UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
June 21, 2010
ESTHER KIOBEL, ET AL. PLAINTIFFS,
ROYAL DUTCH PETROLEUM COMPANY, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.
OPINION AND ORDER
This is a putative class action brought under the Alien Tort Statute ("ATS") against various Royal Dutch/Shell ("Shell") entities involving allegations of human rights abuses in Nigeria in the 1990s related to the Defendants' oil and development activities in the region. Defendant The Shell Petroleum Development Company of Nigeria ("SPDC"), a Shell Nigerian subsidiary, renews its motion to dismiss for lack of personal jurisdiction.
On November 16, 2009, the Court (1) granted Plaintiffs' motion for reconsideration of the Court's March 4, 2008 Order, dismissing SPDC as a defendant for lack of personal jurisdiction, and (2) ordered further jurisdictional discovery.*fn1 Kiobel v. Royal Dutch Petroleum Company, No. 02-Civ.-7618, 2009 WL 3817590 (S.D.N.Y. Nov. 16, 2009). That discovery is now complete.*fn2 For the reasons discussed below, the Court GRANTS SPDC's renewed motion to dismiss. (Dkt. No. 320.) Plaintiffs have failed to assert jurisdictional facts sufficient to establish "continuous and systematic general business contacts" with the United States as required for the assertion of general jurisdiction over SPDC. Fed. R. Civ. P. 4(k)(2); see Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 568 (2d Cir. 1996).
The facts and procedural history of this case are set forth in the Court's prior orders, familiarity with which is assumed. They are summarized here to the extent they are relevant.
Plaintiffs in this and the related actions in Wiwa*fn3 are a group of individuals who, along with their decedents, protested SPDC's oil exploration and development activities in the Ogoni region of southern Nigeria. Plaintiffs allege, inter alia, that these protests were suppressed, with violence, by agents of the Nigerian government, with the corporation and the assistance of SPDC and SPDC's corporate parents, formerly known as Royal Dutch Petroleum Company and Shell Transport and Trading Company (collectively, "Royal Dutch Shell").
I. Procedural History
Plaintiffs filed this putative class action on September 30, 2002 (the "Kiobel action").
Discovery and other pre-trial proceedings in this action have been largely coordinated with the prior related Wiwa actions.*fn4
On April 6, 2004, Wiwa Plaintiffs commenced a separate action against SPDC ("Wiwa III"), and on May 17, 2004, Kiobel Plaintiffs added SPDC as a defendant in this action. In November 2004, Defendant SPDC filed, in both actions, a motion to dismiss for lack of personal jurisdiction and a motion to preclude any further jurisdictional discovery.*fn5
In its March 8, 2008 Order, the Court granted SPDC's motion. The Court found that Plaintiffs failed "to establish a prima facie case of sufficient minimum contacts" with the forum - here the United States - for the Court to exercise jurisdiction over SPDC. Kiobel, 2008 WL 591869 at *10. The Court also found that Plaintiffs' jurisdictional allegations were "too vague and conclusory" to warrant further jurisdictional discovery. Id. In making these findings, the Court relied on the fact that Plaintiffs "[had] access to the extensive discovery taken in connection with the prior related actions, including discovery from SPDC." Id. at *2.
On April 16, 2008, the Wiwa III Plaintiffs appealed the Court's March 4, 2008 Order. The March 4, 2008 Order was a final ruling in Wiwa III (because it dismissed the sole defendant), but the Order dismissing SPDC from the Kiobel Amended Complaint was not a final ruling, and, therefore, was not ripe for appeal.
On June 3, 2009, the Second Circuit vacated this Court's March 4, 2008 Order. The Second Circuit concluded that it was "clear error" for this Court (1) to find that "discovery conducted in the related actions encompassed the issue of personal jurisdiction over SPDC,"*fn6 2009 WL 1560197 at *2, and (2) to have required Plaintiffs to include an averment of facts to support its prima facie case of jurisdiction - the standard courts apply when the motion is brought after discovery has been conducted. In a motion to supplement the record on appeal, Plaintiffs also submitted several documents that Plaintiffs obtained in discovery in the related cases after the Court's decision on SPDC's motion - documents that that Plaintiffs argued on appeal supported their jurisdictional allegations.
On remand, in Wiwa III, this Court was instructed to consider the relevance of the documents at issue, and to decide:
[W]hether continuing discovery in the related cases has now been sufficient  for [plaintiffs] to adequately allege personal jurisdiction over SPDC,  to show that [plaintiffs] are sufficiently unlikely to be able to establish jurisdiction, so as to justify dismissal once more or  to allow further jurisdictional discovery. Id. at *3. On June 8, 2009, the three Wiwa actions settled.
On June 24, 2009, Kiobel Plaintiffs moved for reconsideration of the Court's March 8, 2008 Order, which dismissed SPDC as a defendant from the Kiobel Amended Complaint. On November 16, 2009, this Court granted Plaintiffs' motion for reconsideration. The Court concluded that the "Second Circuit's June 3, 2009 Summary Order, which vacated the Court's March 4, 2008 Order . . . [was] a 'change in controlling law' that warrant[ed] reconsideration of the Court's (same) March 4, 2008 Order dismissing the Kiobel claims against SPDC." 2009 WL 3817590, at *2. The Court stated that:
The Second Circuit found that this Court committed clear error in finding that the prior related discovery included the relevant jurisdiction discovery with respect to SPDC. As a result, this Court applied the wrong standard on SPDC's motion to dismiss for lack of personal jurisdiction. The Court is also persuaded that this error impacted the Court's decision to preclude any further jurisdictional discovery. That decision assumed that it was unlikely Plaintiffs could, given the prior related discovery, uncover additional facts necessary to sustain jurisdiction. See Kiobel, 2008 WL 591869 at *10 (noting the "extensive discovery against all Defendants, including SPDC, in these and their related cases over the past ten years").
On reconsideration, the Court granted Plaintiffs' request to conduct further jurisdictional discovery. The Court ordered discovery with respect to certain categories of alleged business contacts between SPDC and the United States. These categories were related to Plaintiffs' allegations that: (1) a substantial quantity of SPDC-produced crude oil was imported into the United States by Shell International Trading Company ("SITCO"), a separate Shell entity, and that SITCO acted as SPDC's agent in doing so; (2) SPDC targeted the U.S. with a public relations campaign relating to SPDC's operations in Nigeria; (3) SPDC recruited employees in the U.S. through another Shell entity, Shell People Services ("SPS"); (4) SPDC employees came to the U.S. for training, and to attend seminars and conferences; (5) SPDC entered into contracts for services in the U.S. and received financial assistance from, the United States Agency for International Development ("USAID").*fn7 2009 WL 3817590 at *5. The Court stated that: "[o]nce discovery has been completed, the Court will be in a position to consider, with the benefit of a more complete evidentiary record, any renewed motion to dismiss filed by SPDC for lack of personal jurisdiction." Id. at 3.
In a memo endorsed letter, dated December 2, 2009, this Court referred all discovery disputes to Magistrate Judge Pitman. Discovery related to personal jurisdiction over SPDC concluded on February 8, 2010. On February 16, 2010, SPDC renewed its motion to dismiss for lack of personal jurisdiction.
II. Facts Relevant to Personal Jurisdiction
In their opposition to SPDC's renewed motion to dismiss, Plaintiffs contend that personal jurisdiction over SPDC is appropriate based on the following jurisdictional contacts: (1) shipments of SPDC-produced oil to the United States, and SPDC's contractual relationship with SITCO; (2) "cross-posting" of SPDC employees in the United States, and visits by other SPDC employees to the United States; and (3) recruitment efforts by SPS in the United States on behalf of SPDC.*fn8 The Court credits Plaintiffs' factual averments as true, and construes all pleadings and affidavits in the light most favorable to Plaintiffs.*fn9 See, e.g., PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997).*fn10
A. Sales of SPDC-produced crude oil in the United States
According to Plaintiffs, SPDC - the Nigerian operating subsidiary of the Shell Group of Companies - is the largest private-sector oil and gas company in Nigeria. SPDC is the operator of a joint venture agreement between the state-owned Nigerian National Petroleum Company ("NNPC"), SPDC, Elf Petroleum Nigeria Limited, and Nigerian Agip Oil Company. The interests in the joint venture break down as follows: NNPC (varied between 55% and 60%); Shell/SPDC (30%); Elf Petroleum Nigeria Limited (varied between 10% and 5%); and Nigerian Agip Oil Company (5%).
Plaintiffs allege that, from 1996 through 2004, 220 million barrels of SPDC-produced oil were shipped to the United States (valued at approximately $8.3 billion). SPDC's company profile states that the United States is one of SPDC's "main customers" (the others are China, Canada, South Africa, and the UAE). (D'Avino Ex. 11.) A "Memorandum of Understanding" entered into between SPDC and the Government of Nigeria also states that the United States is intended to be one of the primary markets for SPDC-produced crude oil. (MOU ¶ 2.5, Appx. A; D'Avino Ex. 9.)
SPDC did not sell to, or participate in any transactions with, United States buyers. Kiobel, 2008 WL 591869, at *4. Rather, SPDC sold all of its crude oil to Shell International Trading Company ("SITCO"). SITCO, in turn, sold the oil around the world to third-party buyers. (See Arbido Tr. 46-47; Millson Ex. 2; see also P. Watts Tr. 189-90, Millson Ex. 6 (testifying that "SITCO bought the crude and, when it left, they were the owners" and "of course, they [SITCO] would sell it to whoever")). Plaintiffs have alleged that about of half of SPDC's oil production reached the United States market via SITCO.
During the relevant period, the transactions between SPDC and SITCO were governed by two "Sale and Purchase Agreements": the 1992 Agreement (Millson Ex. 3) and the 2000 Agreement (Millson Ex. 4). Pursuant to the Sale and Purchase Agreements,*fn11 SPDC (the "Seller") agreed to sell and deliver, and SITCO (the "Buyer") agreed to purchase: "all the Crude Oil which [SPDC] may require from time to time to be exported from Nigeria." (Agreements § 2.) SPDC sold its crude oil to SITCO "free on board" (F.O.B.) in Nigeria. Ownership of, and all risk associated with, the crude oil passed to SITCO at the point the oil was loaded onto a vessel (of SITCO's choosing) at port in Nigeria. (Agreements §§ 3, 4.) SPDC appears to play no part in determining to whom SITCO sells the crude oil, or the locations to which SITCO ships the crude oil.
The price of the oil sold under the Agreements (1) was calculated on a monthly basis by reference to the prices for the relevant grades of crude oil quoted in Platt's Oilgram Price Report (published by McGraw Hill), and (2) was weighted using certain markets as reference points to calculate the adjusted or "realizable price" ("RP") of the oil. Oil sold under the Agreements was "deemed delivered" in specific percentages to three regions: 60% was deemed delivered to the United States; 20% was deemed delivered to North West Europe; and 20% was deemed delivered to the Mediterranean. (Agreements Appx. 1 § 3.) In this way, the price paid by SITCO did not depend on the location of the oil's final delivery; the price was set in advance, based upon the assumption that 60% of oil would reach the United States market. The RP formula also appears to contain cost adjustments that take into account "processing fees," "refinery yields," and "freight" charges for each of the identified regions, including the United States. (Agreements Appx. 1 §§ 4, 7, 8.) Plaintiffs cite an internal memorandum suggesting that the inclusion of refinery yields in the RP formula may reflect "the old argument of Nigeria's entitlement to participate in high refiners' margins." (See A002333; D'Avino Ex. 21.)
Finally, Plaintiffs note that the bills of lading and certificates of origin used in "every SPDC/SITCO" transaction identify SPDC as the "shipper" and SITCO as the "consignee."*fn12 (See D'Avino Ex. 34; Millson Exs. 7-9.) The bills of lading also contained a "New Jason Clause," a "Both to Blame Clause," and a "USA Clause Paramount" that would apply in the event that liability for an accident or collision is decided "in accordance with the law and practice of the United States of America."
B. "Cross-posting" of SPDC employees and SPDC employee visits to the United States
Plaintiffs allege that at least 48 SPDC employees were "cross-posted" to Shell affiliates in the United States during the years 2000-2004.*fn13 These assignments usually lasted for a period of three to four years.*fn14 When an employee is "cross-posted", his "formal"*fn15 employment with SPDC terminates, and he becomes an employee of the host company.*fn16
Plaintiffs allege that "cross-posting" "was part of a systematic program through which SPDC sent staff to the United States (and other locations), for training and temporary assignment" in order to increase the "technical and managerial competence of Nigerian nationals." (Pls. Mem. at 12.) SPDC's Rule 30(b)(6) deponent testified as follows:
Whenever there are opportunities for people who have the right potential to go far in the organization, we send them out to have first-hand experience [sic] of these projects, and it doesn't have to be the U.S. alone. . . . We send them to Malaysia, Singapore, the Middle East. They go everywhere. It's all about developing local competence, and that's why today 95 percent, more than 95 percent of staff in Nigeria are Nigerians. . . . [I]n the management of say SPDC or SNEPCO, for example, there are just very few expatriates who are in management positions. They are virtually all Nigerians. So this is the result of this kind of exposures and opportunities that are provided to people to learn how these things are done hands-on. (Aribido Dep. 116:8-117:10; D'Avino Ex. 14.)*fn17
Plaintiffs point to certain employment-related documents that were sent to SPDC "cross-posted" employees, which Plaintiffs contend show a continuing relationship between the employee and SPDC. One of these documents was an employment letter from Shell International Exploration and Production B.V. ("SEIP"), a Netherlands company and Shell's global headquarters for worldwide operations. The letter states, inter alia, that (1) Shell Oil Company (the well-known U.S. operator) or one of its subsidiaries "wishes to offer you employment, effective from your departure, taking account of travel"; (2) the employee's "base country" would remain Nigeria (in order to establish a baseline for certain items such as remuneration, pension, and leave arrangements if and when the employee returns to Nigeria); (3) that the employee will remain a member of the Shell Nigeria pension fund (for purposes of contributions); and that (4) SPDC will "remain your home company responsible for your career." The letter also stated that "You will receive a letter from your home company [SPDC] concerning the position that applies when your employment with Shell Oil Company is concluded."*fn18
The letter was transmitted to the "cross-posted" employee along with an "Open Resourcing Handshake" agreement, a form with sections to be completed by the host company (in the United States), the employee, and the parent/base company (SPDC). The handshake agreement identifies the host company; the job and title of the position in the United States; the "last day payroll" at SPDC and "first day payroll" at the host company; and a departure window (approximately when the employee's assignment at the host company would terminate);
Plaintiffs also note that various other SPDC employees traveled to the United Sates for training, to attend seminars and various trade and industrial conferences, and for other purposes. SPDC produced a chart (Appendix A) listing some 145 individuals who planned to travel to the United Sates, when they planned to travel, and for what purpose.*fn19 (D'Avino Ex. 91.) SPDC required its employees to demonstrate a "business driven learning need" to justify attendance at overseas events. (Aribido Dep. 116:18-117:10; D'Avino Ex. 14.) SPDC's Personnel Polices and Procedures Manuel for the year 2000 also stated that: "[F]rom time to time a team comprising of one or more SPDC staff might be required to work overseas, possibly in offices of a contractor for the purpose of supervising project design, gaining hands-on experience, etc." (D'Avino Ex. 115.) Plaintiffs also identify several SPDC employees who appeared to receive training in the United States with respect to the operation of barges and rigs that were being constructed by third-party contractors or subcontractors (for ultimate delivery to SPDC in Nigeria), as well as SPDC employees who appeared to be involved in supervising certain aspects of the construction and/or testing of this equipment in the United States. (See Pls. Mem. at 24-27; Millson Ex. 19.)
C. Recruitment efforts in the United States
Plaintiffs allege that another Shell entity, Shell People Services ("SPS"), attempted to recruit employees in the United States to work for SPDC in Nigeria. The facts adduced in jurisdictional discovery demonstrate the following regarding SPDC's recruitment of employees in the United States.
SPDC performed a majority of its recruiting itself in Nigeria. (Aribido Tr. 191, Millson Ex. 2.) SPDC used the services of SPS to attempt to recruit a small number of employees from the United States and Europe. In 2002, 2003, and 2004, it appears that SPS recruited no employees for SPDC from the United States.*fn20
For recruiting that was conducted through SPS, the process generally worked as follows. Every year, each operating Shell company, such as SPDC, would submit to SPS (a global services company based in Europe) a list of the number and type of employees it hoped to recruit for open positions at the company. (See Millson Ex. 11.) After the operating company submitted this list to SPS, SPS would assign responsibility for filling the position to its various branch offices, including SPS's United States office located in Houston, Texas ("SPS Houston").
The SPS branch office was responsible for performing screening interviews and assessments of individual candidates. Applicants who demonstrated potential to fill a vacancy at SPDC were forwarded to SPDC's human resources department to review and to determine whether to make an offer. SPDC maintained discretion as to whether to offer employment to any candidate: "Every offer will be extended by the OU [operating company such as SPDC]." (DEF 086786 Millson Ex. 16.) SPS charged the operating company a fee for each candidate ultimately hired with SPS's assistance, which ranged from $8,000 to $12,000 for each employee hired. (D'Avino Ex. 110.)
The factors that typically support the exercise of general jurisdiction over a corporate defendant are not present in this case. SPDC is a foreign corporation organized under the laws of Nigeria, with its corporate headquarters in Lagos, Nigeria. SPDC does not have "an office, place of business, postal address, or telephone listing in the United States" and it is not "licensed to do business in any state or territory in the United States." See Kiobel, 2008 WL 591869, at *9. Plaintiffs contend that personal jurisdiction over SPDC is nevertheless appropriate because:
(1) shipments of SPDC-produced oil were made to the United States; (2) SPDC employees were "cross-posted" to, and otherwise visited, the United States; and (3) SPDC used SPS to attempt to recruit United States residents to work for SPDC in Nigeria. As set forth below, these contacts, taken as whole, are not sufficient to establish the sort of "continuous and systemic general business contacts with the United States" required for the assertion of general jurisdiction over SPDC.
I. Legal Standards
To establish personal jurisdiction over a defendant pursuant to Federal Rule of Civil Procedure 4(k)(2), a plaintiff must show that (1) the plaintiff's cause of action arises under federal law, (2) the defendant is not subject to the jurisdiction of any one state, and (3) the exercise of personal jurisdiction over the defendant is consistent with the requirements of due process. Porina v. Marward Shipping Co., Ltd., 521 F.3d 122, 127 (2d Cir. 2008); Daventree Limited v. Republic of Azerbaijan, 349 F.Supp.2d 736, 760 (S.D.N.Y. 2004) ("Rule 4(k)(2) is designed to fill a gap in the enforcement of federal law . . . over defendants having sufficient contacts with the United States [as a whole] . . . but having insufficient contact with any single state to support jurisdiction under state long-arm legislation." (citing Fed. R. Civ. P. 4(k)(2), adv. comm. note (1993)). The parties do not dispute that the first two elements of the Rule 4(k)(2) inquiry are satisfied in this case. Accordingly, the existence of personal jurisdiction over SPDC will turn on whether the exercise of personal jurisdiction is consistent with the requirements of due process.
The due process inquiry for personal jurisdiction has two related components: the "minimum contacts" test and the "reasonableness" test. Metropolitan Life Ins. Co. v. Robertson- Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996).
First, a court must determine whether the defendant has sufficient minimum contacts with the forum to justify the exercise of personal jurisdiction. Porina, 521 F.3d at 127. Where, as here, a plaintiff relies on the court's general jurisdiction, it must demonstrate that the defendant has maintained "continuous and systematic general business contacts" with the United States. Metropolitan Life, 84 F.3d at 568-69 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984)); see also id. (explaining that a determination that a court can assert general jurisdiction over a defendant demands the application of a "more stringent minimum contacts test" than that applicable to specific jurisdiction). The "continuous and systematic" standard requires a plaintiff to prove that the defendant's contacts "approximate physical presence" in the United States. In re Ski Train Fire in Kaprun, Austria, 257 F. Supp. 2d 717, 730 (S.D.N.Y. 2003). Courts must assess a defendant's contacts with the forum "as a whole" to determine whether exercising personal jurisdiction over the defendant would satisfy the requirements of due process, Metropolitan Life, 84 F.3d at 570; the relevant time period for this inquiry is "a period that is reasonable under the circumstances - up to and including the date the suit was filed," id. at 568-69; Daventree, 349 F. Supp. 2d at 765.
On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Metropolitan Life, 84 F.3d at 566. A plaintiff's burden, however, "varies with the procedural posture of the case." Daventree, 349 F. Supp. 2d at 757. Prior to discovery, a plaintiff can defeat a Rule 12(b)(2) motion to dismiss by pleading "good faith, legally sufficient allegations of jurisdiction, i.e., by making a prima facie showing of jurisdiction." Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (internal quotations marks and citations omitted). Where, as here, jurisdictional discovery has been conducted, a plaintiff's prima facie showing must be "factually supported"; that is, it must "include an averment of facts that, if credited by [the ultimate trier of fact], would suffice to establish jurisdiction over the defendant."*fn21 Metropolitan Life, 84 F.3d at 567 (quoting Ball v. Metallurgie Hoboken Overpelt, S.A., 902 F. 2d 194, 197 (2d Cir. 1990)).
Second, if a plaintiff is able to demonstrate the requisite minimum contacts, the Court must determine whether the assertion of jurisdiction comports with "traditional notions of fair play and substantial justice," i.e., whether it is "reasonable under the circumstances" of the particular case. Metropolitan Life, 84 F.3d at 568. If a plaintiff fails to satisfy the minimum contacts test, the due process inquiry ends, and the Court need not proceed with the reasonableness analysis. Id.
At the motion to dismiss stage, the Court credits all Plaintiffs' factual averments as true, resolving any doubts in Plaintiffs' favor.*fn22 See A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).
A. Oil Shipments
The facts submitted by Plaintiffs regarding the shipment of SPDC-produced oil to the United States are insufficient to establish jurisdiction over SPDC.
SPDC does not sell any crude oil in the United States and does not sell it to any customers in the United States. Pursuant to the Sale and Purchase Agreements, SPDC (the Seller) sells all of its crude oil to SITCO (the Buyer) F.O.B. in Nigeria, such that ownership of, and all risk associated with, the oil passes to SITCO at the point of loading in Nigeria. SITCO in turn sells the oil to customers around the world, including to customers in the United States. SPDC appears to play no role in determining to whom SITCO sells the oil, or the location to which SITCO ships the oil. Sales of a foreign manufacturer's product in the United States made by third parties are generally insufficient to establish jurisdiction over the foreign manufacturer. See Jazini, 148 F.3d at 184 (foreign car manufacturer, Nissan Japan, is "not present in New York simply because it sells cars through a New York distributor"); McShan v. Omega Louis Brandt et Frere, S.A., 536 F.2d 516, 517-18 (2d Cir. 1976) ("[S]ales, no matter how substantial, of a foreign manufacturer's product in New York through an independent agency do not make the foreigner amenable to suit in New York . . . ."); In re Chocolate Confectionary Antitrust Litig., 674 F. Supp. 2d 580, 602-03 (M.D. Pa. 2009) (declining to exercise general jurisdiction over foreign defendant, Mars Canada, which sells nearly 85% of its products to a U.S. Mars affiliate F.O.B. in Canada for ultimate distribution in the United States, where the transfers between Mars Canada and the U.S. affiliate "are consummated as arms-length wholesale transactions outside of the United States," and where Mars Canada "possesses no control over [the U.S. affiliates'] distribution or promotion). Thus, in this case, the fact that a substantial quantity of crude oil produced in Nigeria is sold on the United States market by a separate entity, SITCO, does not suffice to establish general jurisdiction over SPDC.*fn23 See also Kiobel, 2009 WL 3817590, at *5.
Plaintiffs contend that jurisdiction over SPDC is nonetheless appropriate, because SPDC's exclusive sales relationship with SITCO was based on an understanding (and was structured in recognition of the fact) that a substantial quantity of SPDC-produced oil would be sold in the United States. In support of this contention, Plaintiffs note that, inter alia, the price SPDC paid SITCO for oil under the Agreements was weighted to reflect that 60% of the oil would be delivered to the United States, and included an adjustment for refinery yields, processing fees, and freight charges in the United States.
It is clear that customers located in the United States buy a substantial amount of the oil produced by SPDC, and that SPDC made business decisions with respect to their contractual arrangements and operations in Nigeria based, in part, on its expectations concerning market conditions in the United States.. However, these facts do not suffice to confer general juridction over SPDC, and Plaintiffs cite no law to suggest otherwise.*fn24
B. "Cross-Posting" and Employee Visits
The facts submitted by Plaintiffs regarding SPDC employees being "cross-posted" to the United States, and otherwise visiting the United States, do not suffice to confer jurisdiction over SPDC.
Generally, to become a meaningful factor for jurisdictional purposes, employee travel must occur in connection with generating, or otherwise conducting, business in the forum. SPDC's purpose in sending its Nigerian employees to the United States was for them to receive training - to increase their subsequent utility in Nigeria - and that any business they may have conducted in the course of their training was only secondary to their training.*fn25 The fact that SPDC sent employees to the United States on various occasions to be trained or educated does not suffice to confer jurisdiction over SPDC. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416-19 (1984) (holding that the purchase of helicopters, equipment and training services in forum and sending the company's personnel for training to facilities in forum on a periodic basis over the course of a three-year period do not constitute continuous and systematic business contacts); In re Chocolate Confectionary, 674 F. Supp. 2d at 603-04 (concluding that travel by foreign affiliate's executives "approximately eighty-five times per year between 2001 and 2008 . . . primarily to attend meetings, participate in group-wide conferences, and receive training from the parent organization" does not approximate physical presence in the United States); cf. Metropolitan Life, 84 F.3d at 573 (exercising jurisdiction where defendant had sent employees to the forum state on over 150 separate occasions to provide product and sales support to authorized dealers in forum).
With respect to "cross-posting" assignments, the facts adduced in the course of jurisdictional discovery show the following: (1) that approximately 12 SPDC employees were "cross-posted" to Shell affiliates in the United States each year from 1996 to 2004 (each staying in the United Sates for approximately four years, resulting in a total of about 50 employees being posted in the United States in any given year), (2) that assignments lasted for approximately a three year period, and (3) that when the employee was "cross-posted", his formal employment with SPDC terminated and he began employment with the host company in the United States. Various aspects of the "cross-posting" arrangement reflect an intention that the employee will return to SPDC after his service for the host company: the letter of employment given to an employee of SPDC being "cross-posted" refers to SPDC as the home company (and Nigeria as the home county) of employment, and provides for certain benefits to make the employee whole upon his return to SPDC in Nigeria (such as pension payments and salary adjustments).
These facts do not support the exercise of personal jurisdiction over SPDC. The approximately 50 "cross-posted" employees in the United States in any given year who come from SPDC are not SPDC employees when they travel to and work in the United States. There is no evidence that SPDC engages in any support of the employee or has any supervisory responsibility over the employee while the employee is posted in the United States. Finally, the fact that "cross-posting" serves SPDC's corporate objectives - by increasing the competence and leadership experience of the Nigerian workforce (to ultimately benefit SPDC's business in Nigeria) - does not constitute continuous and systematic contact with the United States.
Thus, the fact that some SPDC employees were "cross-posted" to Shell affiliates in the United States, and that other SPDC employees traveled at various times to the United States for education and/or training, does not constitute continuous and systematic business contacts with the United States as required for the assertion of jurisdiction over SPDC.
C. Recruitment of Candidates For Employment by SPS
Plaintiffs have not submitted facts sufficient to demonstrate that SPS in Houston is an agent of SPDC, or that SPS's efforts in the United States to recruit employees to work for SPDC rose to the level of continuous and systematic business contacts with the United States.
The Court found in its March 4, 2008 Order that "although Plaintiffs label SPS an 'agent' of SPDC, they allege no facts detailing the purported agency relationship between the two entities," and that the Court would "not credit such conclusory allegations on a motion to dismiss." Id. at *8. Plaintiffs have come forward with no new facts to support the existence of such an agency relationship; indeed, the facts adduced in discovery appear to demonstrate the absence of such a relationship.*fn26 Two of the most important factors in determining whether agency exists are (1) whether the purported agent has the power to bind the principal, Ball, 902 F.2d at 198-99, and (2) whether the agent is "primarily employed by [the principal] and not engaged in similar services for other clients," Wiwa, 226 F.3d at 95. Here, Plaintiffs have not alleged (and the facts do not suggest) that SPS could bind SPDC in recruiting matters. Rather, SPDC made all final hiring decisions. See Alkhulaqi v. Ocean Ships, Inc., No. 95-Civ-10458 (RPP), 1996 WL 403057, at *2 (S.D.N.Y. July 18, 1996) (defendant not "doing business" in forum through third-party recruiter because recruiter lacked the ability to make binding employment decisions). Furthermore, SPS was not primarily employed by SPDC; rather, performed recruiting for Shell companies worldwide.
However, even if the Court were to impute SPS's activities in the United States to SPDC for jurisdictional purposes, such activity would in this case be insufficient to confer general jurisdiction over SPDC. The evidence submitted shows that SPDC did a majority of its recruiting in Nigeria. In 2002, 2003, and 2004, it appears that SPS recruited no employees for SPDC from the United States. Plaintiffs' conclusory assertion that SPDC "continuously and systematically recruited staff in the United States through the offices of [SPS] in Houston, Texas" (Pls. Mem. at 2) should not be credited. See Kiobel, 2008 WL 591869, at *3 ("[T]he Court will not draw 'argumentative inferences' in plaintiff's favor, nor will the Court accept conclusory allegations as support for the exercise of personal jurisdiction.")
For the reasons stated above, the Court GRANTS SPDC's motion to dismiss (Dkt. No 320), and AFFIRMS Magistrate Pitman's April 16, 2010 Order (Dkt. No. 354). The facts averred by Plaintiffs, assessed as a whole, do not suffice to establish a prima facie case of personal jurisdiction over SPDC.