in Re CVR Energy, INC. and CVR Refining, LP ( 2016 )

Opinion issued April 7, 2016
In The
Court of Appeals
For The
First District of Texas
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NO. 01-15-00715-CV
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IN RE CVR ENERGY, INC. AND CVR REFINING, LP, Relators
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION
Relators CVR Energy, Inc., and CVR Refining, LP (collectively “CVR
Defendants”) have filed a petition for a writ of mandamus challenging the trial
court’s denial of their motion to dismiss the underlying lawsuit based on forum non
conveniens.1 In a single issue, relators contend that the trial court abused its
1
The underlying proceeding is Donald R. Collier, Jennifer J. Collier, Dale A.
Niemeyer, and Wendy Niemeyer v. CVR Energy, Inc. and CVR Refining, LP, cause
discretion in denying the motion because they established that Texas is an
inconvenient forum for the lawsuit. We conditionally grant the petition.
Background
Real parties in interest Donald R. Collier, Jennifer J. Collier, Dale A.
Niemeyer, and Wendy Niemeyer (collectively “Plaintiffs”) filed suit against the
CVR Defendants in Fort Bend County district court to recover damages for injuries
resulting from a fire at a refinery located in Coffeyville, Kansas. The Colliers reside
in Independence, Kansas, and the Niemeyers reside in South Coffeyville, Oklahoma.
Donald Collier and Dale Niemeyer were injured in the fire and are employees of
Coffeyville Resources Refining & Marketing LLC (“CRRM”), the refinery owner.
CRRM is a wholly-owned subsidiary of CVR Refining, and CVR Energy owns CVR
Refining’s general partner and a majority of CVR Refining’s limited partner units.
The CVR Defendants are entities organized under Delaware law and have offices in
Sugar Land, Fort Bend County, Texas.
In their original petition, Plaintiffs allege that “a critical leak occurred on a
pump in the Isometric Unit” of the CRRM refinery and a “huge, fiery explosion
resulted, severely injuring” the Plaintiffs. They assert negligence and gross
negligence claims against the CVR Defendants, alleging that they control CRRM,
no. 2015-DCV-220330, in the 268th District Court of Fort Bend County, the
Honorable Brady G. Elliott presiding.
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their “wholly-owned subsidiary,” and, therefore, are liable for CRRM’s torts.
Plaintiffs further allege that the CVR Defendants’ acts of negligence and gross
negligence caused damages to Plaintiffs. Plaintiffs supplemented their petition to
allege that the CVR Defendants “were independently negligent in the performance
of their duties under the Management Services Agreement proximat[ely] causing
Plaintiffs damages and injuries.” They seek “all damages available for the injuries
of DONALD R. COLLIER and DALE A. NIEMEYER.” The CVR Defendants
answered with a general denial and asserted affirmative defenses that (1) Kansas
workers’ compensation law barred the claims; (2) the alleged injuries and damages
resulted from intervening or superseding causes; and (3) the comparative
responsibility of Donald Collier, Dale Niemeyer, CRRM, and its contractors,
subcontractors, and suppliers should reduce any damages or render them not
recoverable.2
The CVR Defendants also moved to dismiss the suit based on forum non
conveniens under Texas Civil Practice and Remedies Code section 71.051(b),
2
In this Court, the CVR Defendants contend that Plaintiffs have not asserted a viable
cause of action because there is no evidence the CVR Defendants exercised control
over the operation or maintenance of the pump or pump seal. However, the issue of
whether evidence supports Plaintiffs’ claims is not before the Court in this
proceeding. See Morris v. Scotsman Indus., Inc., 106 S.W.3d 751, 754 (Tex. App.—
Fort Worth 2003, no pet.) (affirming summary judgment when evidence did not
show that defendant had actual control or right of control over workplace and had
no duty to provide safe workplace).
3
contending that Kansas was a more reasonable and appropriate jurisdiction.
Plaintiffs responded that the CVR Defendants failed to prove that the section
71.051(b) factors supported dismissal and Texas was a convenient forum because
the negligence that caused the Plaintiffs’ injuries occurred in the CVR Defendants’
office in Sugar Land, Texas. The trial court denied the motion.3 The CVR
Defendants seek mandamus relief to direct the trial court to vacate its ruling and
dismiss the underlying suit.
Discussion
A. Standard of review
Mandamus is appropriate to remedy an improper denial of a motion to dismiss
for forum non conveniens. See In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 679 (Tex.
2007). We review a trial court’s ruling on a motion to dismiss for an abuse of
discretion. See In re ENSCO Offshore Int’l Co., 311 S.W.3d 921, 923 (Tex. 2010);
In re Gen. Elec. Co., 271 S.W.3d 681, 685 (Tex. 2008). A trial court commits a clear
abuse of discretion when its action is “so arbitrary and unreasonable as to amount to
a clear and prejudicial error of law.” In re CSX Corp., 124 S.W.3d 149, 151 (Tex.
2003). A trial court has no discretion in determining what the law is or in applying
3
Mandamus relief may be based on an oral ruling if the ruling is a “clear, specific,
and enforceable order that is adequately shown by the record.” In re Bledsoe, 41
S.W.3d 807, 811 (Tex. App.—Fort Worth 2001, orig. proceeding); see TEX. R. APP.
P. 52.3(k)(1)(A) (providing appendix must contain certified or sworn copy of order
complained of “or any other document showing the matter complained of”).
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the law to particular facts. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135
(Tex. 2004).
B. Motion to dismiss for forum non conveniens
Texas Civil Practice and Remedies Code section 71.051 governs motions to
dismiss for forum non conveniens in actions for personal injury. See In re Gen. Elec.,
271 S.W.3d at 685–86; In re Mantle Oil & Gas, LLC, 426 S.W.3d 182, 187 (Tex.
App.—Houston [1st Dist.] 2012, orig. proceeding). Section 71.0151(b) provides:
If a court of this state, on written motion of a party, finds that in the
interest of justice and for the convenience of the parties a claim or
action to which this section applies would be more properly heard in a
forum outside this state, the court shall decline to exercise jurisdiction
under the doctrine of forum non conveniens and shall stay or dismiss
the claim or action. In determining whether to grant a motion to stay or
dismiss an action under the doctrine of forum non conveniens, the court
shall consider whether:
(1) an alternate forum exists in which the claim or action may be tried;
(2) the alternate forum provides an adequate remedy;
(3) maintenance of the claim or action in the courts of this state would
work a substantial injustice to the moving party;
(4) the alternate forum, as a result of the submission of the parties or
otherwise, can exercise jurisdiction over all the defendants properly
joined to the plaintiff’s claims;
(5) the balance of the private interests of the parties and the public
interest of the state predominate in favor of the claim or action being
brought in an alternate forum, which shall include consideration of
the extent to which an injury or death resulted from acts or
omissions that occurred in this state; and
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(6) the stay or dismissal would not result in unreasonable duplication
or proliferation of litigation.
TEX. CIV. PRAC. & REM. CODE ANN. § 71.051(b) (West Supp. 2015). Section 17.051
does not place the burden of proof on a particular party but requires the trial court to
consider the six factors, to the extent they apply. In re Gen. Elec., 271 S.W.3d at
687. Further, section 71.051 does not require that a movant prove every factor or
that every factor must weigh in favor of dismissal. In re Mantle Oil, 426 S.W.3d at
188 (citing In re Gen. Elec., 271 S.W.3d at 687). “To the extent evidence is
necessary, the trial court must base its decision on the weight of the evidence, and it
is entitled to ‘take into account the presence or absence of evidence as to some issue
or position of a party.’” Id. (quoting In re Gen. Elec., 271 S.W.3d at 687). If the
factors weigh in favor of the claim or action being more properly heard in a forum
outside Texas, section 71.051(b) “‘requires dismissal of the claim or action.’” In re
ENSCO, 311 S.W.3d at 924 (quoting In re Gen. Elec., 271 S.W.3d at 686).
The forum non conveniens doctrine affords great deference to a plaintiff’s
choice of forum but “generally affords substantially less deference to a nonresident’s
forum choice.” In re Pirelli Tire, 247 S.W.3d at 675; see Quixtar, Inc. v. Signature
Mgmt. Team, LLC, 315 S.W.3d 28, 31 (Tex. 2010) (noting, in common-law forum
non conveniens cases, fact that “plaintiff is not a Texas resident speaks directly to a
defendant’s burden” in establishing propriety of dismissal). The doctrine recognizes
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“that the plaintiff’s choice must sometimes yield in the public interest, and in the
interest of fundamental fairness.” In re Pirelli Tire, 247 S.W.3d at 675. Dismissal
on forum non conveniens grounds is appropriate when sufficient contacts to confer
personal jurisdiction exist between the defendant and the forum state, but the case
has no significant connection to the forum state. Id. at 675–76; In re Omega Protein,
Inc., 288 S.W.3d 17, 21 (Tex. App.—Houston [1st Dist.] 2009, orig. proceeding).
The first, second, and fourth section 71.051 factors are whether (1) an
alternate forum where the claim may be tried exists, (2) the alternate forum provides
an adequate remedy, and (3) the alternate forum can exercise jurisdiction over all the
defendants properly joined to the plaintiff’s claims. TEX. CIV. PRAC. & REM. CODE
ANN. § 71.051(b)(1), (2), (4). The CVR Defendants are registered to do business,
and do business in Kansas. Plaintiffs do not dispute that the CVR Defendants are
amenable to process in Kansas and, therefore, Kansas is an alternate forum to Texas
and could exercise jurisdiction over them. Further, although contending that Texas
law applies to this dispute, plaintiffs do not dispute that “Kansas would be an
alternative forum that could provide an adequate remedy.” These three factors weigh
in favor of the CVR Defendants’ motion to dismiss.
The fifth section 71.051 factor requires the balancing of the public interests
of the state and the private interests of the parties. A consideration in this balancing
is the extent to which Plaintiffs’ injuries resulted from acts or omissions that
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occurred in Texas or in Kansas. TEX. CIV. PRAC. & REM. CODE ANN. § 71.051(b)(5);
see In re ENSCO, 311 S.W.3d at 926. The public interest factors to be considered
are the administrative difficulties related to court congestion, burdening the people
of a community with jury duty when they have no relation to the litigation, the local
interest in having localized controversies decided at home, and trying a case in the
forum that is at home with the law that governs the case. In re Mantle Oil, 426
S.W.3d at 194 (citing In re Gen. Elec., 271 S.W.3d at 691; In re Pirelli Tire, 247
S.W.3d at 679). The CVR Defendants contend that the public interest factors favor
Kansas because the accident “occurred to Kansas residents, employed at a Kansas
place of business, through a Kansas employment relationship, for which Kansas
workers’ compensation benefit were provided” and Texas courts should not be
burdened with hearing cases with no significant connection to the state. They further
contend that comity and choice-of-law concerns favor a Kansas forum.
Plaintiffs contend that the public interest factors weigh in favor of Texas
because they allege that the CVR Defendants committed, at their Sugar Land offices,
the negligent acts that caused the fire and “the case turns exclusively” on establishing
“whether the managerial and operational decisions made in Sugar Land, Texas”
proximately caused the fire and damages. Accordingly, they assert the case is a
localized controversy that should be decided in Fort Bend County, any
administrative difficulties would be ones associated with proof related to negligence
8
in Texas, jury duty would be imposed on the community where the negligence
occurred, and “the issue of a Texas judge determining Kansas law in this case is a
non-issue.”
One consideration in the public-interest analysis is consideration of what law
governs the case. See In re ENSCO, 311 S.W.3d at 928; In re BPZ Res., Inc., 359
S.W.3d 866, 876 (Tex. App.—Houston [14th Dist.] 2012, orig. proceeding).
Plaintiffs assert that, under the most significant relationship test, Texas law applies
but “the negligence laws of Kansas and Texas are so similar” that no conflict of laws
is present. In this Court, Plaintiffs also state, “It is plausible that Texas law regarding
liability applies and that Kansas law regarding remedies applies.” See Hughes Wood
Prods., Inc. v. Wagner, 18 S.W.3d 202, 205 (Tex. 2000) (stating, under most
significant relationship test, court considers which state’s law has most significant
relationship “to the particular issue to be resolved”); see also Torrington Co. v.
Stutzman, 46 S.W.3d 829, 850 (Tex. 2000) (noting plaintiff’s domiciliary state
usually has strong interest in seeing its compensatory damages law applied). The
CVR Defendants assert that Kansas law applies and “[s]tatutory worker’s
compensation immunity is the most significant difference between the Kansas and
Texas laws relevant to this case.” Further, Plaintiffs argued in the trial court that a
key document is the “Service Agreement,” which Plaintiffs assert fixes
responsibility on the CVR Defendants in Texas for day-to-day operations of the
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refinery in Kansas. That document has a choice-of-law clause, which states that the
document shall be governed and construed under Kansas law. The mandamus record
does not indicate that the trial court decided which law applied but the trial court
indicated that it would not have difficulty applying Kansas law.
Before deciding a choice of law issue, a court first must identify a conflict of
law. Vinson v. Am. Bureau of Shipping, 318 S.W.3d 34, 51 (Tex. App.—Houston
[1st Dist.] 2010, pet. denied) (citing Ford Motor Co. v. Aguiniga, 9 S.W.3d 252, 260
(Tex. App.—San Antonio 1999, pet. denied)).
The conflict that the CVR Defendants identify is “statutory workers’
compensation immunity,” specifically that Kansas law, unlike Texas law “does not
allow plaintiffs to circumvent the workers’ compensation immunity by allegations
of gross negligence.”4 However, any conflict between Kansas and Texas workers’
compensation law in this regard does not apply in this case because it is not a
wrongful-death case since none of the Plaintiffs died. Texas law allows recovery of
exemplary damages by a survivor or heir of an employee “whose death was caused
4
The CVR Defendants indicate that differences between Texas and Kansas law
regarding comparative negligence when workers’ compensation benefits have been
paid exist, and Kansas law, although “not completely settled,” provides broad
immunity to employer entities and may provide immunity to parent companies, such
as the CVR Defendants. They, however, have not established such a difference. See
Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tool,
Inc., 246 S.W.3d 42, 53 (Tex. 2008) (stating party advocating application of
Louisiana law had burden to establish that it differed from Texas law to overcome
presumption that it is same as Texas law).
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. . . by the employer’s gross negligence.” TEX. LAB. CODE ANN. § 408.001(b) (West
2015). Otherwise, recovery of workers’ compensation benefits is the exclusive
remedy of an employee covered by workers’ compensation insurance. Id. §
408.001(a) (West 2015); Rodriguez v. Naylor Indus., Inc., 763 S.W.2d 411, 412
(Tex. 1989) (“An employee who receives workers’ compensation benefits may not
bring suit for injuries caused by his employer’s negligence, or even gross
negligence.”). Absent a conflict between Kansas and Texas law on this record, we
do not undertake a choice-of-law analysis.
Other public interest considerations are administrative difficulties related to
court congestion, burdening the people of a community with jury duty when they
have no relation to the litigation, and the local interest in having localized
controversies decided at home. The accident, of course, occurred in Kansas and
injured exclusively residents of Kansas and nearby portions of Oklahoma. Plaintiffs
focus their argument for a Texas connection on their contention that “the case turns
exclusively on what happened in the Sugar Land offices” and allegations of
negligence under the management services agreement. In support, Plaintiffs
provided the trial court a copy of a CVR Refining 2014 Form 10-Q, which states
that CVR Refining obtains management and other services from CVR Energy under
a services agreement among CVR Energy, CVR Refining, and its general partner.
Under the agreement, the general partner engaged CVR Energy “to conduct a
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substantial portion of its day-to-day business operations” and the services rendered
included “management of [CVR Refining’s] property and the property of its
operating subsidiaries in the ordinary course of business.”5 Plaintiffs also provided
deposition testimony of Robert Haugen, who works in CVR Energy’s Sugar Land
office, and is an officer of CVR Refining and “all subsidiaries on the refining side.”
He testified that he is responsible for “day-to-day operations of the refineries” and
that “day-to-day refinery operations and maintenance personnel report[ed] to [him].”
The record contains no further evidence of the extent and level of detail of his
involvement in operations for the refinery operated in Kansas by CVR’s subsidiary,
CRRM, or his responsibility for the equipment involved in the accident. The record
contains no evidence about which acts or omissions occurred in Texas that caused
the accident in Kansas. Plaintiffs argued to the trial court that there was a form called
“Management of Change” that addressed improvements to the relevant hydrogen
separator specifically and that tied decisions about the separator to Texas. No such
document is in the record to support that argument or to identify the level of
management where decisions about maintenance and repair were made.
5
Although the CVR Defendants include in the mandamus record a copy of the
“Services Agreement” and aver that it is the agreement referenced in Plaintiffs’
supplemental petition, a copy of the agreement was not before the trial court. Here,
the CVR Defendants state that they dispute the Plaintiffs’ interpretation of the
agreement as “giving CVR Energy operation responsibilities over [the] Kansas
refinery.” The agreement states that is to be governed and construed under Kansas
law.
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It is undisputed that the Collier plaintiffs are Kansas residents, Donald Collier
and Dale Niemeyer are both employees of the CRRM refinery in Kansas, the refinery
fire occurred in Kansas, and Collier’s and Niemeyer’s injuries occurred there. It is
probable that the applicable law is that of Kansas. The public interest factors in
favor of the Kansas forum outweigh the factors that favor a Texas forum. The record
does not include evidence of any administrative difficulties caused by litigating in
Texas. Further, Plaintiffs are not Texas residents and their forum choice is entitled
to less deference than if they were Texas residents. See Quixtar, 315 S.W.3d at 33;
In re Mantle Oil, 426 S.W.3d at 188.
Even assuming that Texas has an interest in the case based on the location of
the CVR Defendants’ office, Kansas has a stronger interest in adjudicating a dispute
arising out of a refinery fire in Kansas. The balance of factors here is similar to that
in In re Mantle Oil in which Louisiana residents sued Mantle Oil in Galveston
County, alleging that the company committed, in Texas, negligent acts in operating
a Louisiana well, resulting in a blowout. 426 S.W.3d at 195–96. However, because
the plaintiffs were Louisiana residents, the well blowout occurred in Louisiana, and
the alleged injuries and damages occurred in Louisiana, the balance of public interest
factors weighed in favor of Louisiana. Id.; see In re Omega Protein, 288 S.W.3d at
22–23 (concluding that, despite Texas location of defendants’ principal office, suit
did not involve local dispute and factors favored dismissal when Virginia resident
13
was injured on fishing vessel operating out of Virginia). Finally, the presence of a
corporate headquarters is an insufficient basis for keeping a nonresident’s suit in
Texas when the other factors favor another forum. In re Omega Protein, 288 S.W.3d
at 23 (citing In re Gen. Elec., 271 S.W.3d at 684–85).
The private factors are the ease of access to proof, the availability and cost of
compulsory process for witnesses, the possibility of viewing the premises, if
appropriate, and other practical problems that make trial easy, expeditious, and
inexpensive. In re ENSCO, 311 S.W.3d at 926. Plaintiffs contend that the balance of
these factors favors Texas because the contested issue is “whether there was
negligence within the Sugar Land office” and, therefore, the evidence and relevant
witnesses are located in Sugar Land and the refinery will not need to be viewed.
However, the location of a joint office in Sugar Land is the only “real connection
with Texas,” virtually all identified witnesses to the accident reside in Coffeyville,
Kansas, or South Coffeyville, Oklahoma, and only two identified witnesses are
within the subpoena power of the Texas courts and one of these is an expert witness.
The CVR Defendants support their motion with the affidavit of Edmund S.
Gross, General Counsel to the CVR Defendants and CRRM at the time of the
refinery fire. Gross averred that the fire occurred when a refinery pump “experienced
a shaft seal failure,” causing the release of a volatile vapor that ignited; the
investigation was undertaken at the refinery and “a shop” in Lee’s Summit,
14
Missouri; the approximately 1000-pound pump was stored in Coffeyville, Kansas;
and “[a]ll witnesses to the accident were either CRRM employees who were at work
at the time, or medical or emergency personnel from the Coffeyville, Kansas area
who arrived soon thereafter.” The CVR Defendants also provided the trial court with
a copy of their Responses to Plaintiffs’ Requests for Disclosure in which they
identified thirty-four individuals as persons with knowledge of relevant facts. Based
on the addresses provided, only two of those persons would be subject to compulsory
process in Texas. See TEX. R. CIV. P. 176.3(a) (“A person may not be required by
subpoena to appear or produce documents or other things in a county that is more
than 150 miles from where the person resides or is served.”).
Plaintiffs responded that “the primary discovery is against CVR—its policies,
procedures, email, budgets, orders, Purchase orders, documents” and assert the
documents are located in Sugar Land. However, as shown by Plaintiffs’ requests for
production of documents to the CVR Defendants, Plaintiffs seek a greater variety of
documents, including witnesses statements, incident and investigation reports,
maintenance and repair manuals, and documents relating to maintenance and repairs
for the refinery. The mandamus record does not reflect the location of any such
documents. The evidence before the trial court reflects that compulsory process is
unavailable to compel the vast majority of identified witnesses to appear in Fort
Bend County, not all documents are located in Sugar Land, and the accident location
15
and pump in question are all located in Kansas. We conclude that consideration of
the private interests also weighs in favor of dismissal.
The third section 71.015 factor is whether maintaining the action in Texas
would work a substantial injustice to the moving party. TEX. CIV. PRAC. & REM.
CODE ANN. § 71.051(b)(3). Under this factor, a trial court considers, among other
things, the location of relevant documents and evidence, and whether a majority of
witnesses may be reached by compulsory process in Texas, which are also
considerations under the balance of private interest factors. In re Mantle Oil, 426
S.W.3d at 192 (citing In re ENSCO, 311 S.W.3d at 925; In re BPZ Res., 359 S.W.3d
at 875; Vinson, 318 S.W.3d at 52). We have concluded that the record demonstrates
that the majority of identified witnesses cannot be reached by compulsory process
in Texas. Additionally, we have concluded that the public and private interest factors
weigh in favor of a Kansas forum, we also conclude that this factor weighs in favor
of dismissal. See In re Omega Protein, 288 S.W.3d at 23.
The sixth and final section 71.051 factor is whether stay or dismissal would
result in unreasonable duplication or proliferation of litigation. The CVR Defendants
did not address this factor in the trial court, and do not address it here. Plaintiffs
assert only that “dismissal would not result in unreasonable duplication or
proliferation of litigation, because once the case is resolved in Texas or Kansas the
16
dispute will not be required to be litigated elsewhere.” Accordingly, this factor
favors the CVR Defendants.
Conclusion
Considering the section 71.051(b) factors, we conclude that the trial court
abused its discretion in denying the CVR Defendants’ motion to dismiss. See TEX.
CIV. PRAC. & REM. CODE ANN. § 71.051(b); In re BPZ Res., 359 S.W.3d at 881. We
conditionally grant the petition for a writ of mandamus and direct the trial court to
vacate its ruling denying the motion to dismiss and grant the motion. The writ will
issue only if the trial court fails to comply.
Russell Lloyd
Justice
Panel consists of Justices Higley, Huddle, and Lloyd.
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