Court Opinion

ID: 7822866
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:00:20.234685+00
Date Added: 2024-06-11T16:30:48.779472
License: Public Domain

Case: 22-20065     Document: 00516461829         Page: 1     Date Filed: 09/07/2022

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

                                                                              FILED
                                  No. 22-20065                        September 7, 2022
                                Summary Calendar                         Lyle W. Cayce
                                                                              Clerk

   Robert Manabu Torson,

                                                           Plaintiff—Appellant,

                                       versus

   Hyundai Oilbank Company Limited, doing business as
   Hyundai Oil Houston Office Company,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                            USDC No. 4:21-CV-778

   Before Stewart, Duncan, Wilson, Circuit Judges.
   Per Curiam:*
          In this appeal arising from a stockholder dispute, Robert Manabu
   Torson (“Torson”) appeals the district court order granting Hyundai
   Oilbank Company Limited’s (“Hyundai Oilbank”) motion to dismiss.

          *
            Pursuant to 5th Circuit Rule 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   opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
Case: 22-20065     Document: 00516461829           Page: 2   Date Filed: 09/07/2022

                                    No. 22-20065

   Because we hold that the district court properly declined to exercise personal
   jurisdiction over the defendant, we affirm.
                               I.    Background
          Hyundai Oilbank is a privately owned, for-profit, oil refining
   corporation based mostly out of South Korea. Hyundai Oilbank was formed
   and incorporated under South Korean law and maintains its principal place
   of business in Seosan, South Korea. Including its headquarters in Seosan,
   Hyundai Oilbank maintains a total of 37 offices in South Korea. These 37
   offices hold over 99% of the corporation’s approximately 2,000 employees.
   Hyundai Oilbank maintains six branch offices outside of South Korea,
   totaling 14 employees in all. These offices are spread out across the globe in
   a strategic manner to assist in Hyundai Oilbank’s oil and gas operations.
   Hyundai Oilbank opened its sole United States office in Houston, Texas
   (“the Houston Office”) on June 4, 2019.
          The Houston Office is devoid of any high-level executives, officers, or
   directors. It is staffed with a single employee, a mid-level manager, Kwan
   Hwan Han (“Han”). Hyundai Oilbank registered its business with the Texas
   Secretary of State and created Han’s role in Houston out of appreciation for
   the time difference between South Korea and the U.S. and the important role
   Texas plays in the global energy and gas industries. Han’s primary duties are
   to research and report back real time updates regarding the American energy
   industry to the headquarters in Seosan. The Houston Office has no direct
   involvement in the purchasing or selling of materials in Texas. While
   Hyundai Oilbank has entered into roughly 60 contracts for oil produced in
   U.S. wells, none of these contracts were entered into in the U.S. or required
   payment to corporations in the U.S. The only contracts the Houston Office
   has entered into on behalf of Hyundai Oilbank are the sublease for the
   physical office space for Han and a commercial automobile insurance policy.

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                                    No. 22-20065

          Torson is a United States citizen and resident of Hawaii. On August
   13, 2018, Torson purchased 2,900,000 shares of Hyundai Oilbank from a
   Japanese citizen. Torson’s purchase qualified him as a minority shareholder
   within Hyundai Oilbank. Since Hyundai Oilbank is not publicly traded,
   Torson sought to use the power obtained through his newly acquired shares
   to request relevant information to aid him in determining the value of his
   shares. Additionally, Torson requested Hyundai Oilbank recognize his
   shares as founder’s shares, and that Hyundai Oilbank document that he is the
   shareholder in due course on its corporate stock ledger. To date, Hyundai
   Oilbank has not met Torson’s demands. In response to Hyundai Oilbank’s
   inaction, Torson filed suit in the federal district court for the Southern
   District of Texas, Houston Division, asserting a claim for conversion and
   seeking a declaratory judgment ordering Hyundai Oilbank to comply with his
   various requests.
          Hyundai Oilbank moved to dismiss Torson’s action under Federal
   Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction for forum
   non conveniens and under Rule 12(b)(6) for failure to state a claim upon
   which relief can be granted. The district court granted Hyundai Oilbank’s
   motion to dismiss, on grounds that it lacked personal jurisdiction, but
   declined to address the merits of the forum non conveniens issue and the
   Rule 12(b)(6) claim.
          On appeal, Torson argues that the district court erred in holding that
   it lacked personal jurisdiction over Hyundai Oilbank for three reasons. First,
   Torson claims that Hyundai Oilbank’s activities mirror those of cases where
   the Supreme Court has held that the exercise of general jurisdiction over
   foreign corporations was proper. Second, Torson argues that general
   jurisdiction exists under the exceptional case doctrine because the Houston
   Office’s activities in Texas are so continuous and systematic that it is central
   to Hyundai Oilbank’s success and thus qualifies as its U.S. principal place of

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   business. And third, Torson contends that general jurisdiction exists because
   he is unable to seek redress in any alternative U.S. jurisdiction.
                           II.     Standard of Review
          We review de novo a district court’s determination that it lacks
   personal jurisdiction. Sangha v. Navig8 ShipManagement Priv. Ltd., 882 F.3d
   96, 101 (5th Cir. 2018). “The plaintiff bears the burden of establishing
   jurisdiction, but need only present prima facie evidence.” Patterson v. Aker
   Solutions Inc., 826 F.3d 231, 233 (5th Cir. 2016). We “must accept the
   plaintiff’s uncontroverted allegations, and resolve in his favor all conflicts
   between the facts contained in the parties’ affidavits and other
   documentation.” Id. (internal quotation marks, alterations, and citation
   omitted). However, “such acceptance does not automatically mean that a
   prima facie case for [personal] jurisdiction has been presented.” Sangha, 882
   F.3d at 101.
                                 III.    Discussion
          Personal jurisdiction exists over a non-resident defendant if “the
   state’s long-arm statute extends to the defendant and exercise of such
   jurisdiction is consistent with due process.” Johnston v. Multidata Sys. Int’l
   Corp., 523 F.3d 602, 609 (5th Cir. 2008). “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.” Id.; see also Tex. Civ.
   Prac. & Rem. Code § 17.042. Due process requires that the defendant
   have “minimum contacts” with the forum state, such that the defendant has
   “purposefully availed himself of the privilege of conducting activities within
   the forum state.” Id. (quoting Wilson v. Belin, 20 F.3d 644, 647 (5th Cir.
   1994)). The exercise of personal jurisdiction must be consistent with
   “traditional notions of fair play and substantial justice.” Id.

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          Personal jurisdiction may be either specific or general. “A court may
   assert general jurisdiction over foreign corporations 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).
   “General jurisdiction. . . will attach[] even if the nonresident defendant’s
   contacts with the forum state are not directly related to the cause of action.”
   Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994). Given the broad reach of
   general jurisdiction, we have held that 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) (citation
   omitted)).
          The Supreme Court has noted that in “exceptional case[s]” a
   corporate defendant’s operations in another forum “may be so substantial
   and of such a nature as to render the corporation at home in that State.”
   Daimler AG v. Bauman, 571 U.S. 117, 139 n.19 (2014). This inquiry requires
   that we “apprais[e] a corporation’s activities in their entirety” to evaluate
   whether this high burden has been met. BNSF Railway Co v. Tyrrell, 137 S.
   Ct. 1549, 1559 (2017). Furthermore, the inquiry remains consistent in
   dealings with states and foreign-country corporations. Daimler, 571 U.S. at
   127.
          Specific jurisdiction exists “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) (emphasis in original). More specifically, specific jurisdiction is
   found where “a nonresident defendant has purposefully directed its activities
   at the forum state and the litigation results from alleged injuries that arise out

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   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 omitted).
          Preliminarily, we acknowledge that Torson concedes that specific
   jurisdiction does not exist because none of the alleged injuries occurred in the
   forum state or relate to activities of the Houston Office. Instead, both parties
   focus on the issue of general jurisdiction.
          First, we address Torson’s argument that Hyundai Oilbank’s
   activities are analogous to those set forth in Perkins v. Benguet, 342 U.S. 437
   (1952). In Perkins, the president of a Philippines corporation moved business
   operations to Ohio in response to World War II. Id. In so doing, the president
   moved and kept business records, held directors’ meetings, maintained
   substantial corporation accounts, and made all key business decisions in
   Ohio. Id. The Supreme Court held that “under the circumstances above
   recited, it would not violate federal due process for Ohio either to take or
   decline jurisdiction of the corporation in this proceeding.” Id. at 448.
   Accordingly, if Torson’s case is analogous to the facts set forth in Perkins, the
   district court may exercise general jurisdiction over his claims.
          Here, the evidence demonstrates that Han’s role and the Houston
   office is distinguishable from the circumstances described in Perkins. First,
   Han is a mid-level manager within Hyundai Oilbank. He is not a high-level
   executive, director, or board member, so he hardly possesses the powers
   exercised by the president in Perkins. Moreover, Torson fails to produce any
   evidence that any high-level employees have visited or made business
   decisions from the Houston Office. There is no evidence that key business
   records were moved from South Korea to the Houston Office, or that any
   funds are held in financial institutions in Texas. On this record, Torson has
   only shown that Hyundai Oilbank has an office in Houston, staffed with one

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   employee. These facts fall short of mirroring Perkins and provide no basis for
   general jurisdiction.
          Next, we address Torson’s argument that Hyundai Oilbank’s
   activities out of the Houston Office are so continuous and systematic that it
   qualifies as a U.S. principal place of business. Alternatively, he contends that
   the Hyundai Oilbank’s operations in Houston permit general jurisdiction
   under the “exceptional cases” doctrine. Daimler, 571 U.S. at 139 n.19. In
   support of his arguments, Torson relies primarily on PetroSaudi Oil Services
   Ltd. v. Hartley, 617 S.W.3d 116 (Tex. App. 2020). In PetroSaudi, an employee
   of PetroSaudi Oil Services Ltd. (“PetroSaudi”) sued for injuries sustained
   on one of its vessels. PetroSaudi was incorporated in the Cayman Islands and
   had its principal place of business in London, England. Id. at 140. The
   corporation had a single U.S. office in Houston, Texas, owned by one of its
   subsidiaries. Id. The Texas court of appeals determined that it could exercise
   general jurisdiction over PetroSaudi because the “work performed in the
   Houston office was integral to the operation of the vessel, the success of
   which was the focus of PetroSaudi’s business.” Id. at 141. Specifically, the
   court noted that “[t]he Houston office was not merely incidental to
   PetroSaudi’s work but was instead akin to ‘a general business office’ located
   in Texas.” Id. “PetroSaudi’s contacts with Texas were such that it was
   essentially ‘at home’ in Texas and . . . PetroSaudi had sufficient minimum
   contacts with Texas to support the exercise of personal jurisdiction.” Id. at
   141.
          To the contrary in Torson’s case, the Houston Office is merely one of
   37 total offices, has existed for only three years, and only employs Han, who
   has no authority to make any business decisions on behalf of Hyundai Oilbank
   in the U.S. or abroad. At best, the Houston Office is “merely incidental” to
   Hyundai Oilbank’s work or overall success, and is not akin to a “general
   business office.” PetroSaudi, 617 S.W.3d at 141. The most significant contact

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   Hyundai Oilbank has with Texas is that it has registered a business and
   provides an office for Han there. The Houston Office is of minor significance.
   Accordingly, we “decline[] to exercise general personal jurisdiction over a
   corporation where its most significant and continuous contact with the forum
   [is] having employees located there.” Patterson, 826 F.3d at 235 (citing Bowles
   v. Ranger Land Sys., Inc., 527 F. App’x 319, 321-22 (5th Cir. 2013)).
   Furthermore, because no “appraisal” of Hyundai Oilbank’s activities in
   Houston indicates that their operation is substantial, BNSF, 137 S. Ct. at
   1559, the Houston Office fails to qualify as an “exceptional case.” Daimler
   571 U.S. at 139 n.19.
          Finally, we address Torson’s contention that his inability to seek
   redress in an alternative U.S. forum should factor into our general
   jurisdiction analysis over Hyundai Oilbank. He argues that Hyundai Oilbank
   has limited suit in the U.S. to Texas by opening and maintaining a branch
   office in a single U.S. location. To that end, he maintains that the district
   court erred in its application of Daimler by not accounting for the lack of an
   alternative U.S. forum. We disagree.
          In Daimler, the Supreme Court held that a federal court does not have
   general jurisdiction over a foreign corporation due to the contacts of its
   subsidiaries even if that subsidiary is “at home” in the plaintiff’s desired
   forum. Id. at 134. Instead, the Court reaffirmed that the “paradigm all-
   purpose forums for general jurisdiction are a corporation’s place of
   incorporation and principal place of business.” Id. at 118-119 (quoting
   Goodyear, 564 U.S. at 924).
          Here, the evidence reflects that Torson purchased his shares prior to
   Hyundai Oilbank ever opening an office in Houston. Moreover, he bought
   his shares from a Japanese citizen. Therefore, he was likely aware that any
   dispute over his purchase would occur internationally. The fact that a more

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   convenient forum has potentially surfaced since his purchase does not factor
   into our jurisdictional analysis. Consequently, this court will not use
   Torson’s lack of an alternative U.S. forum as a basis for exercising general
   jurisdiction over Hyundai Oilbank.
          The district court properly dismissed Torson’s claims for lack of
   personal jurisdiction. Sangha, 882 F.3d at 101.
                              IV.    Conclusion
          For the foregoing reasons, we AFFIRM the district court’s judgment
   dismissing Torson’s claims for lack of personal jurisdiction.

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