Pemex Exploracion y Produccion v. BASF Corporation et al
Filing
636
MEMORANDUM OPINION AND ORDER denying 610 MOTION for Attorney Fees, granting 613 MOTION for Certification and Entry of Final Judgment, denying 618 MOTION to Designate Responsible Third Party, denying 620 MOTION for Reconsideration of 607 Memorandum and Opinion, denying 621 MOTION for Certificate of Appealability and Stay. (Docket Call set for 2/21/2014 at 03:30 PM in Courtroom 9B before Judge Sim Lake.) (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PEMEX EXPLORACION Y PRODUCCION,
Plaintiff,
v.
BASF CORPORATION; BASF FINA
PETROCHEMICALS LIMITED
PARTNERSHIP; MURPHY ENERGY
CORPORATION; BIO-NU SOUTHWEST,
INC. d/b/a VALLEY FUELS; US
PETROLEUM DEPOT, INC.; ARNOLDO
MALDONADO; JONATHAN DAPPENj
STEPHEN PECHENIK; TIMOTHY L.
BRINKj CONTINENTAL FUELS, INC.;
and HIGH SIERRA CRUDE OIL &
MARKETING, LLC, Successor to
PETRO SOURCE PARTNERS, LP,
Defendants.
PEMEX EXPLORACION Y PRODUCCION,
Plaintiff,
v.
BIG STAR GATHERING LTD L.L.P.;
F&M TRANSPORTATION, INC.;
JAMES JENSEN; JOPLIN ENERGY,
LLC f/k/a HUTCHISON HAYES
ENERGY, LLCj JEFF KIRBYj
PLAINS ALL-AMERICAN PIPELINE,
L.P.; SAINT JAMES OIL, INC.j
SUPERIOR CRUDE GATHERING, INC.j
TRANSMONTAIGNE PARTNERS, L.P.;
and WESTERN REFINING COMPANY,
L.P. ,
Defendants.
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CIVIL ACTION NO. H-IO-1997
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CIVIL ACTION NO. H-11-2019
MEMORANDUM OPINION AND ORDER
Plaintiff, PEMEX Exploraci6n y Producci6n ("PEP"), has brought
suit
against
multiple
defendants
in
two
sepa~ate
-
but
now
consolidated
-
actions
for
claims
arising
from
sales
in
the
United States of natural gas condensate allegedly stolen from PEP
in Mexico.
Pending before the court are five motions:
(1)
(2)
Defendant Plains Marketing, L.P.'s Motion for
Certification and Entry of Final Judgment Pursuant
to Rule 54(b)
("Plains' Motion for Judgmenttl)
(Docket Entry No. 613) i
(3)
Defendant Murphy Energy Corporation's Motion for
Leave to Designate Responsible Third Parties
("Murphy Energy's Motion to Designate Responsible
Third Parties") (Docket Entry No. 618) i
(4)
Pemex Exploraci6n y Producci6n's Motion for Partial
Reconsideration and Opposition to Plains Marketing,
L.P.'s Motion for Certification and Entry of Final
Judgment
("PEP's Motion for Partial Reconsideration tl ) (Docket Entry No. 620) i and
(5)
For
Defendant/Third-Party
Plaintiff
Murphy
Energy
Corporation's Motion for Attorneys' Fees ("Murphy
Energy's Motion for Attorneys' Fees") (Docket Entry
No. 610);
Pemex Exploraci6n y
Producci6n's
Motion
for
Certification of an Interlocutory Appeal and for a
Stay
of
Proceedings
("PEP's
Motion
for
Certification and Stay") (Docket Entry No. 621).
the
reasons
explained
Attorneys'
Fees
Motion
Designate
to
below,
(Docket Entry No.
Responsible
Murphy
610)
Energy's
Motion
will be denied,
Third
Parties
for
Murphy's
(Docket
Entry
No. 618) will be denied, Plains' Motion for Judgment (Docket Entry
No.
613)
will
be
granted,
and
Pemex's
Motion
for
Partial
Reconsideration (Docket Entry No. 620) and Motion for Certification
and Stay (Docket Entry No. 621) will be denied.
-2-
I.
Background
There are two live complaints in this consolidated action:
PEP's Third Amended Complaint (Docket Entry No. 220) filed in Civil
Action No. H-I0-1997 (the "BASF Action")
Complaint
2019
(Docket Entry No. 378)
and PEP's First Amended
i
filed in Civil Action No. H-llEach of the two live complaints
(the "Big Star Action").
asserts claims against different defendants for conversion arising
from
the
use
of
stolen
property
alleged
to
be
natural
gas
condensate, for equitable relief (unjust enrichment, money had and
received,
and constructive trust), violation of the Texas Theft
Liability Act, and civil conspiracy.
The Third Amended Complaint
filed in the BASF Action also asserts claims for violations of the
Racketeer
U.S.C.
Influenced and
Corrupt
Organizations Act
On September 30,
signed
and
a
Memorandum
607)
history
that
of
Defendant
(Docket
18
1962(c)- (d), against a group of defendants referred to as
§
the "Conspiring Defendants."
No.
(RICO),
Opinion
summarized the
the
consolidated
Plains Marketing [
Entry No.
475),2
Order
factual
cases 1
2013,
("MO&O, "
allegations
and,
inter
the court
Docket
Entry
and pleading
alia,
granted
L. P. 's Motion for Summary Judgment
granted
in
part
and
denied
in
part
Defendant Murphy Energy Corporation's ("Murphy Energy") Motion for
Final
Summary
Judgment
(Docket
Entry
No.
lMO&O, Docket Entry No. 607, pp. 4-9.
2Id. at 34-83[ and 179.
3Id. at 117-143, and 179.
-3-
479),3
denied
PEP's
Dispositive Motion for partial summary judgment on claims asserted
against Plains and Murphy Energy,4 and granted PEP's Dispositive
Motion for judgment on Murphy Energy's counterclaims. 5
II.
PEP
PEP's Motion for Partial Reconsideration
moves
the
court
for
partial
reconsideration
September 30, 2013, MO&O in which the court,
Plains'
of
the
inter alia, granted
motion for summary judgment on all of PEP's conversion
claims, including those that arise from transactions that occurred
within
the
two-year
limitations
period.
PEP
states
that
its
"motion to reconsider is limited to a single issue-Whether this
Court
properly
granted
summary
judgment
to
Plains
conversion claims based on transactions after May 29,
date
on
PEP's
2009,
the
the Court held was the applicable limitations deadline.,,6
Citing John Deere Co. v. American National Bank, Stafford, 809 F.2d
1190
(5th Cir.
1987),
PEP argues that the court erred because
Plains did not move for summary judgment on the grounds for which
judgment was granted, 7 and because PEP presented evidence that
Plains purchased stolen condensate within the limitations period. 8
4Id. at 156-57, 167-68, and 180.
5Id. at 158-68, and 180.
6PEP's Motion for Partial Reconsideration, Docket
No. 620, p. 2 (citing MO&O, Docket Entry No. 607, p. 73).
7Id.
at 3-5.
8Id.
at 5-8.
-4-
Entry
In John Deere a defendant moved for summary judgment solely on
the basis of
res
Id.
judicata.
at
The district court
1191.
granted the motion for summary judgment for a different reason,
i.e., that the plaintiff had presented no evidence of damages.
Id.
Concluding that the damages issue "certainly was not raised by the
[defendant]
in a
manner that
would be
sufficient
to put
[the
plaintiff] on notice that failure to present evidence of damages
could be grounds for summary judgment,"
id.,
the Fifth Circuit
reversed the grant of summary judgment, stating that "a district
court may not grant summary judgment sua sponte on grounds not
requested by the moving party."
Id. at 1192.
John Deere stands
for the principle that summary judgment is not appropriate where
the district court relied on grounds not advanced by the moving
party,
and the nonmoving party had no notice or opportunity to
respond.
See United States v. Houston Pipeline Co., 37 F.3d 224,
228 (5th Cir. 1994)
(finding summary judgment appropriate where a
plaintiff's claim was premised on the applicability of a case, the
plaintiff knew that it needed to introduce evidence to bring the
claim within the holding of the case, yet plaintiff introduced no
such evidence) .
A.
Standard of Review
PEP
has
styled
reconsideration.
its
motion
as
a
motion
for
partial
"[T]he Federal Rules of Civil Procedure do not
recognize a general motion for reconsideration."
-5-
St. Paul Mercury
Insurance Company v. Fair Grounds Corporation, 123 F.3d 336, 339
(5th Cir.
1997).
Entry No.
607)
The court's September 30,
was interlocutory,
not final,
2013,
MO&O
(Docket
because it did not
resolve the entire case.
See Moody v. Seaside Lanes, 825 F.2d 81,
85 & n.3 (5th Cir. 1987)
(explaining that only the resolution of an
entire
adversary
proceeding
is
Courts
final).
interlocutory orders under Rule 54 (b),
reconsider
which in pertinent part
provides that
any order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties does not end
the action as to any of the claims or parties and may be
revised at any time before the entry of a judgment
adjudicating all the claims and all the parties' rights
and liabilities.
Fed. R. Civ. P. 54(b).
"Rule 54(b) authorizes a district court to
reconsider and reverse its prior rulings on any interlocutory order
'for any reason it deems sufficient.'ff
F.3d 472,
479
(5th Cir.),
cert.
United States v. Renda, 709
denied,
134
S.
Ct.
618
(2013)
(quoting Saqui v. Pride Central America, LLC, 595 F.3d 206, 210-11
(5th Cir. 2010)).
Denial of motions to reconsider are reviewed for
abuse of discretion.
Id. (citing Swope v. Columbian Chemicals Co.,
281 F.3d 185, 193 (5th Cir. 2002)).
B.
Analysis
PEP argues that the court erred by granting Plains' motion for
summary judgment on conversion claims that arose from transactions
that occurred after May 29,
2009,
PEP's tracing methodology was
-6-
because Plains'
challenge to
date-neutral and was not directed at transactions within
a particular limitations date.
PEP responded accordingly by providing general
examples of its tracing methodologYI without regard to
particular dates.
See Dkt. 545 at 4.
PEp s summary
judgment proof thus was intended to rebut Plains
argument that PEP could not show that Plains purchased
the "identical condensate allegedly stolen from PEP / " not
to trace every single transaction including those within
two years.
See id. Dkt. 475 at 5.
l
l
1
UI timately
this Court rej ected Plains
proposed
standard of proof on tracing holding that PEP need only
trace
its
condensate
to
Plains
"with reasonable
certainty." Dkt. 607 at 102.
With respect the Court
erred in then requiring PEP post hoc to present evidence
of all transactions under the appropriate standard. As
the Court s Order established
PEP defeated the sole
ground on which Plains based its requested relief. 9
I
I
l
l
I
l
PEP also argues that the court erred because PEp/s response to
Plains
l
motion
for
summary judgment
cited evidence
capable of
establishing that Plains engaged in transactions involving stolen
condensate after May 29
1
2009
1
and that had PEP been on notice of
the need to present tracing evidence for Plains
occurred after May 29
1
2009
1
l
transactions that
PEP would have provided such evidence.
As proof of its ability to provide evidence that Plains engaged in
transactions that involved stolen condensate after May 29
1
2009 1
PEP has attached to its motion for partial reconsideration three
transaction reports issued by the Texas Railroad Commission that
PEP
argues
constitute
evidence
that
Plains
condensate in February of 2010. 10
9rd. at 4.
lOrd. at Exhibit AI Docket Entry No.
-7-
620-1.
purchased
stolen
Plains
opposes
PEP's
Motion
for
Partial
Reconsideration.
Plains argues that PEP had notice of the grounds for which summary
judgment was sought and granted, that PEP also had an opportunity
to respond,
and that the evidence attached to PEP's Motion for
Partial Reconsideration is not capable of raising a genuine issue
of material fact for trial. ll
1.
The Court Granted Summary Judgment on the Grounds for
Which Plains Moved for Summary Judgment.
PEP argues that the Fifth Circuit's decision in John Deere,
809 F.2d at 1190, supports its motion for partial reconsideration
of
the
court's
decision
to
grant
Plains
summary
judgment
on
conversion claims arising from transactions that occurred after
May
29,
2009,
because
Plains'
challenge
to
PEP's
tracing
methodology was not directed to transactions within the limitations
period,12 and because Plains did not move for summary judgment on
the ground that it had not purchased any condensate within the twoyear period. 13
PEP's argument
that
Plains'
challenge to PEP's
tracing methodology was not directed to transactions within the
limitations period has no merit because Plains argued that it was
llDefendant Plains Marketing, L. P. ' s Response to Plaintiff Pemex
Exploracion y Produccion's Motion for Partial Reconsideration,
Docket Entry No. 628, p. 2.
12PEP's Motion
No. 620, p. 4.
for
Partial
13Id. at 5.
-8-
Reconsideration,
Docket
Entry
entitled to summary judgment "on all claims asserted against it by
Plaintiff [PEP] ."14
Plains' motion expressly requested
that the Court dismiss PEP's claims for conversion
because (i) PEP cannot meet its burden under Texas law to
show that the hydrocarbons purchased by Plains Marketing
are the identical hydrocarbons allegedly stolen from PEP
[and] (iii) any of Plains Marketing's alleged
purchases of stolen Mexican condensate that occurred
prior to April 20, 2010 are time-barred. 15
(a)
Plains
Conversion Claims that Are Time-Barred
argued
that
PEP's
conversion
claims
transactions that occurred prior to April 20,
arising
2010,
from
were time-
barred because under Texas law conversion claims are subject to a
two-year limitations period,
against
Plains until April
and PEP did not assert any claims
when PEP filed the First
20,2012,
Amended Complaint in the Big Star Action (Docket Entry No. 378).
PEP argued - and the court concluded - that the conversion claims
first asserted against Plains on April 20, 2012, related back to
the
filing
Therefore,
date
of
the
Original
Complaint,
were
29,
2011.
the court held that claims arising from transactions
that occurred more than two years earlier,
2009,
May
time-barred.
In
reaching
i.e.,
this
before May 29,
holding
the
court
rejected PEP's arguments that its conversion claims were subject to
tolling provided either by the discovery rule or by the doctrine of
fraudulent concealment.
PEP has not asked for reconsideration of
14Defendant Plains Marketing, L.P.'s Motion for
Judgment ("Plains' MSJ") , Docket Entry No. 475, p. 1.
15Id. at 1-2.
-9-
Summary
the
court's
decisions
that
conversion claims
asserted against
Plains in the First Amended Complaint relate back to May 29, 2011,
or that conversion claims arising from transactions that occurred
more than two-years prior to that date are time-barred.
(b)
Conversion Claims that Are Not Time-Barred
PEP's argument that Plains did not move for summary judgment
on the ground that it had not purchased natural gas condensate
within the two-year limitations period has no merit because Plains
argued that it was entitled to summary judgment on all of PEP's
conversion claims.
Plains argued:
PEP alleges that Plains Marketing purchased stolen
Mexican condensate from June I, 2008 through November I,
2010 from two suppliers: Kemco and STUSCO.
PEP has no
evidence that Plains Marketing actually purchased Mexican
condensate from either entity, or that any Mexican
condensate that Plains Marketing purchased (if any) was
the identical condensate stolen from PEP.
PEP and its
witnesses have admitted that PEP cannot trace any
specific condensate stolen from PEP to any specific
purchase of hydrocarbons by Plains Marketing or any other
defendant, and PEP has no other evidence to show that the
hydrocarbons purchased by Plains Marketing are the same
barrels of condensate stolen from PEP. 14
As a result,
PEP cannot satisfy its burden of proof,
and its
conversion.
. claims should be dismissed.
14.
See, e.g., Exhibit 2 (Valle) at 300-305; Exhibit 3
(Cardenas) at 437; Exhibit 4, PEP's Second Supplemental
Responses to Plains All-American Pipeline's First Set of
Interrogatories, Interrogatory l(j) (as adopted in PEP's
Second Supplemental Responses to Plains Marketing's First
Set of Interrogatories).
16
16Id. at 5 & n.14. Plains' statement that PEP alleges Plains
purchased stolen Mexican condensate from June I, 2008, through
(continued ... )
-10-
Although the parties disputed the precise contours of the Texas law
standard for proving the identity of converted property, Plains'
argument placed PEP on notice of the need to provide evidence
capable
of
proving
the
identity
of
converted
conversion claims that were not time-barred,
property
i. e.,
claims that
arose from transactions that occurred after May 29, 2009.
contention to the contrary has no merit and is,
both
(1)
by PEP's assertion in response
for
in fact,
to Plains'
PEP's
belied
motion for
summary judgment that "it suffices for PEP to show that there is a
fact question as to each defendant's receipt of condensate stolen
from PEP.
to
PEP is not required to provide summary judgment proof as
each of
the
hundreds
of
individual
transactions
in
stolen
16 ( • • • cont inued)
November I, 2010, from two suppliers -- Kemco and STUSCO -- is
based in part on the First Amended Complaint filed in the Big Star
Action (Docket Entry No. 378 at p. 16 ~ 82) ("Although PEP's
investigation continues, Plains purchased and subsequently resold
millions of dollars of stolen condensate.
For example, in 2008
Plains purchased at least $700,000 worth of condensate from Kemco
at its George West facility, which Kemco had purchased from Arnoldo
Maldonado and F&M.
Plains sold this and other amounts to Valero.
There were other transactions, and on information and belief, much
more condensate was purchased and sold by Plains. If); and in part on
PEP's Second Supplemental and Amended Answers and Objections to
Defendant
Plains
All-American
Pipeline's
First
Set
of
Interrogatories to PEP ("PEP' s Second Supplemental Answers and
Objections"), Exhibit 43 to PEP's Dispositive Motion, Docket Entry
No. 493-31, and Exhibit 51 to The Opposition of Plaintiff Pemex
Exploracion y Produccion to the Dispositive Motions of Defendants
("PEP's Opposition to Defendants' Dispositive Motions"), Docket
Entry No. 546-23, Interrogatory 1 (d) (citing Exhibits 1 and 2
thereto consisting of tables summarizing Plains' alleged purchases
from Kemco and STUSCO, respectively.)
-11-
condensate; "17 and (2) by PEP's assertion in its motion for partial
reconsideration that
its response
in opposition cited evidence
capable of establishing that Plains purchased stolen condensate
within the limitations period. 18
After examining the entire
record the court concluded that PEP only succeeded in raising a
fact
issue
with
respect
to
conversion
claims
arising
from
transactions that were time-barred because they occurred in 2008. 19
17PEP's Opposition to Defendants' Dispositive Motions, Docket
Entry No. 545, p. 4. There PEP protested that the defendants were
trying
to force PEP to outline all of its evidence related to
years of transactions (and address all the legal issues)
in a 40-page opposition by seeking partial summary
judgment on a transaction by transaction basis. Rule 56
dies not allow for such a division.
"The vast majority
of cases
. hold that Rule 56 does not contemplate
partial summary judgment as to portions of a single
claim."
Doty v. Sun Life Assur. Co. of Canada, 2009
WL 3046955 (S.D. Tex. 2009); see also Wright & Miller,
FEDERAL PRACTICE AND PROCEDURE § 2737 (2012) ("Rule 56(d)
does not authorize the entry of a judgment on part of a
claim or the granting of partial relief, however.
It
simply empowers the court to withdraw sham issues from
the case and to specify those facts that really cannot be
controverted.") .
Id.
Notwi thstanding this argument in response to defendants'
motions for summary judgment, PEP filed its own dispositive motion
seeking partial summary judgment on conversion claims based on
transactions involving stolen natural gas condensate that passed
through Continental Fuels.
See PEP's Dispositive Motion, Docket
Entry No. 492, pp. 1-31, especially 27-31.
18See PEP's Motion for Partial Reconsideration, Docket Entry
No. 620, pp. 3, 5-7 (citing PEP's Opposition to Defendants'
Dispositive Motions, Docket Entry No. 545).
19MO&O, Docket Entry No. 607, pp. 52-54.
-12-
PEP's argument that its ability to raise fact issues as to
time-barred claims is sufficient to withstand Plains' motion for
summary judgment on claims that are not time-barred misapprehends
the applicable summary judgment standard.
Summary judgment is
authorized if the movant establishes that
there
dispute
law
judgment.
about
any
material
fact
Fed. R. Civ. P. 56(c).
and
the
is no genuine
entitles
it
to
Disputes about material facts
are "genuine" if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.
Lobby, Inc., 106 S. Ct. 2505, 2511 (1986).
Anderson v.
Liberty
The evidence that PEP
cited, and that the court found capable of raising a fact issue as
to
conversion claims based on transactions that occurred in 2008,
was not sufficient to defeat Plains' motion for summary judgment
because that evidence would not be admissible at trial because
claims based on those transactions are barred by limitations.
evidence would not support a jury verdict for PEP.
See id.
Such
PEP's
failure to come forward with evidence capable of raising a genuine
issue of material fact that would support a jury verdict on any of
its conversion claims therefore required the court to grant Plains'
motion for summary judgment on those claims.
Fed.
R.
Ci v .
P.
56 (c) .
2.
PEP Has Not Cited Evidence Capable of Raising a Genuine
Issue of Material Fact for Trial on Conversion Claims
that Are Not Time-Barred.
PEP argues that the court erred by granting Plains' motion for
summary
judgment
because
PEP's
-13-
response
in
opposition
cited
evidence
capable
of
establishing
that
Plains
condensate wi thin the limitations period. 20
purchased
stolen
Alternatively,
PEP
argues that attached to its motion for partial reconsideration is
additional evidence showing that Plains purchased stolen condensate
within the limitations period. 21
(a)
Standard for Proving Identity of Converted Property
Plains argued that in a conversion case based on Texas law
[t]he plaintiff must specifically identify what property
was stolen and prove that the specific defendant
converted the very same property .
In addition, a
conversion plaintiff has the burden of showing the
quanti ty of product allegedly taken with "reasonable
certainty. 1122
PEP does not dispute that as the plaintiff in a conversion case it
bears the burden of establishing the
converted. 23
identity of
the property
See Hughs Blanton, Inc. v. Shannon, 581 S.W.2d 538,
539 (Tex. App. - Dallas 1979, no writ).
See also In re Moody, 899
20PEP's Motion for Partial Reconsideration, Docket Entry
No. 620, p. 2 ("PEP nonetheless presented some evidence, sufficient
to raise a fact question, of transactions taking place after
May 29, 2009."), and p. 3 ("PEP's opposition clearly describes
Plains' transactions within the two-year period (Dkt. 545-21)."
See also id. at 5-7.
21Id. at 7-8 (citing Exhibit A, Docket Entry No. 620-1).
22Plains's
omitted) .
MSJ,
Docket
Entry No.
475,
pp.
6-7
(citations
23See PEP's Opposition to Defendants' Disposi ti ve Motions,
Docket Entry No. 545, p. 5 (acknowledging that "PEP has to prove
that it 'had, at the time of the alleged conversion, acquired some
right or title to the identical goods or chattels claimed to have
been converted.'
O'Connor [v. Fred M. Manning, Inc., 255 S.W.2d
277,] 278 [(Tex. Civ. App. - Eastland 1953), writ refused] ") .
-14-
--------_ .•....
F.2d 383,
385
(5th Cir.
1990)
(recognizing that plaintiffs
conversion cases based on Texas law must prove:
wrongfully exercised dominion or control
ln
(1) the defendant
over property to
the
exclusion of, or inconsistent with PEP's rights;
(2) the identity
of the property converted;
PEP argued that
and
(3)
damages).
Plains' and the other defendants' "main defensive theme is based on
a manufactured legal rule that PEP has to trace, the words of their
experts, 'the identical molecules' of its condensate from the theft
in Mexico into defendants'
tanks and pipelines, ,,24 and that the
court rejected the legal standard for proving identity of converted
property cited by Plains' motion for summary judgment. 25
But the
court actually rejected both PEP's characterization of Plains'
argument
on
this
issue
and
PEP's
attempt
to
avoid
the
identification requirement by arguing that it did not apply to
fungible goods.
The court also rej ected PEP's contention that
under the confusion of goods doctrine if PEP could show that it
owned a fixed percentage of a combined mass, PEP would be entitled
to a presumption that any defendant who bought a portion of that
combined mass took possession of a proportionate percentage of
24Id. at 4-5.
25PEP's Motion for Partial Reconsideration, Docket Entry
No. 620, p. 4 ("[T[his Court rejected Plains' proposed standard of
proof on tracing, holding that PEP need only trace its condensate
to Plains 'with reasonable certainty.'
Dkt. 607 at 102.
With
respect, the Court erred in then requiring PEP post hoc to present
evidence of all transactions under the appropriate standard.
As
the Court's Order established, PEP defeated the sole ground on
which Plains based its requested relief.")
-15-
PEP's property. 26
Observing that Texas courts have not excepted
fungible goods from the identification requirement, and that PEP
had not cited - and the court had not found - any Texas case that
had applied a proportionate percentage of ownership presumption to
26See PEP's Opposition to Defendants' Disposi ti ve Motions,
Docket Entry No. 545, pp. 4-22, especially 5-6 (where PEP argued:
. With readily identifiable goods, there is no
distinction between the identical property and the
property owned. With fungible goods, however, ownership
does not necessarily follow molecules of oil or water, or
grains of sand or wheat, but flows through transactions
and transfers of title according to the property rules
codified in the DCC.
Resolution of
this
argument
is
critical
to
determination of this case.
The defendants' purported
legal rule permeates all of their proof arguments.
According to the defendants, PEP's conversion claim fails
because PEP cannot establish that the defendants bought
the "identical" property that the Cartel stole in Mexico.
The challenges to PEP's experts and the foundation of the
defense experts' opinions arise from the same assumed
legal rule.
The identical property argument also permeates
defendants' factual challenges, particularly the repeated
claim that PEP cannot trace its property.
For example,
if Big Star filled its single sales tank with a mixture
of 25% stolen condensate and 75% legal crude, Plains
argues that it is mere assumption that the deliveries out
of that tank to Plains contained 25% of stolen
condensate.
As a matter of chemistry, Plains might be
correct;
it
is
highly
doubtful,
but
at
least
theoretically possible, that Plains fortuitously received
no hydrocarbon molecules traceable to PEP's Burgos Field.
According to the DCC and property law rules
explained at length in PEP's dispositive motion, however,
as a matter of law, PEP owns 25% of the commingled mass,
precisely because individual molecules are mixed together
and no longer separable.
Since PEP owns a fixed
percentage of a combined mass, when defendants bought a
portion of the combined mass they took possession of
PEP's property without paying PEP for that p~operty.").
-16-
a conversion claim asserted against a defendant who purchased a
portion of a combined mass without knowing that the mass contained
converted property,
exception.
the
court was unwilling to create such an
The court explained that
PEP's proportionate percentage argument is based on the
legal principle that where one wrongfully confuses and
commingles his goods with the goods of another, the
wrongdoer bears the burden of pointing out his own goods
and unless he does so, he is liable for the whole mass.
See Holloway Seed Co. v. City National Bank, 47 S.W. 95
(Tex. 1898).
In Holloway the Texas Supreme Court
explained that
[t] he rule as to the confusion of goods is
merely a rule of evidence.
The wrongful
mingl ing of one's own goods with those of
another, when the question of identification
of the property arises,
throws upon the
wrongdoer the burden of pointing out his own
goods, and, if this cannot be done, he must
bear the loss which results from it.
It is
but an application of the principle that all
things are presumed against the spoilator i
that is to say, against one who wrongfully
destroys or suppresses evidence.
Id. at 97.
While this principle may be applicable
against defendants such as Big Star who are alleged to
have commingled condensate stolen from PEP with other
hydrocarbons, the principle has no application against
Plains Marketing because there are no allegations or
evidence
that
Plains
Marketing
commingled
PEP's
condensate, much less that Plains Marketing did so
wrongfully.
See Kenvon v. Bender, 174 S.W.2d 110, 112
(Tex.Civ.App.-Beaumont 1943, writ refused w.o.m.) .27
After summarizing the Kenyon case, the court stated
Kenyon illustrates that plaintiffs in a conversion action
must trace the property actually converted to the
defendant, and may not hold defendants liable based on
the confusion of goods principle,
unless
(1)
the
defendants themselves wrongfully commingled the goods, or
27MO&O, Docket Entry No. 607, pp. 49-50.
-17-
(2) the defendants acquired the commingled goods with
notice that the sellers from whom they purchased did not
own all of the goods. Therefore r in order to hold Plains
Marketing
liable
for
conversion r
trace
PEP must
condensate that was actually stolen from it in Mexico to
Plains Marketing.
PEP must also present evidence from
which the jury could form a reasonably certain estimate
of the amount of stolen condensate r if anYr that Plains
Marketing purchased.
See Ortiz Oil [Co. v. Luttesl r 141
S.W.2d [1050 r ] 1055 [(Tex. Civ. App. - Texarkana 1940) r
writ dismissed].
These issues are not required to be
proven with exact certaintYr
only with reasonable
certainty.
See Southwest Battery Corp. v. Owen r 115
S . W.2 d 1097 (Tex. 1938).28
PEP has not asked the court to reconsider its conclusions regarding
the Texas standard for proving the identity of converted property.
Thus r in order to hold Plains liable for conversion r PEP must trace
condensate to Plains that was actually stolen from PEP.
also
present
evidence
from
which
a
fact-finder
could
PEP must
form
a
reasonably certain estimate of the amount of stolen condensate r if
anYr that Plains converted.
See Ortiz Oil r 141 S.W.2d at 1055.
The
amount of condensate converted need only be proven with reasonable
certainty.
See Southwest BatterYr 115 S.W.2d at 1098-99.
(b)
PEprs Opposition to Plains r Motion for Summary
Judgment Did Not Cite Evidence Capable of Raising a
Genuine Issue of Material Fact on Conversion Claims
that Are Not Time-Barred.
PEP argues that its
opposition
to
Plains r
motion
presented
evidence
establishing that Plains purchased stolen condensate
within the limitations period. Dkt. 545 at 19-22. That
evidence included a description of Plains r purchases of
28Id. at 51-52.
-18-
stolen condensate from STUSCO that originated with JAG
Energy.
Id. at 21-22.
It is, in fact, undisputed that
Plains purchased hydrocarbons from STUSCO in George West,
Texas from June 2008 through November 2010.
Id.
PEP's
opposition sets forth evidence that shows to a reasonable
certainty that STUSCO sold Plains stolen condensate that
STUSCO had purchased from JAG.
Thus, even though PEP was not addressing the issue
of whether Plains purchased stolen condensate after
May 29,
2009,
it nonetheless presented sufficient
evidence to create a fact question on the issue. 29
At pages 21-22 of its response in opposition to plains' motion for
summary judgment, PEP asserted that
[f] rom around June 2008 through about November 2010,
STUSCO also sold hydrocarbons to Plains at Plains' George
West facility. Exhibit 18:17-20; 54:4-12. Some of this
was JAG's condensate.
Exhibit 53 at 67.
STUSCO's
records
show
mul tiple
deliveries
of
"Burgus
products-including Burgus 2-to George West during the
time that STUSCO was selling to Plains at George West.
Exhibit 56-579. Vrana's understanding is that Burgus 2
referred to condensate.
Exhibit 53 at 121-122.
Steve
McClenathan, a Plains crude trader for the region,
confirmed that Plains bought condensate from STUSCO.
Exhibit 55 at 32-33. He knows this because Plains spotchecked the trucks.
Id. at 35. 30
ll
The statements in PEP's response in opposition to Plains' motion
for
summary
judgment
explained below,
are
not
evidence,
and
for
the
the evidence referenced at pages 21-22
reasons
is not
capable of raising a genuine issue of material fact for trial on
PEP's conversion claims that are not time-barred.
29PEP's Motion for Partial Reconsideration, Docket Entry
No. 620, p. 7 (citing PEP's Opposition to Defendants' Dispositive
Motions, Docket Entry No. 545).
30PEP's Opposition to Defendants' Dispositive Motions, Docket
Entry No. 545, pp. 21-22.
-19-
As evidence that Plains purchased hydrocarbons from STUSCO
within the limitations period, PEP cites Exhibits 18 and 54 to its
response in opposition (Docket Entry No. 545).
Exhibit 18 is the
deposition of Felipe Eguia Lis Ramos, a marketer of petrochemicals
for PEMEX.
The testimony from Felipe Eguia Lis Ramos's deposition
cited by PEP does not support PEP's effort to raise a fact issue on
conversion claims that are not time-bared because at the cited
pages Ramos testified about events that occurred in approximately
January of 2008,31 when he was marketing basic petrochemicals, not
natural gas condensate. 32
Exhibit 54 consists of eight invoices for
condensate transactions between JAG Energy and STUSCO, all of which
are dated November 2008, well before the limitations cut-off date
of May 29, 2009.
As additional evidence that STUSCO purchased stolen condensate
from JAG,
PEP cites Exhibits 53,
opposition (Docket Entry No. 545).
55,
and 56 to its response in
Exhibit 53 is the deposition of
Ed Vrana, a lease crude trader for STUSCO who dealt with crude oil
and
condensates. 33
Exhibit
55
is
the
deposition
of
Steve
McClenathan, Plains' corporate representative designated to testify
about Plains' purchases and sales to designated parties from 2006
31Deposition of Felipe Eguia Lis Ramos, Exhibit 18 to PEP's
Opposition to Defendants' Dispositive Motions,
Docket Entry
No. 545-18, p. 16:18-19 ("Okay. I want to move now to the period,
approximately, January of 2008.")
32Id. at 17:1-2.
See also id. at 17:3-5.
33Deposition of Ed Vrana, Exhibit
Docket Entry No. 546-25, p. 11:1-20.
-20-
53
to
PEP's Opposition,
through 2012. 34
records
Exhibit 56 purports to be a
show [ing]
multiple
deliveries
of
list of
'Burgus'
"STUSCO's
products
including Burgus 2 - to George West during the time that STUSCO was
selling to Plains at George West."35
At page 67 of his deposition cited by PEP,
Vrana testified
that he believed that the product STUSCO delivered to Plains "would
have contained some of the JAG condensate, "36 as well as some of the
JAG crude. 37
At pages 121 and 122 of his deposition cited by PEP,
Vrana testified that the designation "Burgus 2"
STUSCO documents referred to condensate. 38
and "Burgus 3" on
But none of the pages
of Vrana's deposition cited by PEP contain testimony from which a
fact-finder
could
(1 )
conclude
that
condensate
purchased from JAG was stolen from PEP, or (2)
that
STUSCO
form a reasonably
certain estimate of the amount of stolen condensate, if any, that
STUSCO received from JAG and transferred to Plains. 39
34Deposi tion of Steve
Opposition to Defendants'
No. 546-27, p. 9:5-25.
McClenathan,
Exhibit
Dispositive Motions,
Instead,
55 to
Docket
PEP's
Entry
35PEP's Opposition to Defendants' Dispositive Motions, Docket
Entry No. 545, p. 22 (describing Exhibit 56 thereto, Docket Entry
No. 546-28).
36Deposition of Ed Vrana, Exhibit
Docket Entry No. 546-25, p. 67:15-16.
53
to
PEP's Opposition,
37Id. at 67:17-18.
38Id. at 121-122.
39PEP's Opposition to Defendants' Dispositive Motions, Docket
Entry No. 545, p. 21 (PEP asserted that "JAG Energy operated at
least two crude gathering facilities in Edinburg, Texas from 2006(continued ... )
-21-
Vrana testified that the product STUSCO delivered to Plains came
from "allover South Texas, ,,40 and when asked to estimate the number
"A general
of leases from which that product came, Vrana said:
estimate's going to be somewhere between 200 and 300 leases."41
At
the pages of his deposition cited by PEP,
McClenathan
testified that although Plains had contracted to purchase crude oil
from STUSCO at George West, Texas, he believed that Plains received
natural gas condensate as well as crude oil.42
of Vrana's deposition on which PEP relies,
But like the pages
none of the pages of
McClenathan's deposition cited by PEP contain testimony from which
a
fact-finder
could
(1)
conclude
that
condensate
purchased from JAG was stolen from PEP, or (2)
that
STUSCO
form a reasonably
certain estimate of the amount of stolen condensate, if any, that
continued)
and
u] sed these facilities to receive Mexican
condensate it was purchasing from multiple importers," but PEP did
not cite any evidence from which a reasonable fact-finder could
conclude either that JAG Energy sold STUSCO condensate stolen from
PEP, or that if JAG Energy did sell STUSCO condensate stolen from
PEP, it did so within the limitations period. The only evidence of
sales from JAG Energy to STUSCO are invoices dated November 2008
included in Exhibit 54 to PEP's Opposition to Defendants'
Dispositive Motions, Docket Entry No. 546-26.
PEP's response in
opposition does not cite any evidence showing how, when, or where
JAG Energy acquired stolen condensate that it allegedly sold to
STUSCO.) .
39 ( • • •
2009 [,
4°Deposition of Ed Vrana, Exhibit
Docket Entry No. 546-25, p. 69:20.
53
to
PEP's
Opposition,
4lId. at 69:24-25.
42Deposition of Steve
Opposition to Defendants'
No. 546-27, pp. 32:22-33:4.
McClenathan, Exhibit
Dispositive Motions,
-22-
55 to
Docket
PEP's
Entry
STUSCO received from JAG and transferred to Plains.
McClenathan
merely stated that there was a "contract for Shell's sale to Plains
of South Texas sweet type crude oil starting in June of 2008." 43
PEP asserts in its response in opposition to Plains' motion
for summary judgment that Exhibit 56 is a list of "STUSCO's records
show ring]
multiple
deliveries
of
'Burgus'
products-including
Burgus 2-to George West during the time that STUSCO was selling to
Plains at George West."44
The vast majority of the entries on this
list pre-date the limitations period cut-off date of May 29, 2009,
but a few entries do reflect dates from the latter half of 2009.
However, as Plains argued in reply to PEP's response in opposition,
Exhibit
56
raising
a
does
fact
not
constitute
issue
for
trial
admissible
because
evidence
"this
capable
document
is
of
not
authenticated and contains hearsay."45
In its motion for summary judgment Plains asserted the absence
of
facts
supporting
the
elements
of
PEP's
conversion
claims.
Because the moving party, Plains, did not bear the burden of proof
on the elements of conversion, Plains was not required to negate
the
existence
Rule 56(c)
43Id.
of
facts
and,
therefore,
satisfied
its
burden.
required PEP to come forward with evidence that could
at 29: 2 - 31: 8.
44PEP's Opposition to Defendants' Dispositive Motions, Docket
Entry No. 545, p. 22 (describing Exhibit 56 thereto, Docket Entry
No. 546-28).
45Plains Marketing, L. P. 's Reply in Support
Summary Judgment, Docket Entry No. 567, p. 12.
-23-
of Motion for
uphold a jury verdict in its favor.
F.3d
1075-76
1069 r
Celotex Corp.
Moreover r
v.
&
n.16
Catrett r
PEP has not
(5th
106 S.
Little v. Liquid Air Corp.r 37
Cir.
Ct.
(en
2548
r
bane)
(citing
2553-2554
1994)
(1986)).
offered any testimony or other evidence
capable of establishing that any of the transactions listed in
Exhibit 56 and dated on or after May 29 r 2009 r involved reasonably
certain amounts of condensate that was stolen from PEP.
Thus r the
court concludes that the evidence cited in PEp r s opposition to
Plains' motion for summary judgment and referenced in PEprs motion
for partial
reconsideration does not
raise
a
genuine
issue of
material fact for trial on PEprs conversion claims that are not
time-barred because that evidence would not allow a
reasonable
fact-finder (1) to conclude that Plains purchased condensate that
was stolen from PEP in Mexico during the limitations period,
or
(2) to form a reasonably certain estimate of the amount of stolen
condensate r if anYr
that Plains purchased during the limitations
period.
(c)
PEprs Motion for Partial Reconsideration Does Not
Cite Additional Evidence Capable of Raising a
Genuine Issue of Material Fact on Conversion Claims
that Are Not Time-Barred.
PEP argues that if it
had been required to specifically address whether Plains
purchased stolen condensate after May 29 r 2009 r it would
have presented the same background information to the
Court r but would have gone further.
For example, PEP
would have outlined its evidence establishing the trail
of stolen condensate In February 2010 through Hector
-24-
Webber's company, Exco Petroleum, to Big Star Gathering
(clearly labeled as from "Mexico n ) to St. James Energy,
to Kemco Resources, and finally to Plains.
Exhibit A.
As described in PEP's opposition, Webber did not have a
legitimate source of Mexican hydrocarbons, so every
downstream purchaser of that condensate is liable to PEP
for conversion. Dkt. 545 at 15-16. 46
Exhibit A to PEP's motion for partial reconsideration consists
of
three
Monthly
Transportation
and
Storage
Reports
from
the
Railroad Commission of Texas Oil and Gas Division, dated February
2010.
The first report bears registration number T1-02-0763 and
shows that Big Star Gathering Ltd. L.L.P. received 9,096 barrels of
crude oil from Exco Petroleum, Inc. -- crude oil that Exco received
from Mexico.
The second report bears registration number T1-02-
0786 and shows that St. James Energy Operating, Inc. received from
Big Star Gathering Ltd. L.L.P. at Swinney Switch Yard RRC Number
T1-02-0763 in the amount of 11,107 barrels,
barrels of that amount to Age Refining,
and delivered 2,833
Inc.
(RRC Number T1-01-
0717), and 8,274 barrels of that amount to Kemco Resources,
(RRC Number T1-01-0737).
The
third report
bears
Inc.
registration
number 01-0737 and shows that Kemco Resources, Inc. received from
St.
James Energy Operation at Swinney Switch Yard the amount of
8,274 barrels (RRC Number 02-0786).
As evidence that the crude oil
reflected on the first report bearing registration number T1-020763
was
stolen,
PEP
cites
pages
15-16
of
its
response
in
opposition to Plains' motion for summary judgment which, in turn,
46PEP's Motion
No. 620, pp. 7-8.
for
Partial
-25-
ReconsideratioD,
Docket
Entry
cites pages 50-51 of the deposition of Exco Petroleum's owner,
Hector Webber.47
There, Webber testified that he never dealt with
Pemex, and never received any document from Pemex saying that he
had the right to sell natural gas condensate. 48
Webber testified
that, instead, he "got things from Chuy, Guerra and Freddy" who he
identified as salesmen or brokers. 49
The evidence that PEP has cited in its motion for partial
reconsideration does not raise a genuine issue of material fact for
trial on the conversion claims asserted against Plains that are not
time-barred because none of that evidence shows sales to or from
Plains.
PEP acknowledges this gap in the chain of evidence in a
footnote:
"The final invoice in this chain of evidence,
showing
Kemco's sale to Plains, has been marked 'confidential' pursuant to
the protective order in force in this lawsuit.
PEP will supply a
copy of the invoice to the Court upon request. ,,50
Since much of the
evidence submitted by PEP both in opposition to Plains' motion for
summary judgment and in support of its own dispositive motion is
marked
"confidential,"
the
confidential
nature of
the
invoices
47PEP's Opposition to Defendants' Dispositive Motions, Docket
Entry No. 545, p. 22 (citing Exhibit 23 thereto, Deposition of
Hector Webber, Docket Entry No. 545-24, pp. 50-51).
48Deposition of Hector Webber, Exhibit 23 to PEP's Opposition
to Defendants' Dispositive Motions, Docket Entry No. 545-24,
pp. 50-51.
49Id. at 51:4-5.
50PEP's Motion
No. 620, p. 7 n.3.
for
Partial
-26-
Reconsideration,
Docket
Entry
should not have prevented PEP from submitting them to the court.
Nevertheless
I
assuming without deciding that
PEP could produce
invoices showing that Kemco made sales to Plains in February of
2010
PEP has failed to cite evidence from which a
1
fact-finder
could reasonably conclude that any such sales involved condensate
that was stolen from PEP in Mexico.
Commission
transaction
reports
Only one of the Railroad
attached
to
PEp/s
motion
reconsideration identifies the product being transferred
report
identifies
the
product
as
crude oil
-
not
l
for
and that
natural
gas
condensate - that Exco Petroleum received from Mexico and sold to
Big Star Gathering.
PEP cites no evidence that the transactions
reflected by the Texas Railroad Commission transaction reports
attached to its motion for reconsideration involved natural gas
condensate.
Exco
Petroleum s
l
owner
Hector Webber
I
created Exco Petroleum in 2010
buying natural gas condensate
ll
1
testified
I
that
he
and that at that time he "wasn/t
but
instead
I
l
"blend chemicals
that was "50, 60 percent naphtha and 10 percent whatever.
1151
I
II
Webber
also testified that he stopped trading in natural gas condensate in
2009 because "the Mexican supplier could not get the custom broker
to export anymore because of some new law.
1152
PEP has not cited any
evidence from which a reasonable fact-finder could conclude that in
51Deposition of Hector Webber Exhibit 23 to PEp/s Opposition
to Defendants' Dispositive Motions
Docket Entry No. 545-24
pp. 29:18 - 30:30:14.
l
l
52Id. at 52:3-11.
-27-
1
2010 Webber was not trading "blend chemicals,lI but was instead
trading natural gas condensate.
capable of
establishing
that
Nor has PEP cited any evidence
the
"blend chemicals
trading included natural gas condensate.
ll
Webber was
Since the allegations in
this lawsuit are that the converted property at issue was natural
gas condensate, the evidence attached to PEP's motion for partial
reconsideration does not raise a genuine issue of material fact for
trial on PEP's conversion claims that are not time-barred because
that evidence would not
conclude that
allow a
reasonable
fact-finder
(1)
to
Plains purchased natural gas condensate that was
stolen from PEP in Mexico during the two-year limitations period,
or
(2)
to form a
reasonably certain estimate of the amount of
stolen natural gas condensate that Plains purchased.
C.
Conclusions
For the
reasons explained above,
the court concludes that
PEP's motion for partial consideration should be denied because PEP
has not carried its burden of showing either
(1)
that the court
granted Plains relief it did not request, or (2) that there exists
evidence
from
which
a
fact-finder
could
conclude
that
Plains
converted reasonably certain amounts of stolen condensate within
the limitations period.
III.
PEP's Motion for Certification of an
Interlocutory Appeal and Stay of Proceedings
Citing 28 U.S.C.
§
1292(b), PEP moves the court to certify the
Memorandum Opinion and Order dated October 20, 2011 (Docket Entry
-28-
No. 292), and the Memorandum Opinion and Order dated September 30,
2013 (Docket Entry No. 607), for interlocutory appeal and to stay
both this proceeding and the related proceeding before this court,
Pemex
Exploracion
y
Produccion
v.
Murphy
Energy
Corporation,
et al., 4:12-cv-01081, until the resolution of the interlocutory
appeal. 53
Defendants argue that PEP's motion for certification of
interlocutory appeal and stay of proceedings should be denied. 54
A.
Standard of Review
28 U.S.C.
§
1292(b) provides for interlocutory appeal when an
order not otherwise appealable satisfies three distinct criteria:
(1)
the order involves a controlling question of law;
(2)
as to
which there is substantial ground for difference of opinion as to
that question;
and
(3)
an immediate appeal
from the order may
materially advance the ultimate termination of the litigation.
Clark-Dietz and Associates-Engineers,
Co.,
702
F.2d 67,
question of
law is
53PEP's Motion
No. 621, p. l .
69
(5th Cir.
controlling
for
See
Inc. v. Basic Construction
1983).
Determining whether a
requires
Certification
courts
and
Stay,
to
distinguish
Docket
Entry
54See Defendants' Response to PEMEX Exploraci6n y Producci6n's
Motion for Certification of an Interlocutory Appeal and for Stay of
Proceedings
(UDefendants'
Response
to
PEP's
Motion
for
Certification"), Docket Entry No. 627, and Defendant Plains
Marketing, L.P.'s Response to Plaintiff Pemex Exploracion y
Produccion's Motion for Certification of an Interlocutory Appeal
and for a Stay of Proceedings, Docket Entry No. 630 (adopting and
incorporating by reference Defendants' Response to PEP's Motion for
Certification) .
-29-
between disagreements based on questions of law and questions that
Fact review questions are inappropriate for
turn on the facts.
§
1292(b)
Id.
review.
(denying
1292(b)
§
petition where issues
presented "appear to be merely fact-review questions").
Courts
have found issues of law controlling if reversal of the district
court's opinion would terminate the action or materially affect the
outcome
of
the
Ryan
litigation.
F. Supp. 2d 718, 723 (N.D. Tex. 2006)
v.
Flowserve
Corp.,
444
(citing, e.g., Klinghoffer v.
S.N.C. Achille Lauro, 921 F.2d 21,24 (2d Cir. 1990))
Substantial
grounds for difference of opinion exist where
a trial court rules in a manner which appears contrary to
the rulings of all Courts of Appeals which have reached
the issue, if the circuits are in dispute on the question
and the Court of Appeals of the circuit has not spoken on
the point, if complicated questions arise under foreign
law, or if novel and difficult questions of first
impression are presented.
Id. at 723-24.
"But simply because a court is the first to rule on
a question or counsel disagrees on the applicable precedent does
not
qualify
the
disagreement."
materially
issue
Id.
advance
as
at
the
one
over which
Whether
724.
there
immediate
ultimate
an
termination of
is
the
substantial
appeal
may
litigation
requires courts to assess whether interlocutory appeal will speed
up or slow down the litigation.
See Tesco Corp. v. Weatherford
International, Inc., 722 F. Supp. 2d 755, 767 (S.D. Tex. 2010).
Because
the
policy
of
appellate
jurisdiction
disfavors
piecemeal appeals, all three criteria must be met for a court to
grant a motion for interlocutory appeal.
-30-
Clark-Dietz, 702 F.2d at
69 ("Section 1292(b) appeals are exceptional.
They are permitted
only when there is a substantial difference of opinion about a
controlling question of law and the resolution of that question
will materially advance, not retard, ultimate termination of the
See also Matter of Ichinose,
litigation.")
Moreover,
Cir. 1991).
" [u] nder
1292 (b)
§
the Fifth Circuit follows the rule that
it
is
the order,
F.3d 393, 398 (5th Cir. 2010)
§
1292(b)
certified
(5th
not
the question that
is
Castellanos-Contreras v. Decatur Hotels, LLC, 622
appealable."
U.S.A. v.
946 F.2d 1169
Calhoun,
116 S.
(en bane)
Ct.
619,
(citing Yamaha Motor Corp.,
623
(1996)
("As the text of
indicates, appellate jurisdiction applies to the order
to
the
court
of
appeals,
and
is
not
tied
particular question formulated by the district court.
to
the
The court of
appeals may not reach beyond the certified order to address other
orders made in the case.").
appeal
is
Chambers
within
County
the
The decision to certify interlocutory
district
Commission,
court's
115
S.
discretion.
Ct.
1203,
Swint
1210
v.
(1995) i
United States v. Caremark, Inc., 634 F.3d 808, 814 (5th Cir. 2011).
B.
Analysis
PEP seeks leave to appeal "two controlling issues of law limitations
and
satisfy the
§
responsible
third parties,,55 -
that
it
argues
1292(b) requirements for interlocutory appeal.
55PEP's Motion
No. 621, p. 4.
for
Certification
-31-
and
Stay,
Docket
In
Entry
addition, PEP contends that
~[o]verlaying
these two issues are the
issues related to Mexican law, including the elements set out in
the Official Opinion of the Mexican Attorney General, including the
imprescriptibility of Mexico's sovereign property.
at 3."56
[because]
Dkt.303-3,
PEP argues that "[t]hese issues are clearly controlling
they substantially determine the result and scope of
trial." 57
1.
Memorandum Opinion and Order of September 30, 2012
The court addressed the parties' disputes over limitations in
the MO&O of September 30, 2013.
PEP argues that
[a]s to limitations, at least four opinions of the Fifth
Circuit have stated that the "statute begins to run when
a plaintiff knows or in the exercise of reasonable
diligence should know that the property has been
converted."
The defendants argued, and this Court agreed, that
recent opinions by the Texas Supreme Court, chiefly HECI
Exploracion Co. v. Neel, altered this historical common
law rule, but the Fifth Circuit has yet to alter its
existing precedent. See id., 982 S.W.3d 881 (Tex. 1999).
The lack of clarity is particularly true as to
sovereign property.
The Mexican Attorney General
established
that
the
stolen
condensate
is
the
~imprescriptible" sovereign property of Mexico.
Given
that sovereign nature, United States Law confirms that
such sovereign rights
cannot
be
lost
absent
an
affirmative act by the sovereign. E.g., Sea Hunt, Inc.
v. Unidentified Shipwrecked Vessel or Vessels, 221 F.3d
634 (4th Cir. 2000)
(sovereign vessel "remains the
property of the nation to which it belonged at the time
of sinking unless that nation has taken formal action to
56Id.
57Id.
-32-
abandon it or to transfer title to another party") i see
also Dkt. 545 (PEP's opposition to defendants' motions to
dismiss) .58
In support of its argument that the court misapplied the Texas
Supreme Court's decision in HECI,
Crossland v.
Canteen Corp.,
982 S.W.3d at 881,
711 F.2d 714,
Connor v. Hawkins, 9 S.W. 684
727
PEP cites
(5th Cir.
1983),
(1888), and Price v. United States,
707 F. Supp. 1465 (S.D. Tex. 1989), rev'd on other grounds, 69 F.3d
46 (5th Cir. 1995), cert. denied, 117 S. Ct. 295
(1996).
Defendants argue that
while application of the two-year statute of limitations
is certainly largely dispositive of a majority of PEP's
claims, it is not a controlling question of law under
Section 1292(b) because the Court found no fact issue as
to whether PEP knew or should have known of the allegedly
stolen condensate. 59
Asserting that "PEP does not, and cannot, offer any legal authority
that conflicts with the Court's Order on limitations,"6o defendants
argue that " [n]othing in Crossland.
by PEP]
[or the other cases cited
conflicts with the Court's application of the discovery
rule in this case."61
PEP's contention that the court misapplied the Texas Supreme
Court's holding in HECI in its analysis of the parties' limitations
58Id. at 4-5.
59Defendants' Response
Docket Entry No. 627, p. 2.
to
PEP's
60Id. at 5.
61Id.
-33-
--------_._--
-
..
-
Motion
for
Certification,
arguments raises a disagreement on applicable precedent that does
not qualify as a controlling question of law over which there is
See Ryan
substantial disagreement.
l
444 F. Supp. 2d at 724.
The
court cited HECI in its discussion of the Texas discovery rule:
The discovery rule defers the running of limitations
if "the nature of the injury incurred is inherently
undiscoverable and the evidence of injury is objectively
verifiable."
S.V. [v. R.V.I 933] S.W.2d [11] 6 [(Tex.
1996)]. "An injury is inherently undiscoverable if it is
by nature unlikely to be discovered within the prescribed
limitations period despite due diligence."
Id. at 7
(citing Computer Associates International, Inc. v. Altai,
Inc.
918 S.W.2d 453 456 (Tex. 1996)).
The discovery
1
1
rule is applied to categories of cases where the nature
of the injury is inherently undiscoverable, not to
particular cases.
HECl Exploration Co. v. Neel, 982
S.W.2d 881, 886 (Tex. 1998). The objectively verifiable
element of the discovery rule is typically satisfied when
the facts upon which liability is asserted can be
demonstrated by direct
physical evidence. [S. V.
933
S.W.2d at 6. See also [i]d. [at 15.] The Texas Supreme
Court has held that expert testimony is not sufficient to
satisfy the obj ecti ve verification prong of the discovery
rule l id. (citing Robinson [v. Weaver] I 550 S.W.2d [18 / ]
21
[(Tex.
1977)],
but that confessions,
criminal
convictions, and records or written statements showing
contemporaneous physical injury resulting from the
alleged conduct can be sufficient to satisfy the
objective verification prong of the discovery rule. Id.
at 15. 62
I
I
PEP's contention that the Fifth Circuit has yet to alter its
existing precedent to bring it in line with HECI's holding that the
discovery rule is to be applied to categories of cases as opposed
to particular cases is not supported by any of the cases cited in
62MO&O, Docket Entry No. 607, p. 29 (emphasis added). See also
id. at 75-76 (analyzing claims against Plains Marketing), 98
(analyzing claims against BASF and BFLP) , and 123 (analyzing claims
against Murphy Energy) .
-34-
In TIG Insurance Co. v.
PEP's motion, and is simply not correct.
Aon Re,
Inc.,
521 F.3d 351
(5th Cir.
2008),
the Fifth Circuit
favorably cited HECl for exactly the same principle that this court
cited HECI in the MO&O of September 30,
There the Fifth
2013.
Circuit stated:
Importantly, the Texas court explained that whether the
discovery rule applies is determined categorically:
[The Supreme Court of Texas] explained in Altai that the
applicability of the discovery rule is determined
categorically. Although the particular injury in Altai
may not have been discovered, it was the type of injury
that generally is discoverable by the exercise of
reasonable diligence.
Id. at 358 & n.34 (citing HECI, 982 S.W.2d at 886, and Altai, 918
S.W.2d at 457).
PEP's argument that the court misapplied HECI's
holding is also contradicted by the response in opposition that PEP
filed
to
defendants'
motions
for
summary
judgment,
acknowledged the applicability of HECI's holding:
concede
that
the
discovery
rule
is
applied
to
where
PEP
"The defendants
\ categories
of
cases,' not ad hoc to particular fact scenarios."63
Moreover, the cases that PEP cites in support of its argument
that
the
issues
of
court's
law
limitations
about
which
decisions
there
is
difference of opinion are all inapposite.
(1888),
and Price,
707 F.
Supp.
at 1472,
constitute
substantial
controlling
ground
for
Connor, 9 S.W. at 684
are inapposite because
63PEP's Opposition to Defendants' Dispositive Motions, Docket
Entry No. 545, p. 28.
-35-
they both involve claims for adverse possession whereas the claims
at
issue here
are conversion claims.
Crossland is
inapposite
because it belongs to the category of conversion cases in which the
defendant's initial possession of allegedly converted property was
lawful as opposed to unlawful.
For reasons explained in various
sections of the September 30, 2013, MO&O, the court rejected PEP's
argument that the conversion claims asserted in this case arise
from initially lawful possessions of PEP's property.64
Because PEP's contention that the court misapplied the Texas
Supreme
Court's
holding
in
HECl,
982
S.W.2d
at
881,
merely
challenges the court's application of well established Texas law,
and because
PEP has not
cited any contradictory opinions
from
either the Fifth Circuit or the Texas Supreme Court, whether the
court misapplied HECl's holding is not a controlling question of
law about
opinion.
which there
is
substantial ground for difference of
Moreover, based on PEP's own admissions that it knew that
its condensate was being converted by sale in the United States at
or near the time of the thefts in Mexico,
al ternati ve
reasonable
that
PEP
failed
fact-finder
could
the court held in the
to cite any evidence
conclude
that
had
from which a
PEP
exercised
64MO&O, Docket Entry No. 607 at 75-83 (regarding claims against
Plains), 98-102 (regarding claims against BASF and BFLP), and 12326 (regarding claims against Murphy Energy). See PEP's Opposition
to Defendants' Dispositive Motions, Docket Entry No. 545, pp. 24-26
(arguing that "Conversion does not occur until the taking is
'unlawful,' and the good faith purchase of stolen goods is not
unlawful until ownership is demonstrated and rejected") .
-36-
reasonable
diligence
PEP
could
not
have
discovered
that
the
individual defendants purchased its condensate within the two-year
period following
the
reversal
court's
of
the
dates
on which those purchases
limitations
decisions
occurred,
would
have
no
material affect on the outcome of the litigation.
Asserting
that
an
interlocutory
appeal
would
materially
advance the termination of the litigation, PEP argues that
[a]s this Court is aware, PEP raised claims for its lost
condensate in three lawsuits, two of which have been
consolidated. Therefore, there will be two trials that
relate to the issues that would be resolved in the
requested interlocutory appeal.
Following those two
trials, there will be two appeals, since PEP will be
compelled to appeal even if PEP prevails on all grounds
remaining.
If PEP is successful on appeal, then the
number of trials could rise to four.
On the other hand, any ruling by the Fifth Circuit
will reduce the likelihood of trial. Whether the Fifth
Circui t affirms or reverses this Court's Orders, the
parties will know their rights with finality, and can
then resolve the issues outside of court. At a minimum,
trial will be narrowed.
Moreover, in this case, the inherent delay of an
interlocutory appeal is a relatively insignificant issue
because, due to unavoidable issues beyond any party's
control, there will be no trial for months, with or
wi thout an appeal. 65
65PEP's Motion for Certification and Stay, Docket
No. 621, pp. 3-4. See also id. at 2 (PEP explains that
Entry
these lawsuits are of immense importance to the Mexican
oil industry.
The lawsuits were launched by the
production and exploration subsidiary of the Mexican
national oil company, PEMEX, and the Mexican Attorney
General issued her official declaration in support of
PEP's claims, including that Mexico's sovereign property
is constitutionally imprescriptible. Dkt. 303.
(continued ... )
-37-
PEP's argument that an interlocutory appeal might result in
fewer
trials and,
therefore,
materially advance the
litigation
because the parties will know their respective legal rights and
settle their disputes in an argument that could be made in every
Defendants assert and
case involving an order on a legal issue.
PEP
does
not
dispute
that
regardless
of
the
interlocutory appeal, a trial will be required. 66
outcome
of
an
Since, moreover,
PEP seeks an interlocutory appeal in hopes of reversing the court's
determination that the discovery rule does not apply, an immediate
appeal could only slow -- not speed -- the ultimate termination of
the litigation because the court held in the alternative that even
if this were a case to which the discovery rule applied, that rule
would not defer the running of limitations for PEP's time-barred
conversion claims.
The court explained that PEP failed to present
evidence capable of raising fact issues for trial with respect to
whether the discovery rule could be applied to the time-barred
conversion claims
asserted against
Plains,
BASF
and BFLP,
and
65 ( ... continued)
These factors lead to another inescapable conclusion
- There will be an appeal of these matters.
PEP is
required by Mexican law to protect the national
patrimony. The procedural issue is whether there will be
two lengthy trials, and then two appeals, or a single
interlocutory appeal that could expedite the resolution
of both lawsuits without the need for trial.
66Defendants' Response
Docket Entry No. 627, p. 2.
to
PEP's
-38-
Motion
for
Certification,
Murphy Energy.67
Consequently, reversal of the court's determina-
tion that the discovery rule does not apply in this case would have
no material effect on the outcome of the litigation.
Accordingly,
the court concludes that PEP has failed to carry its burden of
showing
that
an
immediate
appeal
may
materially
advance
the
ultimate termination of the litigation.
2.
Memorandum Opinion and Order of October 20, 2011
In its October 20, 2011, MO&O the court denied PEP's motion
for application of Mexican law and granted defendants' motions to
designate
responsible
third
parties.
PEP
argues
that
these
decisions constitute controlling questions of law about which there
are substantial grounds for difference of opinion because
[t]he jurisprudence surrounding Chapter 33 to the Texas
Civil Practices and Remedies Code is
. uncertain.
The Texas Supreme Court has been required repeatedly to
set Chapter 33 I S boundaries in relation to other statutes
and the common law. The conflict between the Chapter 33
and the UCC and common law rule in this case is
manifest-Under the common law, the purchaser from a thief
always lost (because the purchaser received no title)
even if the owner failed to protect the property, while,
pursuant to Chapter 33, an innocent purchaser effectively
obtains title because the thief is at greater fault.
Thus, while on one hand, this Court noted that the
defendants were not entitled to a good faith purchaser
defense, on the other hand, the Court effectively allows
them the same defense under Chapter 33.
Applying Chapter 33 to the sovereign property of a
foreign nation is even more troublesome.
Pursuant to
this Court's interpretation of Chapter 33, in order to
67MO&O, Docket Entry No. 607, pp. 75-83 (Plains), 98-102 (BASF
and BFLP) , and 123-26 (Murphy Energy)
-39-
determine if PEP can recover for its lost property, a
jury must determine if PEP adequately protected that
property.
PEP respectfully suggests that it should be
enti tIed to a review of this Court's denial of the
application of Mexican law before it has to defend in a
court of law its actions in protecting Mexico's
patrimony.
It is unlikely the US government would want
its right to the return of its property judged under the
rules of another nation. In this regard, PEP notes that
the United States Supreme Court has explained that any
encumbrance on sovereign property implicates sovereign
rights.
See Permanent Mission of India to the Uni ted
Nations v. City of New York, 551 U.S. 193, 204 (2007) .68
PEP's contention that the court erred either by denying PEP's
motion for application of Mexican law, or by granting defendants'
motion
to
designate
responsible
third
parties
in
the
MO&O
of
October 20, 2011, does not qualify as a controlling question of law
over which there are substantial grounds for disagreement.
In support of it's position on the applicability of Mexican
law, PEP cites two cases, neither of which supports PEP's position:
Permanent
Mission
of
India
to
the
United Nations
v.
City of
New York, New York, 127 S. Ct. 2352 (2007), and Sea Hunt, Inc. v.
Unidentified Shipwrecked Vessel or Vessels, 221 F.3d 634 (4th Cir.
2000), cert. denied, 121 S. Ct. 1079 (2001).
of
India,
127
S.
Ct.
at
2352,
the
United States statute applying a
immovable property in New York City.
In Permanent Mission
Supreme
Court
analyzed
city property tax to
a
India's
In Sea Hunt, 221 F.3d at 634,
the Fourth Circuit analyzed United States law and several treaties
68PEP's Motion
No. 621, pp. 5-6.
for
Certification
-40-
and
Stay,
Docket
Entry
that the United States had signed to determine the obligations owed
to
a
foreign
country's
shipwrecked
vessel.
Both
cases
are
inapposite because neither involved analysis of choice-of-law rules
or proof of relevant foreign law.
In contrast, this court denied
PEP's motion for application of Mexican law in its October 20,
2011,
MO&O only after concluding that
choice-of -law principles
required the application of Texas law to PEP's claims, and that PEP
failed to carry its burden of establishing the relevant foreign law
it was asking the court to apply.
PEP fails to cite any legal authority that is contrary to the
court's decisions on the applicability of Mexican law.
Instead,
PEP offers only its own disagreement with the court's rulings.
Simply because a court is the first
because
counsel
disagrees
with
to rule on a question,
the
court's
application
or
of
established law to the facts does not qualify the question as one
over
which
ther~
F. Supp. 2d at 724.
is
substantial
disagreement.
Ryan,
444
Nor has PEP cited any basis for the court to
conclude that reversal
of its denial of
PEP's motion to apply
Mexican law would result in termination of the case.
reversal of the court's decision on this
Instead,
issue would slow the
ultimate termination of the litigation by increasing the number of
live claims and applying foreign law with which the court and many
of the defendants have little familiarity.
PEP has not cited any legal authority that conflicts with the
court's determination that Texas's proportionate liability statute,
-41-
Tex. Civ.
Prac.
conversion,
& Rem.
Code
conspiracy,
and
§
33.001, et seq.,
Texas
Theft
applies to PEP's
Liability Act
claims.
Absent conflicting legal authority, there is no substantial ground
for difference of opinion with respect to the court's application
of Texas's proportionate liability statute to PEP's claims.
Nor
has PEP cited any basis for the court to conclude that reversal of
its grant of defendants'
motions to designate responsible third
parties would result in the ultimate termination of the litigation.
While reversal of the court's decision on this issue would reduce
the
number
of
potentially
responsible
parties,
neither eliminate the need for trial nor reduce
parties participating in the trial.
reversal
would
the number of
Moreover, as evidenced by the
fact that PEP waited until November 7, 2013, to file its motion for
certification of interlocutory appeal for the October 20,
2011,
MO&O any advantage that an "immediate appeal" of the October 20,
2011, MO&O could have provided the parties has largely been lost.
See 28 U.S.C.
C.
§
1292 (b)
(referencing "immediate appeal") .
Conclusions
The Fifth Circuit has stated that an interlocutory appeal is
an exceptional remedy and "does not lie simply to determine the
correctness of a judgment of liability."
68.
Clark-Dietz, 702 F.2d at
For the reasons stated above, the court is not persuaded that
either the September 30, 2013, MO&O (Docket Entry No. 607), or the
October 20, 2011, MO&O (Docket Entry No. 292) involves controlling
questions
of
law as
to which
there
-42-
is
substantial
ground
for
This action has been pending before this
difference of opinion.
court for almost four years
l
and it is drawing close to trial.
The
delays necessitated by an 'interlocutory appeal would only serve to
delay this matter further l and would not materially advance the
ultimate termination of this litigation.
AccordinglYI
PEpls
motion
for certification of either of these two orders for interlocutory
appeal will be denied.
IV.
Plains' Motion for Certification and Entry
of Final Judgment Pursuant to Rule 54(b)
Plains
moves
the
court
to
certify
the
summary
judgment
rendered in favor of it as a final and appealable judgment under
Rule 54{b) of the Federal Rules of Civil Procedure. 69
Plains l
motion to certify the summary judgment as
appealable judgment urging the courtl
motion
for partial
reconsideration
PEP opposes
a
final
and
instead l to grant its own
(Docket
Entry No.
620)
I
or
motion for certification of an interlocutory appeal and stay of
proceedings
(Docket Entry No.
§§ II and IIII
above
I
621).
For the reasons stated in
the court has already concluded that PEpls
motions should be denied.
A.
Standard of Review
In pertinent part Rule 54{b) provides
[w]hen an action presents more than one claim for
relief--whether as a claim l counterclaim l crossclaim l or
69Plains s Motion for Judgment Docket Entry No. 613 i Defendant
Plains Marketing l
L.P.ls Reply in Support of Motion for
Certification and Entry of Final Judgment Pursuant to Rule 54{b)
Docket Entry No. 629.
I
I
I
-43-
third-party claim- -or when mul tiple parties are involved,
the court may direct entry of a final judgment as to one
or more, but fewer than all, claims or parties only if
the court expressly determines that there is no just
reason for delay.
Fed. R. Civ. P. 54(b).
a
judgment
under Rule
District courts deciding whether to certify
54 (b)
must
determine
(1)
whether it
is
dealing with a "final judgment," and (2) whether there is any just
reason for delay.
Curtiss-Wright Corp. v. General Electric Co.,
100 S. Ct. 1460, 1464-65 (1980).
A judgment is final if it is "an
ultimate disposition of an individual claim entered in the course
of
a
multiple
claims
action."
Id.
at
1464
(quoting
Sears,
Roebuck & Co. v. Mackey, 76 S. Ct. 895, 900 (1956)).
[I]n deciding whether there are no just reasons to delay
the appeal of individual final judgments . . . a district
court must take into account judicial administrative
interests
as
well
as
the
equities
involved.
Consideration of the former is necessary to assure that
application of the Rule effectively "preserves the
historic federal policy against piecemeal appeals."
Id. at 1465 (quoting Sears, 76 S. Ct. at 901).
Rule 54(b) motions
are disfavored and should be granted only "when there exists some
danger
of
alleviated
hardship
by
or
injustice
immediate
appeal."
through delay which would be
PYCA
Industries,
Inc.
v.
Harrison County Waste Management District, 81 F.3d 1412, 1421 (5th
Cir.1996).
B.
Analysis
In this case the court's grant of summary judgment to Plains
on all of the claims asserted by PEP were "ultimate dispositions"
-44-
of those claims.
The only remaining claims are those that PEP has
asserted against other defendants.
As explained by Plains in its
motion for certification and entry of final judgmentr
case where there are substantial
factual
this is a
and legal differences
between PEprs claims against Plains and PEprs claims against the
remaining defendants.
PEP argues that "[u]nder the circumstances of this lawsuit r
judicial administrative interests
(or judicial efficiency) would
best be served by postponing certification until all contested
questions of law are ripe for a single appeal together r u70 but fails
to explain why the claims against Plains should not be severed from
the claims asserted against the remaining defendants.
Nor has PEP
addressed the Fifth Circuit cases cited by Plains r including H&W
Industries. Inc. v. Formosa Plastics Corp .. USAr 860 F.2d 172 r 175
(5th Cir. 1988) rand Ackerman v. F.D.I.C. r 973 F.2d 1221r 1225 (5th
Cir. 1992).
Both of these cases indicate that district courts have
broad discretion to enter Rule 54(b)
judgments in a mUlti-party
case like this r even where similar claims remain pending against
other
defendants.
unnecessary
waste
Under
of
these
resources
circumstances
to
require
it
Plains
would
to
be
an
continue
monitoring PEprs claims against the remaining parties r or to delay
PEP from perfecting an appeal on the claims for which the court has
7°PEprs Motion
No. 620 r p. 8.
for
Partial
-45-
Reconsideration r
Docket
Entry
granted Plains summary judgment.
no
The court concludes that there is
just reason to delay entry of
asserted
by
PEP
against
Plains
final
and
to
judgment on the claims
direct
entry
of
final
judgment for Plains under Rule 54(b).
v.
Murphy Energy's Motion for Attorneys' Fees and
Motion to Designate Responsible Third Parties
Pending before
Energy:
the
court
are
two motions
filed by Murphy
Murphy Energy's Motion for Attorneys' Fees (Docket Entry
No. 610) and Murphy Energy's Motion to Designate Responsible Third
Parties (Docket Entry No. 618).
A.
Murphy Energy's Motion for Attorneys' Fees
Citing Texas Civil Practices & Remedies Code
§
134.0005(b) and
Federal Rule of Civil Procedure 54(d) (2) (B), Murphy Energy moves
for an award of attorneys' fees incurred in defense of PEP's claim
under
the
Texas
Theft
Liability Act
("TTLA").
Murphy Energy
explains that "[b]ased on this Court's October I, 2013 Memorandum
Opinion and Order, which ruled that PEP's claim for violation of
the TTLA arising from acts that occurred before June 7,
time barred, Murphy is the prevailing party."7l
2008 are
Murphy argues that
[u] nder rule 54 (d) (2) (B), a motion for recovery of
attorneys' fees and related expenses must be filed no
later than fourteen days after entry of judgment, unless
a statute or court order provides otherwise.
Fed. R.
Civ. P. 54(d) (2) (B) (i). The Court issued its Memorandum
Opinion and Order and Final Judgment on October I, 2013.
71Murphy Energy's Motion for Attorneys'
No. 610, p. 2.
-46-
Fees,
Docket Entry
Murphy's
is
motion
.72
under
filed
timely
Rule
54(d) (2) (B) (i)
Murphy Energy's request for attorneys' fees is not warranted
at this time because the court has not yet issued a final judgment
with
respect
to
the
claims
asserted
against
Murphy
Energy.
Although in the September 30, 2013, MO&O the court concluded that
PEP's
claims
against
Murphy
Energy
for
conversion,
equitable
relief, and violation of the TTLA arising from acts that occurred
before June 7, 2008, were time-barred, 73 the court also concluded
that there exist genuine issues of material fact for trial on a
variety of
other
claims
that
PEP
has
asserted
against
Murphy
Energy, including claims for violation of the TTLA that arise from
purchases that occurred after June
7,
2008. 74
Thus,
the court
granted in part and denied in part Murphy Energy's motion for
summary judgment.75
Because the court has not yet entered a final
judgment on the claims that PEP has asserted against Murphy Energy
in this action, Murphy Energy is not yet a prevailing party on the
TTLA claims that PEP has asserted against Murphy Energy, and Murphy
Energy's motion for attorneys' fees is premature.
P.
54(d) (2) (B) (i).
Accordingly,
Murphy
Energy's
attorneys' fees will be denied.
72Id.
73MO&O, Docket Entry No . 607 ,pp. 120 - .
26
74Id. at 126-39.
75Id. at 179.
-47-
See Fed. R. Civ.
motion
for
B.
Murphy Energy's Motion to Designate Responsible Third Parties
Citing,
Remedies
§§
Code,
33.004(a) and (j) of the Texas Civil Practices and
Murphy
Energy moves
(PEMEX)
for
employees
leave
as
to
designate
responsible
39
third
Petr61eos
Mexicanos
parties. 76
In support of this motion, Murphy Energy asserts that
[o]n October 29,2013, PEP's parent company, PEMEX issued
a press release announcing that authorities had arrested
thirty-nine PEMEX employees for stealing PEMEX-owned oil
(PEMEX Press Release).
Ex. A.
For its part, Murphy
76Sections 33.004(a) and (j) of the Texas Civil Practices and
Remedies Code provide:
(a) A defendant may seek to designate a person as a
responsible third party by filing a motion for leave to
designate that person as a responsible third party. The
motion must be filed on or before the 60th day before the
trial date unless the court finds good cause to allow the
motion to be filed at a later date.
(j) Notwithstanding any other provision of this section,
if, not later than 60 days after the filing of the
defendant's original answer, the defendant alleges in an
answer filed with the court that an unknown person
committed a criminal act that was a cause of the loss or
inj ury that is the subj ect of the lawsuit, the court
shall grant a motion for leave to designate the unknown
person as a responsible third party if:
(1) the court determines that the defendant has
pleaded facts sufficient for the court to determine
that there is a reasonable probability that the act
of the unknown person was criminal;
(2) the defendant has stated in the answer all
identifying characteristics of the unknown person,
known at the time of the answer; and
(3)
the
allegation
satisfies
the
pleading
requirements of the Texas Rules of Civil Procedure.
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Energy denies that it knowingly purchased, sold, and/or
transported stolen condensate and, according to the brand
new facts set forth in the PEMEX Press Release, now seeks
to designate these thirty-nine Pemex employees as
responsible for PEP's alleged losses. 77
C.
Standard of Review
Pursuant to
§
33.004(a) of the Texas Civil Practice & Remedies
Code, at least sixty days before trial a defendant may "designate
a person as a responsible third party by filing a motion for leave
to designate that person as a responsible third party."
Prac.
Rem.
&
Code
§
33.004(a) 78
Section
33.011
Tex. Civ.
defines
a
responsible third party as:
any person who is alleged to have caused or contributed
to causing in any way the harm for which recovery of
damages is sought, whether by negligent act or omission,
by any defective or unreasonably dangerous product, by
other conduct or activity that violates an applicable
legal standard, or by any combination of these.
Tex. Civ. Prac. & Rem. Code
designate
a
responsible
§
33.011(6).
third
party,
If a court gives leave to
and
there
is
evidence
sufficient to submit a question to the jury regarding the conduct
of
the
party,
the
trier of
fact
determines
77Murphy Energy's Motion to Designate
Parties, Docket Entry No. 618, p. 2.
the
percentage
Responsible
of
Third
78Section 33.004(a) of the Texas Civil Practices and Remedies
Code provides:
(a) A defendant may seek to designate a person as a
responsible third party by filing a motion for leave to
designate that person as a responsible third party. The
motion must be filed on or before the 60th day before the
trial date unless the court finds good cause to allow the
motion to be filed at a later date.
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responsibility of the claimants, defendants, settling persons, if
any,
and any responsible third parties.
Code
§
Tex. Civ.
Prac. & Rem.
33.003 (a) (4) .
Once a defendant has moved for leave to designate responsible
Tex. Civ. Prac. & Rem. Code
third parties plaintiffs may object.
§
33.004(f).
To successfully prevent designation of a responsible
third party the burden is on the plaintiff to establish that
(1)
the defendant did not plead sufficient facts
concerning the alleged responsibility of the [third
party] to satisfy the pleading requirement of the Texas
Rules of Civil Procedure; and
(2)
after having been granted leave to replead, the
defendant failed to plead sufficient facts concerning the
alleged responsibility of the person to satisfy the
pleading requirements of the Texas Rules of Civil
Procedure.
Tex. Civ. Prac.
A
court's
responsible
&
Rem. Code
grant
of
33.004 (g) (1) and (2).
§
a
motion
third party does
not
for
leave
preclude
a
to
party
designate
from
a
later
challenging the designation.
After adequate time for discovery a party may move to
strike the designation of a responsible third party on
the ground that there is no evidence that the designated
person is responsible for any portion of the claimant's
alleged injury or damage.
The court shall grant the
motion to strike unless a defendant produces sufficient
evidence to raise a genuine issue of fact regarding the
designated person's responsibility for the claimant's
injury or damage.
Tex.
Civ.
Prac.
& Rem.
Code
§
33.004(1).
The burden is on the
defendants to produce sufficient evidence to raise a genuine issue
of fact regarding the designated party's responsibility for the
-50-
claimant's
§
D.
injury
or
damage.
Tex.
Civ.
Prac.
& Rem.
Code
33.003(b) 79
Analysis
PEP
argues
responsible
that
Murphy
third parties
Energy's
should be
motion
denied
or,
to
designate
al ternati vely,
stricken because the 39 individuals' responsibility for Murphy's
alleged wrongful acts is implausible on its face, and the time for
discovery ended almost eight months before Murphy Energy filed the
pending motion.
PEP argues that it is implausible that the 39
individuals are responsible for Murphy Energy's alleged wrongful
acts because the allegations against Murphy Energy are that from
late 2006 through April of 2009 Murphy Energy knowingly dealt in
natural gas condensate stolen from the Burgos field near the TexasMexico border, but the information in the Press Release about the
39 individuals states that they were arrested in October of 2013 more than four-and-a-half years after April of 2009 when Murphy
Energy's last wrongful act is alleged to have occurred; they were
arrested for stealing oil - not natural gas condensate; and the oil
they stole came from a refinery located in the central Mexican
state of Guanajuata - not the Burgos field near the Texas-Mexico
border.
None of the facts stated in the Press Release that Murphy
79Section 33.003(b) of the Texas Civil Practices and Remedies
Code provides:
uThis section does not allow a submission to the
jury of a question regarding conduct by any person without
sufficient evidence to support the submission."
-51-
Energy cites in support of its motion to designate responsible
third parties are capable of showing that any of the 39 individuals
named therein caused or contributed to
caused by Murphy Energy.
the
injuries
allegedly
Since Murphy Energy does not dispute
PEP's assertion that the time for discovery ended approximately
eight months before Murphy Energy filed the pending motion to
designate responsible third parties, and since the court plans to
hold docket call within the coming month and set this case for
trial
soon
thereafter,
Murphy
Energy's
motion
to
designate
responsible third parties will be denied because the facts stated
in the October 2013 Press Release are not sufficient to satisfy the
requirements for designating third parties who may be responsible
for the wrongful acts alleged against Murphy Energy.
Accordingly,
Murphy Energy's motion to designate responsible third parties will
be denied.
VI.
Conclusions and Order
For the reasons stated in
II,
§
above,
PEMEX Exploraci6n y
Producci6n's Motion for Partial Reconsideration and Opposition to
Plains Marketing,
L. P. 's Motion for Certification and Entry of
Final Judgment (Docket Entry No. 620) is DENIED.
For the reasons stated in
§
III, above,
PEMEX Exploraci6n y
Producci6n's Motion for Certification of an Interlocutory Appeal
and for a Stay of Proceedings (Docket Entry No. 621) is DENIED.
-52-
For
Marketing,
the
reasons
stated
in
L. P. 's Motion for
§
IV,
above,
Defendant
Plains
Certification and Entry of
Judgment Pursuant to Rule 54(b)
(Docket Entry No. 613) is GRANTED.
For the reasons stated in
§
V, above, Defendant/Third-Party
Plaintiff Murphy Energy Corporation's Motion for Attorneys'
(Docket Entry No.
Corporation's
610)
Motion
is DENIED,
for
Final
Leave
to
Fees
and Defendant Murphy Energy
Designate
Responsible
Third
Parties (Docket Entry No. 618) is DENIED.
Docket Call will be February 21, 2014, at 3:30 p.m., in Court
Room 9-B, United States Courthouse, 515 Rusk Avenue, Houston, Texas
77002.
SIGNED at Houston, Texas, on this 11th day of February, 2014.
SIM LAKE
UNITED STATES DISTRICT JUDGE
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