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PRUDENTIAL OIL CORP. v. PHILLIPS PETROLEUM CO.

June 17, 1975

PRUDENTIAL OIL CORPORATION, Plaintiff,
v.
PHILLIPS PETROLEUM COMPANY, Defendant



The opinion of the court was delivered by: BRIEANT

MEMORANDUM DECISION

 Brieant, J.

 By its complaint, filed on September 27, 1967, more than seven and one-half years ago, plaintiff, a New York corporation, sued defendant, a Delaware corporation having its principal place of business in Oklahoma, for relief upon four separate claims or causes of action. Most of the facts relied on occurred during the period 1961 to 1963.

 All claims pleaded seek equitable relief and/or damages under New York law. As successor by a chain of assignments, hereinafter mentioned, from Prudential Oil Corporation, a Connecticut corporation, hereinafter "Prudential Connecticut", plaintiff seeks to enforce its rights under a claimed joint venture for the establishment of an oil refinery and petrochemical facility in Puerto Rico. It alleges that its assignor, Prudential Connecticut, disclosed confidential proprietary information to defendant, and took and forebore from taking a variety of actions, in reliance on the alleged joint venture, and thereafter defendant appropriated the benefits of the joint venture for its own account. The legal theory of the claims pleaded has been stated variously as an equitable action to impress a trust, or for an accounting, or an action for damages as a result of an intentional tort arising out of misappropriation by defendant for its own use of details, specifications, ideas, concepts, innovations, information contacts, engineering data and designs furnished to defendant in trust and confidence, to be used solely in furtherance of the joint interests of the parties, or all of the above.

 The relief requested includes (1) an accounting of the joint venture and division of the respective rights and interests of the parties; (2) impressing a trust on defendant's property; and (3) a judgment directing payment over to plaintiff of its rights in the venture.

 No federal claims are pleaded, and the sole basis for jurisdiction is diversity of citizenship between the parties pursuant to 28 U.S.C. § 1332(a).

 For a more detailed factual exposition of the issues in this litigation, reference should be had to the memorandum decision dated April 4, 1975 filed herein by Chief Judge Edelstein, denying defendant's motion to strike plaintiff's jury demand. 392 F. Supp. 1018.

 As noted, plaintiff shows (Complaint, para. 1) that it

 
"brings this action as assignee of all the right, title and interest to the claims asserted herein of Prudential Equities Corp., a Delaware corporation, which in turn was a successor in interest and assignee of the entire business, assets and properties of Prudential Oil Corporation, a Connecticut corporation."

 The answer, filed October 20, 1967, pleads as a second affirmative defense, that "the court has no jurisdiction over the subject matter of the action pursuant to 28 U.S.C. § 1359."

 At our hearing held May 2, 1975, the taking of evidence on the issues raised by the motion was waived. The facts pertaining to subject matter jurisdiction are not in dispute, although there is substantial controversy with respect to the inferences to be drawn from those undisputed facts.

 Defendant contends that the present plaintiff, referred to for convenience as "Prudential New York," "had been collusively made (sic) a party to this suit," and that consequently subject matter jurisdiction was wanting under the provisions of 28 U.S.C. § 1359. That latter statute provides as follows:

 
"A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court."

 The parties prior to July 1974 had developed a "Statement and issue concerning jurisdiction" for a proposed pre-trial order. It is clear that Prudential Oil Corporation, a Connecticut corporation, was incorporated in that State in 1959 and until October 1962, maintained its principal place of business at Greenwich, Connecticut. ...


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