Sociedad Colombiana v. Intl Colombia Resrc ( 2002 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-20239
SOCIEDAD COLOMBIANA DE CONSTRUCIONES, SA-SOCOCO,
Plaintiff-Appellant,
versus
INTERNATIONAL COLOMBIA RESOURCES CORPORATION,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Texas
(00-CV-3942)
June 20, 2002
Before GARWOOD, DeMOSS and DENNIS, Circuit Judges.
PER CURIAM*:
Sociedad Colombiana de Construciones, S.A. appeals the
district court's dismissal of its breach of contract suit against
International Colombia Resources Corporation on the grounds of
forum non conveniens. The appellant alleges, inter alia, the
*
Pursuant to 5TH CIR. R.47.5 the Court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
district court committed clear error by relying on the incorrect
belief that the appellee was owned by the Republic of Colombia, and
also claims that the district court lacked diversity jurisdiction
(the only apparent basis of federal jurisdiction) because the
appellee has dual incorporation in Delaware and Colombia. Because
the district court’s exercise of discretion to dismiss on forum non
grounds appears to have been influenced by the factually mistaken
view that appellee was owned by the Republic of Colombia, we vacate
and remand for reconsideration. We leave the jurisdictional
question open for further factfinding and determination in the
first instance by the district court on remand.
Background
International Colombia Resources Corporation (“Intercor”) was,
through 2001, a Delaware corporation1 and a wholly owned subsidiary
of ExxonMobil with at least some connection to Houston, Texas.2
Intercor and Cerrejon Zona Norte, S.A. (“CZN-S.A.”) co-own the El
Cerrejon-Zona Norte Coal Complex, the Colombian facility at issue
in this case. Pursuant to an “association contract,” Intercor
1
Appellant Sococo alleges Intercor is also incorporated in
Colombia. As we explain infra, this court expresses no opinion on
this assertion.
2
Intercor introduced the affidavit of Jorge Alvarez Posada,
which alleges that Intercor has no “office or place of business
outside Colombia,” while Sococo introduced the affidavit of Juan
Montalvo alleging that major decisionmaking occurred in Houston.
It may very well be that Montalvo was referring to the decisions
made by corporate parent ExxonMobil, not the actual management of
Intercor, but it is not clear from the record.
2
operates the facility for the benefit of both owners. The original
co-owner of the facility and signatory of the association contract
was a Colombian government entity named Carbones de Colombia, S.A.
(“Carbocol”), though Carbocol's rights and duties have since passed
to CZN-S.A.
In 1996, Intercor invited bids to provide mining excavation
services at the facility and ultimately awarded the contract to
Sociedad Colombiana de Construciones, S.A. (“Sococo”), a Colombian
corporation whose principal place of business is not clear.3
Though the contract was to last five years, Intercor terminated it
early due to allegedly unsatisfactory performance.
On September 29, 2000, Sococo filed suit against Intercor for
breach of contract in Texas state court. Intercor removed the suit
to the district court below under the alienage provision of the
diversity jurisdiction statute, 28 U.S.C. § 1332(a)(2), and Sococo
did not object or move to remand. Once in federal court, Intercor
moved to dismiss on forum non conveniens grounds, arguing that the
case would be best heard in Colombia. Sococo responded and the
parties debated whether Colombia was an “available and adequate”
forum.
The district court granted the motion to dismiss on January
26, 2001, generally reasoning that the contract had a strong
3
Sococo's petition alleged it had a principal place of
business in Colombia, while the affidavit of its president Timothy
Moore alleges Sococo's principal place of business is Miami,
Florida.
3
connection to Colombia and that it would be easier to litigate
there. The district court also noted that the Colombian government
had a strong interest in the case due to the fact that Intercor was
“wholly owned by the Republic of Colombia.”4 The district court
reasoned that Colombia's interest dominated the public factors, and
concluded that allowing suit in America would be unfair to “a
foreign government that has not submitted itself to the
jurisdiction of this Court.” The court also noted other
considerations favoring forum non dismissal. Accordingly, the
district court exercised its discretion to dismiss the case without
prejudice. The present appeal followed.
Since the oral arguments in this case, ExxonMobil signed an
agreement to sell Intercor to a consortium of buyers. In
anticipation of this sale, Intercor incorporated in Anguilla and
thus holds dual incorporation in Anguilla and Delaware.
Discussion
A. The District Court Abused Its Discretion By Awarding Forum Non
Conveniens Dismissal
We first ask whether the district court properly dismissed the
case on the basis of forum non conveniens. We review for abuse of
discretion, a standard which can be met when the district court
4
The district court’s Order of Dismissal noted that before it was “the defendant International
Colombia Resources Corporation’s (“Intercor”) motion to dismiss,” that “Intercor is a Delaware
corporation that is wholly owned by the Republic of Colombia,” and that “because the government
of Colombia, for its own benefit and that of its citizens, has an interest in the outcome of the case,
public policy dictates against a foreign forum such as Texas.”
4
takes an erroneous view of the law or makes a clearly erroneous
finding of fact. Kaepa, Inc. v. Achilles Corp., 76 F.3d 624, 626
(5th Cir. 1996).
Appellant Sococo urges that the district court clearly erred
by stating that Intercor was owned by the Colombian government. We
agree. Intercor is a wholly owned subsidiary of ExxonMobil, albeit
a subsidiary that does business in Colombia. We suspect that the
district court accidentally confused Intercor with Carbocol, the
Colombian-owned entity that co-owned the mining rights to the El
Cerrejon-Zona Norte Coal Complex until those rights were
transferred to CZN-S.A. Alternately, the district court may have
meant that Carbocol's former ownership interest in the mine meant
that Colombia had a strong (although indirect) interest in the
outcome of the case. Regardless of the source of this error, the
court clearly misattributed the ownership of one of the litigants.
The appellee urges us to overlook the error, but we cannot do
so. The district court makes clear that it was concerned about the
interests of the sovereign Republic of Colombia as a litigant in
the case, and this concern constitutes a significant and recurring
theme of the opinion. The appellee urges various reasons for
considering the error harmless, but the arguments (and by extension
the cases cited in support) are each inapposite. The district
court's mistake was not confined to its discussion of the public
interest factors, and thus Empresa Lineas Maritimas Argentinas,
5
S.A. v. Schichau-Unterweser, A.G., 955 F.2d 368, 376 (5th Cir.
1992), does not persuade. The district court does not elsewhere
indicate that it understood the true ownership of Intercor, so the
“infelicitous turn of phrase” language of Iragorri v. Int'l
Elevator, Inc., 203 F.3d 8, 16 (1st Cir. 2000), cannot hold sway.
Finally, a generous reading of Alpine View Co., Ltd. v. Atlas Copco
AB, 205 F.3d 208, 222 n.10 (5th Cir. 2000), may suggest that a
minor error among a wealth of other evidence can be disregarded,
but that was not the case here. The district court relied to a
significant degree on the interests of a sovereign nation, and the
absence of those interests may profoundly affect the court's
reasoning.
The decision whether to dismiss a case on forum non conveniens
grounds is not a question of pure law; rather, the choice whether
to exercise the doctrine lies within the discretion of the district
court. See, e.g., Gulf Oil v. Gilbert, 67 S. Ct. 839, 843 (1947).
We thus vacate the order of dismissal and remand to the district
court for further reconsideration. In doing so, we do not express
any opinion on the disputed facts of the case or the merits of the
motion to dismiss for forum non conveniens.5
B. The District Court Should Also Consider Whether It Has
Jurisdiction
5
Because we vacate and remand, we need not decide whether the
district court erred by granting the motion to strike Sococo's
surreply.
6
For the first time on appeal, Sococo argues that the federal
courts have no jurisdiction over this case. They are entitled to
raise this argument, even though they did not move to remand,
because jurisdictional error cannot be waived and parties cannot be
estopped from asserting it. See Coury v. Prot, 85 F.3d 244, 249
(5th Cir. 1996). Because this argument was raised for the first
time on appeal, we lack the benefit of a district court's findings
of fact.
The parties agree that Intercor is incorporated in Delaware,
but Sococo claims that certain statements in Intercor's motion to
dismiss for forum non conveniens constitute an admission they are
also incorporated in Colombia. Sococo claims that this dual
incorporation makes Intercor an alien and thus makes this suit one
between aliens and hence outside the scope of 28 U.S.C. § 1332(a).
The motion to dismiss does indeed contain some ambiguous
statements scattered among more definite declarations. The motion
begins with Intercor asserting that it is a “citizen of Delaware”
and a “Delaware corporation”; this section does not mention
possible Colombian incorporation although it concedes that Intercor
has no business outside Colombia. Two pages later, Intercor states
“Defendant [Intercor] is a Delaware corporation duly incorporated
in Colombia under the laws of Colombia. This legal status is
referred to by Colombians as a 'branch.'” Intercor’s motion
continues to explain that while it is a Delaware corporation, it
7
would still be subject to Colombian law–an assertion that would be
redundant if Intercor were truly incorporated in Colombia. At the
end of the motion, Intercor calls itself “a Colombian entity
domiciled in Colombia” but then reiterates that it is “a Delaware
corporation operating in Colombia.”
Intercor now explains this language by arguing that it merely
has a branch in Colombia and is not incorporated there.
Unfortunately, Intercor provides little documentation explaining
Colombian law or the meaning of “branch,” though an explanation is
necessary given their motion’s apparent equation of “branch” status
with “du[e] incorporat[ion].” Moreover, Intercor provides little
or no evidence that it took the necessary actions to be granted the
ambiguous status of a branch. The facts of this case remain
confused.
Despite Sococo's arguments, Intercor's statements do not
justify judicial estoppel. Where a party intentionally makes
statements that are accepted as true by a court, that court may use
the judicial estoppel doctrine to bar the party from relying on
later statements clearly inconsistent with the earlier position.
Ahrens v. Perot Systems Corp., 205 F.3d 831, 833 (5th Cir. 2000).
These requirements are not met, however. Even if we assume for the
sake of argument that Intercor's earlier statements, taken in
context, are clearly inconsistent with their current position, we
nevertheless find no evidence that the district court accepted
8
those statements as an admission they were incorporated in
Colombia. To the contrary, the district court clearly called
Intercor “a Delaware corporation,” albeit one owned by the
Colombian government. We therefore will not use judicial estoppel
to bar Intercor from arguing that diversity jurisdiction exists in
the federal courts.6 We cannot resolve the jurisdictional issue on
purely legal grounds.
This case requires factfinding and determinations of Colombian
law, an undertaking best initially performed by the district court.
We therefore suggest to the district court that in considering this
case again on remand, it should begin by considering the parties'
arguments regarding jurisdiction. See Torres v. Southern Peru
Copper Corp., 113 F.3d 540, 542 (5th Cir. 1997) (courts must
determine subject-matter jurisdiction before moving on to address
forum non conveniens). Because we do not know that Intercor had
dual incorporation, we also decline to decide whether Intercor's
alleged dual incorporation would indeed place it outside the
alienage provision of the diversity statute, whether directly or
through an “alter ego” theory. Compare Coury v. Prot, 85 F.3d 244,
247-48, 250 (5th Cir. 1996) (holding that a natural person of dual
6
It is not clear whether Sococo also argued that Intercor had
made a judicial admission. If so, that argument fails as well.
“Only 'deliberate, clear and unequivocal' statements can constitute
conclusive judicial admissions.” Matter of Corland Corp., 967 F.2d
1069, 1074 (5th Cir. 1992). The statements in the motion to
dismiss were not clear and unequivocal.
9
nationality should be considered an American for purposes of
diversity jurisdiction) with Kuehne & Nagel (A.G. & Co.) v.
Geosource, Inc., 874 F.2d 283 (5th Cir. 1989) and Panalpina
Welttransport GmBh v. Geosource, Inc., 764 F.2d 352, 354 (5th Cir.
1985) (narrowly construing diversity jurisdiction to exclude
multinational corporations). See also 28 U.S.C. § 1332(a).
Finally, we note that Intercor has recently incorporated in
Anguilla, resulting in undisputed dual incorporation in Anguilla
and Delaware. The parties need not have brought this to the
court's attention, because this development has no effect on the
jurisdiction of the district court. It is well-settled that the
existence of diversity jurisdiction is to be determined both at the
time the suit was filed and at the time of removal. Coury v. Prot,
85 F.3d 244, 249 (5th Cir. 1996); Texas Beef Group v. Winfrey, 201
F.3d 680, 686 (5th Cir. 2000); 14B WRIGHT, MILLER & COOPER, FEDERAL
PRACTICE & PROCEDURE: JURISDICTION 3D § 3723, at 571 (1998). The
incorporation in Anguilla occurred after both the filing and
removal, and cannot affect diversity jurisdiction. The district
court therefore need not consider this additional wrinkle.
Conclusion
The district court attributed the ownership of Intercor to the
Republic of Colombia, and this clear error was a significant part
of its decision to dismiss the case. We therefore vacate the order
of dismissal and remand to the district court for further
10
consideration. In light of the fact that the case is being
remanded to the district court, we decline to engage in the
jurisdictional findings urged on us by appellant and merely point
out the dispute to the district court. The order of dismissal is
therefore vacated and the case remanded for further proceedings.
VACATED and REMANDED.
11