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Kehm Oil Co. v. Texaco

February 26, 2007


The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge


Before the Court for consideration are a MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION filed by Chevron Corporation and ChevronTexaco Corporation (collectively "Chevron Corporation") (Document No. 20), and a MOTION FOR SUMMARY JUDGMENT filed by Texaco, Inc., Texaco Refining and Marketing (East), Inc. ("TRMI"), Star Enterprise ("Star") and Chevron USA Inc. ("Chevron USA")*fn1 (collectively the "Remaining Defendants"). Plaintiffs have filed responses to each motion and they are now ripe for disposition. The motions will be granted.

Standard of Review

When considering a motion to dismiss, the court accepts as true all well pleaded allegations of fact. See Albright v. Oliver, 510 U.S. 266, 267 (1994). In addition, the court construes all reasonable inferences from those allegations in a light most favorable to the plaintiff. The complaint will be dismissed only if there is "no set of facts" which would entitle the plaintiff to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Federal Rule of Civil Procedure 8(a)(2) provides that a complaint need only offer "a short and plain statement of the claim showing that the pleader is entitled to relief" enough to "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." See Fed.R.Civ.P. 8(a)(2); see also Conley, 355 U.S. at 47. This is a minimum notice pleading standard "which relies on liberal discovery rules and summary judgment motions to ... dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513-14 (2002). Claims lacking merit may be dealt with through summary judgment pursuant to Rule 56. Id.

Summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Thus, the Court's task is not to resolve disputed issues of fact, but to determine whether there exist any factual issues to be tried. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-49 (1986). The non-moving party must raise "more than a mere scintilla of evidence in its favor" in order to overcome a summary judgment motion. Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989) (citing Liberty Lobby, 477 U.S. at 249). Further, the non-moving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). Distilled to its essence, the summary judgment standard requires the non-moving party to create a "sufficient disagreement to require submission [of the evidence] to a jury." Liberty Lobby, 477 U.S. at 251-52.

Procedural History

Plaintiffs seek injunctive relief or a declaration that Plaintiffs be permitted to continue their status as Texaco dealers in Western Pennsylvania. The Court conducted a hearing on Plaintiffs' motion for a temporary restraining order (TRO) on June 28, 2006. A Memorandum Opinion and Order was issued on June 30, 2006, which denied the motion for TRO. On November 9, 2006, the Court issued a Memorandum Opinion and Order which granted motions to dismiss filed by SFM Energy, LLC ("SFM"), and Motiva Enterprises, LLC ("Motiva"), deferred ruling on Chevron's motion to dismiss, and gave Plaintiffs an opportunity to amend their complaint to address the reasons for dismissal.

The Second Amended Complaint that is the subject of the instant motions was filed on November 21, 2006 and asserts claims for money damages and declaratory relief under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. § 2801 et seq., as well as common law claims for breach of contract, promissory estoppel, civil conspiracy, and interference with contract and prospective contract. Plaintiffs subsequently filed Notices of Voluntary Dismissal as to SFM and Motiva. Chevron renewed its challenge to the exercise of personal jurisdiction. The Remaining Defendants' summary judgment motion remained pending, as Plaintiffs' response was not due until December 13, 2006 and the amendment to the complaint did not affect the substance of their arguments.


A. Chevron Corporation's Motion to Dismiss for Lack of Personal Jurisdiction

The Court extensively analyzed Chevron Corporation's motion in its Memorandum Opinion and Order dated November 9, 2006, even though it ultimately deferred ruling on the motion. That discussion and analysis is incorporated by reference. In summary, the Court evaluates the existence of personal jurisdiction under the Pennsylvania long-arm statute, which authorizes jurisdiction to the fullest extent permitted under the United States Constitution. 42 Pa. C.S. § 5322(b). Thus, the Court must determine whether the exercise of personal jurisdiction over Chevron would violate due process. The "general jurisdiction" test requires an evaluation of whether defendant has such continuous and systematic contacts with Pennsylvania that jurisdiction is proper regardless of the subject matter of the lawsuit. Pennzoil Products Co. v. Colelli & Assoc., 149 F.3d 197, 200 (3d Cir. 1998). The "specific jurisdiction" test requires an evaluation of whether the current lawsuit arose out of a defendant's specific activity that was purposefully directed at Pennsylvania, including an examination of "minimum contacts" to determine whether the defendant could reasonably anticipate being haled into the state forum and an evaluation of whether the exercise of jurisdiction would comport with traditional notions of fair play and justice. Id.

Plaintiffs' primary argument is that Texaco's contacts with Pennsylvania, and/or those of other subsidiaries, may be attributed to Chevron Corporation. Chevron Corporation concedes that it merged with Texaco in October 2001, subsequently changed its name to ChevronTexaco Corporation, and in May 2005, changed its name again to Chevron Corporation. Chevron Corporation is the parent corporation of the Remaining Defendants. It is uncontested that Chevron Corporation is one of the largest multinational corporations in the world.

The general rule is that mere ownership of a subsidiary does not automatically subject the parent corporation to personal jurisdiction in the states where the subsidiary has contacts. Blackwell v. Marina Assoc., 2006 WL 573793 *5 n.4 (E.D. Pa. 2006). In Blackwell, the Court recently outlined the relevant inquiry:

The Court of Appeals has set forth numerous factors to be considered in determining whether a court may impute the jurisdictional contacts of a subsidiary to its parent corporation: (1) whether the subsidiary corporation played a part in the transactions at issue; (2) whether the subsidiary was merely the alter ego or agent of the parent; and (3) whether the independence of the separate corporate entities was disregarded. Lucas, 666 F.2d at 806. This Court has added another factor: (4) "whether the subsidiary is necessarily performing activities that the ...

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