## Facts

- A fire occurred aboard the M/V EB II, a jack-up barge used in offshore operations connected to the East Bay Field, after crane operations accidentally tore a valve from a gas lift line.
- The incident caused multiple deaths and serious injuries to crew members and workers, leading to wrongful-death and personal-injury claims by survivors and injured parties.
- Shell Offshore, Inc. was the actual owner of the EB II at the time of the accident.
- Shell Oil Company remained the documented (record) owner of the EB II, despite a prior transfer of beneficial ownership to Shell Offshore.
- Shell Oil Company and Shell Offshore filed a federal limitation/exoneration proceeding as owners and/or owners pro hac vice and obtained an injunction staying related suits in other forums.
- Claimants sought dismissal of Shell Oil Company from the limitation action for lack of “owner” status, sought modification of the injunction to pursue state-court claims against Shell as field operator (not vessel owner), and opposed Shell’s request to extend the stay to shareholder entities.

## Issues

1. Whether Shell Oil Company, as the documented/former owner, qualified as an “owner” with standing to seek limitation or exoneration.
2. Whether claimants could proceed in state court against Shell solely in a non-vessel-owner “field operator” capacity notwithstanding the limitation injunction.
3. Whether the limitation stay could be extended to Shell’s shareholder entities alleged to have derivative exposure arising from the casualty.

## Decision

- The court denied the motions to dismiss Shell Oil Company for lack of standing and held it could invoke limitation as an “owner.”
- The court denied the motion to modify the injunction to permit state-court litigation against Shell based on an asserted non-owner “dual capacity.”
- The court granted Shell’s motion to extend the stay to Shell Petroleum Inc. and Shell Energy Resources, Inc.

## Legal Principles

- A party may maintain a limitation action if it may be held liable because of its ownership or control of the vessel; “owner” is interpreted functionally rather than limited to present beneficial ownership.
- Where alleged negligence is tied to the vessel’s operation and the casualty aboard the vessel, a claimant cannot avoid the limitation forum by recharacterizing the claim as arising solely from a separate operational role.
- The limitation stay may extend to affiliated entities, including shareholders, when their alleged exposure is derivative of the vessel owner’s interest and suits against them would risk circumventing the limitation proceeding.

## Conclusion

The court treated the documented owner as an eligible “owner” for limitation purposes, kept casualty-related claims within the limitation proceeding despite attempted dual-capacity pleading, and extended the injunction to shareholder affiliates to prevent end-runs around the limitation process.


In re Complaint for Exoneration From or Limitation of Liability of Shell Oil Co., 780 F. Supp. 1086 (E.D. La. 1991)