in Re CVR Energy, INC. and CVR Refining, LP

Citation: Not availableDocket: 01-15-00715-CV

Court: Court of Appeals of Texas; October 9, 2015; Texas; State Appellate Court

Original Court Document: View Document

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The document is an original proceeding in the First Court of Appeals in Houston, Texas, involving CVR Energy, Inc. and CVR Refining, LP as relators. The case originates from the 268th Judicial District Court of Fort Bend County, presided over by Judge Brady G. Elliott, with case number 2015-DCV-220330. It outlines the response from the real parties in interest, including Donald R. Collier, Jennifer J. Collier, Dale A. Niemeyer, and Wendy Niemeyer, represented by attorneys David M. Medina, Timothy A. Hootman, Gary M. Riebschlager, and Richard L. Tate.

The document includes a table of contents with an index of authorities, a statement of facts segment detailing the corporate structure and a Services Agreement connecting negligent acts to Texas, corporate officers' locations and testimonies, a related case in Fort Bend County, and the trial court's rulings. It also presents a summary of arguments and a detailed argument section discussing standards of review for a mandamus petition, specifically regarding a forum non conveniens motion under section 71.051(b) of the Texas Civil Practice and Remedies Code.

Factors in the forum non conveniens analysis include the existence of an alternate forum, adequacy of that forum, potential for substantial injustice, jurisdiction over all defendants, private/public interest considerations, and proliferation of litigation. The document concludes with a prayer for relief, along with certificates of word count and service, and a certification under Rule 52.3(j). The index of authorities cites various Texas cases and statutes relevant to the arguments presented.

Donald and Jennifer Collier, residents of Independence, Kansas, and Dale and Wendy Niemeyer, residents of South Coffeyville, Oklahoma, were seriously injured in an explosion at an oil refinery in Coffeyville, Kansas, caused by a pump leak. The negligence leading to this incident occurred in Sugar Land, Texas, where critical documentary and testimonial evidence is also located. As a result, the Colliers and Niemeyers filed personal injury claims in Fort Bend County, Texas, which they argue is the most appropriate venue. The assertion by Relators that most material witnesses and evidence are in Kansas lacks support in the record, countering their claim that the trial court erred in not dismissing the case based on forum non conveniens.

The case hinges on a 'Service Agreement' between CVR Energy, Inc., CVR Refining, LP, and CVR Refining GP, LLP, which outlines that CVR Energy, Inc. is responsible for the operational decisions at the refinery that exploded. This agreement details CVR Energy, Inc.'s authority over various operational activities, safety, environmental advice, and management of the refinery's business affairs, thereby establishing a direct link between the negligent acts and Texas. CVR Energy, Inc. is a Delaware corporation headquartered in Sugar Land, Texas, and is involved in petroleum refining and nitrogen fertilizing manufacturing through its limited partnerships, including CVR Refining, LP.

CVR Refining, LLC operates separately from CVR Refining, LP. The Coffeyville oil refinery involved in the explosion is owned by Coffeyville Resources Refining Marketing, LLC, a Kansas entity and subsidiary of CVR Energy, Inc. Relators’ memorandum indicates that CVR Energy, Inc. owns 66% of CVR Refining, LP and that Coffeyville Resources is wholly owned by CVR Refining. CVR Refining GP, LLC owns several entities, including Coffeyville Resources Refining, Marketing, LLC, which operates the refinery in question. CVR Energy, Inc. oversees operational decisions for Coffeyville Resources from its Texas office, with at least five witnesses available to provide testimony regarding the decisions made under the Service Agreement leading to the explosion. The corporate structure involves CVR Energy, Inc. managing multiple LLCs that own six plants, including the Coffeyville refinery. Key corporate officers include Robert Haugen, who manages day-to-day operations from Sugar Land, and Jay Finks, a non-decision-making employee based in Kansas. Edmund S. Gross, former General Counsel for the companies, has provided an affidavit supporting the Relators' motion to dismiss, affirming his competence to testify on relevant matters.

On July 28, 2014, an accident at the Coffeyville Resources refinery in Coffeyville, Kansas, resulted in injuries to employees Donald R. Collier and Dale A. Niemeyer, along with the fatal injury of another worker. All affected individuals received workers’ compensation benefits for their injuries. The incident was triggered by a shaft seal failure in pump P-2217, leading to the release and ignition of volatile vapor. Investigations were conducted both at the refinery and at a shop in Lee’s Summit, Missouri, where the pump, weighing approximately 1,000 pounds, is currently stored.

Witnesses included Coffeyville Resources employees and local medical or emergency personnel. Initial medical care for Collier and Niemeyer was primarily provided by healthcare facilities in Kansas and nearby Tulsa, Oklahoma. CVR Energy, Inc. and CVR Refining, LP are both registered to conduct business in Kansas and are subject to legal processes through designated resident agents in Topeka, Kansas.

A related case involving an explosion at another plant owned by the same parties is pending in Fort Bend County, Texas, with no claims of inconvenience regarding that proceeding. The trial court has considered various factors under section 71.051(b) of the Civil Practice Remedies Code in relation to a forum non conveniens motion to dismiss, specifically evaluating the relevance of Kansas law and the complexities of witness testimonies. The court also explored the involvement of the Sugar Land corporations in operations at the Kansas refinery, questioning their direct operational control and decisions leading to the accident, particularly regarding budget allocations for safety improvements.

Key points from the legal document highlight the court's discussion regarding the management and operational oversight of the Kansas refinery by the Sugar Land company. The court identifies a critical distinction between budget allocation and its application, suggesting that negligence may lie in the oversight between these two aspects. Mr. Tate acknowledges that the Kansas operators' actions are contingent upon directives from Sugar Land, indicating a shared services agreement that delineates responsibilities for daily operations at multiple refineries. The court further emphasizes the importance of understanding operational versus administrative responsibilities, positing that this distinction could influence whether the case should be adjudicated in Kansas or Texas.

The trial court ultimately denied a motion to dismiss, asserting that forum non conveniens analysis must consider the location of alleged negligence. Although relators argue that most evidence and witnesses are situated outside Texas, the court found that the core issue revolves around negligence linked to decisions made at the Sugar Land corporate office that allegedly led to the fire and subsequent injuries. Since the trial court's focus aligned with established legal precedents, there was no abuse of discretion, and mandamus relief was deemed inappropriate.

Relators seek mandamus relief, arguing that the trial court abused its discretion by denying their forum non conveniens motion to dismiss under section 71.051(b) of the Civil Practice and Remedies Code. They contend that Kansas is a more suitable forum and that Kansas law governs the case, making Kansas courts more appropriate than Texas courts for adjudication. Relators emphasize that the litigation involves Kansas parties regarding an accident that occurred in Kansas, asserting minimal relevance of a petition filed in Fort Bend County, Texas.

The core of their argument relies on the assertion that most witnesses and evidence are located in Kansas and Oklahoma, which they claim is outside the subpoena range of the Texas court. However, the contested issue revolves around whether decisions made in Sugar Land, Texas, were the proximate cause of the fire and resulting damages in Kansas. The trial court highlighted that the relevant witnesses and documents concerning these decisions are situated in Texas, indicating a significant factor in determining the proper jurisdiction.

The trial court concluded that Texas has a public interest in adjudicating negligence occurring on its soil and that the private interests of the Colliers and Niemeyers are best served by litigating in Texas, where the pertinent evidence is located. Key precedents cited include In re Mantle Oil, Gas, LLC and In re Omega Protein, Inc. 

Regarding the standards of review for mandamus, it is established that such relief is warranted when the relator shows a clear abuse of discretion by the trial court and lacks an adequate remedy by appeal. A clear abuse occurs when the trial court's decision is arbitrary or fails to apply the law correctly to the facts.

The adequacy of an appellate remedy hinges on evaluating the benefits of mandamus review against its drawbacks, as established in various Texas cases. This assessment is influenced by the specific circumstances rather than rigid categorizations. Key considerations include whether mandamus can protect important substantive and procedural rights, provide essential legal guidance that may be lost in appeals from final judgments, and prevent unnecessary waste of time and resources from potential reversals of improperly conducted proceedings.

When reviewing a trial court's decision on a forum non conveniens motion to dismiss, the standard is a clear abuse of discretion. A denial of such a motion is subject to mandamus review. The forum non conveniens doctrine allows a court to decline jurisdiction if the case is better suited for another forum, particularly in personal injury or wrongful death claims under Texas law.

Section 71.051(b) of the Civil Practice and Remedies Code mandates that if a court finds a claim would be more appropriately heard in another jurisdiction, it must dismiss or stay the action. Factors the court must consider include the existence of an alternative forum, the adequacy of that forum, potential substantial injustice to the moving party if the case stays in Texas, jurisdiction over all defendants in the alternative forum, the balance of private and public interests favoring the alternative forum, and the avoidance of unnecessary duplication of litigation.

The court addresses the application of the forum non conveniens doctrine as outlined in section 71.051(b), emphasizing its deference to a plaintiff’s choice of forum while being less deferential to nonresident plaintiffs. It highlights that dismissal under this doctrine is permissible when the defendant has sufficient contacts with the forum state, yet the case lacks significant ties to that state. 

In the context of a mandamus proceeding, Relators claim that most evidence and witnesses related to a fire incident are located in Kansas and Oklahoma, implying that Texas is not a suitable forum. However, the court clarifies that the central issue is not the occurrence of the fire but the negligence associated with corporate decisions made in Sugar Land, Texas, which are crucial to the case. Therefore, evidence regarding these decisions is primarily located in Texas.

The court then evaluates the six factors for determining the appropriateness of the forum:

1. **Existence of an Alternative Forum**: Kansas is deemed an alternative forum since Relators are amenable to process there, allowing the case to be tried outside Texas.
   
2. **Adequacy of the Alternative Forum**: The court must first establish whether Kansas law applies, which is complicated by the determination that Texas law is more pertinent due to the location of the conduct causing the injury. However, if Kansas law applies, it could provide an adequate remedy.

3. **Substantial Injustice to the Moving Party**: The trial court must consider the location of relevant documents and whether witnesses can be compelled to testify in Texas. This factor overlaps with considerations of private interest balance.

Overall, the resolution hinges on the application of Texas law and the significance of evidence located there, contrasting with the Relators' claims regarding the location of witnesses and evidence.

The presence of a corporate headquarters alone does not justify maintaining a nonresident's lawsuit in Texas if other factors favor a different venue. However, if the negligence occurred at the corporate headquarters and key evidence is located there, this may support Texas as the proper forum. In the case of In re Mantle Oil, Gas, negligence related to equipment installation in Louisiana was pivotal, as there were no claims of negligence originating from Texas. In the current case, the main issue is whether actions taken at the Sugar Land, Texas office caused an explosion in Kansas, which the trial court noted as crucial for determining the appropriate jurisdiction.

The fourth factor assesses whether the alternative forum can exercise jurisdiction over all defendants involved. Both Kansas and Texas can assert jurisdiction over the defendants in the Colliers’ and Niemeyers’ cases. The fifth factor requires a balance of private interests and public interests, which favors the alternative forum if it shows a connection to the injury or death stemming from actions in Texas. This assessment incorporates factors from Gulf Oil Corp. v. Gilbert, including access to evidence, witness availability, trial costs, and the local interest in resolving disputes. The court must also weigh how injuries relate to acts in Texas when making this determination.

The contested issue revolves around the negligence occurring at the Sugar Land office and its relationship to injuries sustained in Kansas. The Colliers and Niemeyers argue for the Fort Bend County court based on several private interests: (1) evidence related to negligence is accessible in Sugar Land; (2) obtaining witness attendance is simpler and less costly in Fort Bend; (3) no need for a site visit to the chemical plant since the negligence in question pertains to Sugar Land; (4) a Texas judgment can be enforced as effectively as a Kansas judgment; and (5) the case can be tried more efficiently in Fort Bend due to the focused nature of the contested issue.

Public interests include: (1) administrative challenges are primarily linked to proving negligence in Texas, not Kansas; (2) jury duty would involve local citizens assessing actions from their community; (3) local interest is significant in having a jury from Fort Bend evaluate local negligence; and (4) concerns about a Texas judge interpreting Kansas law are mitigated by similarities between the two states' laws and judicial notice requirements.

The document also states that dismissing the case will not lead to unnecessary duplication of litigation, as resolution in either Texas or Kansas would prevent further disputes elsewhere. The conclusion emphasizes that while the explosion and resulting injuries are undisputed, the critical question is whether the actions of the defendants in Texas caused those injuries, with all relevant evidence and witnesses situated in Texas.

The trial court recognized the critical importance of determining whether the case should be filed in Kansas or Texas, as highlighted in its comments. Relators argue that the trial court abused its discretion, despite focusing on the relevant factors associated with the forum non conveniens issue, particularly whether the injury stemmed from actions in Texas, as established in prior cases (In re Mantle Oil, Gas and In re Omega Protein). The Real Parties in Interest, Donald R. Collier, Jennifer J. Collier, Dale A. Niemeyer, and Wendy Niemeyer, request the denial of the writ of mandamus application. The document includes signatures from multiple attorneys representing the Real Parties in Interest, along with a certificate of word count and a certificate of service confirming the distribution of the document to other attorneys involved. Lastly, it contains a Rule 52.3(j) certification affirming that all factual statements in the response are supported by competent evidence in the attached appendix.