Louisiana Law Blog

by Katherine K. Green and Richard D. McConnell

There are scores of oilfield contamination cases, coined “legacy lawsuits,” in which landowners claim that their property has been contaminated by historical oil and gas exploration and production operations. Legacy lawsuits are a means for plaintiffs to potentially obtain large jury verdicts to remediate property. Plaintiffs, however, are not required to use their monetary awards towards the remediation of their property. In 2006, the Louisiana Legislature, in response to windfall jury verdicts, lack of remediation obligations on landowner plaintiffs, and the adverse effect of those events on oil and gas operators in the State, enacted Louisiana Revised Statute 30:29 (“Act 312”). Act 312 reflects the Legislature’s concern that the State’s natural resources were not being protected under then-existing laws. 

The constitutionality of Act 312 was recently challenged in M.J. Farms, Ltd. v. Exxon Mobil Corporation, No. 07-CA-2371. In a unanimous opinion rendered by the Court, Act 312 was held to be not only constitutional but also applicable to legacy cases.  

by Laura L. Hart

The 16^th Judicial District Court granted a well operator’s motion for summary judgment and exception of no right of action and dismissed all of a property owner’s claims in a pending legacy oilfield suit. The Louisiana Third Circuit Court of Appeal upheld the trial court’s decision in LeJeune Brothers, Inc. v. Goodrich Petroleum Co., L.L.C., et al., 2006-1557 (La.App. 3 Cir. 11/28/07), __ So. 2d __, 2007 WL 4178946, rehearing denied (1/9/2008).   

LeJeune Brothers, Inc. (“LeJeune”), the property owner, claimed that the Goodrich Petroleum Company, L.L.C. (“Goodrich”), a company whose predecessor had operated an oil and gas well on the property at issue, was liable to LeJeune for damages arising in tort and in contract, punitive damages, as well as damages for claims arising under the Mineral Code. Goodrich’s predecessor had operated pursuant to a mineral lease that had been executed with LeJeune’s predecessor in interest. LeJeune claimed that it was only after the purchase of the property in 2000 that it discovered that the property was contaminated with waste resulting from oilfield exploration and production activities and LeJeune maintained that it had no knowledge that the property was contaminated prior to the purchase of the property. 

by Laura L. Hart

The U.S. Supreme Court granted Exxon Mobil Corporation’s (“Exxon Mobil”) Petition for a Writ of Certiorari (2006 WL 1786680, 75 USLW 3009, 6/29/2006) and vacated the punitive damages award granted in the Grefer suit. See, Exxon Mobil Corporation v. Grefer, Joseph, et al., 05-1670 __ S.Ct. __, 2007 WL 559870 (2/26/2007).         

Plaintiffs claimed that their property had been contaminated with naturally occurring radioactive material (“NORM”) as a result of the pipe cleaning operations conducted thereon. A jury rendered judgment for the plaintiffs and awarded $56.145 million in compensatory damages, $145,000 in general damages, $56 million in restoration costs, and $1 billion in exemplary/punitive damages. The Louisiana Fourth Circuit Court of Appeal affirmed the awards of compensatory damages, general damages, and damages awarded for restoration costs, but reduced the $1billion award for punitive damages to $112.290 million. 

by Esteban Herrera, Jr.

On January 31, 2007, a Louisiana district court in Cameron Parish set aside a jury verdict from two months earlier that awarded $57 Million for wetlands losses allegedly caused by decades of surface water discharges of produced water. In its January 31, 2007 Ruling of the Court in the Dore Energy, Corporation v. Carter-Langham, Inc., et al case, the court concluded that the landowner could not sue the sublessee under the mineral lease at issue because the sublessee had concluded its operations under that lease prior to the Louisiana Mineral Code becoming effective.   The court found the landowner-plaintiff had no privity of contract with the sublessee-defendant. The court also found that Act 312 of the 2006 Regular Session of the Louisiana Legislature applied to the plaintiff's claims, reversing an earlier procedural ruling in the case. Act 312 creates certain procedures in lawsuits involving claims of contamination resulting from activities associated with oilfield sites or exploration and production sites. The court ordered the case stayed and ordered that appropriate notices be given to the state of Louisiana as required by Act 312.    Further developments in the case are likely.

Kean Miller is pleased to announce that 12 lawyers, formerly in the Admiralty & Maritime, Construction, and Energy practice areas with Lemle & Kelleher, LLP, have joined the firm in the New Orleans office.

"We are very excited to welcome these distinguished attorneys to our law firm. They are an outstanding resource for our clients. Our offices are located in Louisiana's major port cities --- New Orleans, Baton Rouge and Lake Charles -- and this esteemed group brings over 150 years of combined experience in maritime issues, admiralty law, marine insurance, oil & gas, drilling and exploration, pipelines, construction, and energy law to our clients." said Gary A. Bezet, managing partner of the 121-lawyer firm.

By Richard S. Pabst

Writ applications have been filed with the Louisiana Supreme Court in two oilfield pollution cases that have the potential to dramatically impact the scope of the numerous legacy lawsuits currently pending throughout the state.

As a service to the community and its clients, Kean Miller will present a Post-Katrina Energy Industry Forum on Thursday, October 13th. In addition, the firm will host its Louisiana Environmental Forum on Friday, October 14th. These two important industry events are part of a week-long breakfast briefing series designed to provide innovation, insight and ideas for business and industry in Louisiana. These breakfast briefing events will be held at Drusilla Place, 3482 Drusilla Lane (Jefferson Highway at I-12 in Baton Rouge).

By Lolly White

In-house counsel who are employed in Louisiana but are not licensed to practice law here have until July 1, 2005 to file an application for limited licensure to practice under the Louisiana Supreme Court's new In-House Counsel Rule.

By Dwayne Johnson

The Louisiana Fourth Circuit, in a decision sure to be appealed, recently upheld a lower court's award of compensatory damages - and reduced the lower court's punitive damage award - as a result of the defendants' alleged contamination of the plaintiffs' land with naturally occurring radioactive material (NORM). Grefer, et al. v. Alpha Technical, et al., 2002-CA-1237 (La. App. 4th Cir. 3/31/05); appeal from, Civil District Court, Orleans Parish.

For several years now, some landowners have been suing oil and gas operators concerning the condition of the land subject to a mineral lease. One Louisiana court recently struggled with the issue of when a landowner/lessor can sue a lessee under a mineral lease to remediate the property.

By Trey McCowan

Amicus curiae brief filed by Kean Miller Partners Bill Jarman and Linda Akchin for the American Petroleum Institute, the Louisiana Mid-Continent Oil & Gas Association, and the Louisiana Independent Oil & Gas Association.

Summary:

In Terrebonne Parish School Board vs. Castex Energy, et al., the Louisiana Supreme Court has held that a mineral lessee has no implied obligation to backfill oilfield access canals when the oil company's lease granted an express right to dredge canals and where there is no evidence that the oil company lessees exceeded the rights granted to them under the lease or acted unreasonably or negligently in dredging the canals. Article 122 of the Louisiana Mineral Code only imposes a duty to restore the surface to its original condition where there is evidence of unreasonable or excessive use of the surface of leased premises.