Shell Offshore Inc. v. Eni Petroleum US LLC et al, No. 2:2016cv15537 - Document 117 (E.D. La. 2017)
Court Description: ORDER AND REASONS re 14] Motion to Dismiss for Lack of Jurisdiction, 15 Motion to Dismiss for Failure to State a Claim, 76 Motion to Dismiss for Failure to State a Claim. ORDERED that Eni-Inc.'s motion to dismiss pursuant to Rule 12(b) (2) is GRANTED. The claims against Eni-Inc. are hereby DISMISSED WITHOUT PREJUDICE. FURTHER ORDERED that Eni-LLC's and Eni-Operating's motions to dismiss are hereby GRANTED IN PART, DEFERRED IN PART, and DISMISSED AS MOOT IN PART, as further explained herein. Signed by Judge Susie Morgan on 8/17/2017. (clc)
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Shell Offshore Inc. v. Eni Petroleum US LLC et al Doc. 117 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A SH ELL OFFSH ORE IN C. Plain tiff CIVIL ACTION VERSU S N O. 16 -1553 7 EN I PETROLEU M U S LLC, ET AL. D e fe n d an ts SECTION : “E” ( 2 ) ORD ER AN D REAS ON S Before the Court are three m otions to dism iss filed by Defendants: (1) Eni Petroleum Co. Inc.’s (“Eni-Inc.”) m otion to dism iss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure 1; (2) Eni Petroleum US LLC’s (“Eni-LLC”) and Eni-Inc.’s m otion to dism iss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure 2 ; and (3) Eni US Operating Co. Inc.’s (“Eni-Operating”) m otion to dism iss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. 3 Shell Offshore In c. (“Shell”) opposes these m otions. 4 LEGAL STAN D ARD I. Rule 12(b)(2) of the Federal Rules of Civil Procedure “Personal jurisdiction ‘is an essential elem ent of the jurisdiction of a district court, without which it is powerless to proceed to an adjudication.’”5 When a non-resident defendant challenges personal jurisdiction in a m otion to dism iss, the plaintiff bears the 1 R. Doc. 14. R. Doc. 15. 3 R. Doc. 76. 4 R. Docs. 23, 24, 46, 77. 5 Anderson v . GlobalSantaFe Offshore Services, Inc., 924 F. Supp. 2d 738 , 742 (E.D. La. 20 13) (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999)). 2 1 Dockets.Justia.com burden of proving that personal jurisdiction exists. 6 If the district court rules on the m otion without an evidentiary hearing, as in this case, the plaintiff need only m ake a prim a facie showing of personal jurisdiction. 7 In determ ining whether the plaintiff has m ade a prim a facie showing of personal jurisdiction, the district court m ust take the allegations of the com plaint as true, except as controverted by opposing affidavits, and all conflicts in the facts m ust be resolved in favor of plaintiffs. 8 Thus, the district court m ay consider m atters outside the com plaint, including affidavits, when determ ining whether personal jurisdiction exists. 9 To exercise personal jurisdiction over a non-resident defendant, two requirem ents m ust be satisfied. “First, the forum state’s long-arm statute must confer personal jurisdiction. Second, the exercise of jurisdiction m ust not exceed the boundaries of the Due Process Clause of the Fourteenth Am endm ent.”10 Because Louisiana’s long-arm statute confers personal jurisdiction to the lim its of constitutional due process, these two inquiries becom e one and the sam e. 11 The Due Process Clause of the Fourteenth Am endm ent “operates to lim it the power of a State to assert in personam jurisdiction over a nonresident defen dant.”12 For a court’s exercise of personal jurisdiction over a non-resident defen dant to be constitutional under the Due Process Clause, (1) “that defendant [m ust have] purposefully availed him self of 6 Luv N ’ Care, Ltd. v . Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 20 0 6) (citin g W y att v. Kaplan, 686 F.2d 276, 28 0 (5th Cir. 1982)). 7 See id. Because the Court previously granted Shell’s request for jurisdictional discovery, the argum en t could be m ade that Shell is required to establish jurisdiction by the preponderance of the evidence. However, whether this higher standard is appropriate is irrelevant given that, for the reasons discussed below, Shell is unable to establish even a prim a facie showing of the Court’s person al jurisdiction over En iInc. 8 Id. See also Thom pson v. Chry sler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985). 9 Jobe v. ATR Mktg., Inc., 8 7 F.3d 751, 753 (5th Cir. 1996). 10 Seiferth v. H elicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th Cir. 20 0 6) (citation om itted). 11 Luv N ’ Care, 438 F.3d at 469; La. R.S. 13:320 1(B). 12 Helicopteros N acionales de Colom bia, S.A. v . Hall, 466 U.S. 40 8, 413– 14 (1984). 2 the benefits and protections of the forum state by establishing ‘m in im um contacts’ with the forum state; and (2) the exercise of jurisdiction over that defendant [m ust] not offend ‘traditional notions of fair play and substantial justice.’”13 The “m inim um contacts” test takes two form s, depending on the type of jurisdiction the court seeks to exercise over the defen dant: gen eral jurisdiction or specific jurisdiction. II. Rule 12(b)(6) of the Federal Rules of Civil Procedure Pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court m ay dism iss a com plaint, or any part of it, for failure to state a claim upon which relief m ay be granted if the plaintiff has not set forth factual allegations in support of his claim that would entitle him to relief. 14 “To survive a m otion to dism iss, a com plaint m ust contain sufficient factual m atter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”15 “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defen dant is liable for the misconduct alleged.”16 The court, however, does not accept as true legal conclusions or m ere conclusory statem ents, and “conclusory allegations or legal conclusions m asquerading as factual conclusions will not suffice to prevent a m otion to dism iss.”17 “[T]hreadbare recitals of elem ents of a cause of action, supported by m ere conclusory statem ents” or “naked assertion[s] devoid of further factual enhancem ent” are not sufficient. 18 13 Latshaw v. Johnston, 167 F.3d 20 8, 211 (5th Cir. 1999) (citation om itted). Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 555 (20 0 7); Cuvillier v. Tay lor, 50 3 F.3d 397, 40 1 (5th Cir. 20 0 7). 15 Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (quotin g Tw om bly , 550 U.S. at 570 ). 16 Id. 17 S. Christian Leadership Conference v. Suprem e Court of the State of La., 252 F.3d 781, 786 (5th Cir. 20 0 1) (citing Fernandez-M ontes v. Allied Pilots Ass’n, 987 F.2d 278, 284 (5th Cir. 1993)). 18 Iqbal, 556 U.S. at 663, 678 (citations om itted). 14 3 In sum m ary, “[f]actual allegations m ust be enough to raise a right to relief above the speculative level.”19 “[W]here the well-pleaded facts do not perm it the court to infer m ore than the m ere possibility of m isconduct, the com plaint has alleged—but it has not show[n]’—that the pleader is entitled to relief.”20 “Dism issal is appropriate when the com plaint ‘on its face show[s] a bar to relief.’”21 AN ALYSIS I. Eni-Inc.’s Motion to Dism iss for Lack of Personal J urisdiction On Novem ber 29, 20 16, Defendant Eni-Inc. filed a Rule 12(b)(2) m otion to dism iss. 22 In responding to the m otion, Shell requested the m otion be denied or, in the alternative, that jurisdictional discovery be perm itted. 23 On J anuary 5, 20 17, the Court granted the parties leave to conduct jurisdictional discovery through and including February 21, 20 17. 24 The Court also ordered Shell to file a supplem ental m em orandum in response to Eni-Inc.’s 12(b)(2) m otion to dism iss no later than February 21, 20 17. 25 On February 21, 20 17, Shell filed its supplem ental m em orandum in opposition to Eni-Inc.’s Rule 12(b)(2) m otion to dism iss. 26 On February 28 , 20 17, Eni-Inc. filed its reply to Shell’s supplem ental m em orandum . 27 “Where a defendant challenges personal jurisdiction, the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists. The plaintiff need not, however, establish jurisdiction by a preponderance of the eviden ce; a prim a 19 Tw om bly , 550 U.S. at 555. Id. (quotin g Fed. R. Civ. P. 8(a)(2)). 21 Cutrer v. McMillan, 30 8 F. App’x 819, 8 20 (5th Cir. 20 0 9) (per curiam ) (quotation s om itted). 22 R. Doc. 14. 23 R. Doc. 23, at 4. 24 R. Doc. 35. 25 Id. 26 R. Doc. 46. 27 R. Doc. 52. 20 4 facie showing suffices.”28 A federal court m ay exercise personal jurisdiction over a foreign defendant if (1) the long-arm statute of the forum state confers personal jurisdiction over that defendant, and (2) the exercise of such jurisdiction com ports with due process under the United States Constitution. 29 The lim its of the Louisiana long-arm statute are coextensive with constitutional due process lim its. 30 As a result, the Court m ust determ ine whether Eni-Inc. has purposefully availed itself of the benefits and protections of the forum state by establishing m inim um contacts with the State of Louisiana and whether the exercise of jurisdiction over Eni-Inc. would offend traditional notions of fair play and substantial justice. Shell argues the Court has personal jurisdiction over Eni-Inc. by virtue of the contacts of Eni-Inc.’s subsidiaries with the State of Louisiana. 31 As Shell correctly acknowledges in its supplem ental opposition, “Generally, a foreign parent corporation is not subject to the jurisdiction of a forum state m erely because its subsidiary is present or doing business there; the m ere existence of a parent-subsidiary relationship is not sufficient to warrant the assertion of jurisdiction over the foreign parent.”32 “There m ay be instances,” however, “in which the parent so dom inates the subsidiary that ‘they do not 28 Luv N ’ care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 20 0 6) (citin g W y att v. Kaplan, 686 F.2d 276, 28 0 (5th Cir. 1982)). 29 Electrosource, Inc. v . Horizon Battery Techs., Ltd., 176 F.3d 867, 871 (5th Cir. 1999). 30 Id. See also La. R.S. § 13:320 1, et seq. 31 R. Doc. 46 at 5-8. En i-LLC and Eni-Operating do not contest that they are subject to this Court’s personal jurisdiction . Most of Shell’s argum ent relates to En i-Inc.’s relationship with Eni-LLC; the Court also will address the possibility of exercisin g personal jurisdiction over Eni-Inc. by virtue of its relationship with EniOperatin g. In its original opposition to En i-Inc.’s 12(b)(2) m otion to dism iss, Shell focused on its argum ent that “som e liabilities and responsibilities” related to the J oint Operating Agreem ent in question, “m ay rem ain with Eni Inc. depen ding upon the details of the transaction” in which the Eni entities were assigned Dom in ion Exploration & Production, Inc.’s assets in the Popeye Field. See R. Doc. 23 at 4. Shell’s supplem ental m em o centers on its argum ent that the Court has personal jurisdiction over En i-Inc. based on an alter-ego relationship with its subsidiaries; the Court considers its previous argum ent regarding the allocation of liabilities and responsibilities to be abandoned. 32 R. Doc. 46 at 5-6 (citing H argrave v. Fibreboard Corp., 710 F.2d 1154, 1159 (5th Cir. 1983)). 5 in reality constitute separate and distinct corporate entities . . .”33 The Fifth Circuit has explain ed that the following factors are relevant in determ in ing whether the parent and subsidiary should be treated collectively for personal jurisdiction purposes: (1) the am ount of stock owned by the parent of the subsidiary; (2) whether the two corporations have separate headquarters; (3) whether they have com m on officers an d directors; (4) whether they observe corporate form alities; (5) whether they m aintain separate accounting system s; (6) whether the parent exercises com plete authority over general policy of the subsidiary; and (7) whether the parent exercises com plete authority over daily operations of the subsidiary. 34 In conducting this analysis, “[t]he allegations of the com plain t, except as controverted by opposing affidavits, m ust be taken as true, and all conflicts in the facts m ust be resolved in favor of [the] plaintiff[]” for the purpose of determ ining whether a prim a facie case for personal jurisdiction has been established. 35 “In m aking its determ ination, the Court m ay consider ‘affidavits, interrogatories, depositions, oral testim ony, or any com bination of the recognized m ethods of discovery.’”36 As explained above, “Courts have long presum ed the institutional independence of related corporations, such as parent and subsidiary, when determ in ing if one corporation’s contacts with a forum can be the basis of a related corporation’s contacts.”37 “This presum ption of corporate separateness, however, m ay be overcom e by clear eviden ce.”38 33 Dalton v. R & W Marine, Inc., 897 F.2d 1359, 1363 (5th Cir. 1990 ). Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 339 (5th Cir. 1999) (citing Hargrave, 710 F.2d at 1160 ). 35 Alvarez v. Valero Refinin g-N ew Orleans, LLC, 20 12 WL 893466, at *1 (citin g Thom pson v. Chry sler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985)). 36 Id. (quotin g Thom pson , 755 F.2d at 1165). 37 Dickson Marine Inc., 179 F.3d at 338 (citing cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 33 (1925)). 38 Id. (citing Donatelli v. N ational Hockey League, 893 F.2d 459, 465 (1st Cir. 1990 )). 34 6 “There m ust be eviden ce of one corporation asserting sufficient control to m ake the other its agent or alter ego.”39 “Moreover, the burden of m aking a prim a facie showing of such sym biotic corporate relatedness is on the proponent of the agency/ alter ego theory.”40 a. Factor 1: The Am ount of Stock Owned by Eni-Inc. in Eni-LLC and EniOperating Shell, in its Supplem ental Mem orandum alleges that Eni-Inc. owns 10 0 % of EniBB, which owns 10 0 % of Eni-LLC. 41 Shell also alleges that Eni-Inc. owns 10 0 % of EniOperating. 42 Although Shell does not provide additional support for these allegations, Eni-In c., in its Reply, states “[t]hese facts are accurate and undisputed,” but argues, “they are not relevant to – and certainly do not establish – personal jurisdiction.”43 The fact that Eni-Inc. owns 10 0 % of Eni-Operating weighs in favor of the Court exercising jurisdiction over Eni-Inc. With respect to the Court’s jurisdiction over Eni-Inc. by virtue of its alter-ego relationship with Eni-LLC, Shell acknowledges that 10 0 % of Eni-LLC’s stock is owned not by Eni-Inc. but by Eni-BB, but points out that 10 0 % of Eni-BB’s stock is owned by EniInc. 44 To establish a prim a facie case that Eni-Inc.’s ownership of stock in Eni-BB equates to Eni-Inc.s ownership of stock in Eni-LLC, Shell would have to present clear evidence that Eni-BB and Eni-LLC were operating as a single entity or that the corporate veil between Eni-BB and Eni-LLC should be pierced. Shell has not m ade any allegations or produced any evidence to establish that Eni-BB and Eni-LLC operate as a single entity. 39 Id. (citations om itted). Id. (citations om itted). 41 R. Doc. 46 at 4, 6. 42 Id. at 6. 43 R. Doc. 52 at 6 (citing Melson v. Vista W orld Inc. & Assocs., 20 12 WL 60 0 2680 , at *5 (E.D. La. Nov. 30 , 20 12). 44 R. Doc. 46 at 6. 40 7 Shell has failed to establish a prim a facie case that Eni-Inc.’s ownership of stock in EniBB equates to Eni-Inc.’s ownership of stock in Eni-LLC. The first factor, with respect to Eni-Operating, weighs in favor of the Court exercising jurisdiction over Eni-Inc. The first factor, with respect to Eni-LLC, weighs against the Court exercising jurisdiction over Eni-Inc. b. Factor 2: Whether the Entities Share Headquarters Shell, in its Supplem ental Mem orandum , argues that Eni-In c.’s Corporate Representative testified in his Rule 30 (b)(6) deposition that Eni-Inc., Eni-Operating, EniBB and Eni-LLC share the sam e headquarters. 45 Eni-Inc., in its Reply, does not rebut Shell’s argum ent. 46 The second factor, with respect to both Eni-Operating and Eni-LLC, weighs in favor of the Court exercising jurisdiction over Eni-Inc. c. Factor 3: Whether the Entities Have Com m on Officers and Directors Shell, in its Supplem en tal Mem orandum , argues that Eni-In c. and Eni-LLC share the sam e board m em bers. 47 Shell attaches to its Supplem ental Mem orandum , under seal, copies of the Secretary Certificates for Eni-Inc. and Eni-LLC which dem onstrate substantial overlap of individuals who serve as board m em bers, directors or officers for the two entities. In response, Eni-Inc. argues, “Shell incorrectly asserts that in 20 0 7 both entities had the sam e board m em bers and that in 20 16 the entities still shared the sam e board m em bers. Although there was som e overlap in Eni-Inc.’s and Eni-LLC’s board m em bers during this tim e, the two com panies have never had identical boards.”48 The third factor does not center on whether the entities have identical officers and directors, 45 Id. (citing R. Doc. 46-1 at 18 lns. 10 -16 (Transcript of Rule 30 (b)(6) deposition of Eni-Inc.)). See R. Doc. 52. 47 R. Doc. 46 at 7-8 (citin g R. Doc. 46-2 (Sealed copy of (1) Secretary Certificate, The Managers of Eni Petroleum US, L.L.C. and (2) Secretary Certificate of Eni Petroleum Co., Inc.)). 48 R. Doc. 52 at 5 n.3. 46 8 but whether they have com m on officers and directors. 49 As is clear from the Court’s review of the sealed Secretary Certificates, there is a significant overlap between officers and directors of Eni-Inc. and Eni-LLC. 50 The third factor with respect to Eni-LLC weighs in favor of the Court exercising jurisdiction over Eni-Inc. Shell does not argue that Eni-Inc. an d Eni-Operating have com m on officers or directors. The third factor with respect to Eni-Operating weighs against the Court exercising jurisdiction over Eni-Inc. d. Factor 4: Whether the Entities Maintain Corporate Form alities In Huard v. Shreveport Pirates, Inc., the Fifth Circuit explained: In determ in ing whether to apply the alter ego doctrine, the totality of the circum stances m ust be considered; however, the following factors are usually considered relevant in evaluating adherence to corporate form alities: (1) com m ingling of corporate and shareholder funds; (2) failure to follow statutory form alities for incorporating and transacting corporate affairs; (3) undercapitalization; (4) failure to provide separate bank accounts and bookkeeping records; and (5) failure to hold regular shareholder and director m eetings. 51 Shell has not m ade any allegations or provided any evidence that corporate form alities are not observed. 52 It is Shell’s burden to m ake a prim a facie showing that corporate form alities have not been observed, and it has failed to do so. As the Fifth Circuit has consistently explain ed, “Where a parent and subsidiary observe corporate form alities, the plaintiff has a heavy burden to establish a degree of control sufficient to im pute the subsidiary’s jurisdictional contacts to a parent,”53 Shell’s failure to m ake a 49 See, e.g. Adm inistrators of Tulane Educ. Fund v . Ipsen , S.A., 450 F. App’x 326, 330 (5th Cir. 20 11) (“[T]he district court found . . . that the two corporations have a num ber of com m on officers and directors.”). 50 See R. Doc. 46-2. 51 147 F.3d 40 6, 40 9-10 (5th Cir. 1998 ) (citations om itted) (discussin g the standard under Louisiana law). 52 See R. Doc. 46. 53 Adm inistrators of Tulane Educ. Fund v. Ipsen, S.A., 450 F. App’x 326, 331 (5th Cir. 20 11) (citations om itted). 9 prim a facie showing with respect to factor four weighs heavily against the Court exercising jurisdiction over Eni-Inc. by virtue of its relationship to En i-LLC or Eni-Operating. e. Factor 5: Whether the Entities Maintain Separate Accounting System s Shell, in its Supplem ental Mem orandum , argues Eni-Inc., Eni-LLC, and EniOperating do not have separate accounting system s, but Shell’s argum ent centers on the fact that Eni-Inc., for reporting purposes, has com bined its fin ancial records with EniOperating, Eni-BB and Eni-LLC. 54 In support of its argum ent, Shell cites to the deposition transcript of Eni-Inc.’s Rule 30 (b)(6) representative, Gary Clifford. During the deposition, Mr. Clifford testified that En i-Inc. “consolidates all of its subsidiaries into a – its financials.”55 Mr. Clifford also testified that any profit m ade as a result of the Popeye assets by Eni-LLC would be consolidated to Eni-Inc. 56 In its Reply, Eni-Inc. disputes Shell’s assertion and argues, “Eni-Inc. and Eni-LLC m aintain separate accounting system s and have separate state tax ID num bers in Texas.”57 Eni-Inc. attaches a copy of Eni-Inc.’s and Eni-LLC’s tax payer ID num bers. 58 Eni-In c. does not provide any inform ation regarding whether Eni-Operating has its own tax payer ID num ber. Eni-Inc. also attaches its response to Shell’s jurisdiction al discovery requests in which Eni-Inc. inform ed Shell that it had no docum ents m aintained in its accounting system s responsive to a request for all accounting docum ents relating to the Popeye assets. 59 Eni-Inc. argues the absence of docum ents relating to the Popeye assets 54 R. Doc. 46 at 1, 8 (citing R. Doc. 46-1 at 41 lns. 1-17). Shell also argues that En i-In c. “provides fundin g to som e of its subsidiaries.” Id. at 8 (citin g R. Doc. 46-1 at 57 lns. 6-9). The deposition testim ony cited by Shell does not support this assertion. See R. Doc. 46-1 at 57 lns. 6-9. 55 R. Doc. 46-1 at 41 lns. 11-13. 56 Id. at 57 lns. 12-16. 57 R. Doc. 52 at 7. 58 R. Doc. 52-2. 59 R. Doc. 52-3 at 3. 10 in its accounting system s dem onstrates that all Popeye docum ents and inform ation are m aintain ed in Eni-LLC’s separate accounting system . 60 To prove the entities have separate accounting system s, Eni-Inc. agreed to m ake Eni-Inc.’s annual financial reports from 20 0 7 to present available for inspection at the offices of Susm an Godfrey LLP. 61 Cases describing the analysis under the fifth factor generally look to whether the entities have “separate bank accounts, accounting and payroll system s, insurance contracts, budgets, and financial records.”62 Shell referenced only Gary Clifford’s testim ony that all of the Eni entities’ financials are consolidated into Eni-Inc.’s financials for reporting purposes. 63 It is Shell’s burden to m ake a prim a facie showing that the entities did not m ain tain separate accounting system s and, in light of the evidence provided by Eni-Inc., it has failed to do so. The fifth factor weighs against the Court exercising jurisdiction over Eni-Inc. by virtue of its relationship with Eni-LLC or EniOperating. f. Factor 6: Whether Eni-Inc. Exercised Com plete Authority Over Eni-LLC’s or Eni-Operating’s General Policy Shell does not allege or argue that Eni-Inc. exercises com plete authority over EniLLC’s or Eni-Operatin g’s general policy. 64 The sixth factor weighs against the Court exercising jurisdiction over Eni-Inc. by virtue of its relationship with Eni-LLC or EniOperating. g. Factor 7: Whether Eni-Inc. Exercises Com plete Authority Over the Daily Operations of En i-LLC or Eni-Operating 60 R. Doc. 52 at 11. 61 Id.. 62 See Alvarez, 20 12 WL 893466, at *3 (quotin g Hargrave, 710 F.2d at 1160 ). R. Doc. 46 at 8 (citing R. Doc. 46-1 at 11). 64 See R. Doc. 46. In its Supplem ental Mem orandum , Shell does allege that Eni-Inc. “exercised sign ificant control over its subsidiaries” but it does not provide an y support for this allegation . Id. at 8 . 63 11 Shell argues that Eni-Inc. exercises authority over daily operations of both EniOperating an d Eni-LLC through its control of Eni-Operating. 65 Shell argues that EniOperating “is the only subsidiary that has em ployees who m anage the daily activities of Louisiana and Gulf of Mexico oil and gas leases.”66 Shell’s argum ent appears to be that, if Eni-In c. controls Eni-Operating and Eni-Operating is the only entity that conducts daily operations, Eni-Inc. m ust exercise control over the daily operations of all its subsidiaries. Shell does not provide evidentiary support for its allegation that Eni-Inc. controls EniOperating’s daily operations. In its original m otion to dism iss, Eni-Inc. disputes the allegation and attaches the sworn declaration of Gary Clifford, the Land and Business Developm ent Director for Eni-Operating and Eni-Inc.’s Rule 30 (b)(6) corporate representative, in which Mr. Clifford testifies that Eni-Inc. does not control the internal business operations and affairs of Eni-LLC. 67 It is Shell’s burden to m ake a prim a facie showing that Eni-Inc. exercises authority of the daily operations of Eni-LLC and EniOperating and, in light of the testim ony offered by Eni-Inc., it has failed to do so. The seventh factor weighs against the Court exercising jurisdiction over Eni-In c. by virtue of its relationship with Eni-LLC or En i-Operating. h. The Court May Not Assert J urisdiction Over Eni-In c. as a Result of EniLLC’s or En i-Operating’s Contacts with the State of Louisiana After analyzing the seven factors and the caselaw, the Court finds that it does not have personal jurisdiction over Eni-Inc. Shell has failed to m eet its burden of establishing a prim a facie showing of personal jurisdiction. Most notably, Shell has failed to rebut the presum ption of corporate separaten ess of Eni-Inc., Eni-LLC, Eni-Operating, and Eni-BB 65 R. Doc. 46 at 6. Id. 67 R. Doc. 14-2 at 3 ¶13 (Sworn Declaration of Gary Clifford). 66 12 by alleging or subm itting any evidence that corporate form alities are not observed. “Where a parent and subsidiary observe corporate form alities, the plaintiff has a heavy burden to establish a degree of control sufficient to im pute the subsidiary’s jurisdiction al contacts to a parent.”68 “[T]ypically, the corporate indepen den ce of com panies defeats the assertion of jurisdiction over one by using contacts with another.”69 Two factors weigh in favor of the Court exercising jurisdiction over Eni-Inc. by virtue of its relationship with Eni-LLC, and two factors weigh in favor of the Court exercising jurisdiction over Eni-Inc. by virtue of its relationship with Eni-Operating. But the m ajority of the factors weigh against the Court exercising jurisdiction by virtue of EniInc.’s relationship with Eni-LLC and Eni-Operating, including the m ost im portant factor – whether the entities observe corporate form alities. Eni-Inc.’s m otion to dism iss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure is granted. 70 II. Eni-LLC’s an d Eni-Operating’s Rule 12(b)(6) Motions to Dism iss Shell’s Alternative Claim for Unjust Enrichm ent In their Rule 12(b)(6) m otions to dism iss, En i-LLC an d Eni-Operating m oved for the dism issal of Shell’s claim for unjust enrichm ent alleging that the existence of a claim for breach of contract defeats one of the essential elem ents of an unjust enrichm ent action – lack of another rem edy. 71 In response to Eni-LLC’s m otion to dism iss, Shell am ended 68 Adm inistrators of Tulane Educ. Fund, 450 F. App’x 326, 331 (5th Cir. 20 11) (citations om itted). Access Telecom m ., Inc. v. MCIK Telecom m s. Corp., 197 F.3d 694, 717 (5th Cir. 1999). 70 The Court has already provided Shell with the opportunity to conduct jurisdictional discovery. R. Doc. 35. Despite this opportunity, Shell has not provided the Court with sufficient evidence to establish a prim a facie showing of personal jurisdiction. 71 R. Docs. 15-1 at 6, 76-1 at 5. Eni-Inc. also joined En i-LLC’s m otion but as discussed above, Eni-Inc. has been dism issed pursuant to Rule 12(b)(2). With respect to the two m otions to dism iss Shell’s unjust enrichm ent claim , the Court will refer only to En i-Inc. and Eni-LLC’s m otion to dism iss, Record Docum ent 15, and its related filin gs because En i-Operatin g’s m otion to dism iss, Record Docum ent 76, repeats the argum ents raised in Record Docum ent 15. 69 13 its com plaint “to clarify that its claim for unjust enrichm ent is being plead[ed] as an alternative cause of action.”72 In its reply, Eni-LLC argues Shell’s First Am ended Com plaint does not resolve the m otion to dism iss with respect to Shell’s unjust enrichm ent claim because “In Louisiana, by law, an unjust enrichm ent claim is a subsidiary claim , not an alternative claim .”73 To support a claim for unjust enrichm ent under Louisiana law, a plaintiff m ust show five elem ents: (1) there m ust be an enrichm ent; (2) there m ust be an im poverishm ent; (3) there m ust be a connection between the enrichm ent and the resulting im poverishm ent; (4) there m ust be an absence of “justification” or “cause” for the enrichm ent and im poverishm ent; and (5) there m ust be no other rem edy at law available. 74 “The Louisiana Suprem e Court has observed that ‘[t]he m ere fact that a plaintiff does not successfully pursue another available rem edy does not give the plaintiff the right to recover under the theory of unjust enrichm ent.’”75 “This is because [t]he unjust enrichm ent rem edy is only applicable to fill a gap in the law where no express rem edy is provided.”76 “Louisiana law provides that no unjust enrichm ent claim shall lie when the claim is based on a relationship that is controlled by an enforceable contract.”77 As the Louisian a Suprem e Court explained in Carriere, “The existen ce of a ‘rem edy’ which precludes the 72 See R. Doc. 24 at 1-2 (discussing R. Doc. 22). R. Doc. 31 at 3 (quotin g JP Mack Indus. LLC v . Mosaic Fertilizer, LLC, 970 F. Supp.2d 516, 521 (E.D La. 20 13)). 74 See JP Mack Indus. LLC, 970 F. Supp. 2d at 520 -21 (citing Carriere v. Bank of Louisiana, 95-30 58 (La. 12/ 13/ 96), 70 2 So. 2d 648). 75 Id. at 521 (alteration in original) (citing W alters v . MedSouth Record Mgm t., LLC, 20 10 -0 351 (La. 6/ 4/ 10 ), 38 So. 3d 241, 242 (La. 20 10 ) (per curiam )). 76 Perez v. Utility Constructors, Inc., 20 16 WL 5930 877, at *1 (E.D. La. Oct. 12, 20 16) (internal citations and quotations om itted). 77 Drs. Bethea, Moustoukas & W eaver LLC v. St. Paul Guardian Ins. Co., 376 F.3d 399, 40 7 (5th Cir. 20 0 4) (citing Edw ards v. Conftronto, 636 So. 2d 90 1, 90 7 (La. 11/ 29/ 93)). See also, Double R & J Trucking Serv., Inc. v. Patton Installations of Florida, LLC, 20 15 WL 2452343, at *4 (E.D. La. May 21, 20 15). 73 14 application of unjust enrichm ent does not connote the ability to recoup your im poverishm ent by bringing an action . . . [i]t m erely connotes the ability to bring the action or seek the rem edy.”78 Stated differently, “It is not the success or failure of the other causes of action, but rather the existence of other cause of action, that determ ine whether unjust enrichm ent can be applied.”79 Shell argues that its claim for unjust enrichm ent, pleaded in the alternative, com ports with the Federal Rules of Civil Procedure as well as Louisiana law. 80 Citing Federal Rules of Civil Procedure 8(d)(2) and 8(d)(3), Shell argues the Federal Rules explicitly allow a party to plead alternative and separate claim s, regardless of consisten cy. 81 Further, quoting Perez v. Utility Constructors, Inc., 20 16 WL 5930 8 77 (E.D. La. Oct. 12, 20 16), Shell argues courts in this district have found, “Rule 8 allows [plaintiff] to plead both breach of contract and unjust enrichm ent even though those claim s are inconsistent.”82 As Eni-LLC and En i-Operating correctly explain, “Perez noted and sought to reconcile the differing EDLA authorities by explaining that alternatively-pled unjust enrichm ent is only ‘som etim es’ perm issible, depen ding on whether ‘it is clear that the plaintiff has or had at one point another available rem edy.’”83 In Perez, the court explicitly acknowledged, “Until the validity of the alleged contract can be determ ined, [plaintiff’s] 78 Carriere, 70 2 So. 2d at 673). Zaveri v. Condor Petroleum Corp., 27 F. Supp. 3d 695, 70 2 (W.D. La. 20 14) (quoting Garber v. Badon & Rainer, 20 0 7-1497 (La. App. 3 Cir. 4/ 2/ 0 8), 981 So. 2d 92, 10 0 , w rit denied, 20 0 8-1154 (La. 9/ 19/ 0 8), 992 So. 2d 943). 80 R. Doc. 24 at 5. 81 See id. 82 Id. (quotin g Perez, 20 16 WL 5930 877, at *1). 83 Id. at 6-7 (quotin g Perez, 20 16 WL 5930 877, at *2 n .5 (internal m arks om itted in original)). The En i Defendants also argue Perez “is inconsistent with Louisiana law to the extent it perm its alternative claim s for unjust enrichm ent in an y respect.” Id. at 6 (citing e.g., JP Mack, 970 F. Supp. 2d at 521 & n.2; W alters 38 So. 3d at 246). As explained further below, this Court’s Order and Reasons n eed not address Defendants’ argum ent regarding the validity of Perez. 79 15 unjust enrichm ent claim should not be dism issed on the ground that [plaintiff] has another available rem edy.”84 In Perez, the court found “genuine disputes of m aterial fact preclude this Court from determ ining whether a contract existed for the extra work perform ed.”85 Because “[u]nder Louisiana law, a plaintiff does not have an available contractual rem edy unless a valid contract existed,” the Perez court held it was im proper to dism iss plaintiff’s alternative unjust enrichm ent claim as a result of plaintiff’s breach of contract claim at that tim e. 86 The lim ited holding in Perez does not apply to the case currently before this Court. Unlike Perez, in this case there is no genuine dispute of m aterial fact as to whether a contract exists. Shell filed claim s for breach of contract and open account against Eni-LLC and Eni-Operating 87 and Eni-LLC does not contest that Shell has alleged a viable breach of contract claim against it. 88 In its opposition, Shell states, “While not directly addressed in Eni’s Motion, Eni Petroleum US LLC’s statem ent that [Shell] ‘does not have a valid claim under the [Unit Operating Agreem ent “UOA”] m akes it clear that a m otion on [Shell’s] breach of contract claim again st Eni Petroleum US LLC is forthcom ing.’”89 As a result, Shell argues: Given that the instant m atter is in its early stages and Eni’s suggestion that there are additional challenges to [Shell’s] breach of contract claim against Eni Petroleum US LLC to be addressed, the Court should deny Eni’s m otion to dism iss and allow [Shell’s] claim for unjust enrichm ent to proceed as an alternative claim . 90 84 Perez, 20 16 WL 5930 877, at *2 (internal quotations om itted). Id. 86 Id. 87 R. Docs. 1, 70 . 88 See R. Doc. 31 at 7 n .1 (“Shell alleged a plausible (albeit m eritless) breach of contract claim against EniLLC and, thus, does not have an un just enrichm ent claim .”). 89 R. Doc. 24, at 7 (quotin g R. Doc. 15-1, at 1). 90 Id. 85 16 Although a m otion on Shell’s breach of contract claim against Eni-LLC m ay be forthcom ing, there is no indication that such a m otion would be based on the absence of a contract. Eni-LLC’s adm ission that Shell has stated a “plausible” breach of contract claim against it also precludes an unjust enrichm ent claim against Eni-Operating. Courts have explain ed “the rem edy provided by unjust enrichm ent is precluded where the available rem edy at law is against som eone other than the person against whom the claim is presently asserted.”91 As a result, the Court need not determ ine whether Shell has alleged a viable claim against Eni-Operating before determ ining that Shell’s unjust enrichm ent claim against Eni-Operating m ust be dism issed because it is clear there is a breach of contract claim against Eni-LLC. Eni-LLC and Eni-Operating’s m otions to dism iss Shell’s alternative claim for unjust enrichm ent is granted. III. Eni-Operating’s Rule 12(b)(6) Motion to Dism iss Shell’s Claim s for Breach of Contract Shell, in its Com pliant, refers to Eni-Inc, Eni-LLC, and Eni-Operatin g collectively as “Eni” or the “Eni Defendants.”92 While Eni-LLC does not contest that Shell has alleged a viable breach of contract claim against it, 93 Eni-Operating argues that Shell has not adequately alleged it was a party to the Unit Operating Agreem ent and as a result Shell has not alleged a viable breach of contract claim against it. 94 As Eni-Operating notes in its reply in support of its Rule 12(b)(6) m otion to dism iss, “Shell’s opposition lists a num ber of factual allegations, none of which are alleged 91 Zaveri, 27 F. Supp. 3d 695, 70 2 (W.D. La. 20 14) (citin g Carriere, 70 2 So. 2d at 672-673). See R. Docs. 1 at 1 ¶4, 70 at 1 ¶4. 93 See R. Doc. 41 at 7 n .1. 94 R. Doc. 76-1 at 4. 92 17 in Shell’s com plaint, indicating that em ployees of En i-Operating carry out som e daily operations for Eni-LLC.”95 The Court construes these new factual allegations in Plaintiff's opposition m em orandum as a m otion to file an am ended com plaint. 96 Rule 15(a) "requires the trial court to grant leave to am end freely, and the language of this rule evinces a bias in favor of granting leave to am end." 97 A district court m ust possess a "substantial reason" to deny a m otion under Rule 15(a). 98 Although Shell has already filed two am ended com plain ts, the second of which was objected to by the Eni-LLC, 99 the Court finds that further am endm ent is necessary in order to resolve Eni-LLC’s and EniOperating’s m otions to dism iss Shell’s claim for breach of contract. In its third am ended com plaint, Shell shall address the argum ents raised by En iLLC and Eni-Operating in their m otions to dism iss Shell’s claim for breach of contract. Shell’s allegations m ust be specific with respect to each Defendant, such that, (1) all allegations with respect to the parties to the J oint Operating Agreem ent nam e specific entities; (2) all allegations with respect to the assignm ent of rights under the J oint Operating Agreem ent identify the specific entity to which the assignm ent is m ade; (3) all allegations with respect to the daily operations of Eni-LLC conducted by Eni-Operating list the specific operation; and (4) the third am ended com plaint m ust list the causes of 95 R. Doc. 82 at 3 (citin g R. Doc. 77 at 6-7). See Morin v. Moore, 30 9 F.3d 316, 323 (5th Cir. 20 0 2) ("This Court has held, that in the interest of justice a revised theory of the case set forth in the plaintiff's opposition should be construed as a m otion to am end the pleadings filed out of tim e and granted by the district court pursuant to the perm issive com m and of Rule 15.") (citing Sherm an v. Hallbauer, 455 F.2d 1236, 1241 (5th Cir. 1972)); Stover v. Hattiesburg Pub. Sch. Dist., 549 F.3d 985, 989 n.2 (5th Cir. 20 0 8) (citing with approval cases in which the district court construed new allegations in opposition m em orandum as m otion to am end under Rule 15(a)). 97 Ly n-Lea Travel Corp. v. Am . Airlines, Inc., 283 F.3d 28 2, 286 (5th Cir. 20 0 2) (internal quotation m arks om itted). 98 Sm ith v. EMC Corp., 393 F.3d 590 , 595 (5th Cir. 20 0 4). In decidin g whether to grant leave under Rule 15(a), courts m ay consider factors such as "undue delay, bad faith or dilatory m otive on the part of the m ovant, repeated failures to cure deficiencies by am endm ents previously allowed, undue prejudice to the opposing party by virtue of allowance of the am endm en t, and futility of the amendm ent." Jon es v. Robinson Prop. Grp., LP, 427 F.3d 98 7, 994 (5th Cir. 20 0 5). 99 See R. Doc. 60 . 96 18 actions asserted against each Defendant. In addition, Shell should attach to its third am ended com plaint all docum ents referen ced therein. Shell’s third am en ded com plaint m ust be filed as a restated and am ended com plaint, incorporating all allegations. IV. Eni-LLC’s and Eni-Operating’s Rule 12(b)(6) Motions to Dism iss Open Account Shell’s claim on open account suffers from m any of the sam e flaws described above with respect to its breach of contract claim . As a result, the Court defers ruling on EniLLC’s and Eni-Operating’s m otions to dism iss Shell’s claim based on an open account until Shell has had the opportunity to file its third am ended com plaint. V. Eni-LLC’s Rule 12(b)(6) Motion to Dism iss Shell’s Claim for Attorney’s Fees In its original com plaint, Shell alleged a claim for attorneys’ fees. 10 0 Eni-LLC filed a m otion to dism iss this count as attorneys’ fees are “a rem edy, not a cause of action.”10 1 On Decem ber 6, 20 16, Shell filed its First Supplem ental and Am ended Com plaint in which it am ended its original com plaint to rem ove the count for attorneys’ fees under Section V, “Dam ages.”10 2 In its reply, the Eni-LLC acknowledged that Shell’s First Supplem ental and Am ended Com plaint “resolves [its] m otion on this point.”10 3 Eni-LLC’s m otion to dism iss Shell’s claim for attorneys’ fees is dism issed as m oot. CON CLU SION For the foregoing reasons; IT IS ORD ERED that Eni-Inc.’s m otion to dism iss 10 4 pursuant to Rule 12(b)(2) is GRAN TED . The claim s against Eni-In c. are hereby D ISMISSED W ITH OU T PREJU D ICE. 10 0 R. Doc. 1 at 9. Doc. 15-1 at 2. 10 2 R. Doc. 22 at 1. 10 3 R. Doc. 31 at 10 . 10 4 R. Doc. 14. 10 1 R. 19 IT IS FU RTH ER ORD ERED that Eni-LLC’s and Eni-Operating’s m otions to dism iss 10 5 are hereby GRAN TED IN PART, D EFERRED IN PART, and D ISMISSED AS MOOT IN PART. IT IS FU RTH ER ORD ERED that Eni-LLC’s and Eni-Operating’s m otions to dism iss 10 6 are GRAN TED to the extent they seek the dism issal of Shell’s claim for unjust enrichm ent. Shell’s claim for unjust enrichm ent is D ISMISSED W ITH PREJU D ICE. IT IS FU RTH ER ORD ERED that the Court D EFERS ruling on Eni-LLC’s and Eni-Operating’s m otions to dism iss 10 7 to the extent they seek the dism issal of Shell’s breach of contract claim against Eni-Operating and Shell’s open account claim against Eni-LLC and Eni-Operating. IT IS FU RTH ER ORD ERED that Shell shall have until Th u rs d ay, Au gu s t 2 4 , 2 0 17 at 5 :0 0 p .m . to file its third am ended com plaint. If Shell tim ely files tim ely files its third am ended com plaint, Eni-LLC’s and Eni-Operating’s 12(b)(6) m otions 10 8 with respect to Shell’s claim s for breach of contract and open account will be dism issed as m oot without prejudice. Eni-LLC and Eni-Operating will be free to re-urge their m otions in a tim ely fashion. IT IS FU RTH ER ORD ERED that Eni-LLC’s m otion to dism iss 10 9 Shell’s claim for attorney’s fees is D ISMISSED AS MOOT. N e w Orle a n s , Lo u is ian a, th is 17th d ay o f Au gu s t, 2 0 17. ___________ __ _______ _________ SU SIE MORGAN U N ITED S TATES D ISTRICT J U D GE 10 5 R. Docs. 15, 76. Id. 10 7 Id. 10 8 Id. 10 9 R. Doc. 15. 10 6 20
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