Sone et al v. Harvest Natural Resources, Inc.
Filing
36
OPINION on Dismissal 27 . (Signed by Judge Lynn N. Hughes) Parties notified. (ghassan, 4)
UNITED STATES DISTRICT COURT
Kensho Sone,
ct
al.,
Plaintiffs,
'tJCTSUS
Harvest Natural Resources, Inc.,
Defendant.
SOUTHERN DISTRICT OF TEXAS
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Civil Action H-I3'2161
Opinion on Dismissal
1.
Introduction.
The People's Republic of China hired a Texas company to search for oil and gas in
the South China Sea. For more than forty years, Taiwan and China have disputed who owns
the area. A group ofTaiwanese residents - who concede that they have no personal interest
it - have sued the Texas company for trespassing in their country's waters. They will take
nothing.
2.
Background.
Since 1996, Harvest Natural Resources, Inc., has owned Crestone Energy
Corporation. In 1999, the People's Republic of China awarded Crestone a concession to
explore and produce oil and gas in 9,687 square miles of the South China Sea, a prospect
known as WAB-21. Through October of 20r 3, neither Harvest nor Crestone has drilled a
well nor recovered oil from the area. In July of 2014, Crestone assigned its interest in
China's prospect to a third party. This assignment severed Harvest's only tie to the area,
which had been as a shareholder in Crestone.
Since its inception, the government in Taiwan - the former Republic of China - has
disputed the People's Republic of China's claims in the South China Sea, including this
part. The United States has abstained from these disputes. WAB-21 is near the Spratly
Islands in the West Wan'an Bei Basin of the South China Sea - approximately halfway
between Malaysia and the Socialist Republic of Vietnam.
Taiwanese residents have sued Harvest for trespassing within 200 nautical miles of
its coast. Under current international practices, this area - the exclusive economic :z;one has its sub-sea resources presumptively reserved for the adjacent nation.
These complainants do not sue on behalf of their government; their claims are
strictly for their own losses. They have demanded $2.9 million - the "book value" of the
field - and pleaded no facts about themselves or their interest in this field. In their petition,
they exclusively articulate their government's abstract territorial claims attached to a
demand for money.
Trespass.
3.
In Texas, trespass is an owner's claim for compensation from an entry on his land
by another without his consent. I Axiomatically, the plaintiff must have a direct interest in
the possession of the land to have a claim. 2 A Texan may not, for instance, sue his neighbor
for trespassing in a closed state park. That claim belongs solely to the state.
The plaintiffs have said that their government owns part o(the area where Crestone
was looking for oil. They have not said that they have concessions or licenses for a
pecuniary recovery, like fishing - much less that they personally own these waters. They
do not represent the government ofTaiwan or its people. They have not sued on behalf of
their government and concede that they have no private interest in this area. They have no
claim for trespass.
In a trespass action, the claimants must join all of the owners.3 These 100 or so
claimants are roughly 1/23 o,oooth of the people of Taiwan. Each of these unrepresented
fellow countrymen has an identical claim.
I
Pilcher v. Kirk, 55 Tex. 208, at *5 (Tex. 1881).
2
Timpson & R. Ry. Co. v. Smith, 165 S.W. 86, 89-90 (Tex. Civ. App. Texarkana
19 14).
3 May v. Slade, 24 Tex. 205, at *3 (1859); Taylor v. Catalon, 166 S.W.2d 102,
10 5-06 (1942).
4.
Policy Q.uestion.
In 1972, the United States withdrew her recognition of the Republic of China-
Taiwan - as a sovereign distinct from the People's Republic of China. Every president since
Richard M. Nixon has avoided Taiwan's quarrels with China, including territorial disputes
in the South China Sea.
To find that Harvest trespassed on Taiwan, the court would have to conclude that
(a) Taiwan is a nation capable of having a territorial claim and (b) it owns this portion of
the South China Sea. Both of these determinations are matters constitutionally committed
to other branches of government.
Of the executive, legislature, and judiciary, it is the executive that extends America's
recognition to a foreign nation." Absent an internal Constitutional irregularity, the judiciary
has no authority to review the policy choices of the executive. This is not some humble
deference to other branches; it is the structure by which the government was constituted
in 1789.
Standing.
5.
These Taiwanese residents have standing to sue if (a) each of them have suffered
an injury that was caused by Harvest and (b) their injury is capable of being redressed by
a ruling. 5
They have no injury - none that is recognized at law for they have no legally
protected interest to injure. They concede that they do not own the field - the only source
of an interest. Their grievance is also generalized; every citizen of Taiwan has the same
interest in this area as any particular plaintiff. 6 The misbegotten character of their claim is
illustrated by this 1/23 o,oooth of the population's claiming the entire book value of the area
- an amount untethered to their supposed suffering or even a pro rata share of their claim.
,. Charles L. Williams v. Suffolk Insurance Company, 38 U.S. 415, 420 (1839);
Republic of Vietnam v. Pfizer, Inc., 556 F.2d 892,894 (1977).
5
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
6
United States v. Richardson, 418 U.s. 166, 179-80 (1974).
Assuming these people were injured, this court cannot redress them because it
cannot prevent China from exploring the South China Sea. Although the claims are
nominally addressed to Harvest, they are really complaining about China's aggressive
assertion of territorial claims at sea.
During the pendency of this case, China has stopped using Harvest to explore the
WAB-2 I field. Enjoining China's former agent, Harvest, will not stop China from searching
for oil itself or hiring another company to do so.
No injury: neither Harvest nor Crestone has drilled a well- much less produced
oil from WAB-2I.
These residents ofTaiwan do not have standing to sue Harvest.
6.
Wrong Parry.
The plaintiffs have sued Harvest Natural Resources, Inc. - the wrong party. Harvest
has never had a direct interest in WAB-2I. China dealt with its subsidiary, Crestone. For a
suit to exist, the correct people must have a claim at law and must join the precise people
who did the acts that hurt them. The plaintiffs should not have sued at all, but Harvest is
categorically the wrong target.
7.
Disco'Very.
One year after this case began and eight months after it was fully briefed, the
plaintiffs moved to discover to whom Harvest sold its interest in the field. The problem with
these claims is not whether Harvest owns the field; it is that these plaintiffs concede that
they do not own it. Because their claims are fundamentally flawed in several ways, the
discovery will be denied. Having failed to sue the proper party last year, they want Harvest
to help them sue another wrong party. No.
8.
Conclusion.
This case has nothing to do with Harvest or the United States. A group of
Taiwanese citizens are attempting to profit from their country's precarious position in a sea
claimed by a powerful neighbor. The island ofF ormosa - as it had been historically known
to the West - has been claimed by its aboriginal people, of course, and then by a succession
of governments: Portugese, Spanish, Dutch,1apanese, and competing Chinese ones.
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It is understandable that the people ofTaiwan may be frustrated with forty years of
these unresolved territorial disputes. It is not understandable that an American lawyer
would demand $2.9 million from a parent company of a licensee of China for the sole
benefit of a cluster of Taiwanese citizens and himself.
These Taiwanese citizens will take nothing from Harvest Natural Resources, Inc.
j
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Signed on August
8-
,20I4,
at Houston, Texas.
Z:nN~-----~
United States DistrictJudge
'5'
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