In re: Deepwater Horizon ( 2015 )

Case: 13-31070 Document: 00513028113 Page: 1 Date Filed: 05/01/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 13-31070 United States Court of Appeals
Fifth Circuit
FILED
IN RE: DEEPWATER HORIZON May 1, 2015
_________________________________________ Lyle W. Cayce
Clerk
STATE OF VERACRUZ, Republic of Mexico;
Plaintiff - Appellant
v.
BP, P.L.C.; BP AMERICA, INCORPORATED; BP CORPORATION NORTH
AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA,
INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED;
BP EXPLORATION ; PRODUCTION, INCORPORATED; TRANSOCEAN
OFFSHORE DEEPWATER DRILLING, INCORPORATED; HALLIBURTON
ENERGY SERVICES, INCORPORATED; TRANSOCEAN DEEPWATER,
INCORPORATED,
Defendants - Appellees
TRANSOCEAN HOLDINGS, L.L.C.; TRITON ASSET LEASING GmbH;
Appellees
______________________________________________
STATE OF TAMAULIPAS, Republic of Mexico;
Plaintiff - Appellant
v.
BP, P.L.C.; BP AMERICA, INCORPORATED; BP CORPORATION NORTH
AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA,
INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED;
BP EXPLORATION ; PRODUCTION, INCORPORATED; TRANSOCEAN
DEEPWATER, INCORPORATED; TRANSOCEAN OFFSHORE
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DEEPWATER DRILLING, INCORPORATED; HALLIBURTON ENERGY
SERVICES, INCORPORATED,
Defendants - Appellees
TRANSOCEAN HOLDINGS, L.L.C.; TRITON ASSET LEASING GmbH;
Appellees
______________________________________________
STATE OF QUINTANA ROO, Republic of Mexico;
Plaintiff - Appellant
v.
BP, P.L.C.; BP AMERICA, INCORPORATED; BP CORPORATION NORTH
AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA,
INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED;
BP EXPLORATION ; PRODUCTION, INCORPORATED; TRANSOCEAN
OFFSHORE DEEPWATER DRILLING, INCORPORATED; HALLIBURTON
ENERGY SERVICES, INCORPORATED; TRANSOCEAN DEEPWATER,
INCORPORATED,
Defendants - Appellees
TRANSOCEAN HOLDINGS, L.L.C.; TRITON ASSET LEASING GmbH;
Appellees
Appeal from the United States District Court
for the Eastern District of Louisiana
Before STEWART, Chief Judge, and JONES and HIGGINSON, Circuit
Judges.
CARL E. STEWART, Chief Judge:
2
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In April 2010, a blowout, explosion, and fire occurred aboard the mobile
offshore drilling unit Deepwater Horizon as it was preparing to temporarily
abandon a well 50 miles off the Louisiana coast. Millions of gallons of oil
discharged into the Gulf of Mexico before the well was capped nearly three
months later.
In September 2010, three Mexican states (Veracruz, Tamaulipas, and
Quintana Roo (hereinafter, the “Mexican States” or “Plaintiffs”)) filed
substantially similar complaints in the Western District of Texas for damages
incurred as a result of the oil spill. After the cases were consolidated in the
Eastern District of Louisiana as part of the Deepwater Horizon multidistrict
litigation, the district court in September 2013 granted summary judgment to
the defendants—BP, Transocean, Halliburton, and Cameron 1—because the
Mexican states did not hold a sufficient “proprietary interest” in the allegedly
damaged property. The Mexican States have appealed this judgment.
I. Factual and Procedural Background
The Mexican States each filed suit against BP (well owner, operator, and
block lessee), Transocean (owner of the Deepwater Horizon), Halliburton
(cement contractor), Anadarko (co-owner and co-lessee with BP), and Cameron
(manufacturer of the blowout preventer) 2 for damages they allegedly incurred
or would sustain as a result of the oil spill. These damages included
“monitoring and preparing to respond to the oil spill; contamination and injury
to the waters, estuaries, seabed, animals, plants, beaches, shorelines, etc., of
1The Mexican States sued many corporate entities, but for the sake of simplicity, and
because the corporate niceties are not relevant to the dispute, we will refer to the companies
by the names listed in the text above.
2 All claims against Anadarko were dismissed in December 2011 by the district court,
and the Mexican States have not appealed the September 2013 judgment in favor of
Cameron. Therefore, the only remaining defendants are BP, Transocean, and Halliburton
(collectively, “Defendants”).
3
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the Mexican States; lost taxes, fees, etc., due to reduced fishing activity and
fishing-related industries; lost taxes, etc., due to diminished tourism; and the
net costs of providing increased public services.” In re Oil Spill, 970 F. Supp.
2d 524, 526 (E.D. La. 2013). The Mexican States brought claims alleging
negligence, gross negligence, negligence per se, violations of the Oil Pollution
Act (“OPA”), private nuisance, and public nuisance.
In December 2011, the district court dismissed the Mexican States’ claim
for negligence per se, the OPA claim, 3 and the two nuisance claims. The court
preserved the negligence and gross negligence claims against the current
Defendants “only to the extent there has been a physical injury to a proprietary
interest.” In re Oil Spill, 835 F. Supp. 2d 175, 182 (E.D. La. 2011). Discovery
was eventually limited to the proprietary interest prong, 4 and the parties
cross-moved for summary judgment.
In September 2013, the district court granted summary judgment to
Defendants on the ground that the Mexican States lacked a proprietary
interest sufficient to overcome application of the rule, announced in Robins Dry
3 In an August 2011 order, the district court determined that the OPA did not displace
substantive general maritime law. See In re Oil Spill, 808 F. Supp. 2d 943, 958–62 (E.D. La.
2011). The issue of whether the OPA displaces general maritime law is significant, and the
subject of considerable debate both in and out of this circuit. See e.g., South Port Marine, LLC
v. Gulf Oil Ltd., 234 F.3d 58, 65 (1st Cir. 2000) (“Congress intended the OPA to be the sole
federal law applicable in this area of maritime pollution”); Gabarick v. Laurin Mar. (Am.)
Inc., 623 F. Supp. 2d 741, 750 (E.D. La. 2009) (“OPA preempts general maritime law claims
that are recoverable under OPA.”); John J. Costonis, The BP B1 Bundle Ruling: Federal
Statutory Displacement of General Maritime Law (Part II), 44 Envtl. L. Rep. News & Analysis
10108 (2014) (critiquing the district court’s decision in this case). However, the issue is
insufficiently briefed. In light of our resolution, we need not reach and we express no opinion
on Defendants’ argument that the OPA displaces general maritime law in this or any other
case.
4The parties continue to dispute whether oil actually entered or damaged Mexican
waters, but the district court assumed actual damages for purposes of deciding the
proprietary interest issue. We do the same.
4
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Dock & Repair Co. v. Flint, precluding recovery for economic loss absent a
proprietary interest in physically damaged property. See 275 U.S. 303, 307–09
(1927). After conducting an exhaustive inquiry into Mexican law, the court held
that the Mexican federal government, rather than the states, is the true owner
of the damaged property. In support of this determination, the district court
pointed out that the Mexican federal government, in April 2013, brought a
fundamentally similar lawsuit. That case is progressing, though no
substantive orders have been issued. The court also stated that “it appears that
the Mexican States lack legal standing.” In re Oil Spill, 970 F. Supp. 2d at 541.
Plaintiffs timely appealed. The issues on appeal are: (1) whether the
district court correctly determined that the Robins Dry Dock rule is applicable
to the Mexican States’ claims and (2) whether the district court correctly held
that the Mexican States lack proprietary interests in the allegedly damaged
property sufficient to maintain their claims.
II. Standard of Review
This court reviews a district court’s grant of summary judgment de novo,
applying the same standard as the district court and reviewing the facts in the
light most favorable to the nonmovants. See Tiblier v. Dlabal, 743 F.3d 1004,
1007 (5th Cir. 2014). Summary judgment is proper “if the movant shows that
there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. (“FRCP”) 56(a).
When inquiring into foreign law, courts may consider “any relevant
material or source” whether or not presented by the parties. See FRCP 44.1 &
advisory committee’s note to 1966 adoption. The determination “must be
treated as a ruling on a question of law.” Id. “[D]ifferences of opinion among
experts on the content, applicability, or interpretation of foreign law do not
create a genuine issue as to any material fact.” Access Telecom Inc. v. MCI
5
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Telecomms. Corp., 197 F.3d 694, 713 (5th Cir. 1999); see also 9A Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure § 2444 (3d ed. 1998).
III. Applicability of Robins Dry Dock
A threshold question is whether Plaintiffs’ claims are even subject to the
Robins Dry Dock rule precluding recovery “for economic loss if that loss
resulted from physical damage to property in which [the plaintiff has] no
proprietary interest.” In re Bertucci Contracting Co., 712 F.3d 245, 246 (5th
Cir. 2013) (internal quotation marks and citation omitted). This hard-edged,
longstanding common law principle has been reaffirmed by an en banc panel
of this court. See State of La. ex rel. Guste v. M/V Testbank, 752 F.2d 1019 (5th
Cir. 1985) (en banc) (denying recovery to a wide variety of plaintiffs—including
operators of marinas, cargo terminal operators, wholesale and retail seafood
enterprises, among others—who sought damages from shipowners responsible
for spilling chemicals into a Mississippi River gulf outlet). The rule’s purpose
is to limit the “consequences of negligence and exclude indirect economic
repercussions, which can be widespread and open-ended.” Catalyst Old River
Hydroelectric Ltd. v. Ingram Barge Co., 639 F.3d 207, 210 (5th Cir. 2011).
The Mexican States contend that the Robins Dry Dock rule is cabined to
civil negligence and other unintentional conduct. They argue that Robins Dry
Dock is inapplicable because both BP and Transocean pled guilty to criminal
conduct arising from the Deepwater Horizon disaster. The only intentional
conduct at issue here, however, is BP’s guilty plea to intentionally obstructing
a congressional investigation, which the Mexican States contend “exacerbated
their damages by lulling regulatory authorities and others into deferring the
taking of appropriate and mitigating action.” 5 The balance of the guilty pleas
involves only criminally negligent conduct.
5 Transocean’s guilty plea specifically admitted only “negligent conduct.”
6
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The Mexican States locate the purported exception in some of our case
law. See Amoco Transp. Co. v. S/S Mason Lykes, 768 F.2d 659, 666 (5th Cir.
1985) (“This circuit and others have interpreted Robins Dry Dock to mean that
there can be no recovery for economic losses caused by an unintentional
maritime tort absent physical damage to property in which the victim has a
proprietary interest.” (emphasis added)); Dick Meyers Towing Serv., Inc. v.
United States, 577 F.2d 1023, 1025 (5th Cir. 1978) (recognizing that a plaintiff
may “not recover for interference with his contractual relations unless he
shows that the interference was intentional or knowing”); Kaiser Aluminum &
Chem. Corp. v. Marshland Dredging Co., 455 F.2d 957, 958 (5th Cir. 1972) (“We
agree that recovery by Kaiser is precluded as a matter of law because there
is . . . no contention that the interference with Kaiser’s contract rights was
intentional.”). These pronouncements are arguably dicta, as Defendants note. 6
But even assuming the existence of a criminal or intentional conduct exception,
the Fifth Circuit has not addressed the interplay between such conduct and
Robins Dry Dock.
With one exception, the criminal conduct at issue here was exclusively
negligent in nature, so we first address application of Robins Dry Dock in the
context of criminal negligence. The First Circuit has confronted this issue. See
Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 624 (1st Cir. 1994). In
Ballard Shipping, an oil tanker ran aground in Rhode Island, spilling
hundreds of thousands of gallons of oil into a bay. Id. The captain and the
6 At least one circuit has recognized a Robins Dry Dock exception for “economic losses
that are intentionally caused.” See Ballard Shipping Co. v. Beach Shellfish, 32 F.3d 623, 625
n.1 (1st Cir. 1994) (citing Dick Myers, 577 F.2d at 1025). But see Nautilus Marine Inc. v.
Niemela, 170 F.3d 1195, 1196–1197 (9th Cir. 1999) (holding that “nothing in Robins Dry Dock
or its progeny . . . support[s] [an] exception” for intentional or reckless tortious conduct,
though suggesting that intentional interference with contractual relations may be such an
exception).
7
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shipping company pled guilty to criminally negligent violations of the Clean
Water Act and paid out a total of over $10 million in fines and cleanup costs.
Id. Shellfish dealers alleging severe economic losses brought a lawsuit alleging
violations of, inter alia, general maritime law. Id. The First Circuit affirmed
the dismissal of the general maritime law claims based on Robins Dry Dock,
holding that the claims did not fit into the “recognized exception[]” for claims
based on “economic losses that are intentionally caused.” Id. at 625 & n.1
(internal quotation marks and citation omitted). Effectively, the court held that
criminal negligence did not bar application of Robins Dry Dock. 7
We are persuaded by the First Circuit’s analysis. To the extent that the
Robins Dry Dock rule is concerned with the prospect of runaway recovery
stemming from a negligent act, see Amoco Transp., 768 F.2d at 668 (“The
spectre of runaway recovery lies at the heart of the Robins Dry Dock rubric.”),
there is no principled reason to distinguish between civil and criminal
negligence. This is especially so here because federal law has criminalized
much negligence in the context of oil spills in navigable waters. See In re
Ballard Shipping Co., 810 F. Supp. 359, 364 (D.R.I. 1993); cf. David M.
Uhlmann, Environmental Crime Comes of Age: The Evolution of Criminal
Enforcement in the Environmental Regulatory Scheme, 2009 Utah L. Rev.
1223, 1246 (2009) (“As a matter of prosecutorial discretion, the government
7 The lower court in Ballard provided a more focused discussion of the criminal
negligence issue. See In re Ballard Shipping Co., 810 F. Supp. 359, 364 (D.R.I. 1993). The
court stated that the “Robins Dry Dock rule . . . should [not] be distorted or cease to operate
because the criminal law imposes penalties on particular negligent behavior. As the federal
law now deems criminal virtually all negligence resulting in an oil spill in navigable waters,
. . . adopting the claimants’ position would transform the Robins Dry Dock rule into a
meaningless assertion. This Court does not believe that Congress intended that Robins Dry
Dock be relegated to the scrap heap in this manner.” Id. (citations omitted). Although the
district court was ultimately reversed by the First Circuit on a different issue, its analysis on
criminal negligence went unquestioned in that court.
8
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considers criminal prosecution in most cases that involve significant harm or
risk of harm to the environment.”).
We next address the effect of BP’s intentional criminal obstruction of a
congressional investigation. The plea agreement states that BP did “corruptly,
that is, with an improper purpose, endeavor to influence, obstruct, and impede”
a congressional investigation. The Mexican States argue that the company’s
misrepresentations “lull[ed] regulatory authorities and others into deferring
the taking of appropriate and mitigating action.” The district court held that
the misrepresentations were not “causally related to the blowout, the oil spill,
or the alleged harm to the Mexican states.” In re Oil Spill, 970 F. Supp. 2d at
528. We agree. The intent to obstruct a congressional investigation does not
directly speak to the intent to cause damage to the Mexican States. See Dan B.
Dobbs et al., The Law of Torts § 29 (2d ed. 2011) (“Intent is not a general state
of mind. One has a purpose to accomplish, or a substantial certainty of
accomplishing one or more specific objectives. The defendant might intend to
touch and also intend his touching to have harmful effects. These are two
different intents.”). 8
IV. Discussion
Robins Dry Dock bars recovery for economic damages absent physical
injury to a plaintiff’s proprietary interest. See Catalyst Old River, 639 F.3d at
210. To show a sufficient proprietary interest, the general rule is that a
plaintiff must show he is an owner of the damaged property. When the plaintiff
is clearly not the owner of the physically damaged property, therefore, Robins
Dry Dock bars economic damage recovery. See 275 U.S. at 308–09 (barring a
8The Mexican States argue that the “factual context” of the guilty pleas of Transocean
and BP are sufficient to raise fact questions about Halliburton’s intentional conduct.
Nowhere is there a direct allegation about Halliburton’s intentional conduct, and the Mexican
States provide no authority for such a sweeping reading of the purported exception to Robins
Dry Dock.
9
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time charterer of a steamship from recovery of lost profits where the defendant-
dry dock negligently damaged the vessel). Thus, a production plant that
suffered losses from interruption of gas services—because a barge negligently
damaged another owner’s pipeline—was denied recovery. See Kaiser
Aluminum, 455 F.2d at 958. Likewise, a railroad that had to cease operation
because of damage to another owner’s bridge, despite the railroad’s contractual
right to use the bridge, could not recover. See Louisville & N. R. Co. v. M/V
Bayou Lacombe, 597 F.2d 469, 470, 474 (5th Cir. 1979); see also Dick Meyers,
577 F.2d at 1025 (denying recovery for pecuniary losses suffered by a vessel
operator when a river closed to traffic because of a negligently constructed and
maintained lock).
By contrast, when the plaintiff is the owner of the physically damaged
property, he can recover economic damages. In Vicksburg Towing Co. v. Miss.
Marine Transp. Co., for example, a dock owner who had leased the dock to
another was still able to recover for economic damages sustained as a result of
damage to the dock caused by the defendant’s negligence. See 609 F.2d 176,
177 (5th Cir. 1980); see also Catalyst Old River, 639 F.3d at 209, 214
(permitting recovery by the owner of a hydroelectric station against a tow
operator that negligently caused a barge to block intake channels that took in
water to power the station’s generators).
The Robins Dry Dock Court itself, however, intimated that something
perhaps just shy of outright ownership might suffice to show the requisite
proprietary interest. The Court left open the possibility that a “demise”
agreement might satisfy the proprietary interest requirement even if the “time
charter” at issue in that case did not. See 275 U.S. at 308. This court in Bayou
Lacombe provided a useful explanation of the distinction. With the time
charter, the “owner’s people continue to navigate and manage the vessel, but
her carrying capacity is taken by the charterer for a fixed time.” 597 F.2d at
10
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473 n.3 (quoting G. Gilmore & C. Black, The Law of Admiralty § 4–1, at 194
(2d ed. 1975)). The demise (or bareboat) charter, by contrast, allows the
charterer to “take[] over the ship, lock, stock and barrel, and man[] her with
his own people. He becomes, in effect, the owner pro hac vice.” Id. This provides
the charterer “complete control” of the vessel. Id.
The Mexican States point us to Texas Eastern Transmission Corp. v.
McMoRan Offshore Exploration Co., where this court “employed three criteria
to evaluate proprietary interest: actual possession or control, responsibility for
repair, and responsibility for maintenance.” 877 F.2d 1214, 1225 (5th Cir.
1989) (citing Bayou Lacombe, 597 F.2d at 474). Characterization of these
factors as sanctioning recovery for something less than ownership, however,
misapprehends their origin and purpose. The Bayou Lacombe court, which
originated the factors, explicitly noted that these were “incidents of ownership”
rather than alternatives to it. See 597 F.2d at 474; see also Texas E., 877 F.2d
at 1225 (“Even were we to accept the proposition that repair of property endows
one with a proprietary interest . . . .”); Naviera Maersk Espana S.A. v. Cho-Me
Towing Inc., 782 F. Supp. 317, 320 (E.D. La. 1992) (“[T]he Fifth Circuit clearly
defines the term ‘proprietary interest’ to mean that a party must have control
over the property tantamount to full ownership.” (citing Testbank, 752 F.2d at
1024)). The reach of the definition of “proprietary interest” extends no further
than the demise charter, which is “tantamount to, though just short of, an
outright transfer of ownership.” Guzman v. Pichirilo, 369 U.S. 698, 700 (1962).
With these principles in mind, we turn to the Mexican States’ argument
that they have carried their burden to show the necessary interest in the
damaged property. They rely primarily on: (1) certain Mexican federal
statutory provisions; (2) their own state constitutions; (3) two affidavits from
state ministers from Quintana Roo and Tamaulipas; and (4) the affidavit of a
real estate developer who affirms that he had substantial interaction with the
11
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state of Tamaulipas about a development. Defendants contend that none of
these affidavits or laws vests the requisite proprietary interest in the Mexican
States. They chiefly rest on provisions in the Mexican Constitution, which they
argue place ownership of all the property at issue in this litigation in the
Mexican federal government.
We conclude that none of the Mexican States’ cited sources show that
they own the relevant property. Instead, as the district court held, both
individually and collectively these sources suggest that the Mexican federal
government is the true owner. We address these sources in turn.
A. The Mexican Constitution
Article 27 of the Mexican Constitution 9 contains the following broad
statements about property ownership:
Ownership of lands and waters within the boundaries of national
land territory 10 is vested originally in the Nation, which has had
and has, the right to transmit title thereof to private persons,
thereby constituting private property. . . .
The Nation has full ownership over all natural resources of the
continental shelf and the seabed and subsoil of the marine areas
of the islands . . . .
The Nation has full ownership over the waters of territorial sea in
the extension and under the terms set forth by International
Law . . . .
9 Our translations of Mexico’s Constitution derive entirely from an official version
printed by the Mexican Supreme Court, and available on that court’s official website at
https://www.scjn.gob.mx/normativa/ConstEnglish/CONSTI%20INGLES%20SEPT%202010.
pdf.
10 “National land territory,” as used in Article 27, is a term of art with an expansive
definition. Defined in Article 42 of the Constitution, it includes: “I. The land territory of all
the portions constituting the Federation; II. The territory of the islands, including the reefs
and keys in adjacent seas; . . . IV. The continental shelf and the seabed and subsoil of the
submarine areas of the islands, keys and reefs; [and] V. The waters of the territorial seas in
the extension and under the terms established by International Law and domestic maritime
laws.”
12
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In the cases established in [the preceding two paragraphs], the
Nation’s dominion is inalienable and not subject to the statute of
limitation and the exploitation, use or enjoyment of the resources
in question by private persons or by companies incorporated in
accordance with Mexican laws, may not be undertaken save by
means of concessions granted by the President of the Republic and
in accordance with the rules and conditions set forth by the Laws.
Political Constitution of the United Mexican States (“Mexican Constitution”),
Article 27, ¶¶ 1, 4–6.
This constitutional provision is essentially decisive of this case. Article
27 means that “Mexico’s public domain over these assets is inalienable and
cannot be taken away from the federal government by adverse possession, by
either Mexican nationals or foreigners.” Jorge A. Vargas, Mexican Law: A
Treatise for Legal Practitioners and International Investors § 34.4 (2001)
[hereinafter Mexican Law: A Treatise] (emphasis added); see also Jorge A.
Vargas, Mexican Law for the American Lawyer 161 (2009).
The Mexican States propose a more holistic understanding of the critical
word “Nation,” a term not defined in the Mexican Constitution. They argue
that it embraces the entire Mexican people, and not only the federal
government. However, that expansive reading is foreclosed by several
interpretations of the term “Nation” in the context of the Mexican
constitutional provisions outlined above. The Mexican Supreme Court has
interpreted the term “Nation” narrowly, stating that “[t]he nation cannot be
mistaken for a state, and consequently, State officials are not the ones who
represent it because it is unique and represented by its federal agencies.” In
re Oil Spill, 970 F. Supp. 2d at 533 (citing Nacion, Representacion de la, [TA];
5a. Epoca; 2a. Sala; S.J.F.; LII; Pag. 72 (Registro No. 332930)). 11 And one
11 The Mexican States’ arguments against our consideration of this case are
unavailing. First, the States claim that the proper translation of the initial clause is “the
nation cannot be mistaken for a federal entity,” which would lead to a different conclusion.
13
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commentator on Mexican law explicitly provides that “Nation,” as used in
Article 27, means the federal government. See Stephen Zamora et al., Mexican
Law 495 (2004). 12 Professor Vargas proposes a more nuanced account of the
distribution of sovereignty:
Under Mexican law, all of the “elements” that compose the
national territory of Mexico (including their corresponding natural
resources) belong to the Mexican Nation (and not to the Federation
or to each of the federal entities), with the legal and political
understanding that the Nation is represented by the federal
government.
Jorge A. Vargas, Mexico and the Law of the Sea 9 (2011) (footnotes omitted).
Under either view, we conclude, the Mexican Constitution vests the federal
government with the necessary proprietary interest for purposes of Robins Dry
Dock.
This conclusion about federal supremacy is strengthened by the text in
the sixth paragraph of Article 27, which clarifies that only the federal
government, through Mexico’s president, can allow “exploitation, use or
enjoyment” of the long list of resources delineated in the preceding two
paragraphs. See Mexican Constitution, Article 27, ¶¶ 4–6; see also Corporacion
Mexicana de Servicios Maritimos, S.A. de C.V. v. M/T Respect, 89 F.3d 650,
653 (9th Cir. 1996), as amended on denial of reh’g (Aug. 28, 1996) (“Under
Article 27 of the Constitution of the United Mexican States, the government of
Mexico is the only entity that may own and exploit the country’s natural
We are unpersuaded that the translation the district court used is incorrect, however,
because the official Mexican Supreme Court translation of the Mexican Constitution
translates the same term—“entidad federativa”—as “state.” See Mexican Constitution,
Article 27, ¶ 5. Second, while the case appears not to be controlling precedent under Mexican
law, we find persuasive the Mexican Supreme Court’s interpretation of the Mexican
Constitution. The Mexican States have not offered any subsequent Mexican Supreme Court
decision that embraces their preferred interpretation of the term “Nation.”
12 Professor Zamora served as an expert for Halliburton in this case.
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resources . . . . The Constitution permits the federal government to create
organizations that manage and distribute these resources.” (emphasis added)
(citation omitted)). 13
B. Mexican Federal Statutory Law
An elaborate regime of Mexican federal statutory law—while certainly
allotting some power to the states—further establishes federal supremacy with
respect to the property at issue.
A few examples will suffice. The Mexican States have sought damages
for harm to wildlife. But the General Law of Wildlife (GLW) 14 establishes, as
relevant here, that the “Federal Attorney General’s Office for Environmental
Protection . . . shall exercise in an exclusive manner the action for liability for
damage caused to wildlife and its habitat.” GLW, Article 107. Additionally,
while Mexico’s General Law of Ecological Balance and Environmental
Protection (GLEBEP) affords some power to Mexican states over
environmental matters, see GLEBEP, Article 7, only the federal government is
responsible for “[a]ttending to matters affecting the ecological balance . . .
13 The Mexican States claim that they own certain islands off their coasts. The root of
this argument is a provision in Article 48 of the Mexican Constitution. That article states
that “islands, keys and reefs of adjacent seas belonging to national land territory, the
continental shelf, the sea beds of the islands, keys and reefs, the territorial seas, inland
marine waters, and the space over national land territory, shall depend directly from the
Government of the Federation, with the exception of those islands over which the States have
up to the present, exercised their jurisdiction.” Mexican Constitution Article 48 (emphasis
added). Article 48 has resulted in great uncertainty in Mexico concerning ownership of these
islands. See generally Vargas, Mexico and the Law of the Sea 405–484 (discussing history of
relationship of states to Mexico’s islands). However, the states have “abstained from enacting
legislation to regulate islands offshore their coasts” in part because they have read Article 48
to provide that the “Federal Government . . . legally and politically exercise[s] control over
Mexico’s ‘Insular territory.’” Id. at 455; see also id. at 439 (stressing that the islands have
effectively been under federal control since passage of the 1917 constitution). We are not
persuaded that the Mexican States have demonstrated the mandatory proprietary interest
in these islands.
14 We use the translations of Mexican federal statutory law and the Mexican States’
constitutions provided to us by the parties.
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originating in the territory or areas subject to other States’ sovereignty and
jurisdiction,” see GLEBEP, Article 5. Given that the Deepwater Horizon
incident “originated” outside Mexico’s territorial boundaries, Article 5 signifies
that the Mexican States have ceded the power to protect these resources to the
Mexican federal government. See Mexican Law: A Treatise § 12.61
(highlighting federal control over environmental enforcement); Zamora et al.,
Mexican Law 122 (observing that, in Mexico, “environmental protection
remains almost exclusively a federal matter”).
C. State Constitutions
The State Constitutions of Veracruz, Quintana Roo, and Tamaulipas
provide that the individual states maintain a degree of autonomy and freedom.
Article 1 of the Constitution of Veracruz, for example, states that it is “free and
autonomous in its administration and internal governance.” Article 1 of the
Constitution of Quintana Roo explains that it is a “free state as its members
determine the organization, function and objectives of its community.” Article
1 of the Constitution of Tamaulipas states that it is “free, sovereign and
independent in its government and internal administration,” but also notes
that it is “tied to the branches of government as part of the United Mexican
States, in all that the Constitution expressly sets forth.”
Although the language of the constitutions is expansive, there is
substantial language in these documents recognizing the superior authority of
the federal government. The Veracruz Constitution may, for example, note
that the state is “free and autonomous,” as Plaintiffs argue, but it also makes
clear that this is the case only with respect to its “administration and internal
governance.” Tamaulipas may be “free” and “sovereign” but it is “tied to the
branches of government as part of the United Mexican States.” These state
constitutions must yield to Article 27 of the federal constitution, which vests
ownership of the relevant property “originally in the Nation.” Mexican
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Constitution, Article 27, ¶ 1; see also Mexican Constitution, Article 133
(containing a supremacy clause—similar to the American version embedded in
Article VI of the U.S. Constitution—providing that the Mexican Constitution
and federal law bind the states “notwithstanding any provision to the contrary
in the local constitutions or local laws”).
D. Minister and Developer Affidavits
The Mexican States rely greatly on three affidavits—two from state
ministers, and one from a real estate developer—as further proof of their
proprietary interests. 15 In the affidavits filed by the state ministers (the
Tamaulipas Minister of Urban Development and the Environment and the
Quintana Roo Minister of the Environment), they affirm that the states spent
money out of their own treasuries to address oil that washed up on beaches in
their territory. Defendants do not appear to dispute this. However, some
statements in these affidavits are flatly contradicted by the Mexican
Constitution. For example, both ministers affirm that their respective states
“own[], manage[], possess[] and maintain[] [their] beaches, waters, estuaries,
rivers, waterways, lagoons and flora and fauna of the Gulf of Mexico.” These
claims conflict with the language of Article 27 of the Mexican Constitution,
which again states that “[o]wnership of lands and waters within the
boundaries of national land territory is vested originally in the Nation.”
Mexican Constitution, Article 27, ¶ 1. Even accepting the Mexican States’
holistic interpretation of the term “Nation,” it would still not be true that the
Mexican States own this property. “Estuaries,” “river waters,” and “lagoons,”
furthermore, are explicitly committed to the Nation’s ownership. Mexican
Constitution, Article 27, ¶ 5. We do not find these affidavits persuasive.
15While the Mexican States complain that these affidavits were ignored by the district
court, their own summary judgment briefs do not mention the state ministers and contain
only one mention of the real estate developer in a reply brief.
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As to the real estate developer’s declaration, while he avers that he spent
much time in consultation with state authorities about the development of a
“large scale tourism and beach resort,” in that same declaration he provides a
list of three pages of permits, agreements, and concessions he received from
the federal government for that development.
E. Application of Robins Dry Dock
Ultimately, the question in this case is not whether the Mexican States
have some authority to use or exploit some of the land and other resources at
issue here. They likely do. The question is whether their property interests rise
to the requisite level. They do not.
We recognize that the Robins Dry Dock analytical framework does not
easily map on to an intragovernmental relationship. However, the Mexican
Constitution is sufficiently clear about the distribution of property rights in
the country for us to conclude that the Mexican States in no way resemble
owners permitted to recover economic damages in our case law. See e.g.,
Vicksburg Towing, 609 F.2d at 177 (permitting the plaintiff to recover lost
rental income after damage sustained to its dock because, although the dock
was leased to another, the plaintiff remained the sole owner of the property).
Instead, the Mexican States far more closely resemble the railroad
company disallowed economic damage recovery from a defendant who
negligently damaged another owner’s bridge, in spite of the company’s right to
use the bridge. See Bayou Lacombe, 597 F.2d at 474. They also resemble the
oil company in Texas Eastern that could not recover for a defendant’s negligent
destruction of a pipeline it did not own, even though it maintained a laundry
list of appurtenances to the pipeline. See 877 F.2d at 1225–26.
Seen through the prism of the perhaps less onerous demise charter
analogy, the Mexican States’ interests still do not stack up. Recall that the
demise charterer “takes over the ship, lock, stock and barrel, and mans her
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with his own people. He becomes, in effect, the owner pro hac vice.” Bayou
Lacombe, 597 F.2d at 473 n.3 (internal quotation marks and citation omitted).
He maintains “complete control.” Id. The time charterer, by contrast, can
provide “orders as to ports touched, cargo loaded, and other business matters”
and can have “tonnage under his control for a period of time, without
undertaking the responsibilities of ship navigation and management of the
long-term financial commitments of vessel ownership.” Id.
According to the Mexican States, they “are in charge of the natural
resources at issue” and have the right to “exploit” these assets. They also note
through affidavits of state environmental ministers that they have—at their
own expense—repaired, maintained, managed, developed and protected many
of the relevant resources. But these interests do not even closely approximate
the “complete control” maintained by the demise charterer. It could not be said
that the states have taken over the property at issue “lock, stock and barrel.”
Bayou Lacombe, 597 F.2d at 473 n.3 (internal quotation marks and citation
omitted). Rather, federal law places the bulk of the power here in the hands of
the federal government. The Mexican Constitution vests ownership of “lands
and waters within the boundaries of national land territory” in the “Nation.”
Mexican Constitution, Article 27. The GLEBEP gives the federal government
power over “matters affecting the ecological balance . . . originating . . . in areas
beyond the jurisdiction of any State.” See GLEBEP, Article 5. The GLW
provides that only the federal government, as relevant here, can bring an
action “for damage caused to wildlife and its habitat.” See GLW, Article 107.
The state constitutions, the above-listed laws, and Plaintiffs’ cited affidavits
bespeak a role for the states in managing some of the country’s property. But
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they do not provide the Mexican States with the crucial proprietary interest
for purposes of Robins Dry Dock. 16
V. Conclusion
We hold that the Robins Dry Dock doctrine bars recovery in this case for
the Mexican States, and therefore AFFIRM the district court’s decision.
16 Federal primacy in the environmental arena is further highlighted by the parallel
lawsuit brought by the Mexican federal government seeking damages that risk duplicating
those potentially awarded in this litigation. See Amoco Transp., 768 F.2d at 668–69
(recognizing that concerns about double recovery lie at the heart of Robins Dry Dock).
Plaintiffs attempt to characterize that suit as evidence of the concurrent authority exercised
by the states and the federal government. But it would be an exercise in futility to separate
damages in the one case from those in the other when the complaints allege very similar
harm. Compare Complaint at 37, United Mexican States v. BP Exploration & Prod. Inc. et al.,
No. 2:13-cv-01441-CJB-SS (E.D. La. Apr. 19, 2013), ECF No. 1 (seeking relief for, inter alia,
preventative and monitoring activities, economic damages, and damages to natural
resources), with, e.g., First Amended Complaint at 22, 28, State of Quintana Roo v. BP, PLC
et al., No. SA10CA0763 OG (W.D. Tex. Nov. 8, 2010), ECF No. 1 (praying for relief for, inter
alia, response costs, economic damages, and damage to natural resources).
20