       IN THE UNITED STATES COURT OF APPEALS
                FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                Fifth Circuit

                                             FILED
                                                          November 6, 2009

                              No. 08-20338              Charles R. Fulbruge III
                                                                Clerk

OCEAN IC EXPLO RATION C O M PAN Y, a Delaware Corporation;
PETROTIMOR COMPANHIA DE PETROLEOS, SARL, a corporation organized
under the laws of Portugal,

                                       Plaintiffs-Appellants
v.

PHILLIPS PETROLEUM COMPANY ZOC, a Delaware Corporation; PHILLIPS
PETROLEUM COMPANY INDONESIA, a Delaware Corporation; PHILLIPS
PETROLEUM (96-20) INC, a Delaware Corporation; PHILLIPS PETROLEUM
PRODUCTION INDONESIA INC, a Delaware Corporation; PHILLIPS
INDONESIA INC, a Delaware Corporation; PHILLIPS INTERNATIONAL
INVESTMENT INC, a Delaware Corporation; CONOCOPHILLIPS AUSTRALIA
PTY LTD, an Australian private company organized under the laws of the
Commonwealth of Australia; CONOCOPHILLIPS AUSTRALIA GAS
HOLDINGS PTY LTD, an Australian private company organized under the laws
of the Commonwealth of Australia; CONOCOPHILLIPS JPDA PTY LTD, an
Australian private company organized under the laws of the Commonwealth of
Australia; CONOCOPHILLIPS PIPELINE AUSTRALIA PTY LTD, an
Australian private company organized under the laws of the Commonwealth of
Australia; CONOCOPHILLIPS STL PTY LTD, an Australian private company
organized under the laws of the Commonwealth of Australia;
CONOCOPHILLIPS WA-248 PTY LTD, an Australian private company
organized under the laws of the Com m onwealth of Australia;
CONOCOPHILLIPS (03-12) PTY LTD, an Australian private company organized
under the laws of the Commonwealth of Australia; CONOCOPHILLIPS (03-13)
PTY LTD, an Australian private company organized under the laws of the
Commonwealth of Australia; CONOCOPHILLIPS (03-16) PTY LTD, an
Australian private company organized under the laws of the Commonwealth of
Australia; CONOCOPHILLIPS (03-19) PTY LTD, an Australian private
company organized under the laws of the Commonwealth of Australia;
CONOCOPHILLIPS (03-20) PTY LTD, an Australian private company organized
under the laws of the Commonwealth of Australia; CONOCOPHILLIPS (03-21)
                                       No. 08-20338

PTY LTD, an Australian private company organized under the laws of the
Commonwealth of Australia; CONOCOPHILLIPS CO, a Delaware Corporation;
CONOCOPHILLIPS, a Delaware Corporation; DARWIN LNG PTY LTD, an
Australian private company organized under the laws of the Commonwealth of
Australia; PHILLIPS PETROLEUM CO, ZOC PTY LTD, an Australian private
company organized under the laws of the Commonwealth of Australia; TOKYO
TIMOR SEA, PTY LTD, an Australian private company organized under the
laws of the Commonwealth of Australia,

                                                  Defendants-Appellees.


                   Appeal from the United States District Court
               for the Southern District of Texas, Houston Division
                             USDC No. 4:07-cv-00815


Before BARKSDALE, DENNIS, and ELROD, Circuit Judges.
PER CURIAM:*
       Appellants Oceanic Exploration Company and Petrotimor Companhia de
Petroleos, SARL (collectively, “Oceanic”) appeal the dismissal, on a motion under
Federal Rule of Civil Procedure 12(c) for judgment on the pleadings, of their
Second Amended Complaint (“Complaint”). We agree with the district court that
Oceanic failed to set forth a plausible theory of proximate causation and
accordingly AFFIRM.
I.     Facts and Proceedings
       A.     Background facts
       We set forth the following facts as pleaded in the Complaint, assuming at
the present stage, as we must, that they are true. See Ferrer v. Chevron Corp.,
484 F.3d 776, 780 (5th Cir. 2007). In 1974, Oceanic obtained an exclusive
concession from Portugal to explore for and extract oil and gas in the Timor Gap.


       *
         Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.

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                                    No. 08-20338

The Timor Gap is an area of seabed north of Australia and south of the eastern
part of the island of Timor. Timor, in turn, is surrounded on all other sides by
Indonesia. The Timor Gap is disputed territory. The border across surrounding
ocean has been settled by treaty between Indonesia and Australia, but the
boundary between East Timor and Australia has not been settled. At the time
Oceanic obtained Timor Gap exploration rights from Portugal, East Timor was
a Portuguese colony.
      In 1975, Indonesia invaded and annexed East Timor, effectively thwarting
Oceanic’s rights in the Timor Gap. The United Nations refused to recognize the
annexation, but Australia collaborated with Indonesia to exploit oil and gas in
the Timor Gap and surrounding areas. In 1989, Indonesia and Australia created
a “Joint Authority” for this purpose.1 The Joint Authority awarded Timor Gap
exploration and extraction rights to Defendant-Appellee ConocoPhillips
(hereinafter referring to ConocoPhillips and its relevant predecessors,
subsidiaries, and affiliates). Since that time, ConocoPhillips has extracted large
quantities of oil and gas from the Timor Gap and surrounding areas. At the time
of the Complaint, known reserves in the Timor Gap were valued above $50
billion.
      In 1999, East Timor obtained independence from Indonesia, creating an
opportunity for reassessment of the Timor Gap relationships.               The United
Nations temporarily governed the country through an entity known as the
United Nations Transitional Administration in East Timor (“UNTAET”).
UNTAET agreed essentially to step into Indonesia’s shoes as Australia’s
counterpart in administering and receiving revenues from the Joint Authority.
At the same time, influential politicians in East Timor criticized the historical
Australian-Indonesian arrangement as illegal and exploitative and stated that


      1
        Formally, this entity was known as the “Timor Gap Joint Authority for the Zone of
Cooperation.”

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                                         No. 08-20338

independent East Timor would not function as Indonesia’s successor. The East
Timor Constitution, which entered into force on May 20, 2002, stated that
independent East Timor would not recognize “acts or contracts” regarding its
natural resources that were entered into prior to the constitution’s entry into
force, unless they were “confirmed by the competent organs after the
Constitution enters into force.” E. Timor Const. art. 158, para. 3.
         On May 20, 2002 (the same day that the constitution took effect), East
Timor agreed to the Timor Sea Treaty with Australia. After satisfaction of
various formalities, the treaty came into effect on April 1, 2003. It created a
“Designated Authority” to replace the prior Joint Authority.2                   One of the
Designated Authority’s first acts was to enter into numerous production sharing
contracts with ConocoPhillips, facilitating ongoing extraction efforts that were
predicted to provide billions of dollars of revenue to East Timor. There was no
bidding or reassessment; all Designated Authority production sharing contracts
were awarded to organizations with previous contracts under the Australian-
Indonesian Joint Authority.
         Oceanic approached officials in East Timor and unsuccessfully attempted
to persuade them to follow a different plan. This would have involved a suit in
the International Court of Justice (ICJ), asking the court to declare a border
between East Timor and Australia, such that East Timor would acquire sole
rights over lucrative production areas in the Timor Gap. Oceanic engaged
“[r]espected scholars on international boundaries,” who “rendered opinions on
the issue on Oceanic’s behalf.” 3 Oceanic presented the opinions to East Timor,
and proposed to fund the litigation itself in exchange for “a revenue interest in
the currently producing fields that would come within East Timorese

         2
             Formally, the “Timor Sea Designated Authority for the Joint Petroleum Development
Area.”
         3
             2d Amended Compl. ¶ 120.

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                                    No. 08-20338

sovereignty.”4 Oceanic also proposed to build an undersea natural gas pipeline
from the Timor Gap to East Timor, to be used instead of a ConocoPhillips
pipeline running to Australia. East Timorese officials gave Oceanic cursory
attention and rejected the proposals. Australia shortly thereafter withdrew from
the maritime boundary jurisdiction of the ICJ.
      B.        Proceedings and allegations
      Oceanic has attempted by various means to claim a stake in the lucrative
Timor Gap oil and gas operations, maintaining that ConocoPhillips illegitimately
acquired its rights there. In the early 1990s, Oceanic supported an ICJ suit by
Portugal, against Australia and Indonesia, to reassert rights over the Timor
Gap. The ICJ ruled 14-2 that it could not reach the merits of the claim, because,
as described in the Complaint, “Indonesia, like Australia later, would not submit
to the jurisdiction of that court.” 5 Oceanic has also attempted, in litigation in
Australia and in earlier complaints in the present suit, to assert rights to Timor
Gap oil and gas and proceeds, based on its concession from Portugal and its
related research and exploration activities in the 1970s. These efforts have
failed. Oceanic originally filed the current suit in the United States District
Court for the District of Columbia. Prior to transferring the case to its current
venue in the Southern District of Texas, the court in the District of Columbia
dismissed numerous claims and required Oceanic to re-plead, counseling that it
would “view with great suspicion any claims emanating from Portugal’s colonial
concession.” Oceanic then filed the Complaint presently under consideration.
      The current theory of the case is not based on historical interests related
to the Portuguese concession.       Rather, Oceanic asserts that East Timorese
independence abrogated ConocoPhillips’s rights in the Timor Gap, and that


      4
          Id.
      5
          2d Amended Compl. ¶ 80.

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                                      No. 08-20338

Oceanic was positioned to pull East Timor away from ConocoPhillips, but that
ConocoPhillips prevented this by bribing East Timorese officials.
       In particular, the Complaint revolves around Mari Alkatiri, “the leader of
the largest East Timorese political party, and ultimately Prime Minister for East
Timor.” 6 As alleged,
       From August 30, 1999, until he was named Prime Minister of East
       Timor on April 14, 2002, Mari Alkatiri was the Chief Economic
       Affairs Minister for UNTAET. As Prime Minister, Alkatiri was
       concurrently the Minister for Development of the Environment. In
       addition, Alkatiri serves as the titular head of the Timor Sea
       Designated Authority.7

Oceanic alleges that “regardless of the title he may have held” at these various
positions, Alkatiri effectively “had direct responsibility for all natural resources
in East Timor” and was thus “able to influence” the award of production sharing
contracts after the independence vote.8 The Complaint quotes Alkatiri as stating
that his political party “would not legitimatize a treaty between a thief
[Indonesia] and the receiver of stolen goods [Australia],” and that “[w]e are not
going to be a successor to an illegal treaty.” 9         Based on these and similar
statements, Oceanic alleges that “East Timorese political leaders, including
[Alkitiri], were adamant that East Timor would not recognize any interests that
had been awarded in the Timor Gap while Indonesia occupied East Timor,
including the ConocoPhillips defendants’ production sharing contracts.”10



       6
            2d Amended Compl. ¶ 84.
       7
            2d Amended Compl. ¶ 92.
       8
            2d Amended Compl. ¶ 91.
       9
            2d Amended Compl. ¶ 84.
       10
         2d Amended Compl. ¶ 3. ConocoPhillips counters with other statements by East
Timorese leaders in correspondence and media reports, which tend to indicate that, whatever

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                                      No. 08-20338

       Oceanic alleges that Alkatiri and his political associates denied Oceanic
an opportunity to bid against ConocoPhillips, despite their skepticism of the
prior treaty regime, because ConocoPhillips bribed Alkatiri and others.
According to the allegations, ConocoPhillips delivered millions of dollars in cash
and goods to East Timorese officials in secret transactions and transactions
disguised as humanitarian aid. It did so, according to the Complaint, because
it feared the political transition could upset its lucrative operations in the Timor
Gap.
       The Complaint asserts seven causes of action, but only five are still at
issue, all arising out of the bribery allegation. They are for: (1) violation and
(2) conspiracy to violate the Racketeering Influenced and Corrupt Organizations
Act (RICO), (3) violation of the Robinson-Patman Act, and common law (4)
intentional interference with prospective economic advantage and (5) unfair
competition.11 Oceanic seeks at least $10.5 billion in damages.
       After the case was transferred to the Southern District of Texas, the
district court granted ConocoPhillips’s motion for judgment on the pleadings and
dismissed Oceanic’s claims, concluding that Oceanic failed to plead proximate
causation. Oceanic Exploration Co. v. ConocoPhillips, Inc., 2008 WL 1777003
(S.D. Tex. Apr. 16, 2008). It accordingly entered a take-nothing judgment,
leading to this appeal.




their views toward stepping into Indonesia’s shoes in the relationship with Australia, East
Timorese officials did not intend to disrupt ConocoPhillips’s ongoing operations. These
statements, however, lie outside the Complaint and are not relevant to the present analysis.
       11
          The East Timorese-Australian Designated Authority is listed as a defendant for all
of these claims except the tortious interference claim. Oceanic does not appeal the District
Court for the District of Columbia’s dismissal of the Designated Authority as a party, or the
dismissal of its further claims for unjust enrichment and for violation of the Lanham Act.

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                                    No. 08-20338

II.   Discussion
      A.       Standard of review and Rule 12(c) standard
      We review a motion under Federal Rule of Civil Procedure 12(c) de novo.
Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008). The pleading standard
for a Rule 12(c) motion is the same as for a motion to dismiss under Rule
12(b)(6). Id. Under that standard, the issue is not whether the plaintiff will
ultimately prevail, but whether it is entitled to offer evidence to support its
claims. Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007). We accept
well-pleaded facts as true and construe the complaint in the light most favorable
to the plaintiff, but we do not accept as true “conclusory allegations,
unwarranted factual inferences, or legal conclusions.” Id.
      To avoid dismissal, “a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). In order for a claim to be plausible at the pleading stage,
the complaint need not strike the reviewing court as probably meritorious, but
it must raise “more than a sheer possibility” that the defendant has violated the
law as alleged. See id. Furthermore, the factual allegations must be “enough
to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555.
In determining whether a complaint states a claim that is plausible on its face,
the court “draw[s] on its judicial experience and common sense.” Iqbal, 129 S.
Ct. at 1950.
      B.       Analysis
      Like the district court, we conclude that Oceanic fails to properly plead
proximate causation. Both parties have briefed proximate causation principally
under legal authority related to RICO, and Oceanic presents no argument on
appeal that any of its other claims could survive dismissal on proximate



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                                  No. 08-20338

causation grounds if the RICO claim does not. We accordingly analyze the issue
under authorities applicable to RICO.
      RICO is a criminal statute, but its § 1964(c) provides for civil damages for
a party “injured in his business or property by reason of” a RICO violation. 18
U.S.C. § 1964. The Supreme Court determined in Holmes v. Securities Investor
Protection Corp. that this requirement “incorporate[s] common-law principles of
proximate causation.” 503 U.S. 258, 267 (1992). The Court described proximate
causation as including a “demand for some direct relation between the injury
asserted and the injurious conduct alleged.” Id. at 268. “When a court evaluates
a RICO claim for proximate causation, the central question it must ask is
whether the alleged violation led directly to the plaintiff's injuries.” Anza v.
Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006) (emphasis added).
      In Zervas v. Faulkner, this court recognized proximate causation in the
RICO context as an inquiry into “whether the conduct has been so significant
and important a cause that the defendant should be held responsible . . . taking
into consideration such factors as the foreseeability of the particular injury, the
intervention of other independent causes, and the factual directness of the
casual connection.” 861 F.2d 823, 834 (5th Cir. 1988) (quoting Brandenburg v.
Seidel, 859 F.2d 1179, 1189 (4th Cir.1988)). The causal link cannot “rest only on
an overly attenuated chain of inferences.” See id. at 837.
      The district court below concluded that Oceanic failed to plead proximate
causation because the alleged bribery, assuming it occurred, could only have
caused the alleged harm to Oceanic by means of a highly improbable series of
hypothetical events and decisions by the affected countries and entities. It
determined that in order for Oceanic to prevail,
      [the] facts must be that if ConocoPhillips had not bribed East Timor:
      (a) East Timor would have chosen to abrogate the concessions, (b)
      Australia would have acquiesced, (c) East Timor would have
      reopened bidding, (d) Oceanic would have been permitted to bid, (e)

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       Oceanic would have won the bid, and (f) Oceanic would have
       correctly developed the concession so that it was profitable.

2008 WL 1777003 at *4. The court concluded that the Complaint failed to
adequately plead any of these circumstances.
       We agree that at least some of these circumstances are not plausibly
pleaded in Oceanic’s Complaint, and conclude that Oceanic’s failure to properly
plead one of them in particular requires affirmance.12 Oceanic’s claims fail to
rise above the speculative level, because they fail to address the interests and
influence of Australia.
       Oceanic repeatedly alleges that, absent bribery of Alkatiri, Oceanic would
have been allowed to bid, and would successfully have bid, to displace
ConocoPhillips’s ongoing, multibillion-dollar operations in the Timor Gap. In
particular, Oceanic claims in conclusory terms that the East Timor Constitution
abrogated ConocoPhillips’s contracts, and that Alkatiri had unilateral power to
determine whether those contracts would be renewed. These allegations fail the
test of common sense plausibility when considered together with other
allegations in the Complaint concerning Australia. The quoted portion of the
East Timor Constitution merely indicates that contracts over East Timor’s
natural resources were obviated unless reaffirmed. But, as pleaded in the
Complaint, the Timor Gap is a “gap” because the border between East Timor and
Australia is uncertain—the two countries claim overlapping territory.
       Assuming, absent bribery, that East Timor was willing to consider
replacing ConocoPhillips with Oceanic, the Complaint presents no reason to
believe Australia would have allowed this to happen. To the contrary, the
Complaint describes Oceanic and Australia as adversaries at every historical
stage. It alleges that Australia defied international opinion and subverted

       12
           Our decision should not be taken as an endorsement of the district court’s opinion
in its entirety.

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                                 No. 08-20338

Oceanic’s Portuguese concession by collaborating with Indonesia after an
illegitimate invasion. It alleges that Oceanic supported an unsuccessful ICJ suit
to declare that Portugal, rather than Indonesia and Australia, had rights to the
Timor Gap. And it alleges, more recently, that Oceanic tried to convince East
Timor to turn its back on Australia and build a pipeline to East Timor and a
liquified natural gas facility on East Timorese soil, rather than accepting
proceeds from a pipeline leading to a new facility in Australia. The Complaint
provides no plausible grounds to believe Australia would have desired—or
tolerated—disruption of its long-standing, extremely lucrative collaboration with
ConocoPhillips in response to East Timor, which Oceanic describes as a “new
and impoverished island nation,” 13 replacing Indonesia as its counterpart across
the Gap. Thus, even assuming ConocoPhillips attempted to influence East
Timor through bribery, the Complaint provides no plausible grounds to conclude
that, absent such bribery, Oceanic could have usurped ConocoPhillips’s
operations.
      Indeed, the Complaint implicitly acknowledges that Oceanic had no
genuine expectation of disrupting Australia’s relationship with ConocoPhillips;
it instead alleges that Oceanic tried to convince East Timor to start a formal
border dispute and claim large portions of the Timor Gap for itself.         The
Complaint states that Portugal previously tried to assert rights to the Timor Gap
in the ICJ, but that the ICJ rejected the suit because Indonesia did not submit
to its jurisdiction. It then alleges that Oceanic’s plan involved an ICJ suit
against Australia, and that, shortly after Oceanic presented the plan, Australia
announced its withdrawal from the jurisdiction of the ICJ for maritime
boundaries. This action was consistent with Australia’s repeated practice, as
described in the Complaint, of dividing the resources of the Timor Gap by



      13
           Oceanic Br. at 37.

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                                  No. 08-20338

treaties with its neighbors, rather than asserting or relinquishing territorial
control of the seabed. We have often said that a party cannot state a claim by
pleading legal conclusions. See, e.g., Ferrer, 484 F.3d at 780. It takes conclusory
pleading to new levels to have proximate causation rest on a politically
disruptive, hypothetical lawsuit between nations.
       Because Oceanic fails to plead facts plausibly demonstrating that it would
have had an opportunity to replace ConocoPhillips in the Timor Gap in the
absence of bribery, we conclude that the causal link is “overly attenuated,”
Zervas, 861 F.2d at 837, and that the alleged violation did not “le[a]d directly to
the plaintiff’s injuries.” Anza, 547 U.S. at 461. Accordingly, Oceanic fails to
properly plead proximate causation.
III.   Conclusion
       Because Oceanic fails to plead proximate causation, the district court
correctly granted the motion for judgment on the pleadings. It is accordingly not
necessary for us to consider Oceanic’s arguments concerning reassignment on
remand or the prior dismissal of claims against certain ConocoPhillips
subsidiaries. AFFIRMED.




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