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Matheson Tri-Gas Inc. v. Williamson General Contractors Inc.

United States District Court, W.D. Louisiana, Lake Charles Division

January 23, 2019

MATHESON TRI-GAS, INC.
v.
WILLIAMSON GENERAL CONTRACTORS, INC.

          REPORT AND RECOMMENDATION

          KATHLEEN KAY JUDGE

         Before the court is a re-urged Motion to Dismiss [doc. 72] filed pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure by Taiyo Nippon Sanso Corporation (“TNSC”) and relating to the claims raised against it in defendant Williamson General Contractors, Inc.'s (“Williamson”) First Supplemental and Amended Counterclaim (“amended counterclaim”) [doc. 24]. The matter has been referred to the undersigned for review, report, and recommendation in accordance with the provisions of 28 U.S.C. § 636.

         I.

         Background

         This matter began as a breach of contract suit relating to the building of plaintiff Matheson Tri-Gas, Inc.'s (“Matheson”) Pelican Phase 1 plant (“Pelican project”) in Westlake, Louisiana. Doc. 1. In its original complaint, filed in this court on September 15, 2016, Matheson alleged that it had accepted Williamson's bid to build the facility for an agreed-upon lump sum price of over $15.8 million in May 2015, that the parties also entered into a change order agreement in February 2016 through which Matheson agreed to pay Williamson an additional $3.4 million for various design changes, and that they further agreed that subsequent change orders would be charged to Matheson on a cost plus basis. Id. at 2-3. Matheson maintained that it paid Williamson all sums due and owing under their agreement, totaling over $19.7 million, but that Williamson continued to demand “additional unreasonable sums” to complete the facility and then abandoned the project on or about June 30, 2016, in breach of the parties' agreement. Id. at 3. As a result, Matheson asserted, several of Williamson's subcontractors have filed or threatened to file liens against the facility to recover sums that they allege they are owed by Williamson. Id. at 3-4. Accordingly, Matheson brought this suit seeking damages incurred from Williamson's alleged breaches and subrogation to the rights of any subcontractors it must satisfy because of their liens against Matheson's property based on Williamson's alleged failure to satisfy its obligations. Id. at 4-5.

         In November 2016, Williamson filed counterclaims against Matheson for breach of contract, bad faith breach of contract, and detrimental reliance. Doc. 6, pp. 8-13. Williamson amended its counterclaim in August 2017 to add claims of fraud/fraudulent inducement, cardinal change, open account, unjust enrichment, quantum meruit, and negligence. Doc. 24. In the amended counterclaim it also added TNSC, parent company of Matheson, as defendant. Id. at 1. TNSC, a Japanese corporation, appeared for the limited purpose of filing a motion to dismiss all claims against it for lack of personal jurisdiction. Doc. 41. The court granted jurisdictional discovery and denied the motion, subject to TNSC's right to reurge the motion after the completion of discovery. Docs. 48, 60. TNSC now reurges its motion. Doc. 72. The motion has been fully briefed, with opposition from Williamson, and is now ripe for review.

         II.

         Law & Analysis

         A. Rule 12(b)(2) Standard

         A party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists, and so the plaintiff carries the burden on the defendant's challenge to personal jurisdiction. Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)). When the court rules on the motion without an evidentiary hearing, the plaintiff is only required to make a prima facie showing and the court must resolve all undisputed facts submitted by the plaintiff, as well as all contested issues of fact, in favor of jurisdiction. Id.; WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989). However, the court is not required to credit conclusory allegations. Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001).

         In resolving the motion the court may review pleadings, affidavits, interrogatories, depositions, oral testimony, exhibits, any part of the record, and any combination thereof. Command-Aire Corp. v. Ontario Mech. Sales & Serv., Inc., 963 F.2d 90, 95 (5th Cir. 1992). The plaintiff ordinarily need only make out a prima facie case for personal jurisdiction, but must meet a higher “preponderance of the evidence” standard if the court conducts an evidentiary hearing. Walk Haydel & Assoc., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008).

         Two preconditions must be satisfied before this court will assert personal jurisdiction: (1) the defendant must be amenable to service under the forum state's long-arm statute, and (2) the assertion of jurisdiction must comport with the Due Process Clause of the Fourteenth Amendment. Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1067 (5th Cir. 1992). The Louisiana long-arm statute is coextensive with the limits of due process. E.g., Laird v. Deep Marine Technology, Inc., 2004 WL 2984282, *1 (E.D. La. Dec. 7, 2004). Therefore the requirements are combined for the purpose of this analysis. Id. For personal jurisdiction to comport with due process, the plaintiff must show that (1) the defendant purposefully availed itself of the benefits and protections of the forum state by establishing “minimum contacts” with that state; and (2) exercising jurisdiction over the defendant would not offend traditional notions of fair play and substantial justice. Jones, 954 F.2d at 1068.

         B. Application

         As TNSC emphasizes, “a foreign parent corporation is not subject to the jurisdiction of a forum state merely because its subsidiary is presently doing business there.” Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1159 (5th Cir. 1983). “[S]o long as a parent and subsidiary maintain separate and distinct corporate entities, the presence of one in a forum state may not be attributed to the other.” Id. Williamson maintains that it is not relying on the parent-subsidiary relationship between TNSC and Matheson, and that the court can exercise ...


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