of business in Houston,
   Texas, Sundance is a Colorado corporation with its principal place of
   business in Denver, Colorado, and SEA Eagle is a Texas limited liability
   company with its principal place of business in Colorado and with Sundance
   as its sole member. No defendant has the type of continuous and systematic
   contacts with Louisiana that would “render [it] essentially at home in the
   forum State.” See Daimler AG v. Bauman, 571 U.S. 117, 139 (2014) (quoting
   Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).
          Thus, we consider only specific jurisdiction. We use a three-step
   analysis that asks
          (1) whether the defendant has minimum contacts with the
          forum state, i.e., whether it purposely directed its activities
          toward the forum state or purposefully availed itself of the
          privileges of conducting activities there; (2) whether the
          plaintiff’s cause of action arises out of or results from the
          defendant’s forum-related contacts; and (3) whether the
          exercise of personal jurisdiction is fair and reasonable.
   Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006)
   (quoting Nuovo Pignone, SpA v. Storman Asia M/V, 310 F.3d 374, 378 (5th
   Cir. 2002)).

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                                                 A.
           Before we can examine the defendants’ alleged jurisdictional contacts,
   we must address Libersat’s pervasive effort to join together all of the various
   defendants’ contacts into a single corpus for consideration. To decide
   whether the defendants have sufficient minimum contacts, we must first
   decide which alleged contacts to consider for each defendant. Libersat argues
   that, because they are solidary obligors,2 each defendant’s respective
   contacts with Louisiana should be imputed to every other defendant. Libersat
   asks, “If two corporations are obligated for the same performance and can be
   judicially sanctioned for conduct related to said obligation irrespective of the
   presence of the other, are they not alter egos?”
           No, they are not. Sharing liability is not the same as sharing an
   identity. As our colleagues in the Ninth Circuit explained, “Liability and
   jurisdiction are independent. . . . Regardless of their joint liability, jurisdiction
   over each defendant must be established individually.” Sher v. Johnson, 911
F.2d 1357, 1365 (9th Cir. 1990). Lumping defendants together for
   jurisdictional purposes merely because they are solidary obligors “is plainly
   unconstitutional.” Rush v. Savchuk, 444 U.S. 320, 332 (1980). Libersat’s
   reliance on solidary liability arising specifically from the assignment of a lease
   is unavailing. Courts that have looked at assignor / assignee relationships
   have “determined that an assignee does not step automatically into the shoes
   of the assignor for purposes of personal jurisdiction.” Purdue Rsch. Found. v.
   Sanofi-Synthelabo, S.A., 338 F.3d 773, 784 (7th Cir. 2003) (collecting cases).

           2
           Solidary liability is Louisiana’s civil-law analogue for joint and several liability. In
   re Hari Aum, LLC, 714 F.3d 274, 277 n.1 (5th Cir. 2013) (citing Black’s Law
   Dictionary 1521 (9th ed. 2009)).

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   Without more, the Constitution does not permit us to impute the
   jurisdictional contacts of each defendant to all the others.
          Although joint liability is not a permissible basis for imputing the
   jurisdictional contacts of one defendant to another, imputing contacts may
   be permissible where defendants form certain relationships. Libersat argues
   that the defendants may be linked via such relationships, including agency,
   In re Chinese-Manufactured Drywall Prods. Liab. Litig., 753 F.3d 521, 534 (5th
   Cir. 2014), alter ego, Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 586–
   87 (5th Cir. 2010), or successor-entity relationships, Patin v. Thoroughbred
   Power Boats Inc., 294 F.3d 640, 653–54 (5th Cir. 2002). Purely for the sake of
   convenience, we will assume that some of these relationships may apply and
   thereby arrange the defendants into two groups.
          It is far from clear that Libersat has alleged sufficient facts to find that
   Sundance is merely an alter ego of SEA Eagle. See Jackson, 615 F.3d at 587–
   88 (refusing to impute contacts among closely-affiliated entities where their
   “brands and products appear identical and their business relationships are
   deeply intertwined,” and they shared office space, phone numbers, and
   directors). However, Sundance appears to have conducted business on behalf
   of SEA Eagle, including handling royalty payments, procuring the title
   opinion at issue, and communicating with lessors. Thus, for the sake of
   convenience, we will assume—without deciding—that SEA Eagle and
   Sundance can be treated collectively hereinafter as the “Sundance
   Defendants,” which is the first group.
          We also assume—without deciding—that Clayton Williams, Jr.’s,
   contacts can be imputed to Clayton Williams Energy (as alter egos), and then

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   on to Noble (as successor to Clayton Williams Energy).3 This is the second
   group of entities whose contacts we will consider imputed to one another.
           Libersat does not allege any facts to indicate that SEA Eagle and
   Sundance are connected to Noble or Clayton Williams Energy in any way
   beyond their respective involvement in the lease at issue—whether as agent,
   alter ego, or successor. There is no evidence or allegation of any relationship
   that would allow Clayton Williams’s contacts to be imputed to Sundance, or
   Sundance’s contacts to be imputed to Noble. Thus, there is no basis to
   impute any of the contacts of one group to the other.
                                                B.
           Having thus split defendants into two groups, we can now turn to the
   contacts that are attributable to each group to examine whether they are
   sufficient for specific personal jurisdiction.
                                                (1)
           Noble’s alleged contacts with Louisiana include maintaining an active
   business presence in Louisiana, ratifying the Sundance Defendants’ actions,
   negotiating the lease in Louisiana (imputed through Clayton Williams), and
   sending royalties for over 30 years to Louisiana.
           Libersat’s allegations about Noble’s general business presence in
   Louisiana, including registering to do business and being involved in
   unrelated lawsuits, are inapposite. Libersat relies solely on a theory of specific

           3
            Whether Noble is a “mere continuation” of Clayton Williams Energy, see Patin,
294 F.3d at 649, or Clayton Williams Energy can be treated as an alter ego of Clayton
   Williams, Jr., via a veil-piercing analysis is unclear, since neither Libersat nor the district
   court engaged in any substantial analysis along those lines. In any case, like the district
   court, we find that Libersat has failed to make the requisite showing of minimum contacts
   regardless, and so decline to engage in this analysis in the first instance.

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   jurisdiction, which requires that “the controversy arise[ ] out of or [ ] relate[ ]
   to the defendant[’]s contacts with the forum state.” Freudensprung v.
   Offshore Tech. Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004). By definition,
   none of the unrelated lawsuits or business connections Libersat offers are
   related to this lawsuit, so they are irrelevant to specific jurisdiction.
          Libersat’s allegation that Noble has somehow ratified Sundance’s
   conduct is similarly unavailing. Ratification is an agency theory, whereby a
   person may be bound “if the actor acted or purported to act as an agent on
   the person’s behalf.” Restatement (Third) of Agency § 4.03 (Am.
   Law Inst. 2006). Sundance is an assignee, not an agent of Noble;
   Sundance, so far as we can tell from the record here, has never “acted or
   purported to act as an agent” of Noble, in this or any other matter. Noble was
   never in a position to ratify any conduct by Sundance, nor is there reason to
   believe it did.
          Finally, assuming—again, without deciding—that payments by
   Clayton Williams Energy or negotiations by Clayton Williams, Jr., can be
   attributed to Noble, we nonetheless conclude that there is no sufficient
   connection to the instant litigation. Specific jurisdiction is “a claim-specific
   inquiry.” Seiferth, 472 F.3d at 274. Libersat’s claim must “arise[ ] out of or
   result[ ] from” Noble’s contacts with Louisiana. Id. at 271 (citation omitted).
   Clayton Williams Energy assigned its interest in the relevant portion of the
   lease to Eagle Ford Shale Exploration in 2014, which then assigned it to SEA
   Eagle. Noble acquired Clayton Williams Energy in 2017. The conduct at issue
   occurred in 2017–2018.
          As the district court noted, Libersat’s claims “arise out of royalty
   payments and alleged errors in division orders.” There is no allegation of
   wrongdoing associated with Williams’s negotiations in the mid-1980s and
   Libersat explicitly disclaimed any allegation that Noble had improperly

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   performed its duties under the lease.4 Noble no longer had an interest in the
   relevant portion of the lease when the conduct at issue occurred. Libersat’s
   claims do not arise out of the negotiations and past royalty payments,5 so
   Libersat cannot use Clayton Williams’s interactions with the Libersat family
   to establish minimum contacts for specific personal jurisdiction in this case.
           None of Noble’s alleged contacts imputed through Clayton Williams,
   Jr., or Clayton Williams Energy are meaningfully related to Libersat’s claims.
   Libersat has thus failed to allege that Noble has the requisite minimum
   contacts for Louisiana courts to exercise specific personal jurisdiction.
                                               (2)
           By contrast to Noble, the Sundance Defendants have at least some
   contacts with Louisiana that are related to Libersat’s claims. The question
   remains, however, whether these contacts suffice for the “purposefully
   established ‘minimum contacts’ in the forum State” that are “the
   constitutional touchstone” of personal jurisdiction. Asahi Metal Indus. Co., v.
   Superior Court of Cal., Solano Cnty., 480 U.S. 102, 108–09 (1987) (quoting
   Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)). This, in turn,
   requires that the contacts evince some intent by the defendant to
   “purposefully avail[ ] itself of the privilege of conducting activities within the
   forum State, thus invoking the benefits and protections of its laws.” Id. at 109
   (quoting Burger King, 471 U.S. at 475).

           4
            The only allegation related to Noble’s performance is that Noble should have
   intervened to prevent or correct Sundance’s conduct, but nothing in the record would
   permit us to find that Noble had any such duty or any ability to affect Sundance’s conduct.
           5
             Even if they did, “merely contracting with a resident of the forum state does not
   establish minimum contacts.” Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 433 (5th Cir.
   2014) (quoting Moncrief Oil Int’l Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007)).

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          Because we decline to impute the contacts of unrelated entities to the
   Sundance Defendants, their only relevant contacts are (1) contracting to
   assume a Texas mineral lease associated with a Louisiana lessor, (2) sending
   an unknown number of payments to Louisiana (far fewer than the 30 years’
   worth alleged by Libersat, since the lease was assigned to SEA Eagle in 2014),
   and (3) sending division orders and communications about the lease to
   Libersat in Louisiana.
          On the other hand, the Sundance Defendants acquired the lease from
   a Texas company, for mineral rights on land in Texas, all documentation of
   which was recorded in Texas, for the purpose of operating wells and
   extracting resources in Texas. The assignment from Eagle Ford Shale to SEA
   Eagle specified that the assignment would be governed by Texas law, and the
   original lease between Williams and the Libersats did not include any choice
   of law provision to counter the expectation that Texas law would control.
   The primary activities contemplated by the contract were carried out in
   Texas, and administration of the contract (sending of payments, etc.) was
   done in Colorado.
          The Sundance Defendants’ limited contacts with Louisiana are
   insufficient to show that they “purposefully availed [themselves] of the
   privilege of conducting activities within the forum state, thus invoking the
   benefits and protection of its laws.” Holt Oil & Gas Corp. v. Harvey, 801 F.2d
773, 777 (5th Cir. 1986).
          “The ‘purposeful availment’ element ensures that a defendant will
   not be haled into court in a jurisdiction solely as a result of random,
   fortuitous, or attenuated contacts or the unilateral activity of another person
   or third party.” Choice Healthcare, Inc. v. Kaiser Found. Health Plan of Colo.,
   615 F.3d 364, 369 (5th Cir. 2010). None of the Sundance Defendants’
   activities in assuming a Texas lease to conduct activities in Texas suggest an

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   intention to purposefully avail themselves of the privilege of conducting
   activities in Louisiana or to invoke the benefits and protections of its laws.
   Hanson v. Denckla, 357 U.S. 235, 253 (1958). The fact that the landowner to
   whom royalty checks were due happened to reside in Louisiana is, itself, the
   type of fortuitus connection to the proposed forum that this court has
   repeatedly held is not sufficient for specific personal jurisdiction.
          This court’s holding in Holt Oil & Gas Corp. is particularly instructive.
   There, the defendant’s contacts with the forum (Texas) included (1) entering
   into a contract with a Texas corporation, (2) sending joint operating
   agreements to Texas, (3) sending checks to Texas, and (4) engaging in
   “extensive telephonic and written communication” with the Texan plaintiff.
801 F.2d at 777–78. Those contacts were insufficient. Id. at 778; see also
   Freudensprung, 379 F.3d at 344 (“[T]his Court has repeatedly held that the
   combination of mailing payments to the forum state, engaging in
   communications related to the execution of and performance of the contract,
   and the existence of a contract between the nonresident defendant and a
   resident of the forum are insufficient to establish [ ] minimum contacts[.]”).
          Similarly, the Sundance Defendants (1) assumed a contract with a
   Louisiana resident, (2) sent division orders to Louisiana, (3) sent checks to
   Louisiana, and (4) engaged in written communication with the plaintiffs, who
   lived in Louisiana. Without more, a court may not constitutionally exercise
   specific personal jurisdiction.
          In a final bid to provide that something more, Libersat alleges the
   Sundance Defendants have committed an intentional tort that, by harming
   him in Louisiana, provides a sufficient contact with Louisiana. See Calder v.
   Jones, 465 U.S. 783, 791 (1984). Libersat’s argument misunderstands the
   “effects theory” of Calder and its progeny. As the Supreme Court would
   later clarify, the “proper question is not where the plaintiff experienced a

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   particular injury or effect but whether the defendant’s conduct connects him
   to the forum in a meaningful way.” Walden v. Fiore, 571 U.S. 277, 290 (2014).
   The defendants in Calder had not established contacts with California
   because they caused harm there; they had established contacts with
   California by sending communications to California the very content of which
   was tortious (a libelous article). Calder, 465 U.S. at 788–89; see also Wein Air
   Alaska, Inc. v. Brandt, 195 F.3d 208, 213 (5th Cir. 1999) (“When the actual
   content of communications with a forum gives rise to intentional tort causes of
   action, this alone constitutes purposeful availment.” (emphasis added)).
          Here, Sundance’s communications relate to a contract dispute and are
   not themselves tortious. The intentional tort alleged is conversion, and “‘the
   wrongful exercise of dominion and control over another’s property’ must
   occur in the forum state” to establish personal jurisdiction. Jones v. Artists
   Rights Enf’t Corp., 789 F. App’x 423, 427 (5th Cir. 2019) (quoting Pervasive
   Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214, 229 (5th Cir. 2012).
   Libersat alleges that a Colorado company is wrongfully exercising dominion
   and control over money that belongs to him—in Colorado. The “effects
   theory” is not applicable here and cannot add anything to the set of contacts
   already examined and found to be constitutionally inadequate to establish
   specific personal jurisdiction.
                                IV. Conclusion
          The district court correctly found that the defendants do not have
   sufficient minimum contacts with the state of Louisiana to support an
   exercise of specific personal jurisdiction. The district court’s order is
   AFFIRMED.

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