Bowoto v. Chevron Texaco Corp.

ORDER DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON PHASE I

Defendants’ motion for summary judgment regarding Phase I of this trial is currently pending before the court. Having carefully considered the argument of the parties and the papers submitted, the motion for summary judgment on Phase I is DENIED.

BACKGROUND

This action was filed on May 27, 1999 by five Nigerian plaintiffs who alleged that defendant ChevronTexaco Corporation 1 (“ChevronTexaco” or “CVX”) was involved in the commission of human rights abuses in Nigeria. The complaint has been amended several times, and now includes as defendants both CVX, a United States-based corporation, and ChevronTexaco Overseas Petroleum, Inc. (“CTOP” 2 ), a Delaware corporation which is a wholly-owned subsidiary of CVX, as well as 500 “Moe” defendants. Chevron Nigeria Limited (CNL) operates a joint venture with the Nigerian National Petroleum Company, the Nigerian state oil company. At the time of the Parabe incidents, CTOP owned 90% of CNL directly, and owned the other 10% through a wholly-owned subsidiary.

Plaintiffs allege that the United States defendants, CVX and CTOP, are liable for their own acts and for the acts of CNL in three incidents that occurred in Nigeria, in which defendants and CNL allegedly acted unlawfully and committed human rights abuses.

— The first was the Parabe incident, which occurred on May 28, 1998. Plaintiffs allege that CNL, acting in concert with defendants, recruited the Nigerian military and police to fire weapons at Nigerians staging a protest on one of Chevron’s oil platforms, the Parabe platform. Two protesters were killed in this incident. Plaintiffs allege that CNL’s management and security forces were involved in the subsequent detainment and torture of Bola Oyinbo, one of the leaders of the protest movement on the Parabe platform.

— The second and third were the Opia and lkenyan incidents, which occurred on January 4, 1999. Plaintiffs allege a helicopter flown by Chevron pilots and transporting Nigerian military and/or police flew over the community of Opia and opened fire on the villagers, killing one person and injuring others. Plaintiffs allege that the helicopter then flew to the lkenyan community, opened fire and killed one person and injured several others. Plaintiffs allege that thirty minutes later, CNL sea trucks containing CNL personnel and Nigerian military approached Opia and opened fire on the villagers, killing several people. Plaintiffs allege that the soldiers disembarked from the sea trucks and set fire to buildings and livestock, killing another person.

In October, 2001, the parties stipulated to a bifurcated discovery schedule which limited Phase I discovery to issues related to the liability/responsibility of the United States defendants, CVX and CTOP, for whatever occurred in Nigeria at Parabe, Opia and lkenyan. It was contemplated that at the end of Phase I discovery, CVX *MCCLXXVI and CTOP would move for summary judgment on the limited issue of their direct or derivative liability for their own acts, or the acts of their employees, agents, co-conspirators, alter egos, or joint venturers. In the summary judgment motion currently before the Court, defendants CVX and CTOP seek summary adjudication that plaintiffs have not presented a triable issue of fact supporting defendants’ liability under any of these theories.

LEGAL STANDARD

1. Summary judgment

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R.Civ.P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party, however, has no burden to negate or disprove matters on which the non-moving party will have the burden of proof at trial. The moving party need only point out to the Court that there is an absence of evidence to support the non-moving party’s case. See id. at 325, 106 S.Ct. 2548.

The burden then shifts to the non-moving party to “designate ‘specific facts showing that there is a genuine issue for trial.’ ” Id. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(e)). To carry this burden, the non-moving party must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “The mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In deciding a motion for summary judgment, the evidence is viewed in the light most favorable to the non-moving party, and all justifiable inferences are to be drawn in its favor. “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ruling on a motion for summary judgment.” Id. at 255, 106 S.Ct. 2505.

2. Liability of a parent corporation for the acts of its subsidiary

The law allows corporations to organize for the purpose of isolating liability of related corporate entities. Frank v. U.S. West, Inc., 3 F.3d 1357, 1362 (10th Cir.1993). Only in unusual circumstances will the law permit a parent corporation to be held either directly or indirectly liable for the acts of its subsidiary. “It is a general principle of corporate law deeply ingrained in our legal system that a corporation is not liable for the acts of its subsidiaries.” U.S. v. Bestfoods, 524 U.S. 51, 68, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998). 3 *MCCLXXVII Courts do disregard the corporate form in some instances where such disregard is necessary to prevent injustice to a person or entity that would be harmed by refusing to impose liability on the basis of the corporate structure. The party seeking to disregard the corporate form bears the burden of showing that there are good reasons for doing so. Mobil Oil Corp. v. Linear Films Inc., 718 F.Supp. 260, 273 (D.Del.1989). “Mere ownership of a subsidiary does not justify the imposition of liability on a parent.” Pearson v. Component Tech. Corporation, 247 F.3d 471, 484 (3d Cir.2001).

Officers of a parent corporation may be involved in the supervision of a subsidiary corporation without incurring liability for the parent corporation. Typical acts of parent corporation officers which are within the bounds of corporate formalities and do not warrant veil-piercing include: supervising the acts of the subsidiaries; receiving regular reports from the subsidiaries; creating general policies and procedures which the subsidiaries must follow; and overseeing the financial management of the subsidiaries. “Appropriate parental involvement includes: ‘monitoring of the subsidiary’s performance, supervision of the subsidiary’s finance and capital budget and articulation of general policies and procedures.’ ” U.S. v. Bestfoods, 524 U.S. at 69, 118 S.Ct. 1876 (citations omitted).

Officers of a parent may also simultaneously act as officers of the subsidiary without having their duties as parent corporation officers’ presumed to be effectuated also on behalf of the subsidiary corporation. Liability will not be imposed “on a parent merely because directors of the parent corporation also serve as directors of the subsidiary.” Pearson, 247 F.3d at 483, citing Bestfoods, 524 U.S. at 69, 118 S.Ct. 1876.

Doctrines which courts have employed to analyze the liability of a parent corporation include “piercing the corporate veil” (which is often referred to as “alter ego” liability); “single enterprise liability” (referred to in the employment context as “single employer liability”); agency-based liability; aiding and abetting; and ratification. “The terminology used by courts in considering whether a parent corporation will be held liable for the actions of its subsidiary has not been a model of clarity. Plaintiffs so-called ‘alter ego theory’ is often used interchangeably with such expressions as ‘disregarding the corporate entity’ and ‘piercing the corporate veil’.... In addition, some courts use the word ‘agent’ describe what is essentially the same relationship contemplated by the term ‘alter ego.’ ” Mobil Oil Corp. v. Linear Films Inc., 718 F.Supp. 260, 266 (D.Del.1989). 4

Whether to hold a parent liable for the acts of its subsidiary is a highly fact-specific inquiry. “There are no inflexible tests by which courts determine when to hold corporations liable for the acts of their subsidiaries. Generally, the corporate separateness is respected unless ‘... to do so would work an injustice upon *MCCLXXVIII innocent third parties.’ Fidelity & Deposit Co. of Maryland v. USAFORM Hail Pool, Inc., 523 F.2d 744, 758 (5th Cir.1975). But each case must be considered on its own facts.” Edwin K. Williams & Co. v. Edwin K. Williams, 542 F.2d 1053, 1063 (9th Cir.1976), cert. den. 433 U.S. 908, 97 S.Ct. 2973, 53 L.Ed.2d 1092 (1977)

The parties have not squarely confronted whether state or federal law applies to the question of a parent corporation’s liability for the subsidiary’s actions in this case, and the answer to the question does not emerge clearly from the case law. In U.S. v. Bestfoods, the Supreme Court noted this uncertainty, 5 cited cases from several jurisdictions with differing viewpoints, but declined to rule on the issue because it had not been presented below. Id. at 68, 118 S.Ct. 1876. In any event, the tests are quite similar. 6

In Mobil Oil Corp. v. Linear Films Inc., 718 F.Supp. 260, 267 (D.Del.1989), the court noted the existence of a body of federal common law which has developed on the veil-piercing question and observed that federal courts deciding this question in federal cases have often opted to apply federal common law.

In Seymour v. Hull & Moreland Engineering, 605 F.2d 1105, 1111 (9th Cir.1979), the federal test for piercing the corporate veil was articulated as follows: “Viewing the jumble of federal court decisions together, we find a sort of generalized federal substantive law on disregard of corporate entity which concentrates on three general factors: the amount of respect given to the separate identity of the corporation by its shareholders, the degree of injustice visited on the litigants by recognition of the corporate entity, and the fraudulent intent of the incorporators. Federal decisions naturally draw upon state law for guidance in this field.” (footnotes omitted)

Many of the cases analyzing the question of a parent’s relationship to its subsidiary do so for the purpose of determining whether that relationship is sufficient to find that the minimum contacts requisite to personal jurisdiction exist over the parent or subsidiary corporation. Personal jurisdiction disputes are generally resolved with reference to law of the state in which the action is brought. Bellomo v. Pennsylvania Life Co., 488 F.Supp. 744, 745 (S.D.N.Y.1980).

While the question of whether to pierce the corporate veil has significant overlap with the jurisdictional issue of minimum contacts, the questions of jurisdiction and liability for the subsidiary’s actions are different. The liability question is less procedural than substantive, rendering the federal law a more appropriate guide to *MCCLXXIX this Court’s analysis. Where the causes of action in the complaint are federal in nature, application of federal law will better effectuate the purposes of those statutes. Finally, state and federal precedent on this issue do not appear to diverge in any way meaningful to the adjudication of this case. For these reasons, this Court will apply such federal law as it can find when determining these questions.

A. Piercing the corporate veil

“Although the tests employed to determine when circumstances justifying ‘veil-piercing’ exist are variously referred to as ‘alter ego’, ‘instrumentality’ or ‘identity’ doctrines, the formulations are generally similar and courts rarely distinguish between them.” Pearson v. Component Tech. Corporation, 247 F.3d 471, 485 (3d Cir.2001). Pearson, a case decided under the Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. §§ 2101-09, noted that the biggest difference across jurisdictions is whether fraudulent intent in incorporation is necessary for veil-piercing. Pearson further observed that federal courts are more likely to pierce the corporate veil where necessary to effectuate a federal statute that would otherwise be frustrated by the state’s corporate laws. In the Ninth Circuit, cases suggest, at least in contexts arising from California, that fraudulent intent in incorporation need not be shown to pierce the veil, as long as it can be shown that the separate identity of the corporation has not been respected and that respecting the corporate form would work an injustice on the litigants. RRX Industries Inc. v. Lab-Con Inc., 772 F.2d 543, 550 (9th Cir.1985).

The test for alter ego liability appears almost interchangeable with the veil-piercing test. See Mobil, 718 F.Supp. at 266, defining alter ego as lack of attention to corporate formalities, commingling of assets, and intertwining of operations. Alter-ego requires demonstrating that the two corporations functioned as a single entity.

B. Integrated enterprise theory of liability

Plaintiffs particularly emphasized the “integrated enterprise” theory of liability at oral argument, citing Kang v. U. Lim, 296 F.3d 810 (2002) (a Title VII case addressing whether a foreign employer could be liable for employment actions taken against an employee by a domestic employer) and Pearson v. Component Tech. Corporation, supra (a case arising under the WARN Act). Under the integrated enterprise theory, courts have applied a far less stringent standard to the question of whether related employers can be held liable for one another’s actions. This standard focuses on economic realities, rather than corporate formalities, and is applied in a variety of employment contexts, including disputes under the Labor Management Relations Act, Title VII, the Fair Labor Standards Act, the WARN Act and the Family and Medical Leave Act. Pearson at 486.

While plaintiffs focused significantly on this theory at oral argument, the Court has been unable to find cases applying the “integrated enterprise” theory in a context such as this one. This test, and the joint employer test, have been applied to questions about employer liability and, in some cases, to liabilities arising under CERC-LA. Courts applying the test have noted rather carefully that Congress in passing these statutes had significant remedial purposes in mind, and that these standards are less stringent than those applied to traditional veil-piercing or agency questions. See Pearson, at 486, noting: “Ultimately ‘the policy underlying the single employer doctrine [also referred to as the integrated enterprise theory] is the fair *MCCLXXX ness of imposing liability for labor infractions where two nominally independent entities do not act under an arm’s length relationship,” ’ quoting Murray v. Miner, 74 F.3d 402, 405 (2d Cir.1996). Pearson referred to the integrated enterprise test as “a sort of labor-specific veil-piercing test.” Pearson, at 485.

Questions about veil-piercing are context-specific. The relatively expansive labor and CERCLA context is different from the one faced in this case, and cannot be imported without examination. Nonetheless, the decisions are instructive as they are part of the federal body of common law guiding this Court’s decision about when a parent may be liable for the actions of a subsidiary corporation. 7

C. Agency

A parent corporation can be held vicariously liable for the acts of a subsidiary corporation if an agency relationship exists between the parent and the subsidiary. The Restatement 2d of Agency § 14 M states:

A corporation is not the agent of one person, or of a number of persons, who can direct its conduct because holding a majority of its voting shares of stock. Likewise, a corporation does not become the agent of another corporation merely because the other has stock control. The policy which permits individuals to do business by the organization of corporations permits corporations, authorized to do so, to do business in the same way and with the same immunities from liability. However a corporation may become an agent of an individual or of another corporation, as it does when it makes a contract on the other’s account. Thus a subsidiary may become an agent for the corporation which controls it, or the corporation may become the agent of the subsidiary. In some situations, a court may find that the subsidiary has no real existence or assets, that its formal existence is to cloak a fraud or other illegal conduct. As in a similar situation in which an individual is the offender, it may be found that the parent company is the real party to a transaction conducted by the illusory subsidiary and responsible for its transactions as a principal.

Unlike liability under the alter-ego or veil-piercing test, agency liability does not require the court to disregard the corporate form. Agency has been a theory on which courts in this circuit have allowed plaintiffs to proceed for many decades.

A familiar principle of law has been that a corporation is an entity, distinct in itself. It is true that when resourcefulness of man caused a corporation to be used as a scapegoat for another, courts checked the evil. A common statement of one of the rules is that the entity will “be disregarded ... where a corporation is so organized and controlled, and its affairs are so conducted, as to make it merely an instrumentality or adjunct of another corporation”.... There is just ground for criticism, not of the result reached, but of the theory upon which *MCCLXXXI the result is obtained. Some of the early cases, in the situation described in the statement of the rule, based the liability on the principles of agency.... Later, the liability seems to have been based on the theory that the corporate entity was disregarded... .We believe the liability in most of such cases is based correctly on the rules of agency.... As such it is not a new rule of law, but an old one applied to new situations. Where one corporation is controlled by another, the former acts not for itself but as directed by the latter, the same as an agent, and the principal is liable for acts of its agent within the scope of the agent’s authority.

Pacific Can Co. v. Hewes, 95 F.2d 42, 45-46 (9th Cir.1938) (citations omitted).

The Restatement has likewise noted the distinction between veil-piercing and agency theories of liability:

It is useful to distinguish situations in which liability is imposed on a parent because of the existence of the agency relation, in our common-law understanding of that relation, from cases in which the corporate veil of the subsidiary is pierced for other reasons of policy. Unfortunately, however, the courts have not always observed the distinction between these two separate bases for parent’s liability. When liability is fastened upon the parent it is said that the subsidiary is a “mere agent.” The result has been a weakening and muddying of the term “agent” and a failure by courts to state the real reasons for their decision.

Restatement (Second) of Agency, Appendix S 14M, Reporter’s Notes at 68 (1958).

To establish actual agency a party must demonstrate the following elements: “(1) there must be a manifestation by the principal that the agent shall act for him; (2) the agent must accept the undertaking; and (3) there must be an understanding between the parties that the principal is to be in control of the undertaking.” Rubin Bros. Footwear, Inc. v. Chemical Bank, 119 B.R. 416, 422 (S.D.N.Y.1990). “There is no agency relationship where the alleged principal has no right of control over the alleged agent.” Morgan Guar. Trust Co. of N.Y. v. Republic of Palau, 657 F.Supp. 1475, 1481 n. 2 (S.D.N.Y.1987); see also Rubin Bros., 119 B.R. at 422.

In Bellomo v. Pennsylvania Life Co., 488 F.Supp. 744, 746 (S.D.N.Y.1980), a case analyzing whether agency principles could be used to establish jurisdiction over the defendant corporation, the court asked whether the multi-national corporation was actually a “super-corporation.” In Gallagher v. Mazda Motor of America, 781 F.Supp. 1079, 1083-1084 (E.D.Pa.1992), the court defined the test for whether agency liability applied as requiring a determination of whether the subsidiary is functioning as an incorporated arm of the parent. In Chan v. Society Expeditions, Inc., 39 F.3d 1398 (9th Cir.1994), the court asked whether the subsidiary is involved in activities that, but for the subsidiary’s presence, the parent would be forced to undertake itself. In these cases, however, these questions were asked for purposes of determining not whether the parent could be held liable, but whether the parent’s contacts with the forum state could be taken into account for purposes of determining whether the Court had personal jurisdiction over the subsidiary.

In addition to the need for a close relationship or domination between the parent and subsidiary, agency liability also requires a finding that the injury allegedly inflicted by the subsidiary, for which the parent is being held hable, was within the scope of the subsidiary’s authority as an agent. As was noted in Phoenix Canada Oil v. Texaco, 842 F.2d 1466, *MCCLXXXII 1477-78 (3d Cir.1988), the proper inquiry regarding the existence of an agency relationship focused on the relationship between the parent and subsidiary corporation as it bore on plaintiffs breach of contract claim, rather than the more global question of whether any sort of agency relationship existed between the parent and the subsidiary; “when customary agency [a opposed to alter ego] is alleged the proponent must demonstrate a relationship between the corporations and the cause of action. Not only must an arrangement exist between the two corporations so that one acts on behalf of the other and within usual agency principles, but the arrangement must be relevant to the plaintiffs claim of wrongdoing.” See also Scott v. Ross, 140 F.3d 1275, 1280 (9th Cir.1998) (“To incur liability the agent must be acting on the parent’s behalf, within the scope of its authority as agent”).

DISCUSSION

Plaintiffs assert that defendants CVX and CTOP are liable both directly and indirectly for the actions of Chevron Nigeria Limited. Having reviewed the materials submitted by the parties, and the arguments presented, this Court finds that these defendants cannot be held directly liable for the events that transpired. Plaintiffs have submitted no evidence that these defendants directly commissioned the acts that are the subject of plaintiffs’ complaint, nor any sufficient evidence on which a reasonable jury could base a finding of direct liability. Thus summary adjudication must be granted to defendants on this theory of liability.

Whether indirect liability may be imposed is a closer question. At this point, the only question before the Court is whether plaintiffs have presented sufficient evidence to survive summary judgment on their claim that defendants were so integrally involved in the actions and structure of CNL that CNL’s actions in the events that are the subject of the complaint were undertaken on defendants’ behalf. Regardless which test is applied, plaintiffs will have the burden to persuade the Court to disregard the corporate form. At this juncture, the Court finds that plaintiffs have presented facts which, if accepted by a jury, could warrant finding defendants liable for CNL’s actions on an agency theory or based on aiding and abetting or ratification. Consequently, summary adjudication will be denied to defendants on plaintiffs’ theory of indirect or vicarious liability.

1. Defendants’ argument

Defendants’ present motion argues that the Court should grant summary judgment on the question of defendants’ liability for the actions at issue because: (1) plaintiffs’ injuries were caused by the Nigerian military and police; and (2) the military and police were protecting CNL, not defendants. Defendants argue that plaintiffs have not submitted any evidence that creates a material issue of disputed fact regarding defendants’ direct or vicarious liability.

Regarding direct liability, defendants argue that there is no evidence that defendants gave advice about how to handle the “hostage” situation, including communicating at all with the Nigerian military. They contend that claims brought under the Alien Tort Claims Act require a demonstration that the defendants engaged in “state action,” which is absent here. Even if plaintiffs are able to show state action as to CNL, defendants argue that it may not be imputed to defendants under a respondeat superior theory.

As to vicarious liability, defendants argue that there is no basis for claiming that defendants satisfy the alter ego test for liability because CNL has a distinct and separate corporate existence as marked by *MCCLXXXIII the separation of the companies’ board meetings, shareholders’ meeting, corporate minutes, and accounts of each company. Further, they contend that there is no evidence that injustice would result from the “misuse of the corporate form.”

To the extent that plaintiffs separately allege an agency theory, defendants argue that plaintiffs must fail because there is no evidence that the defendants directed specific actions of CNL which resulted in injuries to plaintiffs or took over the performance of CNL’s day-to-day operations; or that CNL functioned as defendants’ representative in performing important services which defendants would otherwise have to perform themselves. Defendants also argue that plaintiffs produced no evidence that CNL’s top employees were employees or agents of defendants, or that CNL’s actions in the incidents at issue were within the scope of any agency relationship.

Finally defendants argue that plaintiffs’ RICO claims are deficient because they do not satisfy the jurisdictional requirement that they have a substantial effect on U.S. commerce.

2. Plaintiffs’ response

Plaintiffs rely on numerous theories on which to base defendants’ liability. Plaintiffs argue that there are genuine issues of material fact as to all the following: (a) whether CNL was an agent of defendants; (b) whether CNL was defendants’ alter ego; (c) whether defendants are liable under aiding and abetting and ratification theories; and (d) whether defendants are liable under RICO. Each of plaintiffs’ arguments is analyzed below.

A. Agency

“Whether an agency relationship exists between a parent corporation and its subsidiary is normally a question of fact.” Japan Petroleum Co. (Nigeria), Ltd. v. Ashland Oil, Inc., 456 F.Supp. 831 (D.Del.1978). The Court looks to the facts specific to this case for indicia of whether defendants authorized CNL to act as their agent; whether during that agency relationship defendants retained control over plaintiffs; and whether the conduct that plaintiffs’ allege as the subject of their complaint was within the scope of that agency relationship.

Plaintiffs argue that they have presented sufficient facts to raise a genuine issue of material fact regarding whether CNL was acting as defendants’ agent during the Parabe and Opia/Ikenyan incidents. Plaintiffs argue that such a finding would render defendants liable for all intentional torts committed by CNL during the scope of that agency. Plaintiffs suggest that the Court may apply either of two tests for agency: the first test focuses on the parent’s control of the subsidiary, based on Sonora Diamond Corp. v. Super. Ct., 83 Cal.App.4th 523, 541, 99 Cal.Rptr.2d 824 (2000), 8 while the second test focuses on the parent’s dependence on the subsidiary’s services, based on Doe v. Unocal Corp., 248 F.3d 915, 928 (9th Cir.2001). 9 *MCCLXXXIV Plaintiffs argue that under either of these tests, they have adduced sufficient facts to survive summary judgment.

Regarding the parent’s control of the subsidiary’s operations, plaintiffs submit a laundry list of facts which they urge the Court to view as indicia of defendants’ control over CNL. Plaintiffs argue that the following facts establish that CNL was acting as defendants’ agent: COPI controlled the appointment of CNL managers and lower level positions; CNL managers simultaneously served in management positions for defendants (see Summary 10 at 359-373, stating that George Kirkland was defendants’ Personnel Development Representative while at CNL; Thomas Schull, while at CNL, signed an order from defendants assigning Scott Davis to CNL); CNL employees were paid according to standards set by COPI; high-ranking CNL officials simultaneously performed COPI functions; CNL managers did work for other Nigerian subsidiaries; defendants closely monitored CNL’s oil exploration and production, providing almost daily reports (Hadsell Decl.); CVX required all subsidiary companies to obtain authorization for expenditures in excess of $100,000 (Summary at 404); CNL was audited by defendants three times per year (Summary at 409-415); the Corporate Security Group determined the security policies for CNL and other subsidiaries and influenced CNL policy on security (Summary at 5); the security group evaluated CNL security in the wake of the attacks (Summary at 349-358); and the defendants had extensive communications with the plaintiffs during the Parabe and Opia/Ikenyan incidents. Plaintiffs also argue that defendants are liable under an agency theory because they set salaries for CNL representatives; had veto power over decisions made by high-level managers CNL; and threatened CNL managers with termination if they did not take jobs as managers.

Under the second test, plaintiffs present evidence which they argue shows that CNL functioned as defendants’ representative in Nigeria by engaging in activities that, but for the subsidiary’s presence, defendants would have had to undertake themselves. Gallagher v. Mazda Motor of America, Inc., 781 F.Supp. 1079, 1083-84 (E.D.Pa.1992). Plaintiffs argue that the “revolving door” between CNL and COPI for managerial positions and movement of CNL employees to CVX’s other subsidiaries shows CNL’s representative status. Plaintiffs argue that CNL’s performance *MCCLXXXV of duties for CNL and non-CNL companies show defendants were much more than holding companies. Further, plaintiffs argue that the communications between the parent company and CNL are evidence of agency. Modesto City Schools v. Riso Kagaku Corporation, 157 F.Supp.2d 1128, 1135 (E.D.Cal.2001). Plaintiffs argue that the CVX annual report portrayed defendants as part of an integrated operation with CNL. Plaintiffs cite language from the annual report describing CVX as “an international company that, through its subsidiaries and affiliates engages in fully integrated petroleum operations, chemical operations and coal-mining in the United States and approximately 90 countries.” Summary at 314. Plaintiffs argue that the facts indicate that CNL was integral to defendants’ business and that CNL’s oil production represented 20 percent of COPI’s earnings. Summary at 321-23.

The Court recognizes, as defendants contend, that many of the cases cited regarding agency are cases in which the issue presented to the court was jurisdiction. Nonetheless, the Court finds these cases instructive on the factors courts consider when determining whether an agency relationship exists. Further, whether plaintiffs have presented sufficient facts to warrant proceeding to trial on the question of defendants’ liability under an agency theory is necessarily a very fact-intensive inquiry into the structure of the corporations. Acorn v. Household Intern., Inc., 211 F.Supp.2d 1160, 1165 (N.D.Cal.2002) (evaluating whether jurisdiction could be established based on agency principles and describing the test of general agency as requiring a “necessarily wide-ranging inquiry” and evaluation of the “numerous and varied indicia” of the relationship between the parent and subsidiary.).

Factors to which the Court has given particular consideration in its analysis include: (1) the degree and content of communications between CNL and defendants, particularly including the communications during the incidents at issue; (2) the degree to which defendants set or participated in setting policy, particularly security policy, for CNL; (3) the officers and directors which defendants and CNL had in common; (4) the reliance on CNL for revenue production and acknowledgment of the importance of CNL and other international operations to the overall success of defendants’ operations; and (5) the extent to which CNL, if acting as defendants’ agent, was acting within the scope of its authority during the events at issue.

1. Communications

The evidence produced by plaintiffs reflects not that defendants made decisions during the attacks, but that