250 F. Supp. 3d 229
S.D. Tex.2016Background
- Oil and drilling mud seeped from the Penglai 19-3 oil field in the Bohai Sea (China) in June 2011; ConocoPhillips China (a Liberian company) participated in the joint development and operated platforms.
- China’s State Oceanic Administration investigated; ConocoPhillips China paid over $350 million to Chinese authorities and a compensation fund was created for some provinces; Shandong fishermen were not included.
- Thirty Shandong fishermen petitioned a Chinese maritime court for permission to sue and to seek a compensation fund; Chinese authorities have not yet resolved the Shandong claims.
- The fishermen sued ConocoPhillips Company (the U.S.-based parent of the parent of the Liberian operator) in Texas under negligence, nuisance, trespass, unjust enrichment, and the Alien Tort Statute theories.
- Plaintiffs offered no factual allegations tying the U.S. parent to operational control, no evidence of corporate veil abuse, and no showing of a Chinese property interest in the seabed exceeding regulatory licenses.
- The court concluded the dispute is essentially local to China, plaintiffs’ pleadings lack factual specificity, and adjudication would improperly interfere with Chinese sovereign decisions; dismissal with prejudice was ordered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligence | Company caused spill or is liable through control/ownership and admitted responsibility | Only the Chinese/Liberian operator ran the field; no facts tying Company to operations or veil-piercing | Dismissed for failure to plead facts showing Company’s control or veil abuse |
| Nuisance | Pollution destroyed plaintiffs’ aquaculture (scallops, sea cucumbers) — public and private nuisance under Texas law | Plaintiffs lack real-property rights in seabed; at best have personal property/licenses under Chinese law | Dismissed because plaintiffs lack a cognizable real-property interest supporting nuisance |
| Trespass | Oil intrusion onto plaintiffs’ harvest areas / hatcheries constitutes trespass | Company was not the operator; plaintiffs lack land title or possession; any land claim is local to China | Dismissed for lack of property right and because land damage claims must be brought where the land is located |
| Alien Tort / International Law & Comity | Discharge violated international norms/treaties and is actionable under the Alien Tort Statute; U.S. court may adjudicate | No treaty-based private right; customary international law claim too vague and the conduct occurred in China implicating foreign sovereign interests | Dismissed: no actionable international-law violation pleaded; Kiobel/Sosa limit ATS extraterritorial/non-qualifying claims; comity concerns counsel dismissal |
Key Cases Cited
- Jamail v. Stoneledge Condo. Owners Ass'n, 970 S.W.2d 673 (Tex. App.—Austin 1998) (standards for nuisance and private special injury under Texas law)
- Greenpeace, Inc. v. Exxon Mobil Corp., 133 S.W.3d 804 (Tex. App.—Dallas 2004) (property interest requirement for nuisance claims involving environmental harm)
- Corpus Christi v. Heldenfels Bros., Inc., 802 S.W.2d 35 (Tex. App.—Corpus Christi 1990) (discussing unjust enrichment elements)
- Sosa v. Alvarez-Machain, 542 U.S. 692 (U.S. 2004) (ATS requires violations of a norm of international law as defined by historical paradigms)
- Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (U.S. 2013) (ATS claims with foreign conduct must ‘touch and concern’ the U.S. to overcome presumption against extraterritoriality)
- Arnstein v. Porter, 154 F.2d 464 (2d Cir. 1946) (court commentary on strike suits and the propriety of dismissal when ultimate legal result is clear)