## Facts

- A 1979 blowout at the IXTOC I exploratory well in the Bay of Campeche caused a large oil spill.
- Oil from the spill reached Texas coastal waters and shorelines, allegedly damaging fisheries, beaches, and coastal property.
- Sedco, Inc., owner of the mobile offshore drilling unit *Sedco 135*, filed a federal admiralty limitation-of-liability proceeding seeking exoneration or limitation.
- Numerous U.S. private and governmental claimants asserted pollution-related damages within the consolidated proceeding.
- Petróleos Mexicanos (Pemex), Mexico’s national oil company and a state entity, was named as a defendant and third-party defendant.
- Permargo, a privately owned Mexican drilling contractor involved in the drilling operations, was also brought into the proceeding and challenged personal jurisdiction in Texas.

## Issues

1. Whether Pemex qualifies as a “foreign state” or agency/instrumentality under the Foreign Sovereign Immunities Act (FSIA) and is presumptively immune from suit.
2. Whether FSIA exceptions remove Pemex’s immunity, including (a) the commercial-activity exception for acts abroad causing a “direct effect” in the United States, and (b) the non-commercial tort exception for certain torts causing property damage “occurring in the United States.”
3. Whether Texas may exercise personal jurisdiction over Permargo under the Texas long-arm statute and constitutional due process.

## Decision

- The court held Pemex is an agency/instrumentality of Mexico and thus a “foreign state” under FSIA.
- The court ruled Pemex’s exploratory drilling in Mexico’s waters was sovereign rather than commercial activity; the commercial-activity exception did not apply.
- The court ruled the non-commercial tort exception did not apply because the relevant tortious acts occurred in Mexican waters, even though injuries were alleged in Texas.
- Pemex’s motion to dismiss was granted for lack of jurisdiction based on sovereign immunity.
- The court held Permargo was “doing business” in Texas under the long-arm statute and had sufficient minimum contacts with Texas.
- Permargo’s motion to dismiss for lack of personal jurisdiction was denied.

## Legal Principles

- Under FSIA, an entity that functions as an agency/instrumentality of a foreign government is presumptively immune from suit in U.S. courts unless a statutory exception applies.
- Resource-exploration activity conducted by a foreign state entity in the state’s own waters, tied to governmental control of mineral resources and national policy, may be treated as sovereign (not “commercial activity”) for FSIA purposes.
- The FSIA non-commercial tort exception focuses on the location of the foreign state’s tortious act or omission; downstream injury in the United States from acts occurring abroad does not, by itself, satisfy the exception.
- A foreign private contractor may be subject to personal jurisdiction in Texas when its Texas-related business activities satisfy the long-arm statute and the claims arise from contacts reflecting purposeful availment consistent with due process.

## Conclusion

The court dismissed Pemex as immune under FSIA because neither the commercial-activity nor tort exceptions applied to conduct occurring in Mexican waters, while allowing claims to proceed against Permargo because its Texas-related contacts supported personal jurisdiction under the Texas long-arm statute and due process.


In re Sedco, Inc., 543 F. Supp. 561 (S.D. Tex. 1982)