GH America Energy LLC v. Greenalia Wind Power Blue Hills LLC

Background

GH America Energy LLC (GHAE) sued Greenalia Wind Power Blue Hills, LLC (Blue Hills) for breach of contract and sought a court order requiring Blue Hills to perform alleged obligations under an Asset Purchase Agreement. The agreement concerned the purchase of rights and related assets for the Blue Hills Wind Project in Val Verde County, Texas.

GHAE alleged that Blue Hills was required to use reasonable best efforts to obtain approvals and complete a Standard Generation Interconnection Agreement with American Electric Power Service Corporation. GHAE claimed that Blue Hills failed to provide information needed for an interconnection study and instead sought to spread a required milestone payment over 32 months. Blue Hills disputed that the agreement required it to complete the interconnection agreement or achieve the milestone.

Blue Hills moved to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, Rule 12(b)(2) for lack of personal jurisdiction, Rule 12(b)(3) for improper venue, the forum non conveniens doctrine, and Rule 12(b)(6) for failure to state a claim.

Subject-Matter Jurisdiction

The court granted dismissal under Rule 12(b)(1). Federal diversity jurisdiction requires the parties to be citizens of different states or, in certain circumstances, to have the required citizenship arrangement involving foreign parties. The court determined that GHAE was a citizen of China because of the citizenship of its ownership chain.

The court treated Blue Hills as a citizen of Spain. Because a limited liability company takes the citizenship of each member, the court examined the principal place of business of Blue Hills’s member. Applying the “nerve center” test—which looks to where a company’s high-level officers direct, control, and coordinate its activities—the court found that the company’s executive decision-making occurred in Spain. The court rejected GHAE’s reliance on a New York address and on office space leased by an executive of a different entity, concluding that those facts did not show that New York was the location of high-level decision-making.

Because GHAE was a citizen of China and Blue Hills was a citizen of Spain, the court found no diversity jurisdiction and dismissed the case for lack of federal subject-matter jurisdiction.

Other Grounds

Because it found no subject-matter jurisdiction, the court declined to decide Blue Hills’s argument that the court lacked personal jurisdiction.

The court separately found that dismissal was warranted under the forum non conveniens doctrine. Section 10.10(b) of the Asset Purchase Agreement stated that suits arising from the agreement could be brought in federal courts or Texas state courts located in San Antonio and Bexar County, and that each party irrevocably submitted to those courts’ exclusive jurisdiction.

Applying the governing framework, the court found that the clause was reasonably communicated, mandatory, and applicable to the parties and breach-of-contract claim. It also found that GHAE had not shown that enforcing the clause would be unreasonable or unjust. Because the selected forum was in a different state court system, the court concluded that dismissal, rather than transfer, was the proper remedy.

The court also declined to decide whether GHAE’s complaint failed to state a claim under Rule 12(b)(6).

Disposition

The court granted Blue Hills’s motion to dismiss. The Clerk of Court was directed to terminate all motions and close the case. The opinion did not decide the merits of GHAE’s contract allegations.