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In re In re Complaint of Sedco, Inc.

Citation: 12 ELR 20635
No. Nos. H-79-1880 et al., 543 F. Supp. 561/(S.D. Tex., 03/30/1982)

The district court holds that (1) Petroleos Mexicanos (Pemex), the national oil company of Mexico, is immune from suit under the Foreign Soverign Immunities Act (FSIA), 28 U.S.C. § 1602 et seq., (2) the court may exercise personal jurisdiction over Permargo, a private Mexican drilling company, and (3) a semisubmersible drilling rig is a "vessel" within the meaning of the Limitation of Liability Act, 46 U.S.C. § 181 et seq. Following the 1979 IXTOC I oil well disaster and resultant Bay of Campeche oil spill, public and private plaintiffs brought suit against Pemex, Permargo, and Sedco, Inc., lessor to Permargo of the SEDCO 135 drilling rig destroyed in the blowout. In addition, Sedco filed an action under the Limitation of Liability Act and a third-party complaint against Permargo. The court rules that Pemex is a foreign state within the meaning of the FSIA since it is an instrumentality of the Mexican government and that its activities in connection with the IXTOC I well blowout were non-commercial and discretionary in nature. Next, the court rules that Permargo is amenable to service of process under the Texas long-arm statute as it was the drilling contractor on the well at the time of the blowout and since the cause of action arose out of its alleged negligence in that capacity. In addition, the court's exercise of personal jurisdiction over Permargo is in accord with constitutional due process because Permargo purposefully availed itself of the benefits and protection of Texas law. The court also holds that it has subject matter and personal jurisdiction over Sedco's third-party complaint against Permargo and therefore may exercise ancillary jurisdiction over the impleaded claim. Finally, the court finds that the SEDCO 135 semisubmersible rig exhibited the characteristics of a "vessel" under the Limitation of Liability Act, in that it was (1) constructed to be and was, in fact, used in navigation as a means of transporting a fixed cargo, (2) not permanently attached to the shore or seabed, and (3) subject to the perils of the sea.

[The pleadings in this case are summarized at ELR PEND. LIT. 65657 and 65683; for a discussion of the liability issues surrounding the IXTOC I blowout, see Comment, Voyage into Uncertainty: Assigning Liability for the Bay of Campeche Oil Spill, 9 ELR 10218 (1979) — Ed.]

The full text of this opinion is available from ELR (21 pp. $3.25, ELR Order No. C-1282).

Counsel for Plaintiffs
Carol E. Dinkins, Ass't Attorney General; Wells D. Burgess
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 724-7371

Mark White, Attorney General; Brian Berwick
P.O. Box 12548, Capitol Station, Austin TX 78711
(512) 475-0425

Joseph D. Jamail
Jamail, Kolius & Mithoff
3300 One Allen Center, Houston TX 77002
(713) 651-3000

W. James Kronzer
Kronzer, Abraham, Watkins, Nichols, Ballard & Friend
800 Commerce St., Houston TX 77002
(713) 222-7211

Counsel for Defendants
Finis E. Cowan
Baker & Botts
One Shell Plaza, Houston TX 77002
(713) 229-1234

Ted Hirtz
Hirtz & McDonough
2009 Bank of the Southwest Bldg., Houston TX 77002
(713) 751-0021

Theodore C. Dimitry
Vinson & Elkins
First City Tower, Houston TX 77002
(713) 651-2222

O'Conor, J.