TOTAL E&P USA, Inc. v. Marubeni Oil & Gas (USA), Inc.

RESPONSE to 161 Objections to Report and Recommendations

S.D. Tex.June 29, 2018

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION TOTAL E&P USA, INC. * CIVIL ACTION NO. Plaintiff * 4:16-cv-02671 * v. * JUDGE NANCY ATLAS * MARUBENI OIL & GAS (USA) INC. * Defendant * **************************************** MARUBENI OIL & GAS (USA) LLC’S RESPONSE TO TOTAL E&P USA, INC.’S OBJECTIONS TO THE REPORT AND RECOMMENDATION ON CROSS MOTIONS REGARDING CHOICE OF LAW Marubeni Oil & Gas (USA) LLC (“MOGUS”) hereby responds to the objections made by Total E&P USA, Inc. (“TOTAL”)1 to the well-reasoned Report and Recommendation on Choice of Law by Magistrate Judge Palermo.2 TOTAL’s objections lack merit. Judge Palermo correctly concluded that Alabama law applies to this dispute in accord with controlling Fifth Circuit and other relevant jurisprudence. For the reasons discussed below, as well as those set forth in MOGUS’s underlying choice of law briefs,3 the Court should adopt Judge Palermo’s Report and Recommendation. 1 Dkt. 161. 2 Dkt. 159. 3 MOGUS hereby adopts and incorporates by reference its Motion for Partial Summary Judgment on Choice of Law (Dkt. 93), Reply in Support (Dkt. 122), and Opposition to TOTAL’s Motion to Apply Louisiana Law (Dkt. 105). Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 1 of 21 ii TABLE OF CONTENTS Page SUMMARY OF THE ARGUMENT .................................................................................. 1 STATEMENT OF THE ISSUES ........................................................................................ 4 NATURE AND STAGE OF THE PROCEEDINGS .......................................................... 4 STANDARD OF REVIEW ................................................................................................. 4 LAW AND ARGUMENT ................................................................................................... 5 I. The Court Should Accept Judge Palermo’s Recommendations. ............................... 5 II. The 2006 Administrative Map Cannot Be “Dispositive” or “Controlling” ............... 6 III. The Snyder/Reeves Factors and Evidence Support Alabama Adjacency ............... 10 CONCLUSION ................................................................................................................. 15 CERTIFICATE OF SERVICE ........................................................................................... 17 Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 2 of 21 iii TABLE OF AUTHORITIES Page(s) Cases Brown v. Total E & P USA, Inc., No. 07-8133 (E.D. La. June 12, 2008) ..................................................................... 8 Cupit v. Whitley, 28 F.3d 532, 535 (5th Cir. 1994) .............................................................................. 2 Danos & Curole Marine Contractors, Inc. v. BP Am. Prod. Co., 61 F. Supp. 3d 679 (S.D. Tex. 2014) (J. Miller) ............................................. passim Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc) .................................................................... 4 Foley v. Texas Dep’t of Family & Protective Servs., No. 12-270, 2013 WL 84852 (E.D. Tex. Jan. 7, 2013) .................................... 4, 5, 6 Forcucci v. United States Fidelity and Guaranty Company, 11 F.3d 1 (1st Cir. 1993) .......................................................................................... 4 Gates Gates v. Allstate Texas Lloyd’s, 267 F. Supp. 3d 861 (W.D. Tex. 2016) ................................................................ 4, 6 Jimenez v. Deutsche Bank Nat’l Tr. Co., No. 11-1110, 2013 WL 12100577 (W.D. Tex. Apr. 17, 2013), aff’d sub nom. 552 Fed. Appx. 379 (5th Cir. 2014) ............................................. 5, 6 Lewis v. Helmerich & Payne Int’l Drilling Co., No. 13-5995, 2015 WL 1040458 (E.D. La. Mar. 10, 2015) …………………13, 15 Nettles v. Wainwright, 677 F.2d 404 (5th Cir. 1982) (en banc) ................................................................ 4, 6 Noel v. Freeport-McMoran Oil & Gas, LLC, No. 15-2411, 2017 WL 515072 (E.D. La. Feb. 8, 2017) ....................................... 13 Phillips v. Williams Oilfield Servs.-Gulf Coast Co., LLP, No. 03-1984, 2006 WL 1098923 (W.D. La. Apr. 21, 2006) .................................. 13 Reeves v. B & S Welding, Inc., 897 F.2d 178 (5th Cir. 1990) ........................................................................... passim Snyder Oil Corp. v. Samedan Oil Corp., 208 F.3d 521 (5th Cir. 2000) ........................................................................... passim Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 3 of 21 iv United States v. Wilson, 864 F.2d 1219 (5th Cir. 1989) .................................................................................. 5 Statutes 28 U.S.C. § 636(b)(1) .......................................................................................................... 4 3 U.S.C. § 301 ................................................................................................................. 2, 7 43 U.S.C. § 1333(a)(2)(A) .......................................................................................... passim 43 U.S.C. § 1344 ................................................................................................................. 7 43 U.S.C. § 1345 ................................................................................................................. 7 Regulations 71 Fed. Reg. 127 (Jan. 3, 2006) ....................................................................................... 7, 8 Fed. R. Civ. P. 72(b)(3) ....................................................................................................... 4 Other Authorities H.R. 1165 (113th Congress) ................................................................................................ 8 H.R. 1663 (114th Congress) ................................................................................................ 8 H.R. 3302 (112th Congress) ................................................................................................ 8 H.R. 4301 (112th Congress) ................................................................................................ 8 H.R. 5899 (111th Congress) ................................................................................................ 8 Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 4 of 21 1 SUMMARY OF THE ARGUMENT Consistent with Fifth Circuit jurisprudence, Magistrate Judge Palermo correctly concluded that Alabama law applies in a well-reasoned, carefully considered 24-page Report and Recommendation. Judge Palermo properly analyzed all evidence presented by the parties, and correctly applied the factors identified in Reeves v. B & S Welding, Inc.4 and Snyder Oil Corp. v. Samedan Oil Corp.5 As instructed by Snyder, Judge Palermo found TOTAL’s evidence less probative than the agency determinations submitted by MOGUS because such evidence fails to follow the dictates of 43 U.S.C. § 1333(a)(2)(A).6 Judge Palermo also properly considered prior case law, which has unanimously held that blocks in the vicinity of the Canyon Express Assets are adjacent to Alabama – even though some are geographically closer to Louisiana. The Fifth Circuit itself, in the pinnacle Snyder case, concluded that Main Pass 261 (“MP 261”), the northernmost and westernmost endpoint of the Canyon Express Pipeline System (“CEPS”), is adjacent to Alabama.7 Judge Palermo’s findings are correct and should be adopted by this Court. In its original briefing, TOTAL presented various – albeit unpersuasive – items of evidence to support its underlying motion requesting the application of Louisiana law. Although Reeves and Snyder require a four-factor analysis, each of which was thoroughly 4 Reeves v. B & S Welding, Inc., 897 F.2d 178 (5th Cir. 1990). 5 Snyder Oil Corp. v. Samedan Oil Corp., 208 F.3d 521 (5th Cir. 2000). 6 See id. at 525 (one agency determination “may be more probative if it is believed that the agency more closely followed the dictates of § 1333(a)(2)(A) . . . .”). 7 MP 261 is home to the Canyon Express Station, which is where all production transported by the CEPS was processed. MP 261 is geographically closer to Louisiana than any of the other “Assets” (as defined in Dkt. 159, p. 2), including the CEPS. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 5 of 21 2 discussed by Judge Palermo, TOTAL focuses on only one factor – agency determinations. TOTAL now abandons all of its evidence in support of this factor except for the 2006 “Administrative Map” created by the Minerals Management Service (“MMS” n/k/a Bureau of Ocean Energy Management (“BOEM”)).8 TOTAL, for the first time in its objections, claims that the Administrative Map should control this and all other Outer Continental Shelf Lands Act (“OCSLA”) choice of law disputes.9 TOTAL’s proposal, however, has already been rejected by this Court in Danos & Curole Marine Contractors, Inc. v. BP Am. Prod. Co. for two unassailable reasons: the Administrative Map does not constitute the President’s official projections and is inconsistent with the dictates of OCSLA.10 The authority to project official state boundaries does not belong to the MMS, it belongs to – and only to – the “President” under § 1333(a)(2)(A). Since being vested with this power in 1953, the President has not published the boundaries. Moreover, within the last 64 years, the President has never delegated this power to any executive branch agency, including the MMS or BOEM. Such delegation would require the President to issue a formal writing and publication in the Federal Register authorizing the MMS/BOEM to act under § 1333(a)(2)(A), which has not happened.11 8 The map’s full title is “State Offshore Administrative Boundaries – Gulf of Mexico Region.” The original MMS version of the map is available at Dkt. 113-6. The Administrative Map was later reissued by BOEM, and that version is available at Dkt. 159, Appx. “D”. Moreover, a version of the Administrative Map imposed over the Gulf of Mexico lease blocks is available at Dkt. 159, Appx. “C”. 9 In addition to being legally unsound, TOTAL’s new argument that only one piece of evidence should govern may be deemed waived by this Court because this argument was not presented to Judge Palermo. See Cupit v. Whitley, 28 F.3d 532, 535 (5th Cir. 1994) (a party who objects to the magistrate judge’s report waives legal arguments not made in the first instance before the magistrate judge). 10 61 F. Supp. 3d 679 (S.D. Tex. 2014) (J. Miller). 11 See 3 U.S.C. § 301. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 6 of 21 3 Despite the fact that the MMS had no authority or intent to issue formal projections under § 1333(a)(2)(A) when creating the Administrative Map, TOTAL claims that the map should be attributed the same “definitive force” that the President’s projections would have. The Administrative Map is no more special than the dozens of other maps created by the MMS (now BOEM) or the agency maps already analyzed by the Fifth Circuit in Snyder. If the map truly had the power to resolve OCSLA choice of law disputes as TOTAL contends, then it certainly would have been embraced by some court within the 12 years of its creation. However, aside from the Danos court and Judge Palermo – which both rejected the map’s probative value – no court since 2006 has considered the map, much less adopted it as determinative evidence. Because the President has not published the projected lines required by § 1333(a)(2)(A), courts after 2006 continue to follow the guidance imparted by the Fifth Circuit, which requires a consideration of “all relevant evidence” and an analysis of the four adjacency factors.12 The court does not have “free reign arbitrarily to elevate one bit of relevant evidence to a determinative position.”13 Thus, Judge Palermo’s determination that the Administrative Map is not probative or controlling is correct. As TOTAL makes no other substantive objections to Judge Palermo’s findings, this Court should adopt them and confirm that Alabama law applies. 12 Snyder, 208 F.3d at 525 (emphasis added). See also Reeves, 897 F.2d 178 (5th Cir. 1990). 13 Snyder, 208 F.3d at 525, n.3. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 7 of 21 4 STATEMENT OF THE ISSUES Did Judge Palermo err in holding that the CEPS is adjacent to Alabama and that, as a result, Alabama law applies to this dispute? No. The totality of the evidence and an analysis of the Snyder/Reeves factors establish that Alabama is the adjacent state. NATURE AND STAGE OF THE PROCEEDINGS MOGUS does not dispute TOTAL’s summary of the nature and stage of the proceedings. STANDARD OF REVIEW Pursuant to Rule 72(b)(3) of the Federal Rules of Civil Procedure: The district judge must determine de novo any part of the magistrate judge’s disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.14 Although the review is de novo, the Court “should be slow to reverse a magistrate’s careful conclusions, thoughtfully reviewed.”15 “Parties filing objections must specifically identify those findings” to which they object.16 “Frivolous, conclusive or general objections need not be considered by the district 14 See also 28 U.S.C. § 636(b)(1) (“A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made”). 15 Forcucci v. United States Fidelity and Guaranty Company, 11 F.3d 1 (1st Cir. 1993). 16 Foley v. Texas Dep’t of Family & Protective Servs., No. 12-270, 2013 WL 84852, at *1 (E.D. Tex. Jan. 7, 2013) (quoting Nettles v. Wainwright, 677 F.2d 404, 410, n.8 (5th Cir. 1982) (en banc), overruled on other grounds by Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415 (5th Cir. 1996) (en banc)). See also Gates Gates v. Allstate Texas Lloyd’s, 267 F. Supp. 3d 861, 864 (W.D. Tex. 2016). Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 8 of 21 5 court.”17 “Findings to which no specific objections are made do not require de novo review; the Court need only determine whether the report and recommendation is clearly erroneous or contrary to law.”18 LAW AND ARGUMENT I. The Court Should Accept Judge Palermo’s Recommendations. This Court’s review of the record will show that Judge Palermo correctly applied OCSLA and relevant Fifth Circuit jurisprudence. In this case, the parties agree that OCSLA requires that the Court apply the substantive law of the “adjacent state.”19 Because the President has not published boundary lines described in OCSLA,20 the Fifth Circuit requires courts to review four factors to determine the adjacent state, namely: (i) geographic proximity, (ii) considerations of other federal agencies as to which state was adjacent to a particular offshore block, (iii) prior court determinations, and (iv) projected boundaries.21 In assessing these four factors, the Court must consider “all relevant evidence”22 and does not have “free reign arbitrarily to elevate one bit of relevant evidence to a determinative position.”23 Consistent with Fifth Circuit guidance, Judge Palermo thoroughly analyzed “all relevant evidence” presented by the parties and properly applied the evidence to the 17 Foley, 2013 WL 84852, at *1. 18 Jimenez v. Deutsche Bank Nat’l Tr. Co., No. 11-1110, 2013 WL 12100577, at *1 (W.D. Tex. Apr. 17, 2013), aff’d sub nom. 552 Fed. Appx. 379 (5th Cir. 2014) (citing United States v. Wilson, 864 F.2d 1219, 1221 (5th Cir. 1989)). 19 43 U.S.C. § 1333(a)(2)(A). 20 Id. 21 See Reeves, 897 F.2d 178; Snyder, 208 F.3d. 521. 22 Snyder, 208 F.3d at 525 (emphasis added). See also Reeves, 897 F.2d 178 (5th Cir. 1990). 23 Snyder, 208 F.3d at 525, n.3. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 9 of 21 6 Snyder/Reeves factors. Upon careful consideration of each of the factors, Judge Palermo correctly concluded that Alabama law applies to this dispute. This Court should adopt Judge Palermo’s Report and Recommendation in its entirety. II. The 2006 Administrative Map Cannot Be “Dispositive” or “Controlling”. The only Snyder factor substantively addressed by TOTAL in its objections is the second factor, agency determinations.24 TOTAL imagines that, if given the chance, the Fifth Circuit would deem the Administrative Map “dispositive,” thereby transforming the choice of law analysis into a simple matter. TOTAL’s proposal, however, is fundamentally flawed because the Administrative Map does not constitute the President’s official OCSLA projections. The “President” is the only person with authority to unequivocally pair a particular Outer Continental Shelf (“OCS”) area with a particular adjacent state under § 1333(a)(2)(A). Although no President in the last 64 years has ever made the projections, TOTAL insists that the Administrative Map created by the MMS in 2006 should be attributed “definitive force,” despite the fact that the President never delegated any authority to the MMS (or any of its successor agencies) to make boundary projections under § 1333(a)(2)(A). If the President were to do so, such delegation would need to be explicit as required by Section 301 of Title 3 of the United States Code: 24 TOTAL makes no specific objections to Judge Palermo’s conclusion that the first Snyder factor is not controlling, nor does it make any specific objections to her reasoning or conclusion that the third and fourth factors weigh in favor of Alabama law. Rather, in a single paragraph consisting of only a few sentences, TOTAL concludes that if the Administrative Map is “the only true boundary projection” then the third and fourth factors also weigh in favor of Louisiana law. Dkt. 161, pp. 13-14. These types of non-specific, general, and conclusory objections to a magistrate’s ruling need not be considered de novo by the Court. See Foley, 2013 WL 84852, at *1; Nettles, 677 F.2d at 410, n.8; Gates Gates, 267 F. Supp. 3d at 864. At most, the Court may consider them under a clearly erroneous standard. See Jimenez, 2013 WL 12100577, at *1. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 10 of 21 7 The President of the United States is authorized to designate and empower the head of any department or agency in the executive branch . . . to perform . . . any function which is vested in the President by law . . . Such designation and authorization shall be in writing [and] shall be published in the Federal Register . . . .25 There is no writing or other publication in the Federal Register by which the President granted the MMS with authority to make official projections under OCSLA. In addition to lacking the required authority under § 1333(a)(2)(A), the MMS never intended to establish official adjacency projections when creating the Administrative Map. As implied by its title, the MMS intended for the map to serve internal “administrative” purposes.26 This is confirmed by the January 3, 2006 Notice that the MMS published in the Federal Register (71 Fed. Reg. 127) when it promulgated the map, which stated that the map’s purpose was to: Set[] Federal OCS offshore administrative boundaries beyond State submerged lands for Department of Interior planning, coordination, and administrative purposes.27 Nowhere does the Notice mention § 1333(a)(2)(A) or state adjacency issues. Instead, in the January 3, 2006 Notice, the MMS specified that it concerned two wholly unrelated sections of OCSLA: “section 18” (which correlates with § 1344 - OCS leasing program) and “section 19” (which correlates with § 1345 - Coordination and consultation with 25 3 U.S.C. § 301 (emphasis added). 26 The full title of the map is “State Offshore Administrative Boundaries – Gulf of Mexico Region.” 27 See 71 Fed. Reg. 127 (Jan. 3, 2006) (the “Notice”) (emphasis added), available at Dkt. 113-6. Sections 18 and 19 of OCSLA are available at Dkt. 122-2. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 11 of 21 8 affected State and local governments).28 Neither provision impacts the choice of law analysis.29 Moreover, in at least four sessions since the Administrative Map was published, Congress has specifically rejected attempts to adopt MMS maps as official § 1333(a)(2)(A) projections.30 These attempts would be unnecessary if the Administrative Map were truly a binding declaration by the executive branch or the President. The map’s significance is also undermined by other maps and authorities presently used by BOEM, which have boundaries that contradict those in the Administrative Map. For instance, an MMS publication issued one year after the Administrative Map (NTL 2007-G20) indicates that the CEPS is adjacent to Alabama.31 Likewise, BOEM’s current OCS Plans Map and ROW Map place the CEPS within Alabama waters.32 If the MMS or BOEM had intended that the Administrative Map be the defining evidence for adjacency, then these subsequent boundary inconsistencies should not exist. TOTAL’s position that the Administrative Map controls is further undermined by conflicting claims TOTAL made in prior cases. In Brown v. Total E & P USA, Inc., two years after the MMS published the Administrative Map, TOTAL argued successfully 28 See Notice at Dkt. 113-6. For the Court’s reference, § 1333(a)(2)(A) correlates with Section 4 of OCSLA. 29 See Sections 18 and 19 of OCSLA at Dkt. 122-2. 30 See H.R. 5899 (111th Congress), available at: https://www.govtrack.us/congress/bills/111/hr5899/text; H.R. 3302 and H.R. 4301 (112th Congress), available at: https://www.govtrack.us/congress/bills/112/hr3302/text and https://www.govtrack.us/congress/bills/112/hr4301/text; H.R. 1165 (113th Congress), available at: https://www.govtrack.us/congress/bills/113/hr1165/text; H.R. 1663 (114th Congress), available at: https://www.govtrack.us/congress/bills/114/hr1663/text. 31 See Dkt. 99-5. 32 The Plans Map and ROW Map are defined in Judge Palermo’s Report and Recommendation at Dkt. 159, p. 8, n. 8. The Plans Map is available at Dkt. 159, Appx. “A” and the ROW Map is available at Dkt. 159, Appx. “C”. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 12 of 21 9 that Viosca Knoll Block 823 was adjacent to Alabama.33 However, according to the Administrative Map, Viosca Knoll 823 is located in Louisiana waters.34 If the Administrative Map were actually “controlling evidence” as TOTAL now insists, TOTAL would have been forced to concede that Louisiana was the adjacent state in Brown. The Administrative Map is no more – and in fact, far less – compelling than other MMS/BOEM sources or the MMS maps analyzed by the Fifth Circuit in Snyder. Moreover, the Snyder court has already categorically rejected the argument that one piece of evidence can be dispositive to an OCSLA adjacency analysis, stating: the Court does not have “free reign arbitrarily to elevate one bit of relevant evidence to a determinative position.”35 Instead of one determinative piece of evidence, the Snyder court analyzed various “charts, maps, notices, and reports published by the MMS, the Bureau of Land Management, NOAA, and the Coast Guard.”36 The totality of the evidence led the court to find MP 261 – the hub of the Canyon Express Assets – adjacent to Alabama. If the Administrative Map were actually controlling as TOTAL suggests, it would have been adopted by some court within the last twelve years. However, aside from the Danos court and Judge Palermo – which both rejected the map’s probative value – no court since 2006 has even considered the map, much less adopted the map as determinative evidence. Because the map does not constitute the President’s official projections under § 33 See TOTAL’s “Pre-Trial Memorandum Regarding Applicable Law Under OCSLA” filed in Brown v. Total E & P USA, Inc., Case No. 07-8133, Dkt. 57 (E.D. La. June 12, 2008). 34 See Dkt. 159, Appx. “C”, which is the Administrative Map imposed over the Gulf of Mexico lease blocks. 35 Snyder, 208 F.3d at 525, n.3. 36 Id. at 526. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 13 of 21 10 1333(a)(2)(A), courts must continue to assess “all relevant evidence”37 which is precisely what Judge Palermo did in her Report and Recommendation. III. The Snyder/Reeves Factors and Evidence Support Alabama Adjacency. When “all relevant evidence” is properly weighed and considered, the Administrative Map is not probative of adjacency. Consistent with this Court’s earlier decision in Danos, Judge Palermo properly determined that the Administrative Map was “not persuasive” and that the Snyder/Reeves factors support application of Alabama law. Factor 1: Geographic Proximity. While the CEPS appears to be slightly closer to Louisiana than Alabama, Judge Palermo properly determined that geographic proximity is not conclusive of the adjacent state law application, and TOTAL has not specifically objected to this finding. Judge Palermo’s finding is consistent with the Fifth Circuit’s holding in Snyder, which stated: “We cannot apply the formalistic test desired by [plaintiff], for neither logic nor authority allows this court arbitrarily to disregard all relevant evidence except that of geographic proximity.”38 The Snyder court considered MP 261 to be closer to Louisiana than Alabama, but determined Alabama to be the adjacent state based on the other three factors described below.39 Here, MOGUS does not dispute that geographic proximity leans slightly in favor of Louisiana adjacency. However, because the three other Snyder/Reeves factors weigh in favor of the conclusion that Alabama is the adjacent state, Alabama law should govern. 37 Id. at 525 (emphasis added) (“As long as the President fails to perform and publish the § 1333(a)(2)(A) calculations, we must follow Reeves in considering all relevant evidence.”). 38 Id. 39 See id. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 14 of 21 11 Factor 2: Agency Determinations. Judge Palermo properly considered the various agency determinations presented by the parties, including the Administrative Map. Consistent with the Fifth Circuit in Snyder, Judge Palermo determined that the Administrative Map is less probative because it does not extend the Mississippi and Alabama boundaries to the outer margin of the OCS as dictated by § 1333(a)(2)(A), which provides in relevant part:40 . . . [T]he civil and criminal laws of each adjacent State . . . are declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf . . .41 The maps and other evidence submitted by MOGUS more closely follow the statute because they extend the boundaries of “each adjacent State,” including Mississippi and Alabama, to the outer margins of the OCS. For example, MOGUS submitted a Plans Map, which is currently used by BOEM to depict the “affected states” for activities in the OCS.42 Compared to the Administrative Map, the Plans Map provides greater detail and extends the state borders to the OCS following a natural seaward extension as required by § 1333(a)(2)(A). The Plans Map also fairly allocates the Gulf waters to the states consistent with their share of the coastline. TOTAL cannot deny that the Plans Map is more consistent with § 1333(a)(2)(A), so it instead criticizes the map has having “overlapping and non- 40 Id. at 525 (an agency decision “may be more probative if it is believed that the agency more closely followed the dictates of § 1333(a)(2)(A) . . . .”). 41 43 U.S.C. § 1333(a)(2)(A) (emphasis added). 42 The Plans Map is available at Dkt. 159, Appx. “A.” Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 15 of 21 12 exclusive designation of states.” The Plans Map, however, is simply a source to illustrate the agency’s view of adjacency, not to establish the official boundaries for purposes of § 1333(a)(2)(A). That is, again, the job of the President. Even more fatal to TOTAL’s criticism, the Plans Map clearly depicts all of the Canyon Express Assets, including the CEPS, as being exclusively in Alabama waters. Thus TOTAL’s “overlapping” critique is not an issue here. In addition to the Plans Map, Judge Palermo found the ROW Map submitted by MOGUS to be more persuasive than TOTAL’s Administrative Map.43 The ROW Map is also presently used by BOEM to show the “affected states” for OCS activities. Unlike the Administrative Map, the ROW Map extends state borders to the outer margins of the OCS, which is more consistent with the dictates of § 1333(a)(2)(A). As properly concluded by Judge Palermo and the Danos court, MOGUS’s evidence is more probative according to Snyder and weighs in favor of Alabama as the adjacent state. Moreover, in addition to the BOEM sources submitted by MOGUS, the agency decisions described by the Fifth Circuit in Snyder support a finding that the CEPS is offshore Alabama. Snyder, which involved MP 261 – the endpoint of CEPS and the OCS lease block geographically closest to Louisiana – noted that the Coast Guard considered MP 261 as falling within its Alabama district.44 According to Snyder, MP 261 was also included in the U.S. Geological Survey’s “Mississippi-Alabama” area of the OCS.45 Given 43 The ROW Map is available at Dkt. 159, Appx. “B.” 44 Snyder, 208 F.3d at 526. 45 Id. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 16 of 21 13 the location of the CEPS relative to MP 261, the agency determinations in Snyder should apply with even greater force here. Factor 3: Prior Court Determinations. Judge Palermo properly rejected the irrelevant cases that TOTAL submitted in support of its underlying choice of law motion. TOTAL’s objections do not dispute Judge Palermo’s analysis or conclusions regarding prior court determinations. Instead, TOTAL now abandons its arguments regarding this factor and contends that all prior jurisprudence breeds “confusion and uncertainty.” TOTAL cannot produce any relevant cases because prior courts have consistently determined that nearby lease blocks – both east and west of the CEPS – are adjacent to Alabama. Those cases include Snyder, in which the Fifth Circuit held that MP 261 is adjacent to Alabama.46 Other courts have determined that blocks within Viosca Knoll – which the CEPS traverses – are adjacent to Alabama. These cases, which include Lewis and Danos, were decided after the Administrative Map was first published in 2006, yet the courts still applied the Snyder/Reeves factors.47 TOTAL’s request to elevate the Administrative Map to a determinative position would effectively ignore Fifth Circuit jurisprudence providing that no one piece of evidence can control absent the President’s official projections under § 1333(a)(2)(A). The adjacency determinations by several prior courts would also be wrong given that the 46 Id. See also Phillips v. Williams Oilfield Servs.-Gulf Coast Co., LLP, No. 03-1984, 2006 WL 1098923, at *2 (W.D. La. Apr. 21, 2006) (also applying Alabama law as adjacent state law to MP 261). 47 See Lewis v. Helmerich & Payne Int’l Drilling Co., No. 13-5995, 2015 WL 1040458 (E.D. La. Mar. 10, 2015) (decided in 2015 and concerning Viosca Knoll 956); Danos, 2014 WL 6477175 (decided in 2014 and concerning Viosca Knoll 915). See also Noel v. Freeport-McMoran Oil & Gas, LLC, No. 15-2411, 2017 WL 515072 (E.D. La. Feb. 8, 2017) (decided in 2017, concerning Viosca Knoll 915, and adopting Danos findings). TOTAL does not discuss Lewis at all and argues, without support, that Danos should be summarily disregarded. Dkt. 161, p. 10. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 17 of 21 14 Administrative Map’s boundary lines are inconsistent with the ultimate adjacency determinations made in those cases. For example, the Snyder holding would no longer stand because the Administrative Map depicts MP 261 as falling within Louisiana – rather than Alabama – waters.48 The Danos case would also be bad law because the Administrative Map depicts Viosca Knoll 915 in Louisiana waters.49 Prior court determinations overwhelmingly weigh in favor of finding that Alabama is the adjacent state. TOTAL’s position is inconsistent with all precedent on this issue. Factor 4: Projected Boundaries. TOTAL essentially gives up on this factor as well and makes no specific objections to Judge Palermo’s findings or conclusions. Rather, TOTAL claims that the Administrative Map projects boundaries under OCSLA; however, TOTAL cannot dispute that the map does not extend each state’s boundaries “to the outer margin of the outer Continental Shelf” as expressly stated in § 1333(a)(2)(A) and as noted by Judge Palermo. For this factor, the Fifth Circuit has “favorably considered” a “due south” or “natural southeasterly” extension from the Mississippi-Alabama border to the outer margins of the OCS.50 In Snyder, the Fifth Circuit explained: “[I]f the Mississippi-Alabama border is extended seaward from the three mile line through the OCS, either due south or in the natural southeasterly direction of the common boundary . . . , Block 261 lies eastward of the extension and hence is in Alabama waters.”51 This Court in Danos, relying on Snyder, 48 See Dkt. 159, Appx. “C”, which is the Administrative Map imposed over the Gulf of Mexico lease blocks. 49 See id. 50 See Snyder, 208 F.3d at 528. 51 Id. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 18 of 21 15 found that a lateral extension of the states’ boundaries supported Alabama as the adjacent state to Viosca Knoll 915.52 Viosca Knoll is one block east of CEPS. Also, in Lewis, the Eastern District of Louisiana projected boundaries using, among other evidence, the Plans Map submitted by MOGUS.53 The Lewis court determined that Viosca Knoll 956, which is west of CEPS, was in Alabama waters. TOTAL cannot dispute that all of the blocks through which CEPS traverses fall east of such a projected due south or natural southeasterly extension line. Judge Palermo, therefore, properly concluded that a south seaward projected boundary supports a finding that CEPS is adjacent to Alabama. This factor, along with factors 2 and 3, heavily weigh in favor of Alabama law. CONCLUSION For the foregoing reasons and the reasons set out in MOGUS’s underlying choice of law briefs, the Court should adopt Magistrate Judge Palermo’s Report and Recommendation and apply Alabama law. 52 See Danos, 61 F. Supp. 3d at 691-92 (citations omitted) (“Specifically, in Snyder the expert found that if the Mississippi/Alabama boundary is extended seaward through the OCS in a true south or southeasterly extension, Main Pass Block 261 would be east of this boundary. Danos uses the same projected boundary, and the fact that Main Pass Block 261 is more west than Viosca Knoll Block 915, yet still adjacent to Alabama, to claim that the Marlin is also adjacent to Alabama.”). 53 Lewis, 2015 WL 1040458. Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 19 of 21 16 Respectfully submitted, LOOPER GOODWINE P.C. /s/ Paul J. Goodwine Paul J. Goodwine (Attorney-in-Charge) LA Bar No. 23757; SDTX ID No. 437800 Holly O. Thompson LA Bar No. 31277; SDTX ID No. 2953818 Taylor P. Mouledoux LA Bar No. 31889; SDTX ID No. 1581156 650 Poydras Street, Suite 2400 New Orleans, Louisiana 70130 Telephone: (504) 503-1500 Telecopier: (504) 503-1501 pgoodwine@loopergoodwine.com hthompson@loopergoodwine.com tmouledoux@loopergoodwine.com -and- SCHONEKAS, EVANS, McGOEY & McEACHIN, LLC Kyle Schonekas LA Bar No. 11817; SDTX ID No. 305350 Joelle F. Evans LA Bar No. 23730; SDTX ID No. 436275 909 Poydras Street, Suite 1600 New Orleans, LA 70112 Telephone: (504) 680-6050 Telecopier: (504) 680-6051 kyle@semmlaw.com joelle@semmlaw.com Attorneys for Marubeni Oil & Gas (USA) LLC Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 20 of 21 17 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing pleading has been served on all counsel of record for the parties via e-mail, FedEx and/or by electronic filing in the Court’s electronic filing system on this 29th day of June, 2018. /s/ Paul J. Goodwine Paul J. Goodwine Case 4:16-cv-02671 Document 164 Filed in TXSD on 06/29/18 Page 21 of 21