Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 1 of 8 PageID #: 1883
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`ELBIT SYSTEMS LAND AND C4I LTD. and
`ELBIT SYSTEMS OF AMERICA, LLC,
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`C.A. No. 2:15-cv-00037-RWS-RSP
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`JURY TRIAL DEMANDED
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`Plaintiffs,
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`v.
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`HUGHES NETWORK SYSTEMS, LLC,
`BLACK ELK ENERGY OFFSHORE
`OPERATIONS, LLC, BLUETIDE
`COMMUNICATIONS, INC., and COUNTRY
`HOME INVESTMENTS, INC.,
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`Defendants.
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`PLAINTIFFS’ SUR-REPLY TO DEFENDANT BLUETIDE COMMUNICATIONS,
`INC.’S RENEWED MOTION TO DISMISS FOR IMPROPER VENUE
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`Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 2 of 8 PageID #: 1884
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`Defendant BlueTide Communications, Inc. (“BlueTide”) does not dispute that it has
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`installed allegedly infringing satellite equipment on platforms attached to the continental shelf
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`off the coast of this District. Nor does it explain why it selectively annotated a Gulf map to show
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`distances from Freeport, in the Southern District of Texas, rather than from the more proximate
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`Port Arthur, in this District. Instead, in asking the Court to dismiss, BlueTide continues to press
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`two unavailing arguments. First, it argues against a position that Elbit has never taken, i.e., that
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`federal jurisdiction broadly extends “up to two-hundred miles over any patent issue.” Dkt. 77 at
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`2. But Elbit has not made such an argument; rather, Elbit has maintained that activities occurring
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`on platforms anchored on the outer continental shelf, which extends up to 200 miles offshore,
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`are subject to federal jurisdiction through the OCSLA. BlueTide then falls back to a second
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`incorrect argument—that the OCSLA only confers jurisdiction where the actions that gave rise to
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`the suit relate to oil and gas exploration. BlueTide has still not cited a single case standing for
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`that proposition. Glaringly, in arguing that “the grant of jurisdiction under the OCSLA does not
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`extend to patent law,” Dkt. 67 at 9, BlueTide flouts this Court’s contrary holding that “[t]he
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`Patent Act is a law of the United States extended through the OCSLA.” L.C. Eldridge Sales Co.
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`v. Azen Mf’g Pte., Ltd., No. 6:11-cv-599, 2013 U.S. Dist. LEXIS 186151, *4 (E.D. Tex. Nov. 14,
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`2013). Because BlueTide has installed infringing equipment on platforms off the coast of this
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`District that are anchored to the continental shelf, and the OCSLA extends U.S. patent law to
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`such platforms, venue is proper in this Court. BlueTide’s motion should be denied.
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`A.
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`Elbit Does Not Argue That the United States Has Unfettered Sovereign
`Rights Within 200 Miles Of American Coastline.
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`In its opening brief, BlueTide made the sweeping argument that “to the extent that the
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`Eastern District of Texas has any jurisdiction in the Gulf of Mexico, it would be along that
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`portion of the Gulf from Galveston to Port Arthur that extends to the territorial boundaries which
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`Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 3 of 8 PageID #: 1885
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`terminates twelve miles off-shore.” Dkt. 67 at 7. To rebut this incorrect premise, Elbit showed
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`that the Outer Continental Shelf (“OCS”) extends from 3 to 200 miles off the U.S. coast, and that
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`under the OCSLA, the federal government has jurisdiction and control over the OCS. See, e.g.,
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`Amber Res. Co. v. United States, 538 F.3d 1358, 1362 (Fed. Cir. 2008). Now, in its reply brief,
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`BlueTide revisits the academic question of whether the United States “enjoy[s] full sovereign
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`rights up to two hundred miles offshore,” Dkt. 77 at 1—a question this Court need not decide.
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`Rather, the more limited issue raised here is whether personal jurisdiction (and therefore venue)
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`is proper under the OCSLA where Defendants operate infringing communications equipment on
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`oil and gas platforms affixed to the continental shelf off the coast of this District.
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`B.
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`BlueTide Incorrectly Attempts to Limit the OCSLA to “Activities
`Concerning Exploring, Producing, or Developing Natural Resources.”
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`BlueTide argues that the OCSLA does not confer jurisdiction because Plaintiffs’
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`infringement allegations are not specifically related to natural resource exploration.
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`First, BlueTide’s stringent jurisdictional interpretation is legally incorrect. BlueTide
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`argue that in WesternGeco LLC v. Ion Geophysical Corp., the Court made a determination of the
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`OCSLA’s applicability by “consider[ing] whether the accused infringing activity related to the
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`exploration and production of natural resources.” Dkt. 77 at 3. But the Court in WesternGeco
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`declined to find jurisdiction for patent infringement under the OCSLA because of the location of
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`the activity in question (“vessels traversing the seas above the OCS”) not because of the type of
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`activity. 776 F. Supp. 2d 342, 371 (S.D. Tex. 2011) (emphasis added). In this case, there is no
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`dispute that Defendants engage in allegedly infringing activity on installations attached to the
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`Outer Continental Shelf.
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`BlueTide also overlooks this Court’s recent L.C. Eldridge case in arguing that
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`WesternGeco was the “lone case in which a Court analyzed the application of the OCSLA to a
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`Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 4 of 8 PageID #: 1886
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`patent infringement action.” Dkt. 77 at 3. In Eldridge, “[t]he parties dispute[d] whether the [oil]
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`rigs at issue in this case (the Accused Rigs), which operate in the Gulf of Mexico, are subject to
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`the Patent Act.” 2013 U.S. Dist. LEXIS 186151, at *4. The plaintiffs, who argued that the
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`Patent Act applies to activities on these rigs under the OCSLA, moved for partial summary
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`judgment, which this Court granted. Id. In doing so, the Court first noted that the OCSLA
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`“extends the laws of the United States to the seabed of the outer Continental Shelf and ‘devices
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`or vessels permanently or temporarily attached to the seabed’ for the purpose of developing
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`natural resources.” Id. The Court then noted that the “Patent Act is a law of the United States
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`extended through the OCSLA.” Id. Because there was “no[]dispute that the Accused Rigs
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`operate on the outer Continental Shelf,” and that “the Accused Rigs attach to the sea bed of the
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`outer Continental Shelf in order to drill,” the Court concluded that the OCSLA properly provided
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`jurisdiction over plaintiffs’ patent claims. Id. at *4–*5. The L.C. Eldridge Court engaged in no
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`analysis of whether the infringing activity related to natural resources exploration. It was the
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`location of the infringing activity that was the critical inquiry in the jurisdictional analysis, not
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`the nexus between the infringing activity and natural resource extraction.
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`BlueTide also argues that Youman v. Newfield Exploration Co., 977 F. Supp. 809 (E.D.
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`Tex. 1997), is “on point.” Dkt. 77 at 4. But there, the platform in question was located off the
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`coast of Louisiana, not Texas. 977 F. Supp. at 810. The plaintiff therefore urged this Court to
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`look to the defendant’s other business activities (unrelated to the personal injury incident) in
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`platforms off the coast of Texas, but this Court declined because those platforms were too far off
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`the coast to fall inside Texas’s territorial waters. Id. at 812.
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`Notably, the Court in Hartfield v. Offshore Oil Services, Inc. rejected a defendant’s
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`argument based on Youman very similar to BlueTide’s argument here. C.A. No. G-06-275, 2006
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`Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 5 of 8 PageID #: 1887
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`U.S. Dist. LEXIS 69469, at *10 (S.D. Tex. Sept. 14, 2006). In Hartfield, the plaintiff sustained a
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`personal injury on an exploration platform “120 miles off the coast of Texas.” Id. at *2. The
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`defendant, like BlueTide here, cited to Youman to argue that “because the platform is not within
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`three leagues of the Texas coast, the tort cannot be deemed to have occurred in Texas,” such that
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`jurisdiction would be improper. Id. at *7. In rejecting this argument, the Court first noted that
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`“unlike the case at hand, the plaintiff in the Youman case was injured in the coastal waters off of
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`the coast of Lousiana.” Id. at *10–11 (emphasis in original). The Court went on to note that
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`“[t]he Youman plaintiff tried to establish that the defendant’s operations on platforms off the
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`coast of Texas constituted the necessary minimum contacts to establish that the defendant was
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`‘doing business’ in Texas--not that the cause of action arose from the defendant’s contacts.” Id.
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`at *11. Therefore, the Hartfield court found that “the legal questions involved in Youman and
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`the case at hand are quite different.” Id. Here, as in Hartfield, BlueTide has admitted that
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`alleged infringing activity occurs in platforms attached to the continental shelf off the coast of
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`this district in Texas. To the extent an incident occurring 120 miles off the coast of Texas was
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`sufficient for OCSLA jurisdiction in Hartfield, the acts of alleged infringement less than 100
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`miles from the Texas coast here are easily sufficient for jurisdiction in this district.
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`BlueTide’s continued argument that the OCSLA should be narrowly construed such that
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`the alleged acts must relate to natural resource exploration is further undermined by the Fifth
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`Circuit’s broad interpretation of the OCSLA’s jurisdictional grant. See, e.g., Texaco Exploration
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`& Prod. v. AmClyde Engineered Prods., 448 F.3d 760, 768 (5th Cir. 2006) (“We have
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`recognized that OCSLA’s jurisdictional grant is broad . . ., and the Act covers a wide range of
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`activity occurring beyond the territorial waters of the states on the outer continental shelf of the
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`United States.”) (internal quotations marks omitted); Tenn. Gas Pipeline v. Houston Cas. Ins.
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`Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 6 of 8 PageID #: 1888
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`Co., 87 F.3d 150, 154 (5th Cir. 1996) (“OCSLA was intended to apply to the full range of
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`disputes that might occur on the OCS . . . . OCSLA not only defines the law applicable to the
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`OCS, but also grants federal courts jurisdiction over disputes occurring there. The jurisdictional
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`grant, contained in 43 U.S.C. § 1349(b)(1), is very broad.”) (emphasis added).
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`Even if BlueTide’s narrow interpretation of the OCSLA’s jurisdictional grant were
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`correct (contrary to Fifth Circuit law), BlueTide’s argument fails factually. Per Plaintiffs’
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`Complaint, Defendants’ infringement relates to their “Hughes Maritime Broadband service” that
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`allows broadband satellite systems to operate “in the specific maritime context.” Dkt. 53 (2d
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`Am. Compl.) ¶ 15. Defendants tout that the accused system “improve[s] the safety, efficiency,
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`and profitability of [Defendant Black Elk’s] Gulf of Mexico operations,” and “provides a highly
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`reliable network infrastructure for remote communications, real-time monitoring, compliance
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`reporting, emergency response, and a host of other platform-to-shore applications.” Dkt. 53-4,
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`Ex. D at 1. The OCSLA statute in turn provides district courts jurisdiction over cases “arising
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`out of, or in connection with . . . any operation conducted on the outer Continental Shelf which
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`involves exploration, development, or production of the minerals.” 43 U.S.C. § 1349(b)(1).
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`Defendants’ communication systems therefore operate “in connection with” their exploration
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`activities, easily satisfying the OCSLA’s “very broad” jurisdictional provision.
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`In conclusion, the critical facts are not in dispute. Defendants operate allegedly
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`infringing satellite communications equipment on oil platforms off the coast of this District,
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`affixed to the continental shelf, and the equipment is used for “a host of [] platform-to-shore
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`applications” related to Defendant Black Elk’s natural resource extraction activities. Therefore,
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`under the OCSLA, this Court has personal jurisdiction over Defendants, and venue is proper.
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`BlueTide’s motion to dismiss should be denied.
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`Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 7 of 8 PageID #: 1889
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`Dated: January 19, 2016
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`Respectfully submitted,
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`/s/ Ranganath Sudarshan by permission
`Wesley Hill
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`Kurt G. Calia – LEAD ATTORNEY
`Cal. Bar No. 214300
`Covington & Burling LLP
`333 Twin Dolphin Drive, Suite 700
`Redwood Shores, CA 94065
`(650) 632-4700
`kcalia@cov.com
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`Ranganath Sudarshan
`Cal. Bar No. 244984
`Covington & Burling LLP
`One CityCenter
`850 Tenth Street, NW
`Washington, DC 20001
`(202) 662-6000
`rsudarshan@cov.com
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`Wesley Hill
`Tex. Bar No. 24032294
`Ward, Smith & Hill, PLLC
`1127 Judson Road, Ste 220
`Longview, Texas 75601
`(903) 757-6400
`wh@wsfirm.com
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`Attorneys for Plaintiffs
`Elbit Systems Land and C4I Ltd. and Elbit
`Systems of America, LLC
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`Case 2:15-cv-00037-RWS-RSP Document 82 Filed 01/19/16 Page 8 of 8 PageID #: 1890
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that all counsel of record who are deemed to have
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`consented to electronic service are being served with a copy of the foregoing document via the
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`Court’s CM/ECF system per Local Rule CV-5(a)(3) this 19th day of January 2016.
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`/s/ Wesley Hill