United States District Court, E.D. Louisiana
J. BARBIER, JUDGE
VAN MEERVELD MAG. JUDGE
ORDER & REASONS
the Court is a Motion to Dismiss (Rec. Doc.
242) by BTB Refining, LLC (“BTB”),
Global Oil Management Group, Ltd. (“Global Oil”),
Global Oil EOR Systems, Ltd. (“Global EOR”),
Global Oil Financial Services, LLC (“Global
Financial”), and Harry Sargeant, III
(“Sargeant”). Several opposition briefs were filed
(Rec. Docs. 245, 246, 249, 251, 252, 260), and Defendants
filed a reply (Rec. Doc. 263). The Court, having considered
the parties' arguments, the applicable law, and the
relevant record, denies Defendants' motion for the
reasons stated below.
October 15, 2017, an explosion and fire occurred on the West
Lake Pontchartrain East Block 41 Oil and Gas Production
Facility (“the Platform”), resulting in one
death, several injuries, and extensive damage to the
Platform. Clovelly Oil Co. LLC (“Clovelly”) owned
the Platform, which was located in Lake Pontchartrain
approximately one and one-quarter miles from the south shore.
(Billiot Compl. ¶ 6, No. 18-9391, Rec. Doc. 1). The
Platform was not a vessel under maritime law; functionally it
was a “fixed” platform. (Rec. Doc. 412 at 6). The
Platform processed oil, gas, and produced water from four
wells located various distances from the Platform. (Billiot
Compl. ¶ 8). A four-inch diameter flowline connected
each of the wells to the Platform. (Billiot Compl. ¶ 9).
At the time of the explosion, one or more of the Corporate
Defendants were in the process of cleaning the interior of
one of the flowlines, as further described below.
around October 2, 2017, Clovelly entered into an oral
agreement with one or more of the Corporate Defendants to
remove paraffin wax accumulations from three of the four
flowlines. (Billiot Compl. ¶ 12). To perform this work,
the Corporate Defendants utilized a steam generating machine
known as the Hydra Steam Generator NO. 003/Hydra III
(“the Hydra”). (Billiot Compl. ¶¶
14-15). The Corporate Defendants mobilized a tug boat and
spud barge preparatory to the commencement of the paraffin
wax cleaning service. (Billiot Compl. ¶ 19). Located on
the spud barge were the Hydra, equipment that monitored and
controlled the Hydra, tanks, pumps, hoses, and other
equipment necessary to clean the flowlines. (Billiot Compl.
¶ 20). To clean a flowline, the tugboat would move the
spud barge to a well so the Hydra could be connected to the
wellhead. (Billiot Compl. ¶ 23). By combining hydrogen
peroxide and a catalyst, the Hydra generated steam which was
injected into the flowline with the intent of melting the wax
accumulations. (Billiot Comp. ¶ 17). The flowline was
then pressure flushed, forcing the melted wax and water to
discharge into a steel tank located on the Platform. (Billiot
Compl. ¶ 19). On October 15, the Corporate Defendants
successfully cleaned two of the flowlines in this manner and
were in the process of cleaning a third when the explosion
occurred on the Platform. (Billiot Compl. ¶ 26).
filed a complaint in this Court to recover for the damage to
its platform and consequential economic losses. Davin
Billiot, James Bordelon, and Paul Pfister- three workers who
were allegedly injured in the explosion (collectively,
“Individual Plaintiffs”)-also filed complaints in
this Court, which were consolidated with Clovelly's
suit. Each of the Plaintiffs sued the four
Corporate Defendants, as well as Harry Sargeant, III, who
allegedly founded, controls, and dominates the Corporate
Defendants. Plaintiffs seek to pierce the Corporate
Defendants' veils and hold Sargeant personally liable for
the injuries and damages allegedly resulting from the
explosion and fire. Defendants filed the instant motion, which
seeks to dismiss Plaintiffs' claims against Global EOR,
Global Financial, and Sargeant. Defendants concede that
Plaintiffs have stated plausible claims against two of the
Corporate Defendants, BTB and Global Oil (Rec. Doc. 242 at
7), although they do move to dismiss any claims that attempt
to pierce BTB's and Global Oil's corporate veils.
motion to dismiss, “[t]he central issue is whether, in
the light most favorable to the plaintiff, the complaint
states a valid claim for relief.” Gentilello v.
Rege, 627 F.3d 540, 544 (5th Cir. 2010) (citations and
quotations omitted). More specifically:
To avoid dismissal, a plaintiff must plead sufficient facts
to state a claim to relief that is plausible on its face. A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. We do not accept as true conclusory allegations,
unwarranted factual inferences, or legal conclusions.
Id. (citations and quotations omitted). Furthermore,
“[d]etermining whether a complaint states a plausible
claim for relief will . . . be a context-specific task that
requires the reviewing court to draw on its judicial
experience and common sense.” Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009).
Plaintiffs' Claims Against Global Financial and Global
first argue that Plaintiffs fail to plausibly allege any
claims against two of the Corporate Defendants, Global
Financial and Global EOR. Defendants further argue that if
Plaintiffs cannot state a claim directly against Global
Financial or Global EOR, then Plaintiffs cannot pierce the
veil of these entities to reach the assets of another entity
or person. The Court accepts the premise of this argument but
finds that Plaintiffs have stated plausible claims for relief
against these entities.
Global Financial, Plaintiffs allege that Tim Morrison-the
person who provided Clovelly with a presentation on the Hydra
in September 2017 and who was present (and tragically died)
during the flowline cleaning operation-was employed by Global
Financial. (See, e.g., Clovelly 2d Am. Compl.
¶¶ 40-41, Rec. Doc. 199). Plaintiffs further allege
that Morrison knew of dangers associated with the Hydra prior
to the explosion but did not convey those to Clovelly.
(E.g., Clovelly 2d Am. Compl. ¶ 93). To the
extent Morrison was acting as Global Financial's employee
when he made the presentation to Clovelly or during the
flowline cleaning operation, Global Financial may be
vicariously liable for any misconduct by
Global EOR, Plaintiffs allege the following facts to show
that EOR owned the Hydra: Global EOR is identified as the
“owner” on a placard affixed to the Hydra; Global
EOR applied for a patent related to the Hydra; Global EOR
provided technical drawings related to the Hydra for a sales
and construction proposal and/or contract with Supreme
Electrical Services, Inc. d/b/a Lime Instruments, LLC
(“Lime”), which allegedly developed software to
control and monitor the steam and pressure generated during
the flowline cleaning; Global EOR contracted with another entity
to furnish labor, equipment, and materials to manufacture and
provide equipment related to the Hydra; and Global EOR had
marketing materials for the Hydra that reveal knowledge
regarding particular dangers associated with the Hydra that
were never disclosed to Clovelly. (See, e.g.,
Clovelly 2d Am. Compl. ¶¶ 20, 80-85). Furthermore,
Plaintiffs allege that the explosion was caused by, inter
alia, a failure to have adequate and proper equipment to
clean the flowline. (Clovelly 2d Am. Compl. ¶ 126).
Plaintiffs have alleged plausible claims against Global EOR.
contrast to their arguments regarding BTB and Global Oil,
Defendants do not discuss what veil piercing standard applies
to Global Financial and Global EOR, much less whether
Plaintiffs have plausibly alleged claims that, taken as true,
satisfy this standard. Accordingly, Defendants' motion is
denied insofar as it targets the claims (veil piercing or
otherwise) against Global Financial and Global EOR.
Defendants are free to re-raise these issues on summary
Clovelly's Claims Against BTB and Global Oil
and Defendants appear to agree that Texas law supplies the
veil piercing standard for BTB, while Bermudan law applies to
Global Oil's corporate veil. (Rec. Doc. 251 at 11, 22;
Rec. Doc. 263 at 4, 7). This is in contrast to the Individual
Plaintiffs, who argue that the veil piercing standard under
federal common law, which they contend is lighter than
Texas's and Bermuda's standards, applies to their
claims. (Rec. Doc. 245 at 6-17). The Court is not required to
accept Clovelly and Defendants' agreement as to which law
governs, as the Court is not bound by the parties'
stipulation of law. See Marden v. Int'l Ass'n of
Machinists & Aerospace Workers, 576 F.2d 576, 580
(5th Cir. 1978); see also BAC ...