United States District Court, E.D. Louisiana
SHELL OFFSHORE, INC.
FREEPORT-MCMORAN OIL & GAS, LLC
ORDER AND REASONS
ZAINEY UNITED STATES DISTRICT JUDGE
following motion is before the Court: Motion to
Dismiss for Lack of Personal Jurisdiction (Rec. Doc.
62) filed by defendant, PXP Gulf Coast LLC.
Plaintiff, Shell Offshore, Inc., opposes the motion. The
motion, noticed for submission on May 16, 2018, is before the
court on the briefs without oral argument.
Offshore, Inc. filed this action to recover plugging,
abandonment, and decommissioning costs that it incurred for
certain facilities located on Eugene Island Block 30
(“EI30”), which is located on the OCS near
1988, Shell leased EI30 from the federal government for oil
and gas activities. Effective January 1, 1992, via a Purchase
and Sale Agreement (“PSA”), Shell transferred all
of its right, title, and interest in the EI30 lease to
Pel-Tex Oil Co. (Rec. Doc. 43-1, Amended Comp. Exh. A).
According to Shell, under Paragraph 8 of the PSA, Pel-Tex
assumed all of Shell's EI30 liabilities and agreed to
indemnify Shell for certain “claims” associated
with the EI30 lease. (Rec. Doc. 43, Amended Comp. ¶ 14).
17, 2013, Shell received a letter from the federal Bureau of
Safety and Environmental Enforcement notifying Shell, as a
former lessee of EI30, that it was responsible for plugging,
abandoning, or decommissioning all wells, pipelines,
platforms, and other facilities in EI30 for which it had
accrued decommissioning costs.Under federal law, a former OCS
lessee remains liable to the federal government for
decommissioning obligations despite the transfer of its legal
interest in the lease. Shell incurred approximately $6.35
million to carry out the required work.
Oil, the original party to the PSA with Shell, no longer
exists. Shell contends that defendant and movant PXP Gulf
Coast, LLC is the successor in interest to Pel-Tex Oil's
contractual indemnity obligations to Shell stemming from the
PSA. The alleged succession history of Pel-Tex's
contractual obligations is outlined in detail in Shell's
amended complaint. (Rec. Doc. 43, Amended Comp. ¶¶
18-25). Shell provided the following demonstrative depiction
of the succession in its complaint:
Freeport-McMoRan Oil & Gas, LLC (“FMOG”) is
PXP's sole member; PXP is a wholly-owned subsidiary of
2014, Shell made a formal demand on FMOG for indemnity for
the EI30 decommissioning costs. According to Shell, it
engaged in extensive negotiations with FMOG regarding the
decommissioning costs for EI30 and during those negotiations
FMOG never suggested that Shell was dealing with the wrong
entity. When negotiations broke down, Shell initially filed
this lawsuit against FMOG alone based the parties' prior
dealings. After FMOG moved to dismiss the complaint, Shell
amended its complaint to join PXP as a defendant. Shell
alleges that PXP and/or FMOG breached the PSA by refusing to
pay for the EI30 decommissioning costs.
moves to dismiss the complaint arguing that it is not subject
to specific personal jurisdiction in a Louisiana court.