G.R. No. 257821 - Mendaros vs. Lazada E-Services Phil., Inc.

On December 11, 1990, Shell Philippines Exploration B.V. (“Shell”) and the Republic of the Philippines entered into Service Contract No. 38 for petroleum exploration and extraction in northwestern Palawan. In 1992, Shell discovered natural gas in the Camago-Malampaya area and proceeded to develop the Malampaya Natural Gas Project, which entailed constructing and installing a 504-kilometer subsea pipeline from its offshore production platform to a gas processing plant in Batangas, traversing the Oriental Mindoro Sea.
On May 19, 2003, respondents Efren Jalos, Joven Campang, Arnaldo Mijares, and 75 other subsistence fishermen of Bansud, Oriental Mindoro, filed Civil Case P-1818-03 before the Regional Trial Court (RTC), Branch 41, Pinamalayan. They alleged that the pipeline’s construction and operation “greatly affected biogenically hard-structured communities such as coral reefs,” stressed marine life, drove fish away from coastal waters, and caused their average net monthly catch to drop from ₱4,848.00 to ₱573.00, inflicting loss of earnings.

The RTC lacked jurisdiction because the claim was a “pollution case” under R.A. 3931, as amended by P.D. 984, over which the Pollution Adjudication Board (PAB) has primary jurisdiction.
Shell enjoyed state-immunity under the service contract, acting as agent of the Republic without the State’s consent to suit.
The complaint failed to state a cause of action, and did not comply with class-action, verification, forum-shopping, and pauper-litigant requirements.

On March 24, 2004, the RTC granted the motion and dismissed the complaint for lack of jurisdiction, ruling it a pollution case within the PAB’s exclusive authority.
Jalos et al. filed a certiorari petition (CA-G.R. CV 82404) with the Court of Appeals (CA), which on November 20, 2006 reversed the RTC:

The CA held the complaint sounded in quasi-delict and that regular courts had jurisdiction to adjudicate the damage claim.
Shell was not sued as State agent; the Republic had consented to suit by contract.
The complaint sufficiently alleged a cause of action and complied substantially with technical requirements, except for class-action verification.

Shell’s motion for reconsideration was denied, and it filed a Rule 45 petition before the Supreme Court, docketed as G.R. No. 179918, resolved on September 8, 2010.

Whether the complaint is a “pollution case” falling within the PAB’s primary jurisdiction under R.A. 3931 as amended by P.D. 984.
Whether the complaint sufficiently alleges a cause of action against Shell.
Whether the action is effectively against the Philippine State and barred by state-immunity doctrine without the State’s express consent.