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AG Equipment Co. v. IE Services (Pvt.) Ltd.

United States District Court, N.D. Oklahoma

August 30, 2019

AG EQUIPMENT COMPANY, Plaintiff,
v.
IE SERVICES (PVT.) LTD., and PETRO ALLIED SOLUTIONS PVT. LTD., Defendants.

          OPINION AND ORDER

          CLAIRE V. EAGAN UNITED STATES DISTRICT JUDGE.

         Now before the Court are Petro Allied Solutions (Pvt.) Ltd.'s Motion to Dismiss Improper Party and Motion to Dismiss for Lack of Personal Jurisdiction (Dkt. ## 31, 32) and IE Services (Pvt.) Ltd.'s Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6), 8(a)(2), and 9(b) (Dkt. ## 33, 34). Petro Allied Solutions (Pvt.) Ltd. (PAS) states that it is a corporation organized under the laws of Pakistan and it argues that it is not subject to personal jurisdiction in Oklahoma. Dkt. # 32. IE Services (Pvt.) Ltd. (IES) argues that plaintiff AG Equipment Company (AG) has failed to state a claim upon which relief can be granted.

         I.

         AG is an Oklahoma corporation with its principal place of business in Broken Arrow, Oklahoma, and AG states that it “sells compressors and related parts to various companies around the world, including Pakistan.” Dkt. # 30, at 2. On December 28, 2016, AG retained IES and PAS as representatives or agents for the purpose of bidding on a contract with Engro Fertilizer Ltd. (Engro), and AG agreed to pay IES and PAS a commission. Id. A dispute arose between the parties concerning the amount of the commission, and the dispute was resolved by means of settlement agreement. Id.

         The settlement agreement was executed on August 31, 2017. The parties agreed that any disputes arising under the settlement agreement would be resolved under Oklahoma law and IES and PAS consented to the jurisdiction of the “Courts of Oklahoma.” Dkt. # 38-1, at 2. AG agreed to pay “IES/Petro Allied Solutions (Pvt) Ltd” $75, 000, “[s]ubject to the condition that IES/Petro Allied Solutions (Pvt) Ltd will not compete directly or indirectly with AG Equipment Company in Engro Fertilizer Ltd and OPL till 31st March, 2019.” Id. AG states that it paid the money to “IES and PAS, ” but AG claims that IES and PAS breached the settlement agreement by “bidding competitively against AG.” Dkt. # 30, at 3. AG claims that IES and PAS never had any intention of complying with the settlement agreement. Id. at 4.

         On April 19, 2018, AG filed this case in Tulsa County District Court alleging claims of breach of contract, money had and received, and fraud against IES and PAS. Defendants removed the case to this Court and filed motions to dismiss. AG filed an amended complaint (Dkt. # 30) and the Court found that the motions to dismiss the original complaint were moot. Dkt. # 29. IES and PAS have renewed their motions to dismiss as to the claims asserted in AG's amended complaint.

         II.

         PAS argues that it is a foreign company not a party to the settlement agreement, and that it is not subject to personal jurisdiction in Oklahoma. Dkt. # 34. AG responds that PAS and IES were both parties to the settlement agreement, and PAS consented to be sued in Oklahoma for claims arising out of the settlement agreement. Dkt. # 37.

         When a defendant moves to dismiss for lack of personal jurisdiction under Rule 12(b)(2), the plaintiff bears the burden of establishing that the Court has personal jurisdiction over the defendant. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). “When a district court rules on a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, . . . the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion.” Id. (citations omitted). “The plaintiff may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.” Id. at 1091. “In order to defeat a plaintiff's prima facie showing of jurisdiction, a defendant must present a compelling case demonstrating ‘that the presence of some other considerations would render jurisdiction unreasonable.'” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). The allegations of the complaint must be accepted as true to the extent they are uncontroverted by a defendant's affidavit. Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir. 1990). If the parties provide conflicting affidavits, all factual disputes must be resolved in the plaintiff's favor. Id.

         For a court to exercise personal jurisdiction over a nonresident defendant in a diversity action, the plaintiff must demonstrate the existence of every fact required to satisfy both the forum's long-arm statute and the Due Process Clause of the United States Constitution. See Okla. Stat. tit. 12, § 2004(F). “Because Oklahoma's long-arm statute permits the exercise of jurisdiction that is consistent with the United States Constitution, the personal jurisdiction inquiry under Oklahoma law collapses into the single due process inquiry.” Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (citing Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1416 (10th Cir. 1988)); see also Hough v. Leonard, 867 P.2d 438, 442 (Okla. 1993).

         “Due process requires that the nonresident defendant's conduct and connection with the forum state are such that the nonresident could reasonably anticipate being haled into court in that state.” Conoco, Inc. v. Agrico Chem. Co., 115 P.3d 829, 835 (Okla. 2004) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). “The Due Process Clause permits the exercise of personal jurisdiction over a nonresident defendant ‘so long as there exist minimum contacts between the defendant and the forum State.'” Intercon, 205 F.3d at 1247 (quoting WorldWide Volkswagen, 444 U.S. at 291). The existence of such minimum contacts must be shown to support the exercise of either general jurisdiction or specific jurisdiction. Id. “When a plaintiff's cause of action does not arise directly from a defendant's forum related activities, the court may nonetheless maintain general personal jurisdiction over the defendant based on the defendant's business contacts with the forum state.” Id. (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-16 & n.9 (1984)). Alternately, a court “may, consistent with due process, assert specific jurisdiction over a nonresident defendant ‘if the defendant has purposefully directed his activities at the residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities.'” Id. (quoting Burger King Corp., 471 U.S. at 472).

         The settlement agreement identifies the parties to the agreement as “IES/Petro Allied Solutions (Pvt) Ltd.” and AG, and the settlement agreement states that “the Courts of Oklahoma shall have jurisdiction to settle any dispute arising out of or in connection with the execution or interpretation of this Settlement Agreement . . . .” Dkt. # 37-1, at 1. There is no dispute that PAS is a corporation organized under the laws of Pakistan and that PAS has its principal place of business in Pakistan. PAS does not maintain an office in Oklahoma and does not regularly conduct business in the state, and PAS states that it does not directly advertise or solicit business in Oklahoma. Dkt. # 32-1, at 4. PAS states that it has provided brokerage services to one other customer from Oklahoma and it claims that sales were made in Pakistan. Id. AG disputes some of PAS' statements and AG claims that PAS' website shows that PAS invites potential customers to contact PAS regardless of where the customer is located. Both parties claim that contract negotiations took place where they were respectively located.

         The key fact for the exercise of personal jurisdiction is whether PAS is a party to the settlement agreement, because there is no evidence that PAS regularly conducts business in Oklahoma or even sought out AG as a potential customer. AG argues that PAS uses its website to solicit business from customers outside of Pakistan, but AG has offered no evidence in support of this assertion. On the other hand, PAS' arguments are based on its unsupported assertions that it is not a party to the settlement agreement, and it asks the Court to ignore the plain language of the parties' contract. At this stage of the case, the Court finds that the settlement agreement names “IES/Petro Allied Solutions (Pvt) Ltd.”[1] as the party or parties to be bound by the contract, and the parties to the settlement agreement stipulated that the “Courts of Oklahoma” would have jurisdiction over claims arising out of the execution or interpretation of the settlement agreement. This is sufficient evidence that PAS knowingly entered a contractual relationship with an Oklahoma business and that PAS agreed to litigate disputes arising out of this relationship in Oklahoma courts.

         As the Court has found that PAS has minimum contacts with Oklahoma, the Court must now “consider whether the exercise of personal jurisdiction over the defendant offends ‘traditional notions of fair play and substantial justice.'” OMI Holdings, 149 F.3d at 1091. The touchstone of this analysis is whether the exercise of personal jurisdiction would be “reasonable.” Id. The determination of reasonableness “evokes a sliding scale: the weaker the plaintiff's showing on [minimum contacts], the less a defendant need show in terms of unreasonableness to defeat jurisdiction. The reverse is equally true: an especially strong showing of ...


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