By Maureen N. Harbourt

Just a quick reminder that in 2007, the Louisiana State Police (“LSP”) adopted regulations requiring special reporting requirements for persons “engaged in the transportation of hazardous materials by railcars, vessels, or barges, or the temporary storage of hazardous materials in any storage vessel not permanently attached to the ground” if that activity is within “a parish affected, or projected to be affected, by a Category 3 or higher hurricane for which a mandatory evacuation order has been issued.”  LAC 33:V.11103.  Hazardous materials are those materials listed in 40 C.F.R. Part 355, Appendix A.  Temporary storage is defined as storage in a portable container, and excludes any storage in pipelines or any other storage vessel permanently attached to the ground.

At the present time (11 a.m, CST, August 25, 2017),  Hurricane Harvey is a Category 2 storm with maximum sustained winds of 110 mph; but, it is projected that Harvey will strengthen to a Category 3 Hurricane by the time of landfall, which is projected to occur between Corpus Christi and Houston, Texas, late evening on August 25, 2017.  It is also projected that the hurricane will affect southwest and south central Louisiana parishes.  In fact, the Governor of Louisiana has issued an executive order that puts the entire State of Louisiana under a declaration of emergency.  Yesterday evening, Cameron Parish entered a mandatory evacuation order for all areas of the parish south of the Intracoastal Waterway, effective at 6 a.m., CST, August 25, 2017.   We are not aware of any mandatory evacuation orders for any other Louisiana parishes at this time.  The following is a link to all parish emergency response offices which will provide contact information to inquire about any orders issued: http://gohsep.la.gov/about/parishpa.

If a mandatory evacuation order is issued for any Louisiana parishes due to a Class 3 or higher category hurricane, the rules (LAC 33:V.11105) require the following:

  • Notification shall be given to the DPS, via electronic submittal, to the 24-hour Louisiana Emergency Hazardous Materials Hotline email address at emergency@la.gov within 12 hours of a mandatory evacuation order issued by the proper parish authorities.
  • For persons engaged in the transportation activities noted above, the report must include the following information:
    • the exact nature of, and the type, location, and relative fullness of the container (i.e., full, half-full, or empty) of all hazardous materials that are located within a parish subject to the evacuation order;
    • the primary and secondary contact person’s phone, e-mail, and fax number; and
    • whether the facility will be sufficiently manned such that post-event assessments will be performed by company personnel (as soon as safely practicable) and that any releases and/or hazardous situations will be reported in accordance with existing Louisiana Department of Environmental Quality (LDEQ) and State Police reporting requirements.
  • For those materials that are stored, it shall be necessary to only report those hazardous materials that were not reported in the annual SARA inventory report (40 CFR Parts 312/313) and those that are in excess of what is typically stored at the facility.

In addition to the notification to the LSP, “within a reasonable period of time” persons subject to the rule “shall perform a post-event assessment of those hazardous materials that were actually present in the affected area and to what degree, if any, those materials were compromised by said event and their current condition.”  Such information must be available for review by both the LSP and the LDEQ shall have access to this information.

aqd2

By Devin Ricci

The City of Baton Rouge and the surrounding areas have been struck by devastating floods.  Thousands were stranded. The roadways to their homes are flooded and most impassable.  Flooding is not new to Louisiana.  Just over ten years ago, the state experienced one of the most devastating natural disasters on record with Hurricane Katrina.  Since then, numerous other storms have taken swipes at the state –  Gustav, Rita, Isaac, to name a few. 2016 has been the year of unnamed storms thus far for the citizens of Louisiana. Alexandria, Monroe, Shreveport, and Lake Charles each flooded in the months preceding the “Great Flood of 2016” currently affecting Baton Rouge.

Storms are uncontrollable, but as a patent attorney, I turn to technology that we can control for assistance in the aftermath. There is a glimmer of hope that we are not alone, that similar events throughout the world have resulted in great innovations some of which are currently being implemented throughout Baton Rouge to speed the recovery and rescue stranded citizens.  These innovations are far and wide, including solar technology, mobile cell phone towers, power stations, water filtration apparatuses. Even the oft-hated drones are being used to locate people and assess flooding from vantage points that would have previously been limited to helicopters.

One of the more popular examples of these innovations is the Aqua Dam by Layfield, which is being used across the area to block water from roadways.  We have all heard the moniker that you cannot fight fire with fire; the Aqua Dam is proof, however, that you may be able to hold off water with water.  Patented as U.S. Patent nos. 8,840,338 in 2014 and 9,297,133 in 2016, the Aqua Dam is a portable reservoir body apparatus comprising a plurality of interior bladders contained within an exterior housing (the outer tube).  The interior bladders are filled with fluids causing them to expand and fill the cavity of the outer tube.  The unit further comprises a series of fasteners to maintain its shape, thereby creating a displacement dam which prevents the passage of water.  These units are being used on the interstate, major highways and bridges.  In most instances, the flood water is being pumped straight from the road into the dam being formed to keep the water at bay, opening the roadways.

To the folks at Layfield, we salute you and appreciate your innovative contributions.  The Aqua Dam structures have and will continue to open our roadways, allowing evacuees to escape and rescuers to enter flooded areas. To others, and particularly the citizens of Louisiana, please keep innovating.  We cannot prevent all future flooding, but we can help diminish their impact with innovations like these.

 

wet

By Sam O. Lumpkin

On May 31, 2016, the US Supreme Court ruled in United States Army Corps of Engineers v. Hawkes Co., Inc. that a jurisdictional determination issued by the Corps of Engineers under the Clean Water Act constitutes a final agency action that is judicially reviewable under the Administrative Procedure Act.  Justice Roberts wrote the decision of the Court, to which all other justices joined or concurred in the result.

The Clean Water Act prohibits the unpermitted discharge of any pollutant into “the waters of the United States,” including wetlands, without a permit.  However, only wetlands with a “significant nexus” to other waters of the United States are within Corps and EPA Clean Water Act jurisdiction.   Rapanos v. United States, 547 U.S. 715 (2006).  Dredging and filling activities are considered to be the discharge of a pollutant.   As a result, any dredging or filling activities involving a waters of the US within Corps jurisdiction must be approved beforehand by the US Army Corps of Engineers, which is responsible for issuing permits for discharges that would otherwise be forbidden by the Clean Water Act. The Clean Water Act allows imposition of potentially massive criminal or civil penalties for discharging any pollutant without a permit.

Determination of what constitutes a “wetland” or “other waters” of the US often involves expert determinations.  Further, the process for obtaining a Corps permit can itself be time-consuming and expensive – the Court noted that the average applicant for the type of permit at issue in Hawkes spends “788 days and $271,596 in completing the process,” and “[e]ven more readily available ‘general’ permits took applicants, on average, 313 days and $28,915 to complete.” To aid applicants, the Corps issues “jurisdictional determinations” (“JDs”) on a case-by-case basis. JDs are either “preliminary” – advising that there may be waters of the United States on a piece of land – or “approved,” which definitively states the presence or absence and extent of such waters.  The JDs provide some certainty for a landowner or developer as to whether they are required to endure the permitting process. The approved JDs are administratively appealable to the Corps; however, until the Hawkes decision, it was unclear as to whether judicial review of the Corp decision was available.

In Hawkes, the applicant sought a jurisdictional determination and was granted an approved JD stating that the property contained “water of the United States,”with a delineation of where those waters were located. Central to the case was whether the wetlands had a close enough nexus to a major river 120 miles away such that they were within the Corps’ jurisdiction. The applicants administratively appealed the JD under 33 C.F.R. Part 331, and the Corps reaffirmed its decision with revisions to the extent of the wetlands. Not satisfied, the applicants sought review of the JD in a federal district court under the Administrative Procedure Act (APA), which allows district courts to review “final agency actions.” 5 U.S.C.A. § 704. The Corps argued that judicial review was available only at the time of the final permitting decision or on an enforcement action commenced for dredge or fill activity without a permit. The district court agreed with the Corps and dismissed for lack of jurisdiction, holding that a JD is not a “final agency action.” 963 F.Supp.2d 868 (Minn. 2013). The applicants then appealed to the US Court of Appeals for the Eighth Circuit, which reversed. 782 F.3d 994 (2015).

The Supreme Court agreed with the Eight Circuit, holding not only that an “approved” JD is a final agency action, but also that there are no adequate alternatives to the APA for challenging a Corps JD in court. On the issue of finality, the Court noted that  JDs give rise to “direct and appreciable legal consequences,” and they are also binding on the Corps and the EPA for five years following the determination.[1] Unlike other possible agency actions which are merely advisory, such as informal advice from an agency or a preliminary JD, an approved JD follows extensive fact-finding, marks “the consummation of the agency’s decision-making process” and constitutes a final determination of rights and obligations “from which legal consequences will flow.” The Court further held that there are no adequate alternatives to an APA challenge to the Corps’ JD, noting that the only alternatives available were to forego a permit altogether or proceed with the permitting process. Without a permit, the applicant could either proceed with its proposed activity and be exposed to the civil and criminal penalties of the Clean Water Act, or abandon its proposed activity altogether. But the permitting process also poses a highly expensive, time-consuming, and uncertain proposition, for which judicial review would only be available when complete. As a result, the Court held that an approved JD is reviewable in federal district court under the APA.

The Hawkes ruling is a narrow one, and applies only to approved JDs. However, because JDs are literally determinations of the extent of the Corps’ jurisdiction, the scope of the Corps’ authority will likely be subjected to many more challenges than in the past, when such objections would have to wait until the permitting process was complete. As a result, in the future the Corps’ jurisdiction may face additional restraints imposed by federal courts.

Because an adverse ruling on an approved JD is appealable beyond the Corps after Hawkes, a thorough record in the initial JD proceeding is more important than ever. Ordinarily, a consultant will prepare a draft JD for submission to the Corps, which may or may not visit the site in question; the Corps then issues its decision on the record. This process, however, does not offer the applicant any further opportunity to develop the record. Any administrative appeal and subsequent judicial review is limited to the administrative record before the Corps, unless good cause is demonstrated as to why additional information should be admitted. As a result, applicants should ensure that their consultant’s initial submittal is thoroughly documented and, possibly, subjected to legal review prior to submission. Because federal district courts do not possess the same expertise as the Corps, a well-documented and clearly explained initial proposal will aid a district court with the information it needs to review the Corps’ decisions.

____________________________________________

[1]  There were three concurring opinions taking differing positions on whether a Memorandum of Agreement between the Corps and EPA makes the JDs binding on EPA. This aspect could bear further review.

fracking

By Tod J. Everage

Since the announcement by Helis Oil & Gas that it intended to introduce hydraulic fracturing (“fracking”) to St. Tammany Parish, the local response has been vitriolic to stay the least – from public protests and interstate billboards to lawsuits. In fact, according to DNR officials, the large public hearing on Helis’ drilling permit application was a first for them. These fights are raging across the country between oil and gas companies and environmentalists and concerned citizens who worry the fracking will adversely affect their groundwater or adjoining lands. States like Vermont, Maryland, New York, and others have banned fracking altogether. Other local and state governments have banned fracking bans. Needless to say, this issue is a hot topic in the U.S. right now.

Helis, a New Orleans-based energy company, claims over 60 successful fracturing projects around the U.S., and now they hope to do one closer to home in St. Tammany Parish. In June 2014, the St. Tammany Parish Government filed a lawsuit against James Welsh, in his capacity as Commissioner of Conservation for the State of Louisiana, DNR seeking to prevent DNR from issuing a critical permit that Helis needed to begin drilling its exploratory well. St. Tammany argued that its zoning laws prohibited Helis from drilling the well at the proposed site – private timber lands, that were zoned A-3 residential. The Town of Abita Springs later filed similar suits in multiple courts. In December 2014, the Office of Conservation granted Helis’ permit application. In the St. Tammany Parish lawsuit, the state district court judge eventually granted a partial summary judgment on behalf of Helis, declaring that the St. Tammany Parish zoning ordinances were pre-empted by general state law, and on behalf of the Commissioner, declaring that DNR had complied with the law during the Master Plan review of the permit process. Other claims in the case remained unresolved, but this ruling was immediately appealed. On March 9, 2016, the Louisiana First Circuit affirmed the district court’s summary judgment. Though Helis’ opponents have publicly declared that they would not stop until the U.S. Supreme Court weighs in, this is latest in a string of victories for Helis in the various lawsuits filed to stop the proposed drilling.

In this case, St. Tammany Parish argued that its zoning ordinances precluded Helis (or anyone) from drilling wells on the proposed drilling site because it was zoned A-3 residential – “single-family residential environment on moderate sized lots.” The ordinances limit the land use of such zones to “certain specified cultural, educational, religious, and public uses.” The property has been used as a pine tree farm for over 30 years, and sits atop the Southern Hills Aquifer, the sole source of drinking water in the area. St. Tammany Parish argues that its authority to enact and enforce its own zoning ordinances within its geographic boundaries is provided by the Louisiana Constitution, and cannot be displaced.

Helis and DNR countered that La. R.S. § 30:28F expressly preempts local zoning ordinances where they contradict. The State Office of the Conservation is statutorily mandated to regulate the oil and gas resources in Louisiana, and that statute provides that DNR’s issuance of a permit is “sufficient authorization” for the permit holder to enter the property and drill. “No other agency or political subdivision of the state shall have the authority, and they are hereby expressly forbidden, to prohibit or in any way interfere with the drilling of a well or test well in search of minerals by the holder of such a permit.” La. R.S. 30:28F. These laws were enacted at a state level under the guidance of the Louisiana Constitution acknowledging environmental preservation as a public policy of the state.

On issues of pre-emption, unless there is an express provision mandating it, the courts must look to legislative intent, which includes “examining the pervasiveness of the state regulatory scheme, the need for state uniformity, and the danger of conflict between the enforcement of local laws and the administration of the state program.” Palermo Land Co., Inc. v. Planning Comm’n of Calcasieu Parish, 561 So.2d 482, 497 (La. 1990) (citing Hildebrand v. City of New Orleans, 549 So.2d 1218, 1227 (La. 1989)). The First Circuit found that the legislative intent and pervasiveness of the state regulatory scheme was clearly defined (see “expressly forbidden”) within La. R.S. 30:38F itself. As a result, the First Circuit agreed with Helis and found those ordinances that specifically interfered with Helis’ drilling of the well to be unconstitutional.

Underscoring that, the Louisiana Constitution reminds that “notwithstanding any provision of this Article, the police power of the state shall never be abridged.” La. Const. Art. §9(B). The Commissioner’s power is an exercise of police power and the statutes addressing local zoning regulations do not apply to the Commissioner in the exercise of that power. St. Tammany argues then that the Commissioner’s regulation of the oil and gas activity does not preclude those constitutional zoning powers reserved by the local government. The First Circuit disagreed. Specifically, those competing constitutional mandates are both found in Article VI of the Constitution, and §9(B) again provides that nothing within Article VI can abridge the Commissioner’s policing power.

Finally, La. R.S. § 30:28F is a general law enacted by the legislature that denies authority to a political subdivision – such as a Parish – by expressly prohibiting interference with the drilling of a well by a permit holder. Section 5 of the Article VI of the State Constitution further acknowledges that adopted home rule charters by local governments are limited by Louisiana general law and other sections of the Constitution. Consequently, the First Circuit affirmed the district court’s ruling in all respects, and unless reversed by the Louisiana Supreme Court, its order renders local ordinances that infringe on a permit-holder’s drilling rights unconstitutional.

flag

By Jessica Engler 

On March 2, 2015, new federal regulations went into effect which seek to strengthen the protections against human trafficking. A large part of these new regulations, which are updates to the Federal Acquisition Regulation (“FAR”), provide a stronger framework to discourage federal contractor employers from trafficking workers into the country illegally. Since a significant number of federal government contracts are for construction projects, it is imperative that contractors who bid on and win federal contracts be aware of these new regulations.

The United States has long had policies prohibiting government employees and government contractors from engaging in trafficking of persons, and the recent Executive Order, titled “Strengthening Protections Against Trafficking in Persons in Federal Contracts”, and Title XVII of the National Defense Authorization Act for Fiscal Year 2013 have served to heighten the requirements on federal contractors to comply with federal rules against human trafficking. Prior to the implementation of these new rules, federal law prohibited government employees and contractors from participating in trafficking activities including “severe forms of trafficking in persons.” Severe forms of trafficking in persons is defined by section 103 of the Trafficking Victims Protection Act of 2000 to include the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion for the purpose of subjection to involuntary servitude.

Under the new regulations, all contractors and subcontractors (not just those contracting with the federal government) are expressly prohibited from engaging in the following trafficking-related activities:

  • Destroying, concealing, removing, confiscating, or otherwise denying access to an employee’s identity or immigration documents;
  • Failing to provide return transportation for an employee from a foreign country to the country from which the employee was recruited, unless the contractor is exempted or the employee is a victim of trafficking that is seeking redress in his country of employment or is a witness to human trafficking;
  • Solicitation of a person for employment, or offering employment, through materially false or fraudulent pretenses, falsehoods, or promises about that employment. This includes misrepresentations concerning key aspects of employment such as wage payments, fringe benefits, location, and conditions of employment;
  • Use of recruiters who do not comply with local labor laws and charging “recruitment fees” to employees;
  • Providing or arranging housing that fails to meet applicable housing and safety standards; and
  • If required by law or contract, failing to provide an employment contract, recruitment contract, or other required paperwork in writing, in the employee’s native language, prior to departure from the employee’s country of origin.

The regulations impose several additional obligations on federal contractors. For example, these new regulations mandate that such contractors (1) inform their employees and agents of the federal government’s anti-trafficking policies and the penalties for non-compliance, which include removal from contract, reduction in benefits, and termination of employment; and (2) fully cooperate with the federal agencies that are responsible for audits, investigations, or corrective actions related to human trafficking.

Additional rules apply to contractors performing work outside of the United States under a contract valued over $500,000, who must:

  • Create and implement a compliance plan to prevent any prohibited trafficking in persons and implement procedures to prevent any such activities, which must be appropriately designed with regard to the size and complexity of the project, and submitted upon award of the contract and annually thereafter, and published at the contractor’s workplace and website by the start of the contract performance;
  • Certify that, after performing the appropriate due diligence, to the best of the contractor’s knowledge and belief: (1) none of the contractor’s agents, subcontractors, or their agents are engaged in trafficking activities; and (2) if abuses have been found, the contractor has taken the appropriate remedial and referral actions.

Should a violation occur, the contracting officer will consider the compliance plan as a mitigating factor when determining the penalties for the violation.

As stated above, these new requirements apply to all new bids, contracts, and solicitations for federal contracts dated March 2, 2015 onward. Given the heightened new requirements for federal contracts, contractors considering such projects may want to review their current policies and procedures to ensure compliance with the new requirements. Contractors may also consider revising their employee handbooks in light of the new requirements. Consulting a labor and employment or construction attorney may be beneficial in assessing changes to contract labor policies and compliance plans.

 

 

corps

By Daniel Stanton

On May 26, the U.S. Army Corps of Engineers launched a new website to provide the public and industry interests with nationally-issued Notices To Navigation Interests (NTNI).  The new website can be found here.  The new site allows users to search NTNIs by keywords, providing a new-user friendly interface. The site will keep navigation interests up to date on events that affect waterway navigation, such as maintenance activities, hazards to navigation, dredging, and river bank protection projects.

But mariners and industry interests should be aware that the new Corps site does not contain notices from other federal agencies, such as the U.S. Coast Guard. U.S. Coast Guard Notices to Mariners may be found here. Users may also subscribe to the U.S. Coast Guard’s list serve for the districts of their choice and be notified by email when new Local Notices to Mariners are posted here. Also, NOAA Charts can be found here.

These available references are particularly relevant given the U.S. Fifth Circuit’s recent affirmation that marine operators working for the U.S. Army Corp of Engineers need to remain diligent in reviewing the most updated information disseminated by the various federal resources before beginning work that involves risks of striking underwater obstructions and pipelines. This opinion was released two days after the new Corp NTNI website was published, but the NTNI will likely be included in the available resources that the Fifth Circuit expects marine operators to review, calling the burden to remain up-to-date “minimal” given the potential risks.  See Contango Operators, Inc. v. Weeks Marine, Inc., No. 14-20265, slip op. at 15 (5th Cir. 2015) (unpublished).

picture-2

By Tyler Moore Kostal

A federal judge dismissed the lawsuit that the New York Times referred to as “The Most Ambitious Environmental Lawsuit Ever” on February 13, 2015, with a finding that the plaintiffs did not state a viable claim for relief.

The Board of Commissioners of the Southeast Louisiana Flood Protection Authority-East (“SLFPA-E” or “Authority”) filed a lawsuit in the Civil District Court in Orleans Parish, Louisiana, against more than 90 oil and gas and pipeline companies on July 24, 2013.  The SLFPA-E filed the suit individually and as the Board governing the Orleans Levee District, the Lake Borgne Basin Levee District, and the East Jefferson Levee District, contending that it manages and is responsible for more than 150 miles of levees, 50 miles of floodwalls, and numerous drainage structures, pump stations, and floodgates in an area it described as the “Buffer Zone,” which includes coastal wetlands in eastern New Orleans, the Breton Sound Basin, and the Biloxi Marsh.  The SLFPA-E alleged that historical and current oil and gas and pipeline activities in the Buffer Zone, including the construction and use of oil and gas canals and pipeline canals, caused “direct land loss and increased erosion and submergence in the Buffer Zone, resulting in increased storm surge risk, attendant increased flood protection costs, and, thus, damages” to the Authority.

With this lawsuit, the SLFPA-E sought damages and injunctive relief “in the form of abatement and restoration of the coastal land loss” including backfilling and revegetating all canals, “wetlands creation, reef creation, land bridge construction, hydrologic restoration, shoreline protection, structural protection, bank stabilization, and ridge restoration.”

On August 13, 2013, the oil and gas defendants removed this case from state court to the United States District Court for the Eastern District of Louisiana.  On September 10, 2013, the SLFPA-E filed a motion to remand the matter to state court.  On June 27, 2014, the federal court denied the SLFPA-E’s motion to remand.  As a result, this matter continued in federal court, and the court considered a number of dispositive motions.

On February 13, 2015, the federal judge dismissed the wetlands damage lawsuit against 88 remaining oil and gas defendants.  At issue before the court was the defendants’ motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure.  Rule 12(b)(6) provides that an action may be dismissed “for failure to state a claim upon which relief can be granted.”  Therefore, for the Authority’s action to survive, its petition needed to contain sufficient factual matter to state a claim for relief that is plausible on its face.  A claim is considered facially plausible when the pleaded facts allow the court to draw a reasonable inference that the defendants are liable for the alleged misconduct.  All parties extensively briefed the issues, and the court heard oral argument.  The court then applied this legal standard to each of the causes of action brought by the SLFPA-E in its petition—(1) negligence, (2) strict liability, (3) natural servitude of drain, (4) public nuisance, (5) private nuisance, and (6) breach of contract as a third party beneficiary.

To state a claim for negligence, a plaintiff must establish five elements:  duty, breach, cause-in-fact, scope of liability, and damages.  The Authority failed to show the threshold element of a legal duty owed by defendants.  Finding no legal duty under state law, the court reiterated its prior finding that oil and gas companies do not have a duty under Louisiana law to protect members of the public from the results of coastal erosion allegedly caused by operators that were physically and proximately remote from the Authority or its property.  The court also found that the federal statutes on which the SLFPA-E relied to establish the requisite standard of care—namely the Rivers and Harbors Act, the Clean Water Act, and the Coastal Zone Management Act—were not intended to protect the Authority.  Because the Authority failed to demonstrate that defendants owe a specific duty to protect it from the results of coastal erosion allegedly caused by defendants’ oil and gas activities, the court concluded that the Authority did not state a viable claim for negligence.

A claim for strict liability also requires a showing of a legal duty owed to the plaintiff.  Because the court already determined that defendants do not owe a legal duty to the SLFPA-E to protect it from the results of coastal erosion, the court found that the Authority did not state a viable claim for strict liability.

A claim for natural servitude of drain involves the interference with the natural drainage of surface waters over property—i.e., from an estate situated above (dominant estate) to an estate situated below (servient estate).  The owner of the lower estate may not do anything to prevent the flow of the water, and the owner of the higher estate may not do anything to render the flow more burdensome.  The SLFPA-E alleged that defendants possessed temporary rights of ownership in the lands they dredged to create the canal network and that those lands constituted a dominant estate from which water flowed onto its servient estate.  However, the Authority failed to show that a natural servitude of drain may exist between nonadjacent estates with respect to coastal storm surge.  As such, the court concluded that the Authority did not state a viable claim for natural servitude of drain.

The parties and the court addressed the Authority’s public and private nuisance claims together.  The obligations of neighborhood are the source of nuisance actions in Louisiana.  Generally, the owner of immovable property has the right to use the property as he pleases, but the owner’s right may be limited if the use causes damage to neighbors.  A claim for nuisance requires a showing of (1) a landowner (2) who conducts work on his property (3) that causes damage to his neighbor.  The court determined that the Authority failed to show sufficiently that it is a “neighbor,” within any conventional sense of the word, to any property of defendants.  To recover, the SLFPA-E must have some interest in an immovable “near” the defendant landowners’ immovable property; yet, it did not allege physical proximity of the servient and dominant estates whatsoever.  Moreover, nuisance claims after 1996 require the additional showing of negligence, except for damages resulting from pile driving or blasting with explosives.  Because the Authority did not allege that defendants engaged in pile driving or blasting with explosives, and it failed to state a claim for negligence upon which relief may be granted, the court dismissed the Authority’s claims for public and private nuisance.

For its breach of contract claim, the SLFPA-E characterized some of the dredging permits at issue as “contracts” between defendants and the US Army Corps of Engineers to maintain and restore.  The Authority contended that it is a third party beneficiary of those contracts; however, the Authority failed to present any authority suggesting that a dredging permit issued by the federal government is a contract.  The court noted that neither a permit nor a license is a contract.  Therefore, the court concluded that because the dredging permits do not constitute contracts, the third party beneficiary doctrine is not applicable.  The court additionally found that even if the permits were construed as contracts, the Authority did not establish that it is an intended beneficiary under the terms of the permits.  To be a third party beneficiary to a government contract, a third party must be an intended, rather than an incidental, beneficiary.  As such, the court found that the Authority failed to state a claim upon which relief may be granted for breach of contract as a third party beneficiary.

Because the SLFPA-E did not state a viable claim for relief, the court granted defendants’ motion to dismiss and dismissed the Authority’s claims against all remaining defendants with prejudice.  The SLFPA-E filed an appeal from this ruling, and the court’s prior remand ruling, with the Fifth Circuit on February 20, 2015.

The dismissal of this lawsuit by the federal court may not be the final word on coastal erosion lawsuits in Louisiana.  As noted, the SLFPA-E has appealed the court’s dismissal to the U.S. Court of Appeals for the Fifth Circuit.  Further, local governmental bodies and private landowners have filed over 30 additional lawsuits against various oil and gas and pipeline entities for related claims.

 

Flag Art (FINAL)

By Mallory McKnight

Under the “design-build” construction method, the property owner enters into one contract with a single entity that provides the owner with both design and construction services. The advantages of “design-build” include faster construction and delivery, slower cost and schedule growth, and the elimination of potential disputes between the designer and contractor. Due to these advantages, the design-build method is becoming increasingly more common on private construction projects.

However, with respect to state-owned public construction projects, the design-build construction method is heavily disfavored—if not completely prohibited—under Louisiana state law. Two recent Attorney General opinions serve to reiterate that the Louisiana Public Bid Law continues to be driven instead by the traditional “design-bid-build” project delivery method. “Design-bid-build” is the traditional method of project delivery whereby the public entity/owner enters into two separate contracts, one with the design professional and one with the contractor. (1)

Under the Louisiana Public Bid Law, construction contracts for “public works” (2) are generally awarded to the contractor who is the “lowest responsible and responsive bidder,” (3) while the design professional is selected “on the basis of competence and qualifications for a fair and reasonable price.” (4)  The purpose of competitive bidding in the public construction arena is to protect taxpaying citizens “against contracts of public officials entered into because of favoritism and involving exorbitant and extortionate prices.” (5) Contrary to the objective selection process involved in competitive bidding, the “design-build” method of project delivery allows for subjective considerations based on qualifications and/or performance.

The 2014 Louisiana Legislative Session passed a new statute providing for the “construction management at risk” (CMAR) project delivery method. (6)  The advantages of CMAR over the traditional “design-bid-build” are that the public entity/owner is able to select the contractor based on more than price and that the design professional and contractor are able to work together during the design phase to minimize design disputes. The benefits of CMAR are limited in nature because La. R.S. 38:2225.2.4 only applies to projects worth $25 million or more. More importantly, CMAR still does not provide all of the advantages of “design-build” because the public entity/owner is still required to enter into separate contracts with the design professional and contractor.

Two recent Louisiana Attorney General Opinions discuss the lack of authority of a public entity to enter a “design-build” contract for a public work under the Louisiana Public Bid Law. Specifically, the two Opinions discuss La. R.S. 38:2225.2, which states:

Neither the state nor any local entity, unless specifically authorized by law, may execute any agreement for the purchase of unimproved property which contains provisions related to the successful design and construction of a construction project prior to the transfer of title to the state or local entity.

In Louisiana Attorney General Opinion No. 13-0182 (Nov. 26, 2013), the Attorney General stated that the Houma-Terrebone Airport Commission (H-TAC) is a public entity subject to the Louisiana Public Bid Law, which requires the “design-bid-build” method for projects exceeding $150,000. The Attorney General interpreted La. R.S. 38:2225.2 as expressly providing that “unless specifically authorized by law, a public entity has no authority to enter into a design-build contract.” Therefore, the Attorney General’s opinion was that the H-TAC could not enter a design-build contract for the construction of its capital improvement project because it had no special statutory authorization.

In Louisiana Attorney General Opinion No. 14-0033 (Mar. 31, 2014), the Attorney General was asked to state his opinion on whether the Orleans Judicial District Court Building Commission (Commission) could enter a design-build contract for the construction of its new courthouse. The Commission, like the judiciary, is a “public entity” subject to the Louisiana Public Bid Law. As in Op. No. 13-0182, the Attorney General interpreted La. R.S. 38:2212 to provide that the Commission could not enter a design-build contract because it had no special statutory authority to do so. In addition, the Attorney General found that the Commission acted contrary to the Louisiana Public Bid Law by hiring a consultant pursuant to a Request for Qualifications, by which the consultant would be expected to provide additional services including architectural design and construction. Therefore, the Attorney General stated that the Commission must contract with separate entities to provide the design and construction services, pursuant to the Public Bid Law.

As interpreted by the Attorney General, La. R.S. 38:2225.2 expressly prohibits the use of “design-build” contracts for the construction of “public works” unless specifically authorized by statute. Currently, Louisiana provides specific statutory authorization for “design-build” contracts to the Department of Transportation and Development pursuant to La. R.S. 250.2, to Port Commissions pursuant to a pilot program established under La. R.S. 34:3523, and to certain New Orleans public entities pursuant to La. R.S. 38:2225.2.1 “in the construction or repair of any public building or structure which has been destroyed or damaged by Hurricane Katrina, Hurricane Rita, or both or any public building or structure to be constructed or repaired to meet a homeland security or criminal justice need pursuant to a hurricane recovery plan.” (7)  In conclusion, the majority of projects under the Louisiana Public Bid Law continue to be contracted under the traditional, competitive bidding process of “design-bid-build,” and the possibility of “design-build” seems to be a distant reality.

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(1) DBIA: Design-Build Institute of America, What is Design-Build?, available at http://www.dbia.org/about/Pages/What-is-Design-Build.aspx.
(2) La. R.S. 38:2211(A)(12): “‘Public work’ means the erection, construction, alteration, improvement, or repair of any public facility or immovable property owned, used, or leased by a public entity.”
(3) La. R.S. 38:2212(A).
(4) La. R.S. 38:2318.1(A).
(5) La. Atty. Gen. Op. No. 13-0182 (Nov. 26, 2013), 2013 WL 6410534.
(6) La. R.S. 38:2225.2.4.

(7) La. R.S. 38:2225.2.1(A)(1).

By Len Kilgore and Esteban Herrera

In the January 20, 2010 Louisiana Register, the Office of Conservation, Louisiana Department of Natural Resources issued a Notice of Intent to amend Statewide Order 29-B to incorporate new rules for the evaluation and remediation of groundwater conditions at exploration and production sites.

The proposed rules can be found at this link.   As part of the proposal, Conservation has published a draft manual entitled “Exploration and Production Waste Site Evaluation and Remediation Procedures Manual” or “SERP Manual.”   A copy of the SERP Manual can be found here

Conservation will accept comments on the proposal through March 8, 2010.   A public hearing on the proposal is scheduled for March 1, 2010, at 9:00 a.m. (CST).   Anyone with interests involving energy exploration and production sites should carefully review the proposal.

by Erich P. Rapp

The New Orleans Times Picayune posted a story to their web site on July 3, 2007 at 7:45 PM stating that the Corps of Engineers has formally recommended to Congress that the Mississippi River – Gulf Outlet ("MR-GO") be closed. MR-GO is a 60 mile long shipping channel running from the Louisiana coast to the Industrial Canal in New Orleans. Construction on MR-GO started in 1958 and was completed in 1968. The canal was designed to be 36 feet deep and 500 feet wide.

Continue Reading Corps Recommends Closing MR-GO