United States District Court, E.D. Louisiana
SHELL OFFSHORE INC.
FREEPORT-MCMORAN OIL & GAS LLC
ORDER AND REASONS
MICHAEL B. NORTH UNITED STATES MAGISTRATE JUDGE
the Court is the motion to compel jurisdictional discovery
and production of documents filed by Plaintiff, Shell
Offshore, Incorporated (“Shell”). (Rec doc. 88).
The motion is opposed by Defendants, Freeport-McMoran Oil
& Gas LLC and PXP Gulf Coast LLC
(“Defendants”). (Rec. doc. 93). Shell filed a
reply brief (rec. doc. 96) and the Court held oral argument
October 3, 2018. (Rec. doc. 98).
motion arises out of Defendants' motion to dismiss for
lack of personal jurisdiction (rec doc. 62) and Shell's
efforts to meet the arguments raised by Defendants therein.
In ruling upon the motion to dismiss, the District
Shell has requested leave, however, to conduct jurisdictional
discovery in an effort to establish its alter ego theory of
imputation. The Court is persuaded that Shell has made enough
of a preliminary showing to have its request granted. If
Shell can obtain evidence through discovery to enable it to
establish personal jurisdiction based on its alter ego
theory, the Court is persuaded that exercising jurisdiction
over PXP would not offend traditional notions of fair play
and substantial justice.
(Rec. doc. 76 at p. 10).
through on the Court's order, Shell propounded numerous
interrogatories, requests for admission, and requests for
production of documents in search of support for its
alter-ego theory of imputation. The Defendants answered that
discovery in part, but objected to a great many requests as
disproportionate to the needs of the case and outside what
they believe is the proper scope of jurisdictional discovery
in this case.
present motion seeks complete responses to Shell's
discovery requests. Shell argues that, according to the
District Judge's order, it is entitled to conduct
discovery on “its alter ego theory of
imputation, ” which it says should be determined
according to the “totality of the circumstances”
under relevant Fifth Circuit and Louisiana state-court
precedent. (Rec. doc. 96 at pp. 5-6). Defendants argue that
the District Judge's inquiry on the alter-ego theory is
limited to the seven-factor test set forth in Hargrave v.
Fibreboard Corporation and that Shell's discovery
should be limited by those seven factors. (Rec. doc. 93).
Shell responds that application of Hargrave is not
as rigid as Defendants urge because the Hargrave
factors are a “non-exhaustive” list of relevant
factors to be considered; Shell cites a number of cases in
which additional factors have been considered by courts
analyzing alter-ego issues. (Rec. doc. 96 at pp.
5-6)(citing Freudensprung v. Offshore Tech. Services,
Inc., 379 F.3d 327, 346 (5thCir. 2004);
Hardware Resources, Inc. v. Lama, D.D., No.
07-CV-1875, 2009 WL 3230596 at *5 (W.D. La. Sept. 30, 2009);
Laitram Machinery, Inc. v. Carnitech, No.
92-CV-3841, 1993 WL 370624 at *2 (E.D. La. Sept. 10, 1993);
see also Huard v. Shreveport Pirates, Inc., 147 F.3d
406, 409-10 (5th Cir. 1998); United States v.
Jon-T Chemicals, Inc., 768 F.2d 686, 691-92
(5th Cir. 1985), cert. denied, 475 U.S.
1014, 106 S.Ct. 1194 (1986); Shell Offshore Inc. v. Eni
Petroleum U.S. LLC, No. 16-CV-15537, 2017 WL 3582486 at
*5 (E.D. La. Aug. 17, 2017)).
also argues that because this lawsuit was brought under the
Outer Continental Shelf Lands Act (“OCSLA”),
which contains a mandatory choice-of-law rule requiring
application of the law of the adjacent state - here
Louisiana, the Court would be well within precedent to apply
the non-exhaustive 18-factor test of Green v. Champion
Insurance in determining the alter-ego issue in
Court has reviewed the subject discovery requests and
Defendants' responses, along with the caselaw cited by
the parties. Based upon that review and its consideration of
the arguments of counsel in brief and at the hearing, the
Court finds that the motion is well-taken and should be
granted. It is clear to the Court that the District Judge
intended to provide Shell every reasonable opportunity to
obtain the information it needs to mount its alter-ego
argument in response to Defendants' motion to dismiss.
Upon review of the numerous cases cited and discussed by both
parties (and listed above), it is clear to the Court that the
discovery requests propounded by Shell are sufficiently
tailored to that purpose. Whether the ultimate analysis
conducted by the District Judge involves a seven-factor,
12-factor, or 18-factor test, it is clear to this Court that
these “tests” are rarely if ever rigidly applied
and there is substantial overlap between them.
Court's task is not to make the final choice-of-law
decision as to which test should be applied. This is a
discovery motion in a case brought under the OCSLA, whose
mandatory neighboring-state choice of law provision at a
minimum makes possible the fact that the District Judge may
look to the 18-factor test in Green to resolve the
alter-ego issue. For this reason, the Court finds the
contested discovery to be appropriate and will grant the
motion to compel, with two exceptions.
Court finds that interrogatory number 5 is overly broad and
should be more narrowly tailored. Requesting “every
monetary distribution or transfer of funds” for a
six-year period from FMOG to a plethora of individuals and
entities, including employees and attorneys, is far too broad
to be acceptable. Shell must narrow the scope of this
request for production number 32 is overly broad and must be
narrowed. Complying with a request for documents
“sufficient to show, generally, what ongoing business
activities [Defendants] are conducting in the United States
or elsewhere” is likely impossible and the Court will
not order Defendants to undertake such a task. Relevant
information sought in this request can be ...