Opinion
Civ. No. 98-2352, Section: "J" (3).
January 19, 2000.
Before the Court is a Motion to Dismiss for Lack of Personal Jurisdiction (Rec. Doc. 28) filed by defendant TransGlobe Energy Corporation. Plaintiff opposes the motion. The motion, set for hearing on January 5, 2000, is before the Court on briefs.
For the following reasons, the Court grants the motion and dismisses the movant for lack of personal jurisdiction.
BACKGROUND
The facts necessary to the resolution of this issue are not in dispute. In its original complaint, plaintiff alleges that defendants Robert Cohen ("Cohen"), a California stockbroker, and Round Hill Securities, the California brokerage house which employed Cohen, violated Louisiana Securities law and breached the fiduciary duty owed to plaintiff through the sale of "unsuitable" TransGlobe stock to plaintiff.
Plaintiff subsequently amended his complaint asserting causes of action against Bear Stearns, a New York clearinghouse, and TransGlobe Energy Corporation ("TransGlobe"). Plaintiff alleges that Bear Stearns also breached its fiduciary duty to plaintiff and failed to adequately supervise Cohen. As to TransGlobe, plaintiff alleges that it knew or should have known of Cohen's tortious conduct and that it conspired with Cohen to make material misrepresentations about the investment suitability of TransGlobe stock. Plaintiff does not contend that TransGlobe participated in the actual sale of its stock to plaintiff.
However, plaintiff does claim that before he purchased the stock he was "involved in numerous telephone calls and telephone conversations with officers and directors of TransGlobe (namely, George Laycraft) during 1995." After he purchased the stock, plaintiff spoke with Richard Coglon, president of TransGlobe, who represented that the stock was worth $2.50 a share. Plaintiff also spoke with Laycraft, Coglon, and Thomas Ross "between November 1995 and August 1996 on a "1-800" number that TransGlobe maintained in the United States." According to plaintiff, these conversations frequently pertained to the overall profitability of TransGlobe.
TransGlobe is a Canadian corporation involved in the drilling and production of oil and gas, organized under the laws of British Columbia, and principally located in Alberta, Canada. TransGlobe has conducted its operations in Western Canada, the Republic of Yemen, Montana, North Dakota, New Mexico, and Texas.
It is undisputed that TransGlobe does not have any operations in Louisiana; does not own any property in Louisiana; does not sell any of its products in Louisiana; does not maintain any offices in Louisiana; does not have any employees or agents in Louisiana; has never paid Louisiana taxes; and none of its agents have ever traveled to Louisiana to conduct business.
DISCUSSION
To exercise personal jurisdiction over a non-resident defendant, the Court must satisfy itself that the comportments of due process under the Louisiana and United States Constitutions are satisfied. See Bullion v. Gillespie, 895 F.2d 213 (5th Cir. 1990). "Because the Louisiana Long-Arm Statute LSA-R.S. 13:3201 has been construed to extend jurisdiction coextensively with the limits of due process, the first inquiry collapses into the second." St. Martin Mahoney v. Patton, 863 F. Supp. 311, 313-14 (E.D. La. 1994) (citing Petroleum Helicopters, Inc. v. Avco Corp., 834 F.2d 510, 512 (5th Cir. 1987)). The proper inquiry, then, is whether certain minimum contacts exist between TransGlobe and Louisiana such that TransGlobe's defense of this action will not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 362 U.S. 310, 316 (1945). The burden is on the plaintiff who, without the benefit of an evidentiary hearing, need only establish a prima facie case. See Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 211 (5th Cir. 1999).
In its motion, TransGlobe argues that minimum contacts do not exist with Louisiana and that requiring this Canadian corporation to defend itself in Louisiana would violate the notions of fair play and substantial justice. TransGlobe notes that, without any financial interaction with Louisiana and with the actual sale of the TransGlobe stock being conducted by Cohen out of California, the Court lacks personal jurisdiction.
In his opposition, plaintiff argues that TransGlobe's case-specific contacts with Louisiana provide the basis for specific personal jurisdiction. In particular, plaintiff states that he engaged in a number of telephone calls with officers and directors of TransGlobe, he received several facsimiles and mailings from TransGlobe, and TransGlobe maintains a website on the Internet. The facsimiles, press releases containing the latest business updates, were sent to plaintiff in Louisiana. TransGlobe's website contains information relating to its operations and stock as well as a general introduction. Most importantly, plaintiff relies upon the telephone conversations with TransGlobe officers and agents.
While the Court may exercise specific personal jurisdiction over a nonresident based upon contacts with the forum state which relate to the cause of action, general personal jurisdiction "is found when the nonresident defendant's contacts with the forum state, even if unrelated to the cause of action, are continuous, systematic, and substantial." Marathon Oil Co. v. Ruhrgas, 182 F.3d 291, 295 (5th Cir. 1999). In this case, plaintiff does not allege that TransGlobe's contacts with Louisiana were sufficiently regular or meaningful to support a finding of general personal jurisdiction.
The only relevant conversations, however, are those which occurred before plaintiff bought the stock, since those would be the contacts which allegedly formed the representations inducing him to purchase the stock. See Glater v. Eli Lilly Co., 744 F.2d 213, 216 (1st Cir. 1984).
Plaintiff contends that TransGlobe's actions enable the Court to exercise specific personal jurisdiction over TransGlobe, not general personal jurisdiction. "Specific [personal] jurisdiction over a non-resident exists when the defendant purposefully avails itself of the privilege of conducting activities in the forum, and the plaintiff's cause of action arises out of or relates to that act." Access Telecom, Inc. v. MCI Telecommunications Corp., 1999 WL 1080347, at *19 (5th Cir. Dec. 1, 1999). Therefore, to exercise jurisdiction over TransGlobe, the Court must determine whether plaintiff has established a prima facie case that TransGlobe's activities constituted a purposeful availment of Louisiana's laws and that these activities resulted, at least in part, in the alleged securities violations.
As for the "purposefully availing" inquiry, it is uncontested that plaintiff initiated most of the correspondence with TransGlobe. The facsimiles were sent at plaintiff's behest, and it is self-evident that, if plaintiff spoke with TransGlobe representatives on a "1-800" number, then plaintiff was the one who initiated those calls as well. Furthermore, even assuming that TransGlobe's agents made material statements over the telephone regarding the viability of the stock, this is not enough for the Court to exercise jurisdiction over TransGlobe given the fact that the actual sale of the stock was conducted by Cohen in California. See Coldwell Realty Investments v. Triple T Inns, 785 F.2d 1330, 1334 (5th Cir. 1986) (holding that merely contracting with a resident of the forum state was insufficient to subject the nonresident defendant to the forum's jurisdiction). Lastly, maintaining a website on the Internet, a world-wide system, cannot without more satisfy the "purposefully availing" element. See Mink v. AAAA Development LLC, 190 F.3d 333, 337 (5th Cir. 1999) ("[T]he presence of an electronic mail access, a printable order form, and a toll-free phone number on a website, without more, is insufficient to establish personal jurisdiction."). Accordingly,
Although plaintiff's memoranda implies that TransGlobe placed some of the phone calls to him, plaintiff's affidavit does not support this assertion.
IT IS ORDERED that TransGlobe's motion is GRANTED and TransGlobe should be and is hereby DISMISSED for lack of personal jurisdiction.
MINUTE ENTRY BARBIER, J JANUARY 19, 2000