46 F. Supp. 3d 701
S.D. Tex.2014Background
- Plaintiff Plains Gas Solutions, LLC sued TGP and Kinetica in Texas state court for contract and tort claims, later adding Targa as a defendant.
- Plaintiff alleges TGP assigned its contract to Kinetica, violating the contract’s assignment provisions, and alleges onshore valve closure harmed its processing plant.
- Plaintiff claims misrepresentations about gas flow, interference with contracts with gas producers, and that Targa charged deficiency payments despite force majeure.
- Targa removed the case to federal court asserting federal question jurisdiction under OCSLA, 43 U.S.C. § 1349(b)(1).
- Plaintiff moved to remand, arguing OCSLA does not cover downstream onshore processing and lacks an intimate connection to offshore exploration/development/production.
- The court granted Plains’s motion to remand, concluding no OCSLA jurisdiction over the state-law claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does OCSLA confer federal jurisdiction here? | Plains argues no OCSLA jurisdiction since no intimate offshore connection. | Targa argues OCSLA has broad but-for connection to offshore operations. | Remand granted; no OCSLA jurisdiction. |
| Is the but-for test applicable to state-law claims under OCSLA? | Plains supports a narrower test for contract claims, not the broad but-for standard. | Targa advocates applying the but-for test to all claims arising from OCS activities. | But-for test governs jurisdiction for OCSLA claims. |
| Do the alleged activities constitute an operation on the OCS involving development or production? | Plains contends activities are onshore or non-operational for OCSLA purposes. | Targa contends onshore processing facility may relate to development/production. | No operation on the OCS, nor development/production; no jurisdiction. |
Key Cases Cited
- Amoco Production Co. v. Sea Robin Pipeline Co., 844 F.2d 1202 (5th Cir. 1988) (OCSLA jurisdiction not limited by well-pleaded complaint)
- In re Deepwater Horizon, 745 F.3d 157 (5th Cir. 2014) (two-step test: operation on the OCS and connection to the case)
- Tenn. Gas Pipeline v. Hous. Cas. Ins. Co., 87 F.3d 150 (5th Cir. 1996) (but-for connection concept in OCSLA context)
- Hufnagel v. Omega Serv. Indus., Inc., 182 F.3d 340 (5th Cir. 1999) (but-for standard under OCSLA)
- EP Operating Ltd. P’ship v. Placid Oil Co., 26 F.3d 563 (5th Cir. 1994) (broad OCSLA jurisdiction language)
- In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, 747 F.Supp.2d 704 (E.D. La. 2010) (district court applying Deepwater Horizon framework)
- Barker v. Hercules Offshore, Inc., 713 F.3d 208 (5th Cir. 2013) (OCSLA jurisdiction broad, but not unlimited)
- Amoco Production Co. v. Sea Robin Pipeline Co. (Amoco II), 844 F.2d 1202 (5th Cir. 1988) (recognizes express OCSLA jurisdiction)