Gulf Oil Ltd. P'ship v. Petroleum Mktg. Grp., Inc.
Gulf Oil Ltd. P'ship v. Petroleum Mktg. Grp., Inc.
Opinion of the Court
Gulf Oil Limited Partnership ("Gulf") alleges claims against BP Products North America ("BP") for tortious interference with contract and advantageous business relations or business expectancy (Count VI); violation of Massachusetts General Laws Chapter 93A, § 11 (Count VII); conspiracy under Virginia Code § 18.2-499, et seq. (Count VIII); and civil conspiracy (Count IX). Now pending before the Court is BP's motion under Federal Rule of Civil Procedure 12(b)(2) to dismiss the claims for lack of personal jurisdiction.
I. Factual Background
Gulf, a Delaware limited partnership with a principal place of business in Massachusetts, is a wholesaler of refined petroleum products, including diesel fuel and gasoline. Gulf utilizes a distribution network that supplies fuel products through seventeen terminals and more than 1,800 Gulf-branded gas and service stations. BP is incorporated in Maryland and has a principal place of business in Illinois. It operates BP gas stations in various States, including Massachusetts.
In 2016, co-defendant Petroleum Marketing Group ("PMG") acquired from Gulf 223 northeast and mid-Atlantic dealer-operated convenience stores and gas stations. PMG also entered into a Distributor Agreement with Gulf, pursuant to which PMG's newly acquired gas stations would continue to be branded with Gulf logos and Gulf would supply their fuel. The agreement detailed the parties' respective rights and responsibilities at length. Gulf and PMG are also parties to a number of other more or less related agreements that are apparently not germane to the present issues.
In late 2016 and early 2017, Gulf became concerned that PMG might be planning to lease to BP some of the stations it had acquired from Gulf. The Oil Express, an industry periodical, reported in February 2017 that BP was engaged in conversations with PMG to acquire some of the latter's Gulf-branded stations. The complaint alleges that the Oil Express article was circulated throughout the country, including in Massachusetts. Gulf argues in its brief that BP "triggered multiple false rumors to circulate that BP [was] buying some of Gulf's most valuable stations and Gulf [was] exiting the market," (Gulf's Resp. in Opp'n to BP's Mot. to Dismiss, 2 (dkt. no. 41) ), but there is no similar allegation in the complaint itself, nor are there any supporting factual allegations other than the quoted conclusory assertion set forth in the brief.
By letter dated April 21, 2017, PMG advised Gulf that it had entered into an agreement with BP pursuant to which PMG would lease seventy-six Gulf-branded *457sites to BP and that BP intended to use them to sell BP branded fuels. Gulf became concerned both with the potential loss of revenue under the Distributor Agreement from the conversion of Gulf stations to BP stations and with the adverse public relations effect of what might be seen as a substantial withdrawal from the retail market by Gulf. The sites at issue are located exclusively in New York and New Jersey.
The complaint alleges that BP, which had some knowledge of the ongoing business relationship between Gulf and PMG,
II. Standard of Review
When a court's power to exercise personal jurisdiction over a defendant is challenged, the plaintiff bears the burden of establishing that the exercise of such jurisdiction is proper. A Corp. v. All Am. Plumbing, Inc.,
III. Discussion
The Due Process Clause of the Fourteenth Amendment to the United States Constitution limits the power of a State to subject nonresidents to binding adjudications by its courts. Bristol-Myers Squibb Co. v. Super. Ct. of Cal., --- U.S. ----,
[w]here a defendant "purposely avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws, [ Hanson v. Denckla,357 U.S. 235 , 253,78 S.Ct. 1228 ,2 L.Ed.2d 1283 (1958) ], it submits to the judicial power of an otherwise foreign sovereign to the extent that power is exercised in connection with the defendant's activities touching on the State.
J. McIntyre,
*458In deciding whether a defendant may properly be subjected to personal jurisdiction in a given forum, a court must consider "a variety of interests," including " 'the interests of the forum State and of the plaintiff in proceeding with the cause in the plaintiff's forum of choice.' " Bristol-Myers Squibb,
Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.
World-Wide Volkswagen,
This Court's exercise of personal jurisdiction over a defendant is proper only if the requirements of both the Massachusetts long-arm statute, Massachusetts General Laws Chapter 223A, Section 3, and the Due Process Clause are satisfied. A Corp.,
Gulf's complaint adequately alleges a statutory basis for jurisdiction at least under section 3(d) of the long-arm statute. The question here is whether the exercise of personal jurisdiction over BP for the claims alleged in the complaint would be proper under the Due Process Clause.
A. General Jurisdiction
The doctrine of general jurisdiction, sometimes called "all-purpose jurisdiction," authorizes a court to adjudicate any claim against a defendant, regardless of where the events giving rise to the claim had occurred. Bristol-Myers Squibb,
BP has a sizable economic presence in Massachusetts, and formerly a plausible case might have been made for exercising general jurisdiction over it. No longer. The Supreme Court has held and reiterated that a corporate defendant is generally "at home" only in its State of incorporation and the State where it maintains its principal place of business. BNSF Ry. Co. v. Tyrrell, --- U.S. ----,
BP is incorporated in Maryland. It maintains its principal place of business in Illinois. Even though it does a substantial amount of business in Massachusetts, as it presumably does in other States, that fact does not distinguish it from any other company that does business on a nationwide scale. There are no particular facts in the record to support a conclusion that BP's business operations are "so substantial and of such a nature" that it is "at home" in Massachusetts, so to warrant characterizing this as the sort of "exceptional case" the Supreme Court hypothesized. On the contrary, BP's presence in Massachusetts is rather like BNSF's presence in Montana, which the Court found was not sufficient to support general jurisdiction. See BNSF, 137 S.Ct. at 1554-55. Because the record in this case does not permit a conclusion that a hypothetical exception should be made, personal jurisdiction over BP may not be justified under the doctrine of general, all-purpose jurisdiction.
B. Specific Jurisdiction
Specific jurisdiction, sometimes called "case-linked jurisdiction," may be established where the plaintiff's specific claims arise out of, or relate to, the defendant's contacts with the forum. Bristol-Myers Squibb, 137 S.Ct. at 1780. Gulf's argument for specific jurisdiction fails because its claims against BP in this suit do not arise from, nor are they related to, BP's commercial activities in Massachusetts.
Gulf's claims against BP are, in summary, that it tortuously conspired with PMG to deprive Gulf of the benefit of its Distributor Agreement with PMG by causing several dozen Gulf-branded stations to become BP-branded stations. All of the stations at issue are located in the New York-New Jersey area. None are located in Massachusetts. BP does sell gas through stations in Massachusetts, but that economic activity is wholly unrelated to Gulf's claims in this suit.
Gulf argues that BP's necessary claim-related Massachusetts contacts arise because Gulf has suffered here the effects of BP's wrongful conduct committed elsewhere. It relies on two cases: Astro-Med, Inc. v. Nihon Kohden Am., Inc.,
*460It certainly is true that claims arising from a defendant's out-of-state tortious conduct that causes injury within the forum can in certain circumstances provide a basis for statutory jurisdiction over that defendant, provided additionally, as pertains to a Massachusetts forum, that the defendant has also derived substantial revenue from in-State activity.
The Supreme Court has recently emphasized that the "primary focus of our personal jurisdiction inquiry is the defendant's relationship to the forum State." Bristol-Myers Squibb, 137 S.Ct. at 1779 ; see also Walden v. Fiore,
Astro-Med is unstable precedent in its own right. The case does not provide clear guidance because, while the court was unanimous as to the judgment, each of the three panel judges wrote separately, their separate views demonstrating that they were not in full agreement as to the proper jurisdictional analysis. Judge Woodcock, announcing the opinion of the court, noted that the defendant's "conduct in Florida and California was a cause of the breach of contract-the actual injury-that occurred in Rhode Island" and "[t]hat in-forum injury was clearly related to Astro-Med's tortious interference claim, satisfying the first prong of the minimum contacts analysis." Astro-Med,
The so-called "effects test" all three judges relied on in Astro-Med derives from the Supreme Court's decision in Calder v. Jones,
But it turns out the understanding was a misunderstanding.
The crux of Calder was that the reputation-based "effects" of the alleged libel connected the defendants to California, not just to the plaintiff. The strength of that connection was largely a function of the nature of the libel tort.... [B]ecause publication to third persons is a necessary element of libel, ... the defendants' intentional tort actually occurred in California.... In this way, the "effects" caused by the defendants' article-i.e., the injury to the plaintiff's reputation in the estimation of the California public-connected the defendants' conduct to California , not just to a plaintiff who lived there.
134 S.Ct. at 1123-24 (emphasis in original).
That is not quite the subsequent repair it might at first blush seem to be. The same day the Court decided Calder, it also decided Keeton v. Hustler Magazine, Inc.,
*462id. at 777,
Considered together, Calder and Keeton teach that what is critical to the question of personal jurisdiction is the defendant's own connection to the forum, in each of these cases by reason of its publication there of the alleged libel, regardless of whether the plaintiff did (in Calder ) or did not (in Keeton ) herself suffer the effects of the libel there. So, even if the Astro-Med decision properly considered an "effects" test to apply to the relatedness inquiry, as opposed to limiting its consideration of such a test to the purposeful availment inquiry, see Swiss Am. Bank,
Furthermore, the First Circuit has apparently implicitly abandoned the Astro-Med formulation(s). Without expressly citing Walden, the court has, consistently with Walden and inconsistently with Astro-Med, re-emphasized that for a plaintiff's claims to be "related to" a defendant's in-forum contacts, something more would be necessary than the bare fact that the plaintiff "felt the effects" of the defendant's out-of-state conduct at its home within the forum. See A Corp.,
To sustain jurisdiction over BP specific to the claims made in the suit, Gulf must show that those claims arise out of, or are related to, BP's contacts with Massachusetts. It has not made a prima facie showing of that proposition.
C. Jurisdictional Discovery
In a footnote, Gulf requests alternatively that it be permitted to engage in jurisdictional discovery. (Gulf's Resp. Opp'n, 12 n. 4.) However, its request does not identify or proffer what factual issues it would pursue if discovery were allowed and how any discovered information would support specific jurisdiction. It is the plaintiff's duty "to present facts to the court which show why jurisdiction would be found if discovery were permitted." Me. Med. Ctr. v. United States,
IV. Conclusion
BP's Rule 12(b)(2) motion (dkt. no. 35) is GRANTED, and Gulf's claims against BP are DISMISSED for lack of personal jurisdiction.
It is SO ORDERED.
Gulf states that "BP may not have known the exact terms of the entire contract," but generally knew that Gulf and PMG had an ongoing business relationship. (Gulf's Resp. in Opp'n to BP's Mot. to Dismiss, 13.)
The fact that the Court illustrated its reservation of a possible exception with an unusual case from 1952 suggests that the Court's recognition of an exception is likely to be rare.
It should be noted that it is not just the in-forum injury that supports statutory jurisdiction, but the necessary additional fact of the defendant's derivation of substantial revenue from economic action within the State.
See A Corp.,
Cf. T.S. Eliot, The Love Song of J. Alfred Prufrock (1915) ("That is not what I meant at all;/ That is not it, at all").
Justice Rehnquist was the author of both opinions.
The Court also noted: "The plaintiff's residence is not, of course, completely irrelevant to the jurisdictional inquiry.... Plaintiff's residence may be the focus of the activities of the defendant out of which the suit arises." Id. at 780,
In an apparent attempt to grab some purchase from this fact, in the present case Gulf points to an industry publication and "rumors" that were circulated in Massachusetts. It is not clear how the rumors were themselves the cause of actionable harm to Gulf apart from the subsequent actual transfer of station locations to BP. In any event, there is nothing in the record that supports the claim that BP was responsible for the circulation of either the industry publication or the rumors. Additionally, as noted above, Gulf made the assertion in its brief and not in the complaint. Even if it were more specific, it could be disregarded.
Reference
- Full Case Name
- GULF OIL LIMITED PARTNERSHIP v. PETROLEUM MARKETING GROUP, INC., and BP Products North America Inc.
- Cited By
- 5 cases
- Status
- Published