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OMNI EXPLORATION, INC. v. GRAHAM ENGG. CORP.

April 27, 1983

OMNI EXPLORATION, INC.
v.
GRAHAM ENGINEERING CORPORATION, a/k/a Graham Production Company, Inc. and Blocker Drilling Company, Inc.



The opinion of the court was delivered by: WEINER

 WEINER, District Judge.

 Plaintiff, Omni Exploration, Inc. (Omni) is a Delaware corporation, with its principal place of business in the Eastern District of Pennsylvania. Omni is engaged in the business of oil and gas exploration, development and production. Defendant, Graham Engineering Corporation (Graham), is a Texas corporation engaged in the business of operating, conducting and supervising the drilling of wells for the exploration and development of oil and gas. Defendant, Blocker Drilling Company, Inc. (Blocker), also a Texas corporation, is engaged in the business of drilling wells for the exploration and development of oil and gas. In December 1980 Omni hired Graham to drill an oil well known as Kingsville Dome A-1 located in Kleberg County, Texas. Subsequently, Graham, with the knowledge and consent of Omni, entered into a drilling contract with Blocker who agreed to conduct and operate the drilling of the well. Shortly after the drilling commenced problems arose causing delays and additional expense. Omni filed this suit alleging the delays and expense were due to the negligence of the defendants.

 Initially we must determine whether this court has personal jurisdiction over the non-resident defendants. Rule 4(e) of the Federal Rules of Civil Procedure permits a district court to assert personal jurisdiction over a non-resident to the extent allowed under the law of the state in which the court sits. The plaintiff asserts that this court has jurisdiction over both defendants under Pennsylvania's long arm statute, 42 Pa.C.S.A. § 5321, et seq. The applicability of the statute as it pertains to each defendant will be discussed separately below.

 Jurisdiction Over Graham

 With respect to jurisdiction over defendant Graham the plaintiff relies on 42 Pa.C.S.A. § 5322, which reads in pertinent part:

 
(a) General rule -- A tribunal of this Commonwealth may exercise personal jurisdiction over a person . . . who acts directly or by an agent, as to a cause of action or other matter arising from such person:
 
(1) Transacting any business in this Commonwealth. Without excluding other acts which may constitute transacting business in this Commonwealth, any of the following shall constitute transacting business for purpose of this paragraph.
 
. . .
 
(ii) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.
 
. . .
 
(b) Exercise of full constitutional power over nonresidents -- In addition to the provisions of subsection (a) the jurisdiction of the tribunals of this Commonwealth shall extend to all persons who are not within the scope of section 5301 (relating to persons) to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States.

 This statute as interpreted by the Pennsylvania courts makes the exercise of jurisdiction over a nonresident co-extensive with the permissible limits of due process. Koenig v. International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, 284 Pa.Super. 558, 426 A.2d 635, 639, 640 (1980); Hart v. McCollum, 249 Pa.Super. 267, 376 A.2d 644, 647 (1977).

 In determining whether due process will allow us to hold Graham subject to suit we must undertake a two part analysis. The initial determination to be made is whether the cause of action arises from the defendant's forum related activities or non-forum related activities. Reliance Steel Products Co. v. Watson, Ess, Marshall and Enggas, 675 F.2d 587, 588 (3d Cir.1982); Schwilm v. Holbrook, 661 F.2d 12 (3d Cir.1981).

 If the claim is forum related the plaintiff need show only "minimum contacts" by the defendant with the forum. Pennsylvania case law evaluates minimum contacts under the three-part test formulated in Proctor and Schwartz, Inc. v. Cleveland Lumber Co., 228 Pa.Super. 12, 19, 323 A.2d 11, 15 (1974). See also, Schmidt v. Leader Dogs for the Blind, Inc., 544 F. Supp. 42, 45 (E.D.Pa.1982); The Union National Bank of Pittsburgh v. L.D. Pankey Institute, 284 ...


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