Fireman's Fund Insurance v. Thyssen Mining Construction of Canada, Ltd. , 703 F.3d 488 ( 2012 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS December 19, 2012
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
FIREMAN'S FUND INSURANCE
COMPANY; ZURICH INSURANCE
COMPANY, LTD., as Subrogees to Boart
Longyear, Inc.,
Plaintiffs - Appellants,
v. No. 12-2021
THYSSEN MINING CONSTRUCTION
OF CANADA, LTD.; MUDJATIK
THYSSEN MINING JOINT VENTURE,
Defendants - Appellees,
and
COMINCO ENGINEERING SERVICES,
LTD., DOES 1 - 10 INCLUSIVE,
Defendant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. NO. 6:10-CV-00401-MV-LFG)
Thomas M. Dunford, Cozen O’Connor, Denver, Colorado, appearing for Appellants.
Jennifer L. Collins (Ada B. Priest, with her on the brief), Madison & Mroz, P.A.,
Albuquerque, New Mexico, appearing for Appellees.
Before MURPHY, EBEL, and MATHESON, Circuit Judges.
MATHESON, Circuit Judge.
Fireman’s Fund Insurance Company and Zurich Insurance Company Ltd.
(collectively “Plaintiffs”), as subrogees of Boart Longyear, Inc., sued Thyssen Mining
Construction of Canada Ltd. (“Thyssen”) and Mudjatik Thyssen Mining Joint Venture
(“MTM”) (collectively “Defendants”) in New Mexico for negligence relating to the
collapse of a mine that MTM was excavating in Canada. The district court dismissed
MTM for lack of personal jurisdiction and dismissed the entire case under the forum non
conveniens doctrine. The Plaintiffs filed a timely appeal. Exercising jurisdiction under
28 U.S.C. § 1291, we affirm the dismissal of MTM for lack of personal jurisdiction and
reverse the dismissal of Plaintiffs’ complaint under forum non conveniens.
I. BACKGROUND
A. Factual Background
This case arises from the partial collapse of the Cigar Lake Uranium Mine in
Saskatchewan, Canada, during an MTM excavation project. MTM is a joint venture
formed by two independent companies—Thyssen, the sponsor and managing partner, and
Mudjatik Enterprises, Inc., a Saskatchewan-based business corporation—to undertake
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mining and contracting work in Northern Saskatchewan and to excavate the Cigar Lake
Mine.
In November 2004, Boart Longyear, Inc., an excavation company headquartered
in Salt Lake City, Utah, contracted with Cameco Corporation, a Saskatchewan uranium
producer with mines in Canada and the United States, to provide skilled labor and drilling
equipment for uranium ore extraction at the Cigar Lake Mine. Cameco then contracted
with MTM to excavate underground tunnels at the Cigar Lake Mine by drilling and
blasting. On October 22, 2006, while MTM was excavating an underground tunnel at
this mine, a portion of the tunnel collapsed and flooded, causing $3,766,000 of damage to
Boart Longyear’s drilling equipment.
Plaintiffs Fireman’s Fund Insurance Company and Zurich Insurance Company
Ltd. insured Boart Longyear before the Cigar Lake Mine collapse. Boart Longyear
submitted insurance claims to Plaintiffs after the mine collapsed and received payment
equal to the $3,766,000 in damages caused by the collapsed tunnel and partial flooding.
Plaintiffs, as subrogees of Boart Longyear, now seek damages for Defendants’ allegedly
negligent drilling and blasting excavation procedures at the Cigar Lake Mine.
B. Procedural Background
Plaintiffs sued the Defendants for negligence in Saskatchewan, Canada, on July
20, 2009. The Defendants have asserted a statute of limitations defense in that lawsuit,
which, if successful, would result in dismissal of Plaintiffs’ case. The court has not
decided this issue.
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Plaintiffs also sued the same Defendants for the same claims in New Mexico state
court on December 21, 2009. Defendants removed the suit to federal court based on
diversity jurisdiction. No party is a New Mexico resident. Thyssen conducts business
there, but MTM itself has no contacts with New Mexico. Defendants filed a motion to
dismiss based on lack of personal jurisdiction and improper venue.
The district court held that Thyssen had sufficient contacts with New Mexico to
confer personal jurisdiction but that Plaintiffs had not alleged sufficient facts to subject
MTM to personal jurisdiction. The court explained that Plaintiffs had not made a prima
facie showing of personal jurisdiction over MTM or requested an evidentiary hearing to
determine whether MTM has sufficient minimum contacts with New Mexico.1 Thus, the
court held that it lacked personal jurisdiction over MTM.
The district court also exercised its discretion to dismiss the entire case under the
forum non conveniens doctrine. It found that New Mexico is an inconvenient forum and
that Canada provided a presently available adequate alternative forum despite the
pending statute of limitations issue in the Canadian case.
Plaintiffs filed a timely appeal. They contest (1) the dismissal of MTM for lack of
personal jurisdiction and (2) the grant of Defendants’ motion to dismiss under the forum
non conveniens doctrine. Thyssen did not cross-appeal on the personal jurisdiction issue.
1
The Plaintiffs did request the opportunity for discovery or an evidentiary hearing
on whether Thyssen’s contacts in New Mexico were sufficient to confer personal
jurisdiction over MTM, but this request relied on the agency theory discussed below, not
on a showing of personal jurisdiction over MTM based on MTM’s contacts.
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II. DISCUSSION
A. Personal Jurisdiction
When a district court has dismissed a defendant for lack of personal jurisdiction
based on the plaintiff’s failure to allege sufficient contacts of the defendant with the
forum, “[w]e review [the] district court’s ruling on [the] jurisdictional question de novo.
Thus, our task is to determine whether the plaintiffs’ allegations . . . make a prima facie
showing of the minimum contacts necessary to establish jurisdiction over each
defendant.” Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1417 (10th Cir. 1988) (citations
omitted).
Personal jurisdiction is established by the laws of the forum state and must comport
with constitutional due process. Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d
1244, 1247 (10th Cir. 2000). New Mexico’s long-arm statute, N.M. Stat. Ann. § 38-1-16(1971), “is coextensive with constitutional limitations imposed by the Due Process
Clause.” Trujillo v. Williams, 465 F.3d 1210, 1217 (10th Cir. 2006); see also Tercero v.
Roman Catholic Diocese of Norwich, 48 P.3d 50, 54 (N.M. 2002). Personal jurisdiction
over a nonresident defendant satisfies due process if there are sufficient “minimum
contacts between the defendant and the forum State.” World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 291 (1980) (quotations omitted); Intercon, 205 F.3d at 1247. The
minimum contacts may support specific jurisdiction or general jurisdiction. Id.For specific jurisdiction, the defendant must have sufficient minimum contacts
with the forum state, and jurisdiction over the defendant cannot offend “traditional
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notions of fair play and substantial justice.” Asahi Metal Indus. Co., Ltd. v. Super. Ct. of
Cal., Solano Cnty., 480 U.S. 102, 113 (1987). The minimum contacts must show that
“the defendant ‘purposefully avail[ed] itself of the privilege of conducting activities
within the forum State.’” Id. at 109 (quotations omitted). The contacts with the forum
must make being sued there foreseeable so that the defendant could “reasonably
anticipate” the suit. World-Wide Volkswagen, 444 U.S. at 297. The litigation must
“result[] from alleged injuries that arise out of or relate to those activities.” Intercon, 205
F.3d at 1247 (quotations omitted).
General jurisdiction requires that a defendant have contacts with the forum “so
continuous and systematic as to render [it] essentially at home in the forum State.”
Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)
(quotations omitted); see also Trujillo, 465 F.3d at 1218 n.7 (general jurisdiction requires
“‘continuous and systematic’ general business contacts with the forum state” (quoting
Helicopteros Nacionales v. Hall, 466 U.S. 408, 415 (1984))). Unlike for specific
jurisdiction, the litigation need not arise from the defendant’s activities in the forum.
The district court found that New Mexico courts have general jurisdiction over
Thyssen but neither general nor specific jurisdiction over MTM. The court explained that
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although New Mexico courts have jurisdiction over businesses that are registered and
doing business in the state,2 jurisdiction over Thyssen does not extend to MTM.
Plaintiffs argue on appeal that personal jurisdiction over MTM can be based on an
“agency theory.” Some courts have held that the actions of an agent, such as a partner,
can confer personal jurisdiction over a partnership or joint venture. See, e.g., Donatelli v.
Nat’l Hockey League, 893 F.2d 459, 466 (1st Cir. 1990) (stating that under the agency
theory, a “partner is deemed by law and contract to be the partnership’s general agent”).
The Tenth Circuit has recognized that “a principal may be subject to the jurisdiction of
the court because of the activities of its agent within the forum state,” but this agency
theory applies only when the agent’s “acts are committed in the course of or within the
scope of the agent’s employment.” Taylor v. Phelan, 912 F.2d 429, 433 (10th Cir. 1990)
(emphasis added).
Plaintiffs argue that the district court has jurisdiction over MTM because it has
jurisdiction over Thyssen, the managing partner of the MTM joint venture.3 They
2
New Mexico’s long-arm statute provides for personal jurisdiction over “[a]ny
person, whether or not a citizen or resident of this state, who. . . submits himself or his
personal representative to the jurisdiction of the courts of this state as to any cause of
action arising from . . . the transaction of any business within this state.” N.M. Stat. Ann.
§ 38-1-16(A)(1) (1971).
3
Plaintiffs cite Curtis Publishing Co. v. Cassel, 302 F.2d 132, 138 (10th Cir.
1962) to support this contention. That case involved actions of a “wholly owned but
independent subsidiary” which was essentially an alter ego of the principal corporation.
Actions of alter egos confer jurisdiction on principal corporations because the nature of
the alter ego gives it implied actual authority to act for the corporation. Id. Thyssen is
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contend that Thyssen’s actions need only be incidental to the joint venture to confer
personal jurisdiction over MTM.
Plaintiffs’ arguments stretch the agency theory too far. Thyssen’s actions in New
Mexico—registering to do business in the state, conducting transactions there, and
designating an agent for service of process—were completely unrelated to the MTM joint
venture, which was created for the sole purpose of completing the Canadian drilling
project. See Quarles v. Fuqua Industries, Inc., 504 F.2d 1358, 1364-65 (10th Cir. 1974).
Thus, the agency theory is inapplicable.
Plaintiffs’ arguments for personal jurisdiction over MTM therefore fail. They did
not allege any facts to establish that MTM has the requisite minimum contacts with New
Mexico to confer personal jurisdiction, nor did they allege facts showing that the New
Mexico district court had personal jurisdiction over MTM under the agency theory.
Thyssen’s acts were not “committed in the course of or within the scope of the agent’s
[i.e., Thyssen’s] employment.” Taylor, 912 F.2d at 433.
Finally, Plaintiffs contend that the district court erred by failing to grant an
evidentiary hearing on the agency basis for jurisdiction. District courts have discretion to
hold or deny an evidentiary hearing to determine personal jurisdiction. Dudnikov v.
Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th Cir. 2008). Plaintiffs
asked for an evidentiary hearing to show that Thyssen’s contacts in New Mexico confer
not a wholly owned subsidiary or alter ego of MTM. Instead, MTM was formed by two
independent companies, as a joint venture to complete the Cigar Lake Mines.
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personal jurisdiction over MTM, but they did not allege that Thyssen’s contacts with
New Mexico relate to the Canadian project. See Melea, Ltd. v. Jawer SA, 511 F.3d 1060,
1065 (10th Cir. 2007) (explaining that plaintiffs must make at least a prima facie showing
of personal jurisdiction when there is no evidentiary hearing). Instead, they relied on the
argument that Thyssen is an agent of MTM with respect to the Canadian mining project
and does business in New Mexico. As noted above, this argument fails to support
personal jurisdiction, much less justify an evidentiary hearing.
We therefore affirm the district court’s dismissal of MTM for lack of personal
jurisdiction.
B. Forum Non Conveniens
“The forum non conveniens determination is committed to the sound discretion of
the trial court.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981). This court may
reverse the district court’s discretionary decision on this issue only “when there has been
a clear abuse of discretion; where the court has considered all relevant public and private
interest factors, and where its balancing of these factors is reasonable, its decision
deserves substantial deference.” Id.Although the district court’s decision is entitled to substantial deference, its
discretion is not unlimited. Courts have less discretion to dismiss cases based on forum
non conveniens than they have to transfer cases within our unified federal courts. See id.
at 253 (“District courts were given more discretion to transfer . . . than they had to
dismiss on grounds of forum non conveniens.”); Chrysler Credit Corp. v. Country
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Chrysler, Inc., 928 F.2d 1509, 1515 (10th Cir. 1991). This is especially true when
dismissal in favor of a foreign forum creates a “danger that [the plaintiffs] will be
deprived of any remedy” or “the remedy provided by the alternative forum is so clearly
inadequate or unsatisfactory that it is no remedy at all.” Piper Aircraft, 454 U.S. at 254-
55. In such cases, dismissal may “not be in the interests of justice.” Id. at 254; see also
Gschwind v. Cessna Aircraft Co., 161 F.3d 602, 607 (10th Cir. 1998) (noting that despite
the deference given to the district court’s decision in forum non conveniens cases,
dismissal may still be barred if there is no way to ensure that the merits of the case will
be heard in the foreign jurisdiction).
Courts apply a two-step test to determine whether a case may be dismissed under
the forum non conveniens doctrine when the only alternative forum is in a foreign
country. First, there must be “an adequate alternative forum in which the defendant is
amenable to process.” Id. at 605. Second, the court must confirm that foreign law is
applicable. Id.; Rivendell Forest Prod., Ltd. v. Can. Pac. Ltd., 2 F.3d 990, 994 (10th Cir.
1993) (holding that the doctrine of “forum non conveniens is not applicable if American
law controls”). “If the answer to either of these questions is no, the forum non
conveniens doctrine is inapplicable.” Gschwind, 161 F.3d at 605-06. All parties agree
that Canadian law applies, so the question here is whether an adequate alternative forum
exists in which Defendants are amenable to process.
“At the outset of any forum non conveniens inquiry, the court must determine
whether there exists an alternative forum. Ordinarily, this requirement will be satisfied
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when the defendant is amenable to process in the other jurisdiction.” Piper Aircraft, 454
U.S. at 254 n. 22 (quotations omitted). But that is not the end of the analysis. The
Supreme Court further explained that a defendant’s amenability to process is necessary
but not sufficient to create an adequate alternative forum in a foreign jurisdiction. If the
remedy provided by the foreign forum is “clearly unsatisfactory, the other forum may not
be an adequate alternative, and the initial requirement may not be satisfied.” Id.
(emphasis added). For example, dismissal is inappropriate if “the alternative forum does
not permit litigation of the subject.” Id.
The district court was premature in determining that the Canadian court is an
adequate alternative forum. The forum non conveniens decision focused on the
applicability of Canadian law and the inconvenience of New Mexico as a forum. All
parties agree that Canadian law applies. And we agree with the district court that the
public and private interests make New Mexico an inconvenient forum. No party is a New
Mexico resident, and trying the case thousands of miles away from the Canadian mine
where the events occurred would complicate management of witnesses and evidence.
Even so, an adequate alternative forum must be available. See Gschwind, 161 F.3d
at 605. Sometimes an inconvenient forum is the only available forum.
Defendants must show that an adequate alternative forum exists. Id. at 606 (“The
defendant must prove that the alternative forum is both available and adequate.”
(citations omitted)). Defendants have not yet met this burden. They argue that the court
in Canada is an adequate alternative forum. But they also claim they cannot be sued
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there based on the statute of limitations. Defendants’ position in the Canadian
proceedings creates the undeniable possibility that the Canadian forum will be
unavailable to the Plaintiffs.
Defendants are trying to have it both ways—arguing that Canada is an adequate
alternative forum while simultaneously raising a statute of limitations defense to the
proceedings there. If the Canadian court rules in Defendants’ favor on whether the
statute of limitations bars Plaintiffs’ claims, Plaintiffs will have no adequate alternative
forum.
Defendants’ argue they have shown that Canada is an adequate alternative forum
because forum non conveniens should only require a “presently available” alternative
forum. The Canadian court is presently available, they contend, because it has not yet
ruled on the statute of limitations defense. Their reliance for this argument on Norex
Petroleum Ltd. v. Access Industries, Inc., 416 F.3d 146, 159 (2d Cir. 2005), is misplaced.
Indeed, Norex supports Plaintiffs’ position here rather than Defendants’.
In Norex, the Second Circuit reversed a district court’s forum non conveniens
dismissal because the alternative forum’s filing deadlines had already lapsed, leaving no
adequate alternative forum. See id. at 159-60. Here, Plaintiffs face the real possibility
that their claims will be similarly time-barred in the Canadian court. As the Norex court
recognized, an alternative forum cannot be adequate “‘if a statute of limitations bars the
bringing of [a] case’ in a foreign forum that would be timely in the United States.” Id. at
159 (quoting Bank of Credit & Commerce Int’l (Overseas) Ltd. v. Bank of Pakistan, 273
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F.3d 241, 246 (2d Cir. 2001)). Merely because plaintiffs in Norex brought their case after
the statute of limitations had run and Plaintiffs here brought their case while the statute of
limitations issue is pending should not produce different conclusions on the availability
of an adequate alternative forum.
The district court’s dismissal of Plaintiffs’ claims was premature because the
Canadian court has not yet ruled on Defendants’ statute of limitations defense. Until this
ruling occurs, the availability of the Canadian court as an adequate alternative forum is
unclear and dismissal of the case in New Mexico risks depriving the Plaintiffs of any
forum.
III. CONCLUSION
We affirm the district court’s dismissal of MTM for lack of personal jurisdiction.
We reverse the district court’s dismissal of Plaintiffs’ case under the forum non
conveniens doctrine. If the Canadian court decides that the Defendants’ statute of
limitations defense bars Plaintiffs’ case, Plaintiffs would be left without an adequate
alternative forum. We remand this case to the district court for further proceedings
consistent with this decision.
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