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CSX Transportation, Inc. v. Apex Directional Drilling, LLC

United States District Court, D. Oregon, Portland Division

November 18, 2014

CSX TRANSPORTATION, INC., a Virginia corporation, Plaintiff,
v.
APEX DIRECTIONAL DRILLING, LLC, an Oregon limited liability company, Defendant. APEX DIRECTIONAL DRILLING, LLC, an Oregon limited liability company Third-Pmiy Plaintiff,
v.
CONTINENTAL CONSTRUCTION, INC., a Pennsylvania corporation, Third-Party Defendant.

OPINION AND ORDER

ANCER L. HAGGERTY, District Judge.

On March 21, 2014, plaintiff CSX Transportion, Inc. (CSX), filed a complaint against defendant Apex Directional Drilling, LLC (Apex), alleging negligence related to damage caused by the overflow of excavation material during the construction of a gravity sewer system in Pennsylvania. On May 2, 2014, Apex fifed a Third-Party Complaint [8] against third-party defendant, Continental Construction, Inc. (Continental). The Third-Party Complaint alleges that it was actually Continental's negligence that caused the overflow. On June 3, 2014, Continental filed a Motion to Dismiss or Stay Third-Party Complaint [15], asserting lack of personal jurisdiction. Because the parties indicated that a request to transfer venue was imminent, the court deferred ruling on the Motion to Dismiss until it received briefing on the transfer issue. On August 1, 2014, Apex field a Motion to Change or Transfer Venue [22]. On August 8, 2014, the action was stayed pending mediation. On October 20, 2014, the stay lifted, and on November 11, 2014, Apex filed a Motion to Compel Mediation and for Abatement [30]. For the following reasons, Continental's Motion to Dismiss [15] is granted; Apex's Motion to Change or Transfer Venue [22] is granted; and Apex's Motion to Compel Mediation and for Abatement [30] is denied.

FACTUAL BACKGROUND

Apex is an Oregon limited liability company with its principal place of business in Portland, Oregon. Continental is a Pennsylvania corporation with its registered office and principal place of business in Ridgeway, Pennsylvania. During 2011, both companies were involved in a construction project in Pennsylvania.

Greenland Construction, Inc. (Greenland), a Pennsylvania corporation, was awarded a contract by the Mon Valley Sewage Authority to construct a gravity sewer system in or near the City of Monessen, Pennsylvania. Greenland entered into a subcontract agreement with Apex to provide directional drilling services. In 2011, Apex contacted Continental to discuss whether Continental could provide equipment and labor for the project. Apex and Continental entered into an oral agreement in which Continental would assist with portions of Apex's work on the project in exchange for payment.

During Continental's performance under the agreement, it transorted materials excavated from the project site at the direction of Apex. Continental dumped the excavated material at a site in the City of Monessen. On September 1, 2011, the excavated material overflowed its embankments resulting in damages to the surrounding properties and fines for both Apex and Continental.

On October 19, 2012, Continental filed a lawsuit in the Court of Common Pleas for Westmoreland County, Pennsylvania against Apex, Greenland, and their respective sureties. The complaint demands payment of unpaid invoices for the work completed on the project as well as the fines incurred by Continental while working on Apex's behalf. Apex's Answer to Continental's Amended Complaint included a counterclaim against Continental for breach of contract, negligence, and indemnification and contribution. Each counterclaim count is related to the overflow incident in Pennsylvania.

On March 21, 2014, CSX, a Virginia corporation, filed this lawsuit against Apex. The Complaint [1] alleges that, during the drilling project in Pennsylvania, Apex's negligence caused excavation debris to flow on CSX's property resulting in damage. On May 2, 2014, Apex filed a Third-Party Complaint [8] against Continental, asserting that Apex is entitled to full and complete indemnity based on Continental's negligence.

ANALYSIS

A. Third-Party Defendant's Motion to Dismiss

Continental asserts that Apex's Third-Party Complaint must be dismissed because this court lacks personal jurisdiction. Apex bears the burden of establishing that this court has personal jurisdiction over Continental. Fireman's Fund Ins. Co. v. Nat'l Bank of Coops., 103 F.3d 888, 893 (9th Cir. 1996). However, a plaintiff need only make a prima facie showing of facts that support the exercise of jurisdiction over a defendant. Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1168 (9th Cir. 2006).

Personal jurisdiction over a non-resident defendant is tested under a two-prong analysis. The exercise of jurisdiction must: (1) satisfy the requirements of the long-arm statute of the state in which the district court sits; and (2) comport with the principles of federal due process. Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995). Oregon Rule of Civil Procedure (ORCP) 4(B)-(K) provides specific bases for personal jurisdiction and subsection (L) extends jurisdiction to the limits of due process under the United States Constitution. Nike, Inc. v. Spencer, 707 P.2d 589, 591 (Or.App. 1985); see ORCP 4. Therefore, Apex need only satisfy the second prong of the personal jurisdiction test.

The Due Process Clause of the U.S. Constitution protects persons from being subject to the binding judgments of a forum with which they have "established no meaningful contacts, ties, or relations.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). Due process requires that a defendant have "minimum contacts with the forum state such that the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice." Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 839 (9th Cir. 1986) (citing Int'l Shoe Co., 326 U.S. at 316). A court may ...


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