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Al-Qarqani v. Arab American Oil Co.

United States District Court, S.D. Texas, Houston Division

August 2, 2019

Waleed Bin Khalid Abu Al-Waleed Al-Qarqani, et. al., Petitioners,
v.
Arabian American Oil Company and Aramco Services Company, Respondents.

          MEMORANDUM OPINION AND ORDER

          Gray H Miller, Senior United States District Judge

          Pending before this court is respondent Aramco Services Company's (“ASC”) motion to dismiss. Dkt. 16 Petitioners responded. Dkt. 28. ASC replied. Dkt. 32. Having considered the motion, response, reply, and applicable law, the court is of the opinion that the motion to dismiss should be GRANTED.

         I. Background

         In 1933, the Saudi Arabian government and Standard Oil Company of California (“SoCal”), now Chevron, signed a Concession Agreement (“Concession Agreement”). Dkt. 9 at 5. The Concession Agreement gave SoCal surface rights to land in Saudi Arabia to search for oil. Id. at 6. Arabian American Oil Company (“Aramco”) was organized during this time as a subsidiary of SoCal. Dkt. 28 at 11. ASC, once known as Aramco Realty Company, was organized in 1950 and was a subsidiary of Aramco, which was a subsidiary of SoCal. Dkt. 28 at 10; Dkt. 29-4; Dkt. 29-3.

         By 1988, the Saudi government had bought all of Aramco's assets and established the Saudi Arabian Oil Company (“Saudi Aramco”). Dkt. 9 at 6; Dkt. 28 at 11. Two years later, in 1990, Aramco dissolved. Dkt. 16-4; Dkt. 16-3 (Horton Declaration).

         Petitioners are the heirs, beneficiaries and titleholders of the lands that were subject to the Concession Agreement. Dkt. 9 at 4. In June 2015, Petitioners obtained an arbitral award against Chevron entities, which included Chevron U.S.A. and Chevron Saudi Arabia, for failure to compensate Petitioners for the use of the land subject to the Concession Agreement. Dkt. 9-2 at 6. The arbitral award also purported to bind Aramco, which at that time had already dissolved. Id. Petitioners brought the present suit seeking to confirm the arbitral award against ASC. Id. at 7. Petitioners allege that ASC is a subsidiary of Aramco. Id. at 2. ASC has moved to dismiss the enforcement of this arbitral award under FRCP 12(b)(1) and FRCP 12(b)(6) because it was not a party to the arbitration agreement. Dkt. 16.

         II. Standard of Review

          A. Lack of Subject Matter Jurisdiction

         Rule 12(b)(1) allows a party to seek dismissal of an action for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Federal courts “have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331 (2013). Federal-question jurisdiction “exists only in those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law.” Willis of Tex., Inc. v. Stevenson, No. H-09-cv-0404, 2009 WL 7809247, at *4 (S.D. Tex. May 26, 2009) (Ellison, J.).

         “In determining whether the court has subject matter jurisdiction, [it] must accept as true the allegations set forth in the complaint.” Crane v. Johnson, 783 F.3d 244, 250-51 (5th Cir. 2015). “A trial court may find that subject matter jurisdiction is lacking based on ‘(1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.'” Wolcott v. Sebelius, 635 F.3d 757, 762 (5th Cir. 2011) (quoting Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996)).

         B. Failure to State a Claim

          Rule 8(a)(2) requires that the pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A party against whom claims are asserted may move to dismiss those claims when the nonmovant has failed “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6).

         “To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to state a claim to relief that is plausible on its face.'” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007)). “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555 (citations omitted). While the allegations need not be overly detailed, a plaintiff's pleading must provide the grounds for his entitlement to relief. Id. That “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id.; see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937 (2009). “[C]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.” Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993). Instead, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

         Evaluating a motion to dismiss is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. “Ultimately, the question for a court to decide is whether the complaint states a valid claim when viewed in the light most favorable to the plaintiff.” NuVasive, ...


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