11.1. General

Any amounts that the pursuers would be entitled to claim under the indemnities, of course, will be affected by the extent of the enforceable liabilities they incurred to the victims and their families. There is little doubt in my view that the pursuers had liability to make some compensation. For reasons already set out OPCAL and the other Participants would have been found liable to make reparation under their statutory duties apart from other grounds of fault. This means in effect that as a result of the accident the pursuers were at the very least liable to pay damages at the Scottish levels of damages. The estimated Scottish damages which would have been payable to the employee of each of the defenders in the seven leading cases have been tabulated and are not disputed so that were Scottish levels of damages the measure of the pursuers’ loss there would be no difficulty in computing any amounts payable under the indemnities. However the pursuers contend that they are entitled to recover the enhanced amounts actually paid out under the settlements. As I have already said this contention depends on the reasonableness of the settlements. It also of course depends on the construction of the indemnities. It of course has to be considered if the claimants would have settled for some lessor amounts than was actually paid to them and I have already expressed the view that had the claimants not been offered amounts in the region of those actually offered the claimants would have refused to settle and gone to American courts - probably those of Texas. Thus a critical question is whether or not Texan courts would have accepted jurisdiction in the actions proposed by the claimants. The levels of damages that would have been determined by a Texas court are of course also critical. It should be noted that it was not disputed even by the defenders’ experts that the level of damages in Texas is generally higher than in Scotland. Thus even allowing for such questions as choice of law it would not be too difficult to find that the probability is that, if the claims had gone to a Texas jury, levels of damages to some degree higher than would have been awarded in Scotland would have been found due. However a more contentious issue is whether levels of damages as high as the settlement amounts would have been obtained. That the pursuers were at serious risk of having to pay such damages is their contention. Of course if the position is that OPCAL and its Participants would have been subject to Texas jurisdiction particularly on the ground of special arrangements OPCAL had for the sale of its oil from Texas then because of the categorisation of the loss as "indirect" the indemnities would not be apt to cover enhanced values in any of the actions except the Andrew Carroll action. The question of the likely recovery by Andrew Carroll of enhanced values would still remain for determination in his case. Moreover my views on the prospects for the recovery of enhanced damages would be highly significant in the other cases if my views on indirect loss are not correct.

11.2. The Experts

Both parties led expert evidence on the issues affecting the American court system .

The pursuers’ principal expert was Professor Russell Weintraub. He was aged 63 and held a chair in Civil Jurisprudence at Austin University, Texas. Professor Weintraub had been teaching law for 38 years. He holds degrees from New York University and from Harvard. He is qualified and experienced in Texas Law. His speciality is International Litigation. He has taught occasionally, by invitation, at a number of universities, including Oxford, Dublin, and Paris. Prior to the present proof he had never before appeared as a witness but he had appeared in a number of litigations arguing specific areas in which he was expert, or submitting documentary material. Some of these have been significant leading cases. He had often appeared for defendants in the special appearance procedure. He is also consulted extensively in litigations . He spends about 15-20 hours in court each month. He was involved by invitation in the drafting of the special Texas corrective Statute which deals with the forum non conveniens problem. Indeed the Statute followed upon an article written by Professor Weintraub. He is also the author of a leading textbook on Conflict of Laws that has run to three editions and which is often cited in the Texas Courts. He has written another book on Contract and has published many articles particularly in the fields of Conflicts of Laws and Choice of Laws. He has written on the due process question in relation to personal jurisdiction in state courts. He has given a short course of lectures at the Hague Academy of International Law. He has been awarded the Teaching Excellence award at the University of Houston. He is a member of the Texas State Bar Association and indeed assisted in the revision of the entire Commercial Code of that state. He is also a member of the American Law Institute and of the State Bars of New York, and Iowa.

A further expert witness for the pursuers was Mrs Ruby Sondock. She was aged 67 and is presently a consultant with a firm of attorneys in Houston . Mrs Sondock sat as a judge in the Texas state court system for 17 years. She qualified in law with distinction in Houston, Texas in 1961 and for four years thereafter practised in her own firm dealing mainly with general civil litigation. She was appointed to the Family Bench in 1973 and by co-option to the Texas State Court in 1977. Thereafter she remained on the Court by election at four yearly intervals. About June 1982 she was elevated to the Texas Supreme Court and served on that court for two years but thereafter decided to return to the State Court. She was serving on the Supreme Court during the second hearing there of the Helicopteros case and she sided with the majority of the court. With regard to the Supreme Court some judges , including Mrs Sondock , initially arrive there by appointment but then have to submit to election when the elections are due to be held and at the expiry of electoral intervals every six years thereafter. As a judge of first instance she had presided in many wrongful death or personal injury claims and clearly in that role has had great experience. She now acts mainly as a mediator in family matters.

Mr Wayne Fisher was led by the pursuers to give the views of an experienced and practical Texas attorney. Mr Fisher was 55 years of age and is a partner in the Houston law firm of Fisher, Gallagher, and Lewis. In 1961 he graduated in law with distinction. Thereafter he practised for a period in Texas as an assistant in defence litigation in what he described as the world’s biggest law firm. In 1966 he founded his own firm and since then has practised extensively in personal injuries litigation, particularly on the plaintiff’s side. He is licensed to practice in the various levels of the Texas court system and also in the United States Supreme Court. In 1981 he was president of the Texas State Bar that encompasses about 45,000 lawyers and he has also been president of the Texas Trial Lawyers Association. In 1991 his University gave him an award as one of its five outstanding alumni of the year. He is the president of the International Academy of Trial Lawyers. He has written a number of articles including some on various topics of jurisdiction and settlement of claims. He personally has conducted between 100 to 150 Jury Trials and settled in excess of 1,000 cases. His own firm have had two jury verdicts with awards of $10,000,000 each. He has had substantial involvement with cases with an international connection including cases involving the North Sea. I was left in no doubt that Mr Fisher was highly respected in Texas for his abilities in his chosen fields of practice.

The pursuers led Professor Hans Baade in replication. This arose because the defenders lodged productions on the question of Equal Treaty Rights at a relatively late stage of the proof. They were allowed by me to do this under reservation of the pursuers’ right to lead further evidence on that matter. Professor Baade was 65 years old and is the Hugh Lamar Stone Professor of Civil Law at the University of Texas in Austin. He has held that post since 1975. He originally graduated in law at Kiel University in Germany and subsequently obtained law degrees in the United States. He also holds a diploma from the Academy of International Law at the Hague. He has pursued an academic career since 1960. He has extensive experience in the fields of International Law, Conflict of Laws, Comparative Law, and International Business Law. He is a member of the American Academy of Foreign law, the American Society of International Law, and the National Panel of Arbitrators. He has lectured by invitation at a number of other universities and has regularly acted as an expert witness, consultant or arbitrator in significant cases involving questions of Public or Private International Law. He has published extensively. He has developed a particular interest in Equal Treaty Rights.

The defenders lead as an expert on Texas law, Thomas Baker Greene, an experienced attorney. He was 45 years of age and is a shareholder in Ware, Snow, Fogel, Jackson & Greene, attorneys in Houston, Texas. He had originally graduated in history and political science. He graduated in law with honours in 1975. He has been practising law since and as well as having considerable general experience of civil law he has practised extensively in personal injury and wrongful death cases. The emphasis of his litigation practice has been defence work. His experience extends to federal law. He has acted extensively for insurance, oil, and transportation companies. He has personally conducted 60-70 Jury Trials of which about twenty led to a jury decision. He has also extensive experience of the operation of the discovery process. However his personal experience of trying wrongful death cases to a conclusion in the State Court system is relatively limited although he has participated in a number of such cases and also settled about twelve. He has tried a number of wrongful death cases in the federal system. He is a member of the Texas State Bar and holds specialist certificates in civil trial law and personal injury trial law. He is a member of the American Bar Association, the Houston Bar Association and the International Bar Association. He has argued several cases before the Texas Courts of Civil Appeals and has participated in preparing a brief for the U.S. Supreme Court. He had acted in many cases where a question of jurisdiction arose. He first became involved in the Piper Alpha case about September 1988. He accepted that Vinson & Elkins rate among the top law firms in Houston and that Mr Fisher is regarded as a formidable Plaintiff’s attorney. He accepted that he had not acted in a case with a foreign defendant during the five years before his appearance in the witness box in the present case. He accepted that he had not advised any of the Contractors on the question of quantum of damages in the Texas system before 1993. Some of the views he gave in his evidence were first formulated and expressed sometime after the present case was under way. He had instructed the witness Dr  Yeager but only after the pursuers’ witness Dr Allen had given evidence.

A further expert witness for the defenders was William Wayne Kilgarlin aged 62 and a former Justice of the Supreme Court of Texas. Mr Kilgarlin presently practises as an attorney in Texas. After graduating in science about 1954 he served for two years in the army and then graduated in law in 1962. From 1959 until 1960 he served as a member of the Texas State Legislature and was a member when the Texas Long-Arm legislation was passed. From 1962 until 1978 he practised in the Texas Courts mainly in the field of plaintiffs’ personal injury law. He was involved during that period in more than 100 jury trials mainly as lead counsel. About 50% of these trials were personal injury or wrongful death cases. He was Democratic Party County Chairman for Harris County from 1962 until 1966. He was appointed a district judge in 1978 and accepts that his political affiliations would have entered into that appointment. As a district judge he would take about 40 jury trials a year. In 1980 he required to stand for election for a further four year term as a district judge and was returned unopposed. In 1980 he ran in primary elections to become the Democratic candidate for the Texas Supreme Court and was defeated. However the successful candidate died a few weeks thereafter. Mr Kilgarlin was appointed to replace him and was thereafter elected to the Supreme Court unopposed. He was elected for a six year term but when he offered himself for re-election in 1988 he was on this occasion defeated. When he was a district judge he always did well in the Polls of the Bar that are taken to rate the popularity of judges. When he lost his seat on the Texas Supreme Court he returned to practice as an assistant in a firm and although he handles some litigation work most of his present practice is in the field of property law. Since returning to private practice he has been involved in a group of three cases which raise a major jurisdictional question and equal treaty rights points. He has been involved in a number of cases which raise international questions. He has taught various aspects of law at a number of Texas Universities, has taken seminars ,and has a number of publications to his name. In 1985 he received the Texas State Bar award for outstanding service to continuing legal education. In 1988 he received an award from an American Civil Liberties organisation as the outstanding Texas Jurist. He had formed no view on the jurisdiction questions affecting this case until he had heard the evidence of Mr Silva and Professor Weintraub and also had an opportunity to read the papers in the Busse case. He accepted that he had raised an equal treaty rights question with his clients before Professor Weintraub had begun his evidence .

11.3. Texas legal system

11.3.1. State and Federal

In each American state (including Texas ) the court system is broadly divided into Federal and State. Thus every state has Federal Courts which cover them. These have two kinds of jurisdiction. Firstly they have jurisdiction over what are properly Federal matters, including questions arising over Federal Statutes, constitutional issues, and Admiralty matters. Secondly the Federal Courts will take jurisdiction over state matters where the rules of diversity of citizenship apply. Thus for example if the plaintiff is Texan and the defendant belongs to another state diversity applies and the case can be removed to a Federal Court although the plaintiff has the initial preference as to which court the suit should be raised in. The objective of the diversity rule is to minimise the risk of bias. If both the litigants suing in Texas are foreign to Texas, diversity does not apply. Equally diversity would not apply if the initial defendant is outside Texas but a Texan defendant is conjoined as an additional party. Thus in the present case it was not disputed that the opportunities of defeating diversity are such that claimants against OPCAL would have had little difficulty in breaking diversity and retaining the cases in the State Court which would have been the court of their choice. The Federal Court derives its powers from the Federal Constitution and similarly the State Court derives its powers from the State Constitution. Judges in the Federal system are appointed whereas judges in the State system are elected and require to stand for periodic re-election. In the State system a judge may be appointed in the first instance if a vacancy occurs between elections. Texas is divided into 254 counties and under the State system each county has District Courts. Thus Harris County where Houston is situated has 60 District Courts and these are divided into four divisions, namely Civil, Criminal, Family and Juvenile. The first level of appeal from the District Courts is the Court of Appeals. There are 14 such courts in Texas and it is necessary to go to the Court of Appeals applicable to the particular District Court of first instance (although if the docquet of the appeal court is too crowded the appeal may be transferred to another court). Normally the Bench of the Court of Appeals consists of three justices but it may also sit en banc that is to say with nine justices. The next level of appeal in the State system is the Texas Supreme Court and in this court a full bench of nine justices would sit. The final appeal level is the United States Supreme Court that is available if the case has federal implications. The Federal Court system also has District Courts and for this purpose each state is divided into Federal Districts. Texas has four such districts. There are 8 Federal Courts in the district in which Houston is situated. There are 11 Federal Appellate Courts and the appeal court that covers Texas is in New Orleans where the jurisdiction of the court also covers Louisiana. Again in the Federal system the final appeal is to the U.S Supreme Court. Each of the two court systems has its own distinct procedures.

In the State District Court system the choice of venue is governed by provisions in the Texas Civil Practices and Remedies Code (the equivalent of the Rules of Court). The general rule is that law suits should be brought in the district where the cause of action accrues. Actions against corporations are to be brought in the district where the corporate body has its seat or has a representative. In relation to actions against foreign corporations these should be brought where the cause of action accrued or where the foreign corporation has a representative. Where the plaintiff has a venue right in a county against one of the defendants the Court can deal with the whole case at that venue. Thus in practice in an important litigation a plaintiff’s attorney may conjoin an additional defendant to achieve what is thought to be a favourable venue for the litigation. The choice of venue can confer an important advantage under the Texas system since certain counties are reputed to be easier for certain categories of litigants - and in particular for plaintiff’s suing personal injuries claims. Thus Mr Fisher said in evidence that if he had been acting for Piper Alpha claimants he would have favoured litigating in Harris County. I have little doubt that in practice and within limits Texas attorneys can manipulate the venue in which they raise their actions.

11.3.2. Jury System

Under the State system nearly all factual issues are tried by a jury no matter how complicated such issues may be. In particular a plaintiff has an inherent right to have the case tried by a jury if this is insisted upon. Thus if the claimants in the present litigations had sued in Texas they would have had a right to have their cases tried before a jury. A jury may consist of 6 or 12 persons and the selection of the jury is often a complex process. In order to simplify issues for juries in difficult cases extensive use is made by counsel of models and graphics. A notable feature of the procedure is that the judge directs the jury before counsel make their final addresses to the jury. In directing the jury the judge will follow the prescribed Pattern Jury Instructions that set out succinct styles of directions for specific kinds of jury trial. Before the judge directs the jury the lawyers are given an opportunity to make recommendations as to the contents of the directions.

11.3.3. Special Appearance

Under the State system if a defendant wants to take a preliminary objection in limine to the competency of the action on the grounds of lack of jurisdiction he does so by lodging a Special Appearance. If he fails to do this and simply appears this would be regarded as a General Appearance and thus a waiver of any right to object to jurisdiction. The Court has a fairly wide range of procedures available to it in deciding a Special Appearance. In some cases the matter may be decided solely on submissions but otherwise recourse can be had to documentary evidence and affidavits and in some cases oral evidence may be taken before a decision is made. In many cases Discovery of Documents is allowed as a preliminary step and this will often give a plaintiff an opportunity to improve the case for jurisdiction. The onus of rebutting jurisdiction rests on the defendant in the State system (although the Federal system differs in this respect). In Texas, particularly in a large or important case, the Discovery process will under the hands of able attorneys tend to be very extensive and exhaustive. Moreover a considerable time may lapse before the Special Appearance is decided. Because plaintiff’s lawyers in Texas tend to operate on a contingency fee basis and because in a major litigation the Special Appearance procedure may involve material outlay it requires attorneys to have considerable financial resources if they are to conduct a Special Appearance to best effect. If the judge eventually sustains the Special Appearance the case will be dismissed but if it is refused the case will proceed until a jury determination. Among Texas lawyers there is some difference of view as to whether it might in certain circumstances be competent to seek an immediate appeal against the refusal of a Special Appearance by use of the writ of mandamus procedure but in practice it would rarely if ever be possible to appeal until the end of the case. Thus in practice if the claimants had chosen to sue in Texas and OPCAL had wanted to challenge jurisdiction they would have been faced with a lengthy, difficult and expensive Special Appearance procedure. The onus of satisfying the judge of the merit of their case would have rested on them and they would have been at the mercy of the District Court Judge who sat in the venue chosen by the plaintiff. If the Special Appearance had failed they would have required to see the claims go to jury trial before an appeal on the jurisdiction question would have been available.

11.3.4. Appeals

If at first instance a party wants to attack an award of damages he can seek a new trial or a re-valuation by the Court of the amount of damages to be awarded. The District Court judge can be asked to allow a new trial. In this event the judge may ask the plaintiff if he accepts remittitur failing which in an appropriate case a new trial will be allowed. The procedure for remittitur is governed by Rule 315 of the Texas Rules of Court but remittitur will only be permitted if the plaintiff agrees to it. The penalty for not accepting remittitur therefore can be the allowance of a new trial. If a new trial is allowed this as a practical matter is not appealable. The question for the judge will always be if there is enough evidence to support the jury award. The grant of a new trial is governed by Rule 320 and the judge has a wide discretion to allow a new trial on the whole or part of the damages on cause shown. At the end of the trial a right of appeal to the first appellate level is available but such an appeal would only be available at an earlier stage by way of mandamus and that only in exceptional circumstances. To proceed further to the Texas Supreme Court the leave of that court is required and this is decided by vote of the Justices. Such an appeal is initiated by a Writ of Error. The case must be appealed to the Court of Appeals before further appeal is competent. Appeal to the U.S. Supreme Court on a question with Federal implications requires the leave of that court. This would only be granted if the case raises a particularly important question. In practice for a defendant to proceed throughout the complete appeal procedure could take years and would be very expensive since a successful party does not recover expenses.

11.3.5. Contingency fees

In Texas the legal fees payable by plaintiffs are generally based on the contingency fee system. This means that the attorneys acting for such plaintiffs only recover fees if the plaintiff is successful. The outlays required to pursue a claim for damages under the Texas system are considerable. Only law firms with substantial financial resources can afford the outlays and risks inherent in pursuing a significant litigation. If a smaller firm takes on a large claim it may not be able to pursue it effectively because of a lack of sufficient financial back-up. Thus for example Mr Wayne Fisher deponed that his own firm has about $8 million invested in outstanding expenses. In damage claims the plaintiff’s attorney may expect to be paid at least 30% / 40% of any damages recovered but a substantial proportion of this will be consumed by the outlays. Parties do not recover expenses from the losing side. Thus for a plaintiff successful in Texas to be as well-off as he would have been suing in Scotland it is necessary to recover damages about 30% more than Scottish levels to take account of the contingency fee deduction. For defendants in Texas it is very expensive to defend a substantial litigation since even if they are successful they have to meet considerable expense.

11.4. Jurisdiction

11.4.1. General

As I have already indicated the circumstances under which a Texas court would have accepted jurisdiction had the claimants gone to Texas was a hotly contested issue between the parties. I was treated to a large volume of American law - particularly case law - on the issue. Generally the pursuers’ experts took the view that there was a strong probability that the claimants had they gone to Texas would have succeeded in establishing jurisdiction. The defenders’ experts while not totally discounting the risk thought that on balance it was unlikely that the Texas Courts would have entertained jurisdiction. There were at times suggestions in the evidence that some of the members of the consortium other than OPCAL would have been vulnerable to jurisdiction in Texas. Had jurisdiction been established against any such Participants then there was evidence that this would have founded jurisdiction against OPCAL as well on the basis of agency. However in the pursuers’ pleadings the specific case of vulnerability to jurisdiction that is made is that OPCAL would have been vulnerable to Jurisdiction because of their trading contacts with Texas and in particular specific contracts they entered into involving Texas. The defenders’ experts say that these contracts would not suffice to found jurisdiction particularly because of the decisions in Helicopteros and also Asahi (which cases I shall discuss later). The pursuers’ experts dispute that these cases would be any bar to acceptance of jurisdiction.

11.4.2 The American Law and Cases

The American Law I was referred to related to the circumstance under which a Texas court would accept jurisdiction against a defendant non-resident in the State. Professor Weintraub explained that if the non-resident has a known minimum contact with Texas out of which the causes of action has risen then jurisdiction would be acknowledged for that particular cause of action. That is to say specific jurisdiction would exist. On the other hand if one requires to sue for a matter that is unrelated to the contact on which jurisdiction is founded general jurisdiction has to be established. To found on general jurisdiction one has to establish continuous and systematic contacts with Texas so that it would be fair and reasonable to invoke Texas jurisdiction for any matter. The outer limits of state jurisdictional power is determined by the due process clause of the fourteenth Amendment of the United States Constitution. The significant words in that Amendment are to the effect that no-one should be deprived of life, liberty, or property without due process of law. This clause has been a prolific source of litigation in the United States since it sets a constitutional limit on State power. However Texas Courts will exercise jurisdiction to the limits of the Federal Constitution. The ultimate criteria for federal intervention are set by the United States Supreme Court but judgments on personal jurisdiction questions are few and far between. There have only been fourteen since 1945.

In chronological order the first case of the United States Supreme Court that deals with personal jurisdiction is Pennoyer v Nieff 95 U.S. 714 (1878 ). The case is merely of historic interest and adds nothing to my deliberations. A more pertinent case is International Shoe Co. v Washington 362 U.S. 310 (1945). This is considered the cornerstone of the American law on in personam jurisdiction. The Appellants were a Delaware corporation having their principal place of business in St. Louis, Missouri. They manufactured shoes and had places of business in other States but not in the Defendant State, Washington. Their merchandise was distributed widely to other States. Although they had no office or stock in Washington they employed 11 to 13 salesmen in the State. These salesmen resided in Washington and their activities were confined to that State. They were remunerated by commissions on their sales. The Appellants provided them with samples to show to prospective customers each sample consisting of one of a pair of shoes. The authority of the salesmen was limited to soliciting orders which were then transmitted to the Appellants’ office in St. Louis from where if the order was accepted the contract was fulfilled. The salesmen had no authority to enter into contracts or to collect money. The dispute between the parties related to a claim by the State to recover certain unpaid employment contributions exigible under the law of the State. The relevant issue was whether the Appellants were amenable to suit at the instance of the State. It has to be noted that the case is a specific jurisdiction case since the contributions claimed by the State related to the alleged business contact with the State. The case represents a development from the historical position under which personal jurisdiction was based on de facto power over the defendant. As Mr Chief Justice Stone observes in the leading judgment, whatever the historical view, the law has now evolved to the extent that due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice". The Chief Justice is there equating due process with fair play and substantial justice. However the case has further significance for the present case because at page 317 the Chief Justice observes that it has been generally recognised that the casual presence of the corporate agent or even his conduct of single or isolated activities in a state on the corporation’s behalf are generally not enough to subject it to suit on causes of action unconnected with the activities there. On the following page Chief Justice Stone, having reviewed certain authorities , proceeds "there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from these activities". Thus in that passage we have clear recognition of the existence of a rule of general jurisdiction although as Professor Weintraub points out the observations of the court on the matter are obiter. Moreover it is perhaps interesting that the dichotomy is represented as being between "single or isolated activities" and something which is clearly more substantial. The Chief Justice also observes that the criteria by which the court will mark the boundary line which justifies the subjection of a corporation to a suit and those which do not cannot be simply mechanical or quantitative. Rather the test depends on the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to ensure. He then goes on to refer to a consideration sometimes referred to as "purposeful availment" namely that to the extent that a corporation enjoys the privilege of conducting activities within a state , it enjoys the benefits and protections of the laws of that state. This is an important observation because if gives guidance about a factor that is often mentioned in the authorities namely the enjoyment of the benefits and protections of the law of a state. If the corporation enjoys the privilege of conducting business activities within a state then it enjoys the benefits and protection of the law of that state. The Supreme Court held that there was jurisdiction against the Appellants.

The next Supreme Court case, Benguet Perkins v Consolidated Mining Co. 342 U.S. 437 (1952) is highly significant because the Court there recognised that general jurisdiction had been established on the basis of circumstances unrelated to the relevant business contacts. Indeed the case is the first general jurisdiction case at the Supreme Court level. The facts were that a corporation owned and formerly operated gold and silver mines in the Philippine Islands. However during the Second World War due to the Japanese occupation of the Philippines the company carried on general administrative business in Ohio. Such business included directors’ meetings, business correspondence, banking, stock transfers, payment of salaries, purchasing of machinery, etc. While engaged in such activities in Ohio the president of the corporation was served with a summons in the Ohio State Court by a non-resident of Ohio. The cause of action did not arise in Ohio and bore no relationship to the corporation’s activities there. It was held that the business done in Ohio was sufficiently substantial and of such a nature as to permit the courts of Ohio to entertain the action although the cause of action did not arise from activities in the State. Moreover acceptance of such jurisdiction did not offend against Due Process. The opinion of the Court was delivered by Mr  Justice Burton. According to Professor Weintraub the case is also important because it establishes the materiality of contacts that are subsequent in date to the incident which gave rise to the action. Mr Kilgarlin on the other hand took the position that to allow events subsequent to the cause of action to affect jurisdiction was philosophically unsound because it would permit a corporation to mould its affairs so as to influence jurisdiction. Moreover he considered that the recitation of facts within the opinion was not itself to be regarded as part of the holding in the case. It is interesting that Mr Justice Burton declared that the amount and kind of activities needed to make it reasonable and just to make a corporation subject to the jurisdiction of a particular State must be determined in each case. Indeed it is notable in considering the authorities that decisions in various cases before and after Perkins are very much (as witnesses declare) "fact driven". It is also worth noting that in this case the corporation concerned carried on in Ohio what generally may be described as administrative activities. The substantial business of the company was mining but there was no suggestion that Ohio state had any connection with the mining because the mines were in the Philippine Islands which had been occupied by Japan. This is important because the defenders sought to argue that it was a necessary implication that the contacts required to set up jurisdiction by a foreigner required the introduction of business into Texas such as would arise if goods were sold to Texas residents. The facts in Perkins do not appear to support this.

The next Supreme Court case was McGee v International Life Insurance Co. 355 U.S 220 (1957). I do not require to review the facts of this case because it is clearly a specific jurisdiction case essentially resting on one insurance contract. However Mr Greene thought that the case was significant because it was observed in the opinion that California had a manifest interest in providing effective means of redress for its residents when insurers refuse to pay claims. It was suggested that no such interest rested in Texas in relation in an action by claimants against the consortium nor would any of the parties have been Texas residents. Moreover it was also said that in McGee "convenience" was specifically mentioned as a factor affecting the question of "fairness". It may be worth observing that in McGee the Supreme Court seems to have accepted the Appeal direct from the Court of Appeals of Texas without the intervention of the Supreme Court of Texas. It is perfectly clear from the later authorities that I shall examine that whatever meaning is to be given to the word "convenience" as used in this case it is certainly something different to the use of a similar expression in forum non conveniens.

Hanson v Denckla 357 U.S. 235 (1958) is another specific jurisdiction case. The case establishes that the unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. It is essential in each case that in respect of the defendant’s activities there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State thus invoking the benefits and protections of its laws. Thus it must not simply be fortuitous that the defendant finds itself in contact with the forum state. It must be by design. Professor Weintraub thought that the court in Denckla retreated a little from the expansive approach of McGee.

Kulko v California Superior Court 436 U.S. 84 (1978) was a case concerning a child custody question. The parties both New York domiciliaries were married in California during a short stopover there. A son and daughter were born in New York while the parties were living together there. In 1972 the parties separated and the mother moved to California. Under the terms of a separation Agreement the children were to remain in New York with the father but to visit the mother during certain vacations. In 1973 by the parties’ consent the daughter began spending the school year with the mother in California visiting the father during vacations.

Two years later the son without the father’s consent joined the mother in California. The mother then raised certain proceedings in the Californian Courts to obtain custody of both children and to advance certain child-support claims. It was held by the Supreme Court that the exercise of jurisdiction over the father in these circumstances would violate the Due Process Clause of the Fourteenth Amendment. The mere fact of sending the daughter to California to live with her mother connotes no intent to obtain nor expectancy of receiving a corresponding benefit in the State that would make fair the assertion of that State’s judicial jurisdiction over the defendant. A defendant to be bound by a judgment against him must have certain minimum contacts with the forum State such that the maintenance of the suit does not offend against "traditional notions of fair play and substantial justice". Mr Justice Marshall observes at page 92 of the Report that like any standard that requires the determination of "reasonableness" the "minimum contacts" test of International Shoe is not susceptible of mechanical application but the facts of each case must be weighed to determine whether the necessary "affiliating circumstances" are present. Few answers will be written "in black and white". The greys are dominant and even among them the shades are innumerable".

The next case of the U.S. Supreme Court is World-Wide Volkswagen Corp. v Woodson 444 U.S. 286 ( 1979). An Audi motor car had been purchased in New York. The family drove it on holiday to Arizona and on the way they had a motor accident in Oklahoma. They brought a products-liability action against the suppliers in Oklahoma. The suppliers did not do business in that State. They sold no goods or services there. Nor did they solicit customers in the State. The Supreme Court refused jurisdiction but there were three dissenting judgments. The Court held that there was a total absence of affiliating circumstances and the fact that the accident had occurred in Oklahoma was not in itself enough. The case gave rise to the important "stream of commerce" doctrine. At pages 297/298 in the opinion of the majority it was stated that the forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. However although the said doctrine was referred to from time to time in the evidence and arguments before me the present pursuers’ case does not really depend on it. Nevertheless the doctrine illustrates the considerations that will appeal to an American Court called upon to exercise jurisdiction. The defenders may have hoped to get some comfort from the suggestion of a requirement to deliver products into the forum state but this was within the context of a specific jurisdiction case involving product liability. There are suggestions in the case that might be thought useful. It was suggested that the defendants must have a reasonable expectation of being hauled into court in the forum market. Moreover in respect of Due Process the circumstances must be such as to make it reasonable to require the corporation to defend the particular suit that is brought there. A second factor is the plaintiff’s interest in obtaining effective and convenient relief. The interest of the host state in the litigation is also a factor and the defenders repeatedly made the point that in respect of an accident in the North Sea only the United Kingdom had an effective interest in the regulatory implications of the accident. It is also worth noting that it was observed in the cases that the various factors affecting Due Process should not be looked at in isolation. It is also an authority for the view that a corporation can avoid jurisdiction by structuring its affairs to that end. In general the last point seems to be the law of Texas. However once again it must be remembered that the case was a product liability case.

The next Supreme Court Case is Helicopteros Nacionales de Columbia S.A. v Hall 466 U.S. 408 (1988) and this is a significant case relied upon particularly by the defenders. The case involved claims against the helicopter company, by the relatives of four men killed when a helicopter crashed in the jungle of Peru. The deceased were working in Peru constructing a pipeline. The main contractors were based in Texas. The helicopter company (Helicol) had been brought into the contract to provide necessary transportation for the workers. They had no office in Texas, maintained no agent there for the service of process, were not authorised to do business in Texas, performed no helicopter services there, nor did they recruit employees in Texas. The deceased were American citizens but not residents of Texas. However Helicol had negotiated their contract in Texas. They purchased substantially all its helicopter fleet in Texas. Thus they had effectively purchased all the tools of their trade in Texas but from one firm. They had done about $4 ,000, 000 of business in Texas as purchasers of equipment, parts, and services. This money was spent in regular amounts. They had sent pilots to Texas to pick up Helicopters and maintenance men were sent there to be trained. Indeed employees were maintained in Texas in connection with these contracts on a year-round basis. Payment of sums due to them from the contract were paid through a Texas bank and certain payments due by them were paid through Texas. Apart from the business relative to their purchase of helicopters Helicol had not previously done business in Texas. The case had a fairly protracted and chequered history. The accident had been in 1976 and the U.S. Supreme Court did not finally dispose of the case until 1984. When the plaintiffs raised their actions in Harris County Court, Texas, the defendants, Helicol, lodged Special Appearances. These were refused and a trial was heard which resulted in judgment for the plaintiff Hall. This lead to an appeal by Helicol to the Court of Civil Appeals which reversed the trial judge on the jurisdiction question and dismissed the actions on the ground of want of jurisdiction. At this stage the court was treating the case as a specific jurisdiction case under the Long-Arm Statute. On a further appeal to the Supreme Court of Texas the court at first rejected the appeal but then set aside its first judgment and after a further hearing in its final judgment allowed the appeal and acknowledged that the Texas court had jurisdiction. This decision is reported 638 S.W. 2d 870 (1982). The first judgment, later withdrawn, had been based on a majority of 6 to 3 and in the second appeal the majority was the same but of course in the opposite direction. In the leading judgment by Justice Wallace he refers to the three-prong test applied in terms of Article 2031b of the Texas constitutional code. Essentially the three prongs in that Code are (1) The nonresident defendant must purposefully do some act or consummate some transaction in the forum state, (2) the cause of action must arise from or be connected with such act or transaction and (3) the assumption of jurisdiction by the forum state must not offend against traditional notions of fair play and substantial justice; consideration being given to the quality, nature, and extent of the activity, the relative convenience of the parties, the benefits and protection of the laws of the forum state afforded the respective parties, and the basic equities of the situation. Justice Wallace stated that the second prong was unnecessary when the nonresident defendant’s presence in the forum through numerous contacts is of such a nature that it satisfies the ultimate test of Due Process. Professor Weintraub suggested that in Justice Wallace’s view we can see how far the Texas courts will go in recognising general jurisdiction subject only to the Federal Supreme Court’s power to intervene on the federal constitutional issue of Due Process. The Texas Supreme Court had given recognition to the fact that Hall had been an American citizen although not resident in Texas. The only question in the U.S. Supreme Court was whether the decision in the final State Court had consisted with Due Process and the view of the majority of the Court was that it did not. In the judgment of the Court Mr  Justice Blackmun observed at page 416 that the Court must explore the nature of Helicol’s contacts with the State of Texas to determine whether "they constitute the kind of continuous and systematic general business contacts the Court found to exist in Perkins". He also by reference to the case of Rosenberg (dated 1923 and therefore somewhat dated) said in relation to general jurisdiction "purchases and related trips standing alone are not sufficient" and this might suggest that Helicopteros was not to be confined to a single purchase. However the point made by the pursuers in relation to Helicopteros was that it referred to a single supplier and we do not know if the facts in Rosenberg although referring to "purchases" were applicable to more than one supplier. In any event the pursuers argued that even if Mr Justice Blackmun was intending to preclude purchases in general the facts of Helicopteros related to a single supplier so that anything extending beyond that was obiter.

The parties’ expert witnesses sought to read the effect of Helicopteros in different ways. Professor Weintraub clearly did not respect the decision in the case and considering that many eminent judges had disagreed with that decision, that in itself may be within his prerogative as an academic. However the defenders criticised the Professor for being so dismissive of a case that was a decision of the Supreme Court of the United States. For my part without forming any view as to the quality of the final decision in the case I must accept the case so far as it goes as representing the law of the United States. Professor Weintraub considered that the plaintiffs had erred in conceding that Helicopteros could not be a specific jurisdiction case. He thought that it would inevitably be arguable that the accident could be attributable to the purchase of the helicopters if they or their spare parts had contributed in any way to the accident. In his strong dissenting judgment Mr Justice Brennan also considered that there might have been a case of specific jurisdiction developed by the plaintiffs. Although he was in the minority Mr Justice Brennan has always been regarded as a judge of distinction so that the defenders’ suggestion that it was extraordinary for Professor Weintraub to suggest that he could have won Helicopteros on specific jurisdiction loses some of its force. Indeed Mr Justice Brennan agrees with Professor Weintraub in other matters such as that it was curious for the Court to rely on an obsolescent case like Rosenberg. Given that the decision in the case was so close Professor Weintraub’s general view that Helicopteros was not a very convincing case and might be distinguished does not seem merely an eccentric academic opinion as the defenders suggest. In any event he thought that the case had been regarded as a single supplier case and a supplier who need not have been used. The Court had placed emphasis on the fact that Helicol had no Texas shareholders whereas OPCAL had shareholders who were Texan. Mrs Sondock had been on the bench of the Texas Supreme Court at the time of the second judgment in Helicopteros. She testified that it was not regarded in Texas as changing the law on general jurisdiction. It was another fact-driven case. The majority of the Court were regarding the purchases of helicopters as essentially being one contract with one manufacturer. Mr Justice Brennan in his dissenting judgment had differed from the majority because he regarded the consequential contracts such as for training of pilots as being distinct contacts. Moreover even Mr  Greene agreed with the pursuers’ experts to the extent that Helicopteros effectively expanded the jurisdiction of the Texas Courts in that the supremacy of the Texas Supreme Court to arrive at its own view of the Long-Arm Statute was acknowledged. He accepted that in the early 1980s the Texas Supreme Court had taken an expansive view of jurisdiction and opened the door to general jurisdiction. However Mr Greene and Mr Kilgarlin took a narrower view of Helicopteros in that they interpret it as meaning that general jurisdiction will only satisfy Due Process if the contacts with Texas relied upon are of the same essential kind as those in Perkins namely involving a situation where the nonresident company has really moved significant parts of its administration to Texas. However it was accepted that "of the same kind" does not necessarily mean "the same". They accepted that it would be too extreme an interpretation of Helicopteros to require that all the essential management of the corporation must be located in Texas. They did not agree that Helicopteros should be regarded simply as a single source of supply case and indeed thought that it was the most important cases in the defenders’ favour. Mr Kilgarlin pointed out that the holding in Helicopteros made no reference to a single source of supply. Helicopteros and Perkins are the only two cases in the US Supreme Court that are specific to general jurisdiction. This may suggest that cases on state jurisdiction are not readily accepted for hearing before the US Supreme Court. This was contended by the pursuers’ experts.

The defenders sought to draw a distinction between contacts that had the effect of putting something into Texas as compared with contacts that merely involved taking something out of it. I was not very clear how valid a distinction this was if it applies at all. If for example OPCAL was selling their oil in Texas they may have been providing employment there and paying agency fees into Texas. The test of purposeful availment of the rights and privileges of Texas law to me seems a more pertinent test.

Burger King Corporation v Rudzewicz 471 U.S. 462 (1985) was a case which involved a dispute between the plaintiffs (who carried on their business in Florida) and a franchise holder who was a Michigan resident. A question arose about a purported termination of the franchise and the plaintiffs raised proceedings in Florida. The case therefore involved a question of specific jurisdiction. The U. S. Supreme Court reversed a finding of the lower Court that to accord jurisdiction would offend against Due Process. At page 471 of the Report Mr  Justice Brennan delivering the opinion of the Court said that "The Due Process Clause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties or relations". He further states that the constitutional touchstone remains whether a defendant purposefully establishes "minimum contacts" with the forum State. A defendant will not be hailed into a jurisdiction because of random, fortuitous or attenuated contacts but jurisdiction is proper where the contacts proximately result from actions by the defendant himself that create a "substantial connection" with the forum State. Where a defendant has engaged in significant activities within State he manifestly has availed himself of the privilege of conducting business there and because his activities are shielded by the "benefits and protections" of the forum’s laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in the forum as well. He too thought that a corporation could structure its affairs successfully to avoid jurisdiction. There is reference in the case to purposefully directing your activities at residents of the forum state but this is hardly surprising where the defendants’ business was to run restaurants. Once it has been established that the defendant has purposefully established minimum contacts with the forum State it is necessary to look to see if the assertion of personal jurisdiction accords with "fair play and substantial justice" Thus Mr  Justice Brennan prescribes a two stage process. As factors to be taken into account in the evaluation of this he lists (for use in appropriate cases) the burden on the defendant, the forum State’s interest in adjudicating the dispute ,the plaintiff’s interest in obtaining convenient and effective relief, the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies. The fact that there is a choice of law clause adopting Florida law is a factor to be considered but does not mean that every litigation has to be brought in the courts of Florida. All the considerations mentioned in the Opinion are of course being applied to a case of specific jurisdiction but it was argued for the pursuers that there is no reason why the underlying principles should not have equal application to a general jurisdiction case. It is also worth noting that Mr Justice Brennan summarises the position about Due Process by observing "the foreseeability that is critical to Due Process analysis is that the defendants’ conduct and connection with the forum state are such that they could reasonably anticipate being hauled into court there." Mr Justice Brennan also observes that where the defendant deliberately engages in significant activities or creates continuing obligations between himself and the residents of the forum then he manifestly availed himself of the privilege of conducting business there. It should be noted that creating obligations with the residents of the forum state is only one of the options. To succeed under Due Process is said to require a compelling case.

Another significant U.S Supreme Court case is Asahi Metal Industry Co. v Superior Court 480 U.S. 102 (1987). This case dealt with the significance of the Due Process test and was heavily relied upon by the defenders. The case arose out of an accident in California when a motor cycle collided with a tractor. The motor cyclist was injured and his wife and a passenger were killed. The case was raised in the Californian court and was a product-liability suit. It was claimed that the tube and valve assembly of the tyre of the motor cycle were defective and had caused the accident. The plaintiffs sued the Taiwanese manufacturers of the tube, namely Cheng Sin, and these settled with them. Asahi had manufactured the valve assemblies and then sold them to Cheng Sin knowing that they would be used to assemble tyres, a proportion of which would be sold in California. Cheng Sin sued Asahi under the terms of an indemnity. The Californian Supreme Court held that the facts were sufficient to support State jurisdiction on the view that the valves had been sold by Asahi to Cheng Sin knowing that they would be delivered into the stream of commerce in California. However this judgment was reversed by the U.S. Supreme Court. In giving an Opinion, which in its conclusion on the Appeal was the opinion of the Court, Justice O’Connor indicated her view that it was not enough that it should be foreseeable that goods will enter the stream of commerce of the forum State. There must be an act purposefully directed towards that State. The case also failed the Due Process test. Asahi did not itself do business in California. Nor did it have any employees, agents, nor any office in California. It did not solicit business there. The State of California had limited interest in the dispute. Although the case is one where jurisdiction was ultimately refused it was in some respect an extreme case where the essential dispute was between two Asian companies neither of whom had any natural interest to litigate in California. The case was also a specific jurisdiction case. It should perhaps be noted that a number of Justices seemed to accept that the circumstances satisfied the minimum contacts test but joined with the majority in holding that the case failed the "fairness" test. The defenders’ submission was that the case shows how in a case like the present Due Process could present an insuperable obstacle to a claimant seeking to have the Texas Court accept jurisdiction. They submitted that the case had raised the Due Process consideration to become the equivalent of forum non conveniens. Professor Weintraub’s view was that in a general jurisdiction case "fairness" considerations were likely to be less acute because the prerequisite contacts were not a single contact but must consist of a number of contacts to offer the foundation for general jurisdiction. The defenders’ expert Mr Greene in particular relied heavily on Asahi. He thought that the fact a defendant had to travel to litigate in the forum State and then had to submit the dispute to a foreign jurisdiction were regarded as important factors in the case. Moreover not only did the plaintiffs have no substantial interest in having their case decided in Texas but Texas itself had no serious interest in the matter whether by the way of effect on social policy or otherwise. However Professor Weintraub argued that this case is very different to the kind of situation encountered in Asahi. Just to take an example Texas is not only a major producer of oil with many oil platforms of its own but it regularly sends people to work on or service the oil industry in Scotland. As the Professor pointed out in relation to the inconvenience point in the present case, before the fire had even been extinguished Vinson & Elkins in Texas were already handling the case on behalf the Occidental interest. It must be remembered that Mr Greene had far less experience than Professor Weintraub in dealing with jurisdiction points in Court. Ahasi was in my view an example of applying a selection of forum clause to a specific jurisdiction case arising out of the contract.

In addition to the United States Supreme Court decisions I was referred to a considerable number of Texas State Court decisions. One of the more interesting of these was Schlobohm v Schapiro 784 S.W. 2d 355 (1990). This was a decision of the Supreme Court of Texas and it was relied on heavily by the pursuers as a case on general jurisdiction. The trial judge had sustained a motion for dismissal on a Special Appearance and the Court of Appeals had sustained this. However these views were reversed by the Supreme Court of Texas. The action was brought by Lessors against a nonresident of Texas in respect of a corporate Lessee’s non payment of rent. Schapiro was a Pennsylvanian doctor. His son resided in Dallas and set up a dry cleaning business called Hangers Inc. Dr  Schapiro invested $ 10 ,000 in this business and received stock in the company. He became the sole director and his son became the president. Dr Schapiro conducted certain company meetings and he kept records of the company with his accountant in Pittsburgh. He guaranteed some leases of property in Texas and he loaned the company further sums of money to buy equipment. Indeed he regularly covered Hanger’s expenses and eventually his expenditure totalled $474,000. He often visited Dallas and he sent his accountant there to look into Hangers’ affairs. Hangers eventually stopped paying rent on a building and this gave rise to the claim against Dr  Schapiro. The case was regarded by the Court as a general jurisdiction case because Dr Schapiro had not directly involved himself in the Lease. Justice Cook in the Opinion of the Court indicated that for a Texas court to exercise jurisdiction over a nonresident two conditions must be satisfied. Firstly the Texas Long-Arm Statute must authorise the exercise of jurisdiction. This Statute authorises the Texas Courts to accord jurisdiction if the nonresident is "doing business" in Texas. Secondly the exercise of jurisdiction must be consistent with Federal and State constitutional guarantees of Due Process. Justice Cook observes that the view of the Court is that the broad language of the Long-Arm Statute in relation to "doing business" allows the Statute to reach as far as the Federal Constitution permits. That last comment was regarded by the pursuers’ expert witnesses as being an indication of the expansive view of jurisdiction taken by the highest State Court at the time although the defenders’ expert Mr  Greene did not see the case in this way. Justice Cook proceeds to examine the federal tests for jurisdiction and observes that where the defendant’s activities in the forum are continuing and systematic jurisdiction may be proper without a relationship between the defendant’s particular act and the cause of action. In other words the Supreme Court of Texas clearly confirms after Helicopteros that general jurisdiction is available against a nonresident and that in many cases this will be quite consistent with Due Process. In fact the point is made that in general jurisdiction failure on Due Process is less likely because essentially there will be a number on contacts. However it is emphasised that Due Process remains a separate issue. The pursuers used Schlobohm as an demonstration of the fact that a Texas Court would not construe Helicopteros as laying down that general jurisdiction requires a situation equivalent to that in the Perkins case. Mr Greene on the other hand suggests that Schlobohm though not identical is the same kind of case as Perkins since the nonresident in each case exercised effective control of a defendant in the forum State. However the value of the comparison is rather limited. In Perkins the nonresident corporation permitted itself to be controlled from Ohio. In Schlobohm Dr Schapiro was the relevant nonresident defendant and although he exercised some control over Hangers that company's connection with Texas does not seem to have been in dispute. Dr Schapiro was held to have done business in Texas but for the most part he personally was not controlling directly there. Professor Weintraub also regarded the case as confirming that contacts after the matter giving rise to litigation will be taken into account. One important point that was repeated in this case is that in deciding a question of jurisdiction on particular facts it is not appropriate to apply any tests mechanically. Mr Justice Cook indicated that he found it difficult to believe that anyone in Shapiro’s position could have been surprised by a call to litigation in Texas. That represents another useful way of looking at the matter of general jurisdiction.

Another case that was cited to me was Myers v Emery 697 S.W. Reporter 2d Series 26 (Texas Appeals, 5th District 1985). It was observed in that case that "The question presented in Helicopteros was whether Helicon contacts with the State of Texas constituted the kind of continuous and systematic general business contacts that existed in Perkins". The defenders argued that this case supports their view of Helicopteros and to a degree it does. Mr Greene thought that Helicopteros recognised Perkins as a benchmark in relation to general jurisdiction. However in Schlobohm the Court seems to have thought that in general jurisdiction "purposeful availment" was the touchstone.

Design Information Systems v Feith Systems & Software Inc. 801 S.W. 2d. 569 (1991) is a relatively recent Texas case which certainly takes an expansive view of jurisdiction but is only at the Court of Appeals level of decision. An out-of-State supplier of computer software was sued in Texas by a purchaser on the basis that the product was not satisfactory. It was held reversing the Trial Judge that the suppliers repeated sales to Texas customers (numbering twenty-five in all) constituted the "continuous and systematic contacts" required to impose jurisdiction. It should be noted that the supplier had no office or employees in Texas and did not engage in any advertising or sales effort specifically directed towards customers in Texas. The decision went to the Supreme Court of Texas 13 S.W. 2d 481 and according to Professor Weintraub the matter did not even result in argument before the Supreme Court so that it can be taken that the decision was effectively affirmed. Professor Weintraub was not cross-examined on that point. The question of Due Process was argued before the Court of Appeals and rejected as a ground for refusing jurisdiction in the case. The Court seemed to treat the case as a general jurisdiction case (and this was certainly Professor Weintraub’s view) but I have some sympathy with Mr Greene’s opinion that despite the apparent approach of the Justices essentially the issue is specific jurisdiction. Mr Kilgarlin disposes of the embarrassment to his point of view by describing the decision as an aberration but be that as it may the case is certainly a cogent illustration of the expansive view of jurisdiction that can be taken by a Texas Court. It may be difficult to see the present case as being other than a fortiori of Design Information Systems.

Another Texas case is Lujan v Sun Exploration & Production Co. 798 S.W. 2d. 828 (1990). In that case a widow of a deceased employee brought a wrongful death action against an employer providing contract oil field services. Once again the Trial Judge sustained a Special Appearance but the Texas Court of Appeals reversed him and held that the plaintiff had established jurisdiction passing both the test of complying with the Long-Arm Statute and that of Due Process. An attempt was made to appeal to the Supreme Court of Texas but that court refused Writ of Error. That means that the court were not satisfied that the judgment of the lower court was in every respect correct but that not withstanding there had not been an error sufficiently important to Texas jurisprudence to justify intervention by the court. The deceased in this case was employed by a New Mexico company and resided in that State. In 1987 he was killed at work in New Mexico as a result of an explosion. He was performing work under a contract between his employers and Sun Exploration, a Delaware company that had offices in Texas. His employers had made several business contacts in Texas. In addition they had sent their employees into Texas to obtain supplies and occasionally to perform work with Texas based companies. They advertised in Texas. The Texas Court of Appeals held that these activities clearly constituted "doing business" in Texas thus satisfying the requirements of the Long-Arm Statute. The Court also held that the Due Process requirement had not been violated and that acceptance of jurisdiction by Texas would not offend against fair play and substantial justice. The case differs in its essentials from the present case in that it was clearly a factor that influenced the majority of the court that the contract between the employers and Sun provided that litigation concerning the contract should be in the Texas Courts. However what is of particular interest to the case is that in the leading Opinion Justice Whittingham discusses the effect of Helicopteros in relation to general jurisdiction. He states the requirement for general jurisdiction to be a showing of "substantial activities in the forum State" and indeed it is Schlobohm that is cited as authority for this. Thus stated the test would seem to be more general than a requirement for a Perkins type situation. In any event the Opinion makes it plain that the decision in the appeal is based on a holding that general jurisdiction has been established and the material facts in the case fall far short of Perkins. The case is not entirely satisfactory nor conclusive but it does show that at a high level Texas courts have been inclined to take a broad view of their right to exercise jurisdiction over nonresidents.

Another modern Texas case is Temperature Systems Inc. v Bill Pepper Inc. 854 S.W. 2d 699 (1993). The Pepper company were an executive search and recruiting agency with their principal place of business in Texas. Temperature Systems Inc. were a Wisconsin company and distributed heating, ventilation, and air conditioning equipment manufactured by a firm called Carrier (which has no factory in Texas). Temperature Systems does not solicit nor advertise in Texas and it has no employees or agents there. However it maintained an inter-distributor relationship with other Carrier distributors across the United States including Texas. It purchases certain equipment from Carrier and between August 1988 and June 1990 it purchased to the amount of $45 ,000 from Carrier distributors in Texas and also purchased $450, 000 worth of HVAC equipment from other Texas residents over a similar period. Temperature Systems employed Pepper to search for sales executives it required and a dispute about commission arose which resulted in Pepper suing Temperature Systems in Texas. The commission question concerned a prospective employee called Ross who was a Wisconsin resident. A Special Appearance lodged by Temperature Systems was overruled and a trial resulted in which Pepper succeeded. The defendants appealed to the Texas Court of Appeals. Originally only specific jurisdiction was argued but general jurisdiction was argued at the Appeal. As the Court pointed out Temperature Systems had the burden of negating the facts that form the basis of Pepper’s general jurisdiction claim. This in itself perhaps emphasises the readiness of State Courts in Texas to assume jurisdiction. It is perhaps significant that although the contract sued under was in 1989 contacts with Texas were looked at until 1990. The Court found that Temperature System’s purchases of goods from Texas and the distributor relationship with Texas Carrier distributors were continuous and systematic contacts of a substantial kind sufficient to meet the second prong of the Texas jurisdictional tests which I have earlier mentioned . The Court observed that "there is no evidence that T.S.I.’s purchases from Texas residents and distributor relationship will cease". This would suggest that the Court is looking at the jurisdictional facts as at the date of the litigation and not merely at the date of the original contract. In relation to the Due Process question the Court cites the following factors: (1) the burden on the defendant (2) the interests of the forum state in adjudicating the dispute (3) the plaintiff’s interest in obtaining convenient and effective relief (4) the interstate’s judicial system’s interest in obtaining the most effective resolution of controversies and (5) the shared interest of the several states in furthering fundamental substantive social policies. The Court found that there was no violation of the principles of Due Process in allowing jurisdiction but one matter they took into account was the fact that Texas had an interest in defending its resident Pepper in respect of their allegation that the contract had been breached. That factor would of course not have been available to the claimants in the present cases generally but may have demanded consideration in the Busse case if the other claimants had been able to attach their cases to that case. Mr Greene thought that an important factor in the intermediate court’s decision was that the defendants had made regular sales into Texas over a 15 year period although if that is so it is perhaps odd that the Court does not make reference to it in its Opinion. Basically, however, Mr Greene’s view is that the decision is wrong. He thought that the case contradicts the ruling in Helicopteros. However the validity of that opinion rather depends on how Helicopteros is read. Pepper was decided after Helicopteros. If a broad view of Helicopteros is taken it decided that mere purchases are not sufficient contacts. In Pepper there were somewhat more than purchases and the Texas Court was obviously prepared to take a broad view. Mr Kilgarlin for his part considered that Pepper ought to be regarded as a specific jurisdiction case. However this opinion sits uncomfortably with the express declaration of the Court that it discounted specific jurisdiction. Apparently the case was further appealed and settled. It may be that Professor Weintraub erred in relation to this case since he thought that the Court relies exclusively on purchases from Texas whereas in fact there was also a distributors’ agreement that the Court took account of. Mr Greene on the other hand thought that the case turned only on the distributors’ agreement.

A case produced by the defenders at a relatively late stage (and after Professor Weintraub finished his evidence) was Luker v Luker 776 S.W. 2d 624 (1989). This case involved a Louisiana resident who was involved in a motor accident in Louisiana. The motorist was a former resident of Texas and retained a Texan driving licence. She travelled to Texas three or four times a year. The plaintiff sought to invoke Texas jurisdiction and the case came before the Texas Court of Appeals. The argument was that since the defendant had driven with the benefit of a Texas driver’s licences she had sought to avail herself of the protection and benefits of the forum State. This argument was rejected by the Court of Appeals. The Court also held that looking to the purchase and financing of an automobile in Texas it could not be said following Helicopteros that this amounted to continuing and systematic contacts with the State. Clearly compared with some of the cases considered above the case for general jurisdiction in Luker is relatively weak. Another case where jurisdiction was refused was Van Pelt v Best Workover Inc. 798 S.W.2d 14. Again in this case the Texas Court of Appeals refused to accord jurisdiction. The plaintiff was a Texas resident who brought an action against his employers for injuries received while working in an oil rig of the coast of Louisiana. The employers were also based in Louisiana and an attempt was made to found jurisdiction against them on the basis that they had a telephone listing in Houston, they bought some supplies in Texas and they mailed wage cheques to Texas. The Court referred to Helicopteros and considered that the contacts relied upon by Van Pelt were much weaker. Certainly the last two cases show that the State Courts in Texas will not allow carte blanche jurisdiction but the decisions depend very much on their facts and the commercial contacts with Texas may well be said to be substantially less significant than in the OPCAL cases .

Scott v Huey L. Cheramie Inc. 833 S.W. 2d 240 (1992) was another case produced by the defenders after Professor Weintraub had given his evidence and was also a case where the Texas Court of Appeals held on appeal that the plaintiffs had not established jurisdiction in Texas. The plaintiff raised an action for damages for personal injuries against a Louisiana company in respect of an accident which had occurred in Louisiana or international waters. The Court held that Cheramie did not do business in Texas within the meaning of the Long-Arm Statute on the date of the alleged injury. It was observed that Cheramie did not contract with a Texas resident until thirteen months after the accident. Thus in this case the Intermediate Court appears to be taking the view that jurisdiction must be measured at the date of the critical event. This is not altogether easy to reconcile with Temperature Systems or more significantly with Perkins. Indeed it is not clear from the Report that Perkins was cited to the Court. On the other hand, as the Court of Appeals held, the business contacts were weak. Cheramie did not recruit Texas residents for employment. They made relatively unimportant purchases in Texas and also made crew changes and barge deliveries there. That was all. These activities were held not to amount to purposeful availment of the benefits of the Texas forum. Thus failing the necessary minimum contacts it was held that jurisdiction had not been established. Nevertheless the case illustrates that in Texas the acceptance of jurisdiction cannot be taken for granted in a marginal case. It may also illustrate that since the late 1980s the Court’s readiness to allow jurisdiction against nonresidents may have hardened.

The next case which the defenders asked me to consider was McFee v Chevron International Oil Co. Inc. 753 S.W. 2d 469 (1988). In this case the Texas Court of Appeals again affirmed the upholding of a Special Appearance that had dismissed the suit on the grounds of no jurisdiction. This is another case that was lodged by the defenders and not put to Professor Weintraub. The case concerned a British citizen who while working for Seiscom Delta, a subcontractor of Chevron Oil Company of Sudan was killed by rebels in Sudan. Although the parent company of Chevron Oil Company of Sudan was a Californian corporation and other Chevron subsidiaries were based in Texas the company was not itself authorised to do business in Texas. In 1976 Chevron Oil Company of Sudan had entered into a contract with United Geophysical Corporation to perform certain seismic exploration services. This contract was negotiated outside Texas. In 1981 United Geophysical Corporation was purchased by Seiscom Delta. There was no doubt that certain Chevron subsidiaries did substantial business in Texas and Group activities were carried out there. Chevron Oil Company of Sudan is a Delaware Company and has its principal offices in Sudan. However certain elements of the contract between Chevron Oil Company of Sudan and Seiscom Delta were performed in Houston, Texas. Seiscom Delta received certain logistic support there and purchased supplies and management services necessary to carry out its contract. Indeed Seiscom’s management decisions were generally made in Houston. The reasoning of the Court in its Opinion seems largely concerned with considering the alter ego doctrine in relation to a parent company and its subsidiaries. It was also noted that when Chevron Oil Company of Sudan contracted with United Geophysical Corporation, a Californian corporation, they had no reason to anticipate that the company would be taken over by Seiscom. Thus there was no apparent intent to do business in Texas. It was said that in that situation the assumption of jurisdiction by Texas would offend against "traditional notions of fair play and substantial justice" In any event the case is a specific jurisdiction case. In relation to a point I shall deal with later it may be noteworthy that although the deceased was a British subject no point about Equal Treaty Rights was taken.

In his Report Professor Weintraub had said that cases of the Texas Supreme Court on Specific Jurisdiction were an indication of the Courts’ readiness to take jurisdiction against foreign corporations. This opinion I may say does not appear to have been challenged by the defenders in cross-examination. Siskind v Villa Foundation for Education Inc. 642 S.W. 2d. 434 (1982) was said to be one such case. This was a specific jurisdiction case before the Supreme Court of Texas. A school in Arizona was sued in Texas by a Texan parent. The school solicited business in Texas by advertising there. Siskind a Texan resident attracted by the advertisements telephoned the school and papers were sent to him that resulted in his signing the enrolment application in Texas. He deleted a provision that said that Arizona was to be the exclusive forum. The cause of action was clearly one which arose out of the contract with the school. It was held that advertising in Texas was a sufficiently purposeful act to admit specific jurisdiction. Nor did the fact that Villa would have to litigate in Texas offend against fair play or substantial justice. In the leading judgment Justice McGee approved a dictum to the effect that "a truly interstate business may not shield itself from suit by a careful but formalistic structuring of its business dealings".

A case referred to by Mr Kilgarlin but which had not been put to Professor Weintraub was Middleton v Kawasaki Steel Corporation 687 S.W. 2d 42 (1985). This was a specific jurisdiction products liability case. The case was decided in the Texas Court of Appeals which reversed the trial judge’s dismissal of the case and held that there were sufficient grounds to justify the exercise of jurisdiction. Kawasaki were a Japanese company and a claim was pursued against them in Texas arising out of the supply of an allegedly defective pipe casing. They conducted market research and sales promotion activities in Texas as well as maintaining an office there .It was held by the Texas Court of Appeals that Kawasaki had sufficient minimum contacts with Texas at the time the cause of action arose to subject them to Texas jurisdiction. The trial judge’s allowance of the Special Appearance was reversed. Mr Kilgarlin used this case as authority for the view that activities in Texas after the cause of action arose were not relevant. However it has to be noted that Kawasaki is essentially a specific jurisdiction case and in such cases the ground of jurisdiction is closely related to the contact out of which a cause of action arises. As the Court mentioned in the Opinion the critical period for determining amenability to process in Texas was the time when allegedly the defective pipe was sold and failed. It was agreed in the case that the analysis of the reach of Texas Courts extends to the permissible limits of due process. It is also noteworthy that the Court observed that Houston is the centre of the oil business in the United States. The Supreme Court of Texas refused to allow appeal.

Keen v Ashot Ashkelon Ltd. 748 S.W. 2d 91 (1988) is another products liability case this time ultimately being decided by the Supreme Court of Texas. It was decided that an Israeli trailer manufacturer which delivered its product into the stream of commerce with the reasonable expectation that the product would enter Texas was amenable to the jurisdiction of Texas Courts for the purposes of the products liability claim. Thus we again have a specific jurisdiction case. The majority of the Court held that "a defendant’s delivery of its product into the stream of commerce with the expectation that the product will enter the forum state will ordinarily satisfy the due process requirement of minimum contacts so as to afford that state personal jurisdiction over the defendant". In fact in the case it is difficult to understand the reference to a "stream" of commerce since there was only one transaction. In fact the case illustrates acceptance of the Court of a broad view of jurisdiction. Certainly that was how Professor Weintraub viewed the case. The majority judges also say that the case is distinguishable from the case of Asahi Metal because in Asahi it was testified that the Asahi company had never contemplated that their limited sales to Taiwan would result in exposure to Californian jurisdiction. Moreover Ahasi had never sold direct into Texas as had Ashot Ashkelon. Mr Greene was inclined to the view that Keen was a bad decision because the fairness factor was not argued. Mr Kilgarlin on the other hand considered that jurisdiction was only a side issue in the case and that the case had really been concerned with contributory negligence.

I was referred by parties to some federal court cases. One important difference in federal procedure is that the onus of establishing jurisdiction rests on the plaintiff. Kervin v Red River Ski Area Inc. 711 Fed. Supp. 1383 (1989) was decided by a federal judge in the United States District Court relating to Texas. The plaintiff, a Texas resident, slipped and fell on a stairway at a ski resort in New Mexico. It was alleged that Red River had been negligent. Red River contested jurisdiction arguing that they had no property in Texas, were not licensed to do business there and had no contacts with travel agents in Texas. However they had inserted one advertisement in one magazine whose general circulation would have been available in Texas and indeed there were other advertisement contacts. They also had engaged in local advertising within Texas. Four out of their five shareholders resided in Texas and they recruited ski instructors from universities in Texas. The company had originally been incorporated in Texas but was later re-incorporated in New Mexico. They mailed promotional brochures to Texas residents who applied for them and in fact about half of their customers were Texans. The Court laid stress on the fact that in specific jurisdiction cases even one contact may support jurisdiction. The judge goes on to observe that in general jurisdiction cases "a greater level of contacts with forum state is required and the contacts must be continuous and systematic". Helicopteros and Perkins are cited but it is perhaps noteworthy that the judge does not attempt to relate the requirements to the kind of overall administrative arrangements which were present in Perkins (as the defenders suggest may be required). Indeed the test I have referred to receives a degree of refinement for it is observed that a defendant must have contacts with the forum state "quantitatively and qualitatively great enough to warrant the significant conclusion that it has constructively consented to defending a suit in Texas". The observations on Helicopteros are interesting and show that the Professor’s view has some support for it is stated that the Court in Helicopteros collapsed the defendants’ Fort Worth activities basically into one contact, "a package of goods and services purchased". In the case before him the judge held that Red River had laid down a pattern of engaging in in-state advertising which even on its own might be regarded as continuous and systematic contact. Reference was then made to the defendants’ other contacts with Texas which I have already mentioned. In declaring that his decision to accord general jurisdiction was consistent with Perkins the judge observed that Perkins had clarified that a nonresident need only conduct a limited portion of its business in the forum state for general jurisdiction to exist. The Court also considered the Due Process requirement and held it to be satisfied. One consideration in this respect was said to be the benefit Red River derives from Texas residents. I should also note that the Court held that in relation to the sufficiency of contacts the fact that Red River had Texas shareholders is a factor. The pursuers stressed that OPCAL were wholly owned by a Texas company. Mr Greene thought that the case could be explained by the fact that New Mexico is contiguous to Texas and that therefore substantial business connection with Texas could be expected. Certainly as Mr Kilgarlin claimed the case only has the authority of a single judge but he delivers what would appear to be a carefully reasoned judgment and in my view the case at least illustrates the struggle the defendants might have had had the claimants pursued in Texas whatever the ultimate outcome may have been.

A federal case that was lodged by the defenders after Professor Weintraub gave his evidence was Holt Oil and Gas Corporation v Harvey 801 F. 2d 773 (5th Cir. 1986. The case was decided in the federal 5th Circuit Court of Appeals. A Texas Oil and Gas Company brought an action against Harvey, an Oklahoma resident. The court of first instance had refused to entertain the case because of lack of jurisdiction. An interesting point is that in Harvey’s contract with the plaintiffs there was a choice of law clause selecting Oklahoma law. Nevertheless the appeal court found that general jurisdiction in Texas was established. Harvey had attended college and been employed in Texas. He owned a condominium in Houston. He travelled to Texas regularly for recreation and to visit his children. He had extensive business dealings with a Texas company other than Holt. He was the sole shareholder of Marlin Oil Company that had drilled oilwells in Texas. The Court held that for purposes of general jurisdiction the correct approach was not to consider Harvey’s contacts individually but to examine them in toto. It was held that the exercise of jurisdiction did not offend against traditional notions of fair play. This was said by the defenders to illustrate that notions of fair play have to be regarded even in general jurisdiction case.

A case that the defenders particularly relied on was Bearry v Beech Aircraft Corporation 818 F. 2d. 370 ( 5th cir. 1987). The litigation was a products liability claim arising out of an aircraft accident. The United States District Court held that jurisdiction had been established. However in the federal system an Interlocutory judgment can be appealed and the Federal Court of Appeals reversed the judge of first instance. The case represented an attempt to invoke general jurisdiction using stream of commerce considerations. A Louisiana resident bought a Beech aircraft. This crashed while in Mississippi. Beech were a Delaware company with a principal place of business in Kansas. Beech had no business contacts nor agents in Texas. However they had for some years run a national marketing campaign and a substantial volume of business had been done with seventeen independent Texas dealers. Beech manufactured aircraft frame assembles for Bell Helicopters of Fort Worth, Texas to the value of about $72 million. Beech representatives visited Texas dealers to help with maintenance problems. Beech purchased over $195 millions worth of goods from over 500 Texas vendors. However none of the plaintiffs resided in Texas and it was considered because the interest of Texas in the litigation was so slight it would be unfair were he suit to proceed in Texas. The Court expressly disagreed with the view of the judge of first instance that stream of commerce considerations applied to general jurisdiction. General jurisdiction was said to be based on the concept of implied consent to Texas jurisdiction. Beech had carefully structured their affairs so as to shield themselves from Texas jurisdiction. It was noted that the fact that Beech products flow into Texas does not create a general presence in the state because Beech carefully completed transactions outside Texas. The law of Texas neither protected nor benefited Beech. It was particularly noted that Beech had no office nor agents in Texas. Of course the case being a federal case was one where the burden of establishing jurisdiction rested on the plaintiffs. Professor Weintraub thought that Bearry was a good example of why Texas lawyers try to stay out of federal courts (it was I think clear that the Piper Alpha cases would not have required to be raised in the federal courts). Professor Weintraub pointed out that the Sixth Circuit Federal Court did not appear to agree with the view expressed in Bearry (the Fifth Circuit) that a party could by mere structuring of its affairs avoid being held accountable to Texas if the reality was that there were significant contacts (Roethlisberger v Tokyo Aircraft Instrument Company of Japan 1991 W.L. 347671). Mr Greene places considerable emphasis on Bearry. He points out that the case shows that the activities of related companies in the same group of companies are irrelevant. He considers that Helicopteros is interpreted as deciding that the business contacts necessary to establish general jurisdiction must be "general business" contacts. However I was not cited any state court case where the concept of "general business" was held to be a prerequisite of general jurisdiction. However Bearry is a case where the dealings of the defendants with Texas were very substantial in value, albeit extremely guarded, and it illustrates the fact that, at least in the federal system, the securing of Texas jurisdiction cannot be taken for granted. One important difference from the present case is of course that it was clear that Beech had no agents in Texas.

A federal case of first instance was Psarianos v Standard Marine Ltd Inc. 728 F. Supp. 2D 438 (l989). Crew members and survivors of deceased crew brought reparation proceedings in Texas against the owner of a vessel which sunk off the coast of Japan. The crew were Greek. The American Bureau of Shipping were also defendants on the basis that they had failed to survey the ship and in fact Mr Greene acted for them so he was personally familiar with the case. It was alleged that ships connected with the defendants had called at Texas ports almost on a daily basis. These regular visits continued after the accident so that this again was a case where post-incident activities were said to support general jurisdiction. Jurisdiction was held to be established. This is consistent with what is stated in Professor Weintraub’s book on jurisdiction that is a standard reference work. In that book Professor Weintraub states that when "doing business" is used as a generally-affiliating basis for jurisdiction (in a cause of action not arising from the business activities in the forum ) jurisdiction must be exercised while the defendant is still doing business in the forum and doing it in a manner that makes it reasonable to use his continued activity there as a generally-affiliating basis for jurisdiction. Due Process was also held to have been satisfied. The defenders argue that the case was not to be taken as an authority that the presence of agents within the forum state is a sufficient ground of jurisdiction.

A relatively recent case that was cited to me was Bissbort v Wright Printing & Publishing Co. 801 SWR. 2d. 388 (1990). The plaintiff sued Wright for the cost of repairing a printing press. Wright were in Iowa and Bissbort in Texas. Jurisdiction was held established by the Court of Appeals but largely on the circumstance that Wright had paid a large sum through a Texas bank. The Court considered that by wiring money to a Texas bank Wright had taken advantage of the protection against misappropriation of the money afforded by Texas law. However it has to be noted that the case was a specific jurisdiction case and that in any event the Court has not always taken the view that payment of money through a Texas bank is a sufficient contact to give rise to jurisdiction. Apart from illustrating the continuing readiness of at least some Texas Courts to take a liberal view of the requirements needed to establish jurisdiction I doubt if the case is particularly important.

Guardian Royal Exchange Assurance Ltd v English Chinese Clays Plc. 815 S.W. 2d 223 (1991) was a case where according to Professor Weintraub the Asahi view of Due Process had been conclusive against the allowance of jurisdiction. It was a specific jurisdiction case but although minimum contacts had been established it was held that it would be unfair to allow jurisdiction. The decision was that of the Supreme Court of Texas. Throughout the history of the case there had been a certain amount of division of judicial opinion. English China Clay were an English company with certain Texas subsidiaries. Guardian Royal were their insurers and this insurance covered subsidiaries. However the acts relating to effecting the insurance had all occurred in England and no indication had been given that subsidiaries were in Texas. The employee of a Texas subsidiary of the English China Clay company was killed and the Texas claimants were paid off. The Court held that whereas "foreseeability" is an important consideration in deciding whether a nonresident purposefully established "minimum contacts" with the forum state so that personal jurisdiction could be exercised over a defendant without offending Due Process foreseeablity was not necessarily determinative. The Court also held that where general jurisdiction is asserted over a nonresident defendant the minimum contacts analysis is more demanding and requires the showing of substantial activities in the forum state. The Court went on to consider in detail the considerations that may affect the Due Process requirement. These considerations include the procedural and substantive policies of other nations whose interests are affected, the burden placed on a defendant who requires to defend in a foreign legal system, the regulatory interests of the forum state (and though these in their own are not a sufficient basis for acceptance of jurisdiction where these interests are present they may justify a lesser showing of minimum contacts than would otherwise be the case), the plaintiff’s interests in obtaining effective relief, the interstate system’s interest in obtaining the most efficient resolution of controversies, and the interests of the several states in obtaining the furtherance of fundamental social policies. These are really a repetition of the Asahi tests. However it is to be noted that in Schlobohm it was suggested that once the contacts for general jurisdiction are established the connection with Texas is so obvious that one is moving towards a situation where it would not be unfair to litigate in Texas. This was recognised at page 231 of the Report where Justice Hightower observes "that only in rare cases, however, will the exercise of jurisdiction not comport with fair play and substantial justice when the nonresident defendant has purposefully established minimum contacts with the forum state". In Guardian Royal Exchange it was held that the assertion of personal jurisdiction over the defendants would not be consistent with fair play and substantial justice. The dispute was between English insurers and American insurers in respect of contribution to wrongful death suits which had been settled and the Texas interest in adjudicating the dispute was diminished since neither insurers were Texas insurers or insured. Thus in Guardian Royal Exchange as in Asahi the real claimants had dropped out of the case and the dispute was between parties with truly minimal interests in Texas. Moreover both were in fact specific jurisdiction cases. However what the case clearly shows is the two stage process where you look first at the matter of minimum contacts and if that test is satisfied you then look at the Due Process considerations. Of course this case was not decided at the time OPCAL were negotiating their settlement.

3-D Electric Company Inc v Barnett Construction Company 704 S.W. 2d 135 (1986) was another case cited by the defenders but not put to Professor Weintraub. It was a decision of the Texas Court of Appeals. A Texas electrical contractor brought an action against a Tennessee general contractor arising out of construction work done on a motel in Colorado. The action was arising out of the contract between the two parties so that the claim to jurisdiction was based on specific jurisdiction but the claim failed. There was an alter ego argument advanced by the plaintiffs that failed but in relation to minimum contacts it was observed that payments into a Texas bank were not a sufficient basis for jurisdiction. This finding seems to be inconsistent with Bissbort.

Another case cited to me was Product Promotions Inc. v Cousteau 495 F. 2d. 483 (1974). Although the decision of the Court was overruled on another issue dicta that were not challenged by the United States Court of Appeals were to the effect that the activities of an agent within the forum state can provide the basis for jurisdiction against the principal. The case on jurisdiction in fact failed because the authority of the agent to act was not established. Indeed Professor Weintraub indicated quite categorically that acts by an agent in the foreign jurisdiction are equivalent to actions of the principal and I did not understand him to have been challenged on this.

A workman called Billy E Cobb was injured on Piper Alpha platform in the North Sea in 1979 and raised a personal injuries action in Texas. There were a number of defendants including OBI and OPCAL. The case was taken on appeal from a decision of the Court of first instance granting Special Appearance and OPCAL were successful in having the case against them dismissed on the ground of no jurisdiction. The case then went to trial against the defendants who remained in the case but in effect failed at trial. This resulted in the appeal to the Texas Court of Appeals. In the appeal no theory of general jurisdiction seems to have been advanced by the plaintiffs nor considered so that in effect the case was decided as a special jurisdiction case. It also has to be noticed that at the relevant date OPCAL neither employed Cobb nor operated the platform. The judgment dismissing the case against OPCAL and OBI was affirmed. The Court ordered that the judgment should not be published which is the practice when a judgment is not considered as important or persuasive. It would appear that only one significant contract with Texas involving OPCAL was presented to the court which of course would have ruled out general jurisdiction. Both Mr Silva and Professor Weintraub did not think that Cobb had any serious bearing on the position in the cases before me and I am inclined to accept that their arguments on this point are persuasive. Cobb was an individual personal injury case. I can accept that the litigations arising out of a multiple disaster such as Piper Alpha would have attracted much more skill and commitment to success than was the case in Cobb. There were clearly many significant contacts that would have been presented to a Court in these claims which were not considered at all in Cobb. The complicated arrangements involving Occidental Crude Sales Inc (which I shall detail later) are just one important example. Moreover the treatment by the Court of the questions raised in Cobb does not suggest the level of analysis encountered in other more significant cases. In particular general jurisdiction is not really dealt with. The Court themselves seemed to have been surprised that the plaintiffs had not raised alter ego issues. This may of course reflect the significance accorded to the case by the attorneys who were acting.

Another case that the defenders founded on was British Malaysia Assurance v El Paso Reyco 830 SW Reporter 2d series 919 (Texas, 1992). The plaintiffs were Texan residents and their action was against foreign re-insurers. It was held by the Supreme Court of Texas that sufficient minimum contacts had not been established.

11.4.8. Minimum Contacts

In the light of the law as discussed in the previous section an issue of critical importance in relation to the prospects enjoyed by the claimants of establishing jurisdiction against OPCAL in Texas is whether or not OPCAL had sufficient minimum contacts with that state and in particular whether the contacts which had occurred satisfied the requirement of being continuous and systematic to the degree demanded by the case law governing jurisdiction. The parties’ experts were in direct conflict on this issue, Professor Weintraub, Mr Silva and Mrs Sondock taking the view that the established contacts with Texas would have sufficed for the purposes of jurisdiction whereas Mr Kilgarlin and Mr Greene took the opposite view. The pursuers argued that not only would the minimum contact rules have been satisfied but that there was no reasonable prospect of the consortium attacking jurisdiction successfully on the basis that for the Court to accord it would offend against Due Process. The pursuers in particular founded on the view expressed by Professor Weintraub that Asahi was a special jurisdiction case and was particular to its own facts. The pursuers contended (and there was no dispute about this) that in entering into contracts in relation to Piper Alpha, OBI were the predecessors of OPCAL.

Evidence about the contracts relating to Texas entered into by OPCAL (and their predecessors) was given by the Pursuers’ witness John James Arnton. Mr Arnton is a solicitor employed with Elf Enterprises (Caledonia) Ltd. and the factual evidence he gave about contracts (as distinct from any inferences he drew from it) was not seriously challenged. Indeed the details of relevant contracts were agreed by Joint Minutes. Since 1985 Mr Arnton has worked in the oil industry. He joined OPCAL in 1987 and thereafter worked in their Law and Contracts department. After the accident he was asked by Paull & Williamsons to look through OPCAL’s contracts with a view to identifying and producing those with a possible Texan connection

Mr Arnton deponed that prior to the accident OPCAL had entered into purchase orders and service contracts with Texas companies relative to their North Sea operations. He explained that under OPCAL’s practice purchases that were off the shelf, such as items of equipment, were entered into by way of purchase order. The purchase orders were on standard forms. On the other hand a large purchase that required special arrangements such as construction work would not be effected by way of purchase order but would be the subject of an individual contract. Between January 1984 and 6 July 1988 OPCAL entered into 140 purchase orders with 27 Texas companies and these contracts are set out in the pleadings. Most of these were for the purchase of goods but some were for the repair of equipment. Purchase orders were effected at regular intervals throughout the said period. Details of purchase orders are set out in the said Joint Minutes. The values of such purchase orders are considerable. They have a total value of $1,660,927. They have clauses to the effect that they shall be governed, construed and interpreted according to English or Scottish Law and in addition the parties agree to submit to the jurisdiction of the courts of the legal system governing the order to the exclusion of any other legal system. Many are follow-up orders to an original supplier. They all relate to the technical aspects of North Sea operations. Moreover most relate to materials that require to be specially fabricated by a specialist supplier. Indeed sometimes the supplier is a sole source supplier. In my view it is quite clear that at the time of the said purchases in many cases it was necessary to go to Texas to acquire particular supplies required by OPCAL and the consortium. For example Texas was one of the three major computer capitals in the world particularly in relation to the oil industry and the consortium acquired computer products and services from there. Other suppliers were also chosen because of their particular expertise. Moreover purchase orders with Texas companies continued to be entered into even after the disaster. Between 25 July 1988 and 3 May 1990 19 such purchase orders were effected with a total value of $182,459.

In addition to the purchase orders the consortium (through OPCAL) also entered into a number of individual contracts with Texas companies. These too are set out in the pleadings and their details are the subject of agreement by Joint Minute. Between 1973 and 1986 16 contracts of this type were entered into with 11 different Texas companies. In 1973 OBI entered into a contract with Oceanic Contractors Ltd. for the design, fabrication, construction and installation of the Piper Alpha platform Oceanic, Contractors were a Panamanian company with its offices in Beirut but the contract provided that any controversies were to be settled by arbitration in Texas (or such other place as the parties might agree) although Californian law was to be applicable. The rights and obligations of OBI were of course subsequently assumed by OPCAL. The said contract provided that the obligations thereunder were to survive the termination of the contract. Thus if a design fault were to emerge sometime after the contract any resultant dispute would be arbitrated in Texas. In April 1974 OBI entered into a contract with Brown & Root Offshore N.V. to build a pipeline from Piper Field to Flotta. The constructing company were a Netherlands Antilles company. It was provided that payment under the contract was to be made in dollars to a Texas bank. Again it was provided that obligations under the contract were expected to continue because the contract contained provision for the keeping of records and auditing after the works had been completed. The law applicable to the contract was stipulated as being Californian Law but there was a provision that if arbitration was required and parties could not agree to an arbiter then application for an appointment could be made to the Chief Justice of the District Court of Texas, Houston Division. The value of the contract was in excess of $1,500,000. The constructing company were part of the Brown & Root group of companies that is centred in Texas. Indeed Brown & Root Inc, the Texas parent company, guaranteed the performance by their contracting subsidiary of the obligations under the said contract. OBI negotiated the contract in Houston and employed as their attorneys the predecessors of Vinson & Elkins. On 25 October 1976 OBI (which as was correct was stated to be a Californian company) entered into a contract with a Texas company, Sedco Inc. This was for the provision of the manpower and services necessary to operate a drilling rig in the North Sea and the contract was stated to be worth $5,000,000 to $12,000,000. The rates payable by OBI are expressed in dollars and are to be paid to a Texas bank. In relation to this contract any arbitration is to be in New York. In this contract OPCAL are specifically mentioned as having an interest in the contract (they were at the time the operators of the Claymore platform). They are indemnified as one of the declared Participants against certain losses. As with the other contracts I have mentioned the contract is said to be binding upon the successors and assigns of the parties to the contract. In this case the contract is said to be governed by the law of England. Thus we have a Californian company contracting with a Texan Company for a contract to be performed in Scotland which is to be regulated by the law of England (although to be arbitrated in New York). This I think emphasises the complex international quality of the relevant contracts. On 26 May 1977 OBI entered into a contract with Aquatic International Corporation based in Houston, Texas. On this occasion OBI were described as having an Aberdeen office. This contract related to the supply of equipment and skilled labour for pipe handling work in the North Sea. As in the case of others of these contracts there are provisions for obligations that would survive the completion of the main work, in this case a confidentiality clause. Once again OPCAL have the specific benefit of an indemnity clause. The effective duration of the work to be carried out under the contract is four and a half years. The law to be applied to the contract is stated to be English law and any arbitration required is to be in England. This contract was signed shortly after Piper Alpha came into stream about January 1977 so that it was envisaged that the contract would be performed to a substantial degree after Piper Alpha was in full operation. The next relevant contract was for professional services and consultation regarding pipeline construction and submarine maintenance and was entered into between OBI and International Oilfield Consultants Inc. of Texas. In this contract OBI are described as London company. The contract is dated September 1977. Again there are a number of clauses that would continue to operate after the work contracted for has been completed. English law is prescribed as the operative law. There were arrangements for the inspection of work at Hydrotech, Houston. Rates of pay are given in dollars. Moreover Texan specialists were recruited in connection with the work. Payment by OBI was to be made into a Texas account. The next contract to be noticed is a contract between OBI and Southeastern Drilling Inc. (a Texas company) dated 7 August 1978. The contract was to affix a jacket to the seabed at the Piper field. OPCAL were specified as Participants. Payment was to be made to the contractors at a Dallas bank. There were contractual obligations prescribed to survive the termination of the contract and some aspects were to be performed in Texas. The contract was to be governed by English law. The total sums to be paid in US dollars were $419,000. The next contract was entered into by OPCAL itself (which is therein described as incorporated in England) and it was with Southeastern Drilling Inc. It was for the provision for the supply of personnel in connection with the Piper Alpha support vessel Tharos. It was dated 28 June 1979. The contract not only provides for the application of English law but also provides for submission to the jurisdiction of the English Courts. Payment is to be in dollars at a specified Texas bank. The next relevant contract is between OPCAL and Sedco Inc of Texas. It is for the construction by Sedco of MSV Tharos. The governing law is English law and the contractor waives any immunity to legal process in England. The contractor reserves a right of pre-emption in respect of the vessel. Payment is to be in Texas in dollars. There was a five year labour agreement to take effect after construction of the vessel itself. The contractors had an obligation to maintain records and to permit inspection and audit of them which in practicable terms would have meant implementation of such conditions in Texas. The contract involved OPCAL in obligations of about $43,000,000. There followed a Mobilisation Agreement between Sedco Inc. of Texas and OPCAL and this provided for the delivery by the former of the new MSV Tharos from Japan. Payment is once more to be in dollars at a Texas bank. The total cost of this contract is estimated at $682,045. Even after Piper Alpha and its equipment had been supplied, installed, and was operating. OPCAL or its predecessors OBI, continued to enter into major contracts with Texas companies particularly with a view to securing consultancy, computing or other specialist engineering services related to the oil industry. These contracts were entered into at regular intervals right up to the accident in 1988. The individual contracts contained provisions similar to those contain in the contracts already detailed. Including the contracts I have detailed 16 major contracts and 3 sub-contracts were entered into with 11 different Texas companies. Seven of the contracts were entered into in the name of OBI, and OPCAL had these assigned to them. Nine contracts and three sub-contracts were entered into directly by OPCAL. The value of all the contracts in total exceeded $ 100,000,000 and the contracts in which OPCAL were directly parties had a value in excess of $60, 000,000. All the contracts provide for payment to the contractors in dollars and seven specifically provide for payment to be made at a Texas bank. All the contracts have survivorship clauses that would lend meaning to any assignations of the contracts to OPCAL. Whereas much of the work to be performed under these contracts involved performance in Scotland certain of the work was to be performed in Texas. The two earliest contracts involved arbitration arrangements in Texas but the subsequent contracts were to be regulated by English or Scots law and some provided for choice of forum in England or Scotland. Some of the contracts provided for continuing or long-term relationships and indeed a contract entered into with Dixiline could have been fully operative until October 1989. Some of the contracts were with sole-source Texas suppliers and others required continuing business contacts for repair and spare parts. There is little doubt that OBI (and thus in effect OPCAL) relied heavily on Texas experience and expertise to have Piper Alpha and its ancillary equipment built and installed and that once the platform was operational the consortium still required to avail themselves of Texan expertise. Houston was generally recognised (at least in the period before 1988) as being the "oil capital" of the world so that it is perhaps not surprising that a company in the industry should have a significant business connection with Texas.

In the post-accident period between the accident and the settlement OPCAL carried out a significant amount of business with Texas companies. Many of these involved Purchase Orders and the details of the relevant contracts are set out in the pursuers’ pleadings and are agreed by Joint Minute. Nine such Purchase Orders were entered into after the accident in 1988 (seven were in 1989 and one in 1990). The total value of these particular Purchase Orders was in excess of $182,000. Seven of them pre-dated the agreement on an outline settlement in November 1988. They involved thirteen different Texas companies. It was argued by the pursuers that these contracts are relevant to the jurisdiction issue as showing a continuation of the preceding "stream of commerce" between OPCAL and Texas. Moreover after the accident OPCAL entered into nine Service Orders with Texas companies and these were directly related to the accident. These too are in the Pursuers’ pleadings and agreed. Five of them pre-date 22 November 1988. A Service Order is a self-standing Order. There is little doubt that many of these contracts were motivated by the need to go to Texas to get access to the special expertise required to deal with the effects of the accident. A rather well publicised illustration of this was the employment of Red Adair (a Texan) who was called in by the personal intervention of the President of the parent Occidental Company because of his special experience in capping oil-related fires. That particular employment was negotiated on a verbal basis. The contracts had a substantial total value and the sums payable by OPCAL were to be computed and paid in dollars. One of these contracts involving Macgrange Inc of Texas was to be governed by the federal maritime law in respect of services or equipment purchased or to be used offshore or in navigable waters but otherwise by the law of the state of Texas. That contract was worth $110,000. Some of the contracts involve work time spent in Texas. Mr Arnton confirmed the rather obvious view that after the accident OPCAL continued to do business with Texas because expertise was required that was not available anywhere else. This was consistent with the pursuers’ contention that over the years the consortium resorted to Texas not on a fortuitous basis but because Texas had oil industry resources that were not at the time available elsewhere. Professor Weintraub thought that the post-accident contracts were relevant to demonstrate OPCAL’s relationship with Texas. They were a continuing part of the stream of commerce with Texas. However Mr Kilgarlin and Mr Greene insisted that the post-accident contracts were not relevant.

A fact upon which the pursuers and their experts placed considerable reliance in relation to the Texas jurisdiction question was that OPCAL sold all the crude oil produced through their North Sea operations through Houston, Texas. These sales were said to have been effected and brokered through another Occidental subsidiary company, namely Occidental Crude Sales Inc. (hereinafter referred to as OCSI). The transactions between OPCAL and OCSI were said to have been a significant - indeed critical - minimum contact which OPCAL had with Texas. OCSI although registered in California were licensed to do business in Texas and the operations they conducted for OPCAL were carried out in the office of OCSI in Houston which was their principal place of business. Houston was a world centre for oil sales and most major oil producers had an office or agent in Houston. Houston was of course a convenient base for oil sales to the Western hemisphere. However because of time change it was necessary, so that oil sales could continue on a 24 hour basis, that there should be a centre to conduct sales in the Eastern hemisphere and many companies used London or Rotterdam for this purpose. To facilitate sales through London, OCSI on 1 February 1972 entered into an Agreement with Occidental International Oil Inc. (hereinafter referred to as OIOI). In terms of that Agreement OIOI were to provide services to OCSI in the marketing of oil. OIOI had their principal office in London although they were in fact a Californian company. OPCAL required to sell at least part of their production of crude oil through Houston and if OCSI had not brokered their oil there they would have needed some other arrangement. There was a sharp issue between the parties as to the exact relationship of OCSI to OPCAL and the precise nature of the transactions which occurred involving them. Evidence in this connection was given by the pursuers’ witnesses Michael Fitzgerald, James Endacott, and Robert Wood, whereas the defenders led Terry Glasgow. The sales of OPCAL’s production of crude oil represented a considerable volume of business. During years of high production such sales were attaining fourteen hundred million dollars per annum and even in 1988 sales were in the region of eight hundred million dollars. Mr Fitzgerald is a chartered accountant and is presently the Executive Vice-President of OIOI in London. He was involved with OPCAL from 1974 until 1990 (when OPCAL was absorbed into the Elf interest) apart from about two years beginning in 1985 when he was involved with Occidental Group’s operations on Libya. From time to time he held positions as a director with a number of other Occidental Group companies. Until he went to Libya in 1985 he held the position of Vice -President of Finance of OPCAL and he was also a Vice-President of OIOI. He was also a director of OPCAL for a number of years. He seemed to me to be well placed to be familiar with the general business procedures of OPCAL in the period prior to the accident. In fact I thought that he was a good witness. He had not given a deposition in the Busse case which meant that he had not compromised his evidence as other witnesses had done to a degree by inconsistencies between what was said in those depositions and in Court. The witness Endacott is presently the Vice-President and General Counsel of OCSI and lives in Houston where OCSI have their principal place of business. He has degrees in Petroleum Engineering and Law. He began to work for the Occidental Group in 1966 and has continued working for various companies of that Group apart from the period from 1973 until 1981. He began doing legal work for OCSI in 1985. The witness Wood is presently the President of OCSI based in Houston and has held that position since 1975. He joined the Occidental Group in 1972. When he gave his evidence he was aged 60 and he had been engaged in the buying and selling of crude oil for thirty years. In OCSI he was responsible for co-ordinating the marketing and selling of all the Occidental companies’ non-US produced crude oil and equity crude (that is to say crude oil not produced by the company but purchased in the third party market) and indeed in 1986 the domestic oil was also put under OCSI. The defenders’ witness Mr Glasgow is a Texas resident and is presently a Vice-President of OCSI. He began worki