Most litigants in Louisiana know that the usual tort claim has a prescriptive period (i.e., statute of limitation) of one year. This one-year clock begins ticking from the day injury or damage is sustained.[1]

But when exactly someone sustains an injury can be a tricky question to answer. If I am unknowingly exposed to a harmful chemical, did I sustain damage then, even if I didn’t know it at the time? If so, what if I don’t find out until over a year later? Although the clock on my tort claim has reached zero, it seems harsh to foreclose my cause of action before I even knew it existed.

Enter the doctrine of contra non valentem. From the Latin phrase for “prescription does not run against one who is unable to act,” contra non valentem pauses that one-year clock under certain circumstances.

One such circumstance is when the cause of action is not known or reasonably knowable to the plaintiff, even though the plaintiff’s ignorance is not induced by the defendant. For example, in my hypothetical case of chemical exposure, because I had no idea of my cause of action at the time of exposure, contra non valentem would pause the clock on my prescriptive period for some time.

The pause created by contra non valentem lasts until the plaintiff gains actual or constructive knowledge of facts that would lead a reasonable person to realize they have been the victim of a tort. There is some difficulty in defining constructive knowledge, but essentially it is the knowledge that a reasonable victim of a tort would possess.

For example, if I unreasonably choose to ignore the obvious signs of my latent injury, my actual knowledge may be very little, but I will be charged with the knowledge of someone acting reasonably in my shoes. The knowledge imputed to me would be my constructive knowledge.

Now imagine that before realizing I was exposed to a chemical but after feeling the effects, I am diagnosed by a doctor with an illness. Does that diagnosis signal the end of the effect of contra non valentem? That is the difficult question answered recently by the U.S. Fifth Circuit.[2]

The case involved plaintiff Ervin Jack, Jr., who for years lived with his wife near a petrochemical manufacturing facility in Reserve, Louisiana that allegedly emitted dangerous levels of a chemical called ethylene oxide, a colorless and odorless gas. Jack’s wife was diagnosed with breast cancer and passed away in 2000. Jack claimed that he was unaware of the ethylene emissions until 2020, when a law firm sent out mailers with information about the allegedly carcinogenic emissions and the nearby facility.

In 2021, Jack and other plaintiffs in similar positions sued the facility on behalf of their deceased family members. Lawyers on behalf of the facility moved to dismiss Jack’s claims as time barred. The facility argued that contra non valentem ceased when Jack’s wife was diagnosed with breast cancer, which was over 20 years before filing suit.

The trial court judge agreed, finding that “[s]tate and federal case law regarding prescription and contra non valentem strongly suggest that a medical diagnosis puts a plaintiff on constructive notice of her cause of action, and thereby starts the prescriptive period.”[3] However, other judges in the Eastern District of Louisiana reached the opposite conclusion: diagnosis is not necessarily constructive notice.[4]

The Fifth Circuit sided with the second group of judges, holding that the diagnosis alone did not put Jack on notice of the alleged tort. The court determined that the proper question was whether a reasonable person with Jack’s lack of education, medical training, and computer literacy would have suspected that he was the victim of a tort. The answer was no, at least at the time of diagnosis.

Significant to the court’s conclusion was the fact that breast cancer is a very common diagnosis, one that has any number of causes and does not necessarily indicate a tortious source, unlike asbestosis or multiple myeloma.

The court also noted that “a man who does not work for an allegedly tortious employer cannot be held, with nothing more, to be suspicious of invisible and unknown emissions of surrounding companies or to embark on an investigation of the inner workings of an otherwise ordinary plant.”

Notably, the court did not address the related question of whether a reasonable plaintiff always inquires into the cause of his diagnosis. Instead, the court simply held that in this case, at the time of diagnosis, the alleged underlying tort was not reasonably knowable. But it’s not hard to imagine a case where the tort was reasonably discoverable at diagnosis, but the plaintiff contends there were good reasons he failed to inquire further.

Nevertheless, this recent case is instructive. It saw the Fifth Circuit reject a one-size-fits-all approach to contra non valentem where diagnosis alone puts plaintiffs on notice of their potential tort.

This means the unique facts of each latent-injury case are key. Parties should focus on the plaintiff’s background, the opportunities for discovering the alleged cause of the injury, the nature of the illness at issue, and the landscape of the scientific literature and other sources linking the harmful agent to the symptoms experienced by the plaintiff. As in any prescription analysis, the timing of these various factors is key.

Finally, parties should keep in mind that contra non valentem is a creature of state law, meaning the Louisiana Supreme Court has the final say in how the doctrine ought to be applied.


[1] La. Civ. Code art. 3492.

[2] Jack v. Evonik Corporation, No. 22-30526, 2023 WL 5359086 (5th Cir. Aug. 22, 2023).

[3] Jack v. Evonik Corp., No. 22-1520, 2022 WL 3347811, at *4 (E.D. La. Aug. 12, 2022) (Barbier, J.); see also Joseph v. Evonik Corp., Civ. No. 22-1530, 2022 WL 16712888, at *4–7 (E.D. La. Nov. 4, 2022) (Vance, J.); Villa v. Evonik Corp., Civ. No. 22-1529, 2022 WL 3285111, at *2 (E.D. La. Aug. 11, 2022) (Ashe, J.).

[4]  Fortado v. Evonik Corp., Civ. No. 22-1518, 2022 WL 4448230, at *4–8 (E.D. La. Sept. 23, 2022) (Milazzo, J.); Jones v. Evonik Corp., 620 F. Supp. 3d 508, 516–19 (E.D. La. 2022) (Africk, J.).

The recent U.S. Supreme Court decision in Sackett v. EPA significantly narrows the definition of “waters of the United States” (“WOTUS”) as applicable to wetlands and other adjacent bodies of water under the Clean Water Act (“CWA”). By extension, Sackett has broad impacts to wetlands delineation and mitigation requirements for section 404 permits issued by the U.S. Army Corps of Engineers (“Corps”).[1] Sackett will affect whether section 404 dredge and fill or other CWA permits[2] are required for wetlands and the extent to which mitigation of wetland impacts is required.[3] Under Sackett, wetlands that do not have a “continuous surface connection” to a perennial traditional waterway will no longer be subject to CWA jurisdiction (and section 404 permitting).

On September 8, 2023, the EPA amended the WOTUS regulatory definition to conform with the Sackett decision.[4] However, the change is only in effect in states where the 2023 rule is not being challenged. In those states, including Louisiana and Texas, the pre-2015 rule is in effect in conformity with the Sackett decision. This presents many potential complications because the pre-2015 rule provides more jurisdiction over wetlands than the holding of Sackett allows. Additionally, without the certainty of the final rule change, the Corps, who makes determinations on wetland delineations, could be hesitant to make new jurisdictional determinations until pending litigation is resolved and the new rule can be applied.

Sackett v. EPA Decision

Prior to the Sackett decision, the WOTUS definition and Corps rules were based on the decision in Rapanos v. U.S.[5] In that case, the Court could not reach a majority on its holding, and a total of five opinions were entered in the case. Thus, the definition of WOTUS was based on Justice Anthony Kennedy’s concurring opinion. The Kennedy concurrence provided two standards: a wetland could be considered a “water of the United States” if it had either a “continuous surface connection” to a traditional navigable water or if it had a “significant nexus to “waters of the United States.” Wetlands could be subject to CWA jurisdiction even when there was no indication of surface water present, no high-water table, and no saturated soil. Jurisdictional determinations could be based on the presence of certain soil characteristics and vegetation (factors that were widely used in the “significant nexus” test).

In Sackett, the Court eliminated the use of the “significant nexus” test, but retained the continuous surface connection standard. The Sackett Court also established a two-step analysis to determine whether wetlands or other adjacent waters are subject to CWA requirements:

  1. Does the adjacent body of water constitute “waters of the United States” (a relatively permanent body of water connected to traditional interstate navigable waters) within the meaning of the CWA?
  2.  If so, does the wetland or secondary water at issue have a “continuous surface connection” with that traditional water?[6]

Effects on CWA Approved Jurisdictional Determinations

The Sackett decision’s two step “continuous surface connection” test will necessarily affect jurisdictional determinations for pending permits primarily in the following four key ways:

  1. “Perennial” bodies of water, such as the Mississippi River or other rivers and lakes in Louisiana, will be classified as a traditional navigable body of water, passing “step 1” of the Sackett test.[7]
  2. Wetlands and other water bodies, such as drainage canals, that have a direct connection to perennial waters will pass “step 2” of the Sackett test. These wetlands and waterbodies will still be subject to CWA jurisdiction.
  3. Wetlands and water bodies where the surface connection to a traditional perennial waterway is interrupted by land or another barrier, such as a levee or road,[8] may no longer be classified as jurisdictional wetlands based on Sackett, but will require the two-step analysis to make that determination.
  4. Wetlands and areas that have a continuous surface connection that is interrupted periodically due to factors such as low tides, seasonal changes, or drought conditions, but that exists for at least some time during a year, may still be under CWA jurisdiction.[9]

September 2023 Conforming Rule

After the Sackett decision was released by the Court, the Corps halted all approved jurisdictional determinations (“AJDs”)[10] until the U.S. Environmental Protection Agency (“EPA”) could amend the WOTUS rule in conformity with the Court’s decision (“the Conforming Rule”). On August 29, 2023, the EPA released a revision to the January 2023 rule to conform with the Sackett decision, which became effective on September 8.[11] The new rule revised the 2023 rule in conformity with the Sackett decision. Namely, the new rule made the following changes:

  • Removed the phrase “including interstate wetlands” from 40 CFR 120.2(a)(1)(iii) and 33 CFR 328.3(a)(1)(iii).
  • Removed the significant nexus standard from the tributaries provisions in 40 CFR 120.2(a)(3) and 33 CFR 328.3(a)(3).
  • Removed the significant nexus standard from the adjacent wetlands provisions in 40 CFR 120.2(a)(4) and 33 CFR 328.3(a)(4).
  • Removed the significant nexus standard and streams and wetlands from the provision for intrastate lakes and ponds, streams, or wetlands not otherwise identified in the definition contained in 40 CFR 120.2(a)(5) and 33 CFR 328.3(a)(5).
  • Removed the term “significantly affect” and its definition in its entirety from 40 CFR 120.2(c)(6) and 33 CFR 328.3(c)(6).
  • Revised the definition of “adjacent” under 40 CFR 120.2(c)(2) and 33 CFR 328.3(c)(2).[12]

Dueling Regulatory Standards

Importantly, the Conforming Rule only applies in states where the January 2023 definition was enjoined, or became final (see map below). In the remaining 27 states, including Louisiana and Texas, the January 2023 rule was challenged in court and is subject to injunction. For these states, the EPA has stated that the pre-2015 WOTUS definition will apply along with the holding of the Sackett decision “until further notice.”[13]

The EPA has not clarified how this “modified” pre-2015 definition differs from the conforming rule, which is especially concerning since the purpose of the Conforming Rule was to implement the Sackett decision. While there is no question that Sackett necessarily affects jurisdictional determinations rendered by the Corps, the EPA has not specified exactly how it will modify the pre-2015 standard. Specifically, the pre-2015 standard provided for CWA jurisdiction over all interstate wetlands.[14] Perhaps the best illustration of this point is that the case giving rise to the Sackett decision itself involved a jurisdictional determination made in 2007 using the pre-2015 rule.

Figure 1: Map Created by the U.S. Environmental Protection Agency (epa.gov)

Post-Sackett WOTUS Outlook

While Sackett significantly clarifies the process for wetland delineation, the decision still contains gray areas. For one, the Court stopped short of defining a “continuous surface connection.” Instead, it characterized it as a connection “making it difficult to determine where the water ends and the wetland begins.”[15] Second, the majority opinion noted that there could be exceptions where the connection does not exist for a portion of the year, but the connection would still be viewed as continuous. (“We also acknowledge that temporary interruptions in surface connection may sometimes occur because of phenomena like low tides or dry spells.”[16]) So, if a wetland is connected only seasonally or intermittently to relatively permanent waters, AJDs will still require a case-by-case determination.

The Conforming Rule incorporates the key holdings of Sackett, but stops short of discussing “gray areas” where the decision lacks specificity. Notably, the EPA did not allow an opportunity for comment on the final rule, using the “good cause” provision of the Administrative Procedure Act (“APA”) to justify the move because the Conforming Rule “does not impose any burdens on the regulated community.”[17] And the Biden Administration stated in its initial response to the decision that it intends to use other legal authorities to fill the alleged regulatory gap.[18] Without clarity in the Conforming Rule on areas such as the degree of surface connection, the EPA and Corps could use other regulatory devices, such as guidance documents, to add requirements where the Sackett decision is silent.

Effects on Section 404 Permitting

The Corps has stated and that it is willing to reconsider prior AJDs based on the new standards in the Sackett decision[19] and that it will resume issuing AJDs now that the new Conforming Rule has been issued.[20] But the dueling regulatory standards between states could result in continued delays for AJDs in states where the Conforming Rule isn’t in effect. At least one effected Corps district has placed all AJDs on indefinite hold.[21] And, even in states where the Conforming Rule is in effect, there is currently no regulatory test or guidance on how the factors such as what degree of continuity in a surface connection will be sufficient for CWA jurisdiction under the Conforming Rule.  As a result, permit applicants may continue to experience delays on wetland AJDs for permit applications until litigation on the January 2023 rule can be resolved.


[1] CWA Section 404 requires permits for the discharge of dredged or fill material into waters of the United States, including wetlands. Activities regulated under this program include fill for development, water resource projects (such as dams and levees), infrastructure development (such as highways and airports), and mining projects. A permit from the Corps is required before dredged or fill material may be discharged into a water of the United States, unless the activity is exempt from Section 404 (such as certain farming and forestry activities). U.S. Env’t Prot. Agency, “Permit Program under CWA Section 404” (March 31, 2023), available at https://www.epa.gov/cwa-404/permit-program-under-cwa-section-404.

[2] The WOTUS rule also affects permitting under the following CWA sections and programs: Section 303(c), Water Quality Standards; Section 303(d), Impaired Waters and Total Maximum Daily Loads (TMDLs); Section 311, Oil Spill Prevention and Preparedness; Section 401 Certification; and Section 402, National Pollutant Discharge Elimination System (NPDES).

[3] Sackett v. Envtl. Prot. Agency, 598 U.S. 651, 143 S. Ct. 1322 (May 25, 2023).

[4] 88 Fed. Reg. 61964 (September 8, 2023).

[5] Rapanos v. U.S., 547 U.S. 715 (2006).

[6] 143 S. Ct. at 1341.

[7] See Envtl. Prot. Agency, National Hydrography Dataset: Streams and Waterbodies in Louisiana (January 19, 2021), available at https://19january2021snapshot.epa.gov/sites/static/files/2014-09/documents/louisiana.pdf.

[8] Sackett, 143 S. Ct. at 1368 (J. Kavanaugh, concurring): “For example, the Mississippi River features an extensive levee system to prevent flooding. Under the Court’s ‘continuous surface connection’ test, the presence of those levees (the equivalent of a dike) would seemingly preclude Clean Water Act coverage of adjacent wetlands on the other side of the levees, even though the adjacent wetlands are often an important part of the flood-control project.”

[9] Id. at 1341 (“[w]e also acknowledge that temporary interruptions in surface connection may sometimes occur because of phenomena like low tides or dry spells”).

[10] AJDs are determinations made by the Corps on whether a reviewed area is subject to CWA jurisdiction. 33 C.F.R. 331.2.

[11] 88 Fed. Reg. 61964 (September 8, 2023).

[12] Id. See also “Regulatory Text Changes to the Definition of Waters of the United States at 33 CFR 328.3 and 40 CFR 120.2” (Aug. 14, 2023), available at https://www.epa.gov/system/files/documents/2023-08/Regulatory Text Changes to the Definition of Waters of the United States at 33 CFR 328.3 and 40 CFR 120.2.pdf.

[13] Envtl. Prot. Agency, Pre-2015 Regulatory Regime, available at https://www.epa.gov/wotus/pre-2015-regulatory-regime.

[14] 40 C.F.R. § 230.3(s)(2) (2015).

[15] Sackett, 143 S. Ct. at 1341.

[16] Id.

[17] 88 Fed. Reg. 61965 (September 8, 2023), citing 5 U.S.C. § 553(d)(3).

[18] The White House, Press Release, Statement from President Joe Biden on Supreme Court Decision in Sackett v. EPA, (May 25, 2023), available at https://www.whitehouse.gov/briefing-room/statements-releases/2023/05/25/statement-from-president-joe-biden-on-supreme-court-decision-in-sackett-v-epa/.

[19] Lewis v. United States Army Corps of Engineers, No. CV 21-937, 2023 WL 3949124, at *1 (E.D. La. June 12, 2023).

[20] U.S. Army Corps of Eng’rs Headquarters, Press Release, EPA and the Army Issue Final Rule to Amend 2023 Rule (September 8, 2023), available at https://www.usace.army.mil/Media/Announcements/Article/3520843/8-september-2023-epa-and-the-army-issue-final-rule-to-amend-2023-rule/.

[21] U.S. Army Corps of Eng’rs, Chicago District, Approved Jurisdictional Determinations, available at https://www.lrc.usace.army.mil/Missions/Regulatory/Jurisdictional-Determinations/ (last visited September 22, 2023).

The digitization of our economy has streamlined company operations but has brought with it persistent, ongoing cyberattacks. Successful attacks disrupt business operations, are costly to remediate, and can compromise confidential and personal information—including client and employee information. These compromises can significantly impact revenue and trust in the company and often result in stock prices dropping. While publicly traded companies typically report incidents to investors, reporting is not always consistent or is buried in quarterly reports made well after the fact.[1]

Effective as of September 5, 2023, the Securities and Exchange Commission (SEC) has finalized its proposed rule requiring publicly traded companies to promptly report “material” cybersecurity incidents and report annually on cybersecurity risk management and governance. This Rule addresses the need for disclosure of data incidents and preparedness to better inform investors with timely and reliable information.

I. Form 8-K Item 1.05: Cybersecurity Incident Reporting

The Final Rule is for the benefit of investors and focuses on streamlining and standardizing disclosures regarding data incidents and cybersecurity risk management, strategy, and governance.[2] New Form 8-K Item 1.05 requires companies to determine whether a cybersecurity incident is material without unreasonable delay after discovery of the incident. So long as a company does not intentionally delay a materiality determination to avoid timely disclosure, it will not likely be found to be in violation of the Rule.  Once a company determines that the incident is material, it has 4 days within which it must disclose the incident, including a description of the nature, scope, and timing of the incident and material impact or reasonably likely impact of the incident.[3] Registrants are not required to disclose the remediation status of the incident, technical information about planned responses, or whether data was compromised. To evaluate materiality, registrants should consider qualitative factors such as harm to company’s reputation, customer or vendor relationships, competitiveness, and potential for litigation or regulatory investigations. Cybersecurity incidents comprise “unauthorized occurrence, or a series of related unauthorized occurrences, on or conducted through a registrant’s information systems that jeopardizes the confidentiality, integrity, or availability of a registrant’s information systems or any information residing therein.”

II. Regulation S-K Item 106: Annual Reporting on Cybersecurity Risk Management, Strategy, and Governance

Registrants much also now disclose in their annual reporting their risk management practices, strategy, and governance. New S-K Item 106 requires companies to describe their processes, if any, for dealing with material risks from cybersecurity threats in enough detail that a reasonable investor would be able to understand it. Ideally, these disclosures will provide investors with material information to better inform their investment decisions, while avoiding the potential issue of a company’s being forced to disclose sensitive information that might further compromise the company’s security.[4] Item 106 reports must also include a description of the company’s governance structure and policies pertaining to cybersecurity and data protection, including which management positions are responsible for assessing and managing the risks, the expertise of the people in those positions, how those persons monitor security and compliance, and whether the risks are reported to the board of directors. The SEC also amended Form 20-F and Form 6-K to require similar disclosures in foreign private issuers’ annual reports.

A. Risk Management Disclosures

Proper compliance with the risk management practices disclosures entails disclosing information that would be material to the investment decisions of potential investors. These disclosures do not need to be so detailed that they would compromise the security of the company providing the disclosures. Indeed, in direct response to commenters’ concerns about the security risk presented from these disclosures, the SEC amended the Final Rule to appropriately account for the potential security vulnerability created by a detailed description of risk management practices or strategy by only requiring disclosure of “processes” instead of “policies and procedures”. Other deletions from the Rule as proposed include removal of the list of risk types (e.g., intellectual property theft, fraud, etc.) and removal of certain disclosure items, include the entity’s activities undertaken to prevent, detect, and minimize the effects of cybersecurity incidents and the business continuity and recovery plans in the event of a data incident.

B. Governance Disclosures

In compliance with S-K Item 106, registrants must also disclose governance of their cybersecurity policies, ideally identifying the management positions or committee responsible for managing cybersecurity risks and detailing the extent and nature of their expertise. Expertise can include prior work experience in cybersecurity, any relevant degrees or certifications, or any knowledge, skills, or other background in cybersecurity. The disclosure should further detail how the manager or committee is informed about cybersecurity threats or incidents and how they prevent, detect, mitigate, and remediate these incidents. Lastly, the company should disclose whether reports by either management or a committee are submitted to the board of directors or a subcommittee of the board. Having dedicated employees in management positions or having a committee whose primary responsibility is cybersecurity will become increasingly important to investors, who will likely exercise increasing scrutiny of such measures.

C. Compliance Considerations

Regulation S-K Item 106 and Form 20-F disclosures begin with annual reports for fiscal years ending on or after December 15, 2023. Form 8-K Item 1.05 cybersecurity incident disclosures must be compliant by the later of ninety (90) days after the date of publication in the Federal Register or December 18, 2023. Smaller reporting companies have an additional 180 days and must begin complying with Form 8-K 1.05 by the later of 270 days from the effective date of the rules or June 15, 2024. While each company will have its own individual considerations, here are some general recommendations to prepare for compliance and additional reporting:

  • Review and update the cyber incident response plan. Every company should have a cyber incident response plan that lays out how the company will respond to a suspected or confirmed data incident, the persons responsible for the incident response, and associated documentation procedures. Companies should update their plans to incorporate the new Form 8-K reporting requirements, including establishing a framework for evaluating materiality to ensure prompt reporting.  Considering that very limited circumstances allow for notification delay, companies should presume they will not be granted an extension unless they regularly interact with agencies of the U.S. government responsible for national security.  Once the policies and procedures are updated, companies should promptly train the appropriate employees on the new process.
  • Review and, if needed, update third party contract terms to include incident disclosure requirements. Cyber incidents often originate from a company’s vendor that has access to the company networks or the company’s data. The Rule requires disclosure of cyber incidents, regardless of where they originate. Companies should ensure that vendors with access to their data or networks are bound by clear, prompt incident notification requirements.
  • Assess possible updates to board assignments and committee responsibility. The SEC rules make clear that management of cybersecurity considerations just be a specifically designated job, and not an afterthought. Public companies should clearly assign cybersecurity oversight responsibilities, which may require updating committee assignments and charters.
  • Prepare the new disclosures for the company’s annual report. In addition to preparing to report on the company’s cybersecurity risk management, governance, and strategy, now is an excellent time to evaluate the effectiveness of the company’s overall cybersecurity posture and whether any gaps exist. The Rule clearly identifies that the person responsible for the cybersecurity oversight should be qualified with appropriate training or experience. If the company presently does not have someone with the appropriate qualifications, the company should consider hiring additional support or supporting a current employee’s training or certification.

While this Final Rule from the SEC will create new challenges for companies, it is worth emphasizing that the disclosure of this information to investors is not only imperative in the present moment but will become increasingly significant in the future. Cybercrime is proliferating, with professional groups organizing attacks on high level business at an ever-increasing rate. How well a company is equipped to deal with cybersecurity threats, and how well it addresses incidents that occur, is something investors will consider more and more as our reliance on technology to function grows. The Final Rule ensures that investors will become more effective in their ability to understand how prepared a company is for these events in the present and future.


[1] Special thanks to Christopher Malon, South Texas College of Law Class of 2025, for his assistance in researching and drafting this article.

[2] Securities and Exchange Commission, “Final Rule: Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure” (available at https://www.sec.gov/files/rules/final/2023/33-11216.pdf).

[3] Securities and Exchange Commission, “FACT SHEET: Public Company Cybersecurity Disclosures; Final Rules”, (available at https://www.sec.gov/files/33-11216-fact-sheet.pdf). In situations where disclosure would pose a substantial risk to national security or public safety, the SEC allows delaying disclosure if the Attorney General determines that the disclosure would indeed pose such a risk. This delay may be extended by the Attorney General so long as the risk to national security or public safety remains.

[4] See id. at 61 (noting that the revised formulation from the proposed amendment helps avoid levels of detail that would go beyond what was relevant to investors and addresses commenters concerns about details that would make companies vulnerable to cyberattacks).

For decades, the Louisiana Supreme Court has grappled with the “open and obvious” liability defense, making several attempts to determine its proper use within Louisiana’s duty-risk negligence analysis. The latest of these cases is Farrell v. Circle K Stores, Inc. and the City of Pineville, in which the Court changed course from multiple of its prior decisions and clarified that the open and obvious determination is not a matter of duty for the court to decide, but a matter of breach for the fact finder. This note explains the open and obvious defense, Louisiana Supreme Court precedent pre-Farrell, the Farrell case, and the implications of the Court’s recent decision.

The open and obvious defense often arises in premises liability cases, where individuals sustain injuries as a result of hazardous or dangerous conditions on the property of another. These individuals have a cause of action against the owner or legal custodian of the property under Louisiana Civil Code article 2317, which provides generally that “[w]e are responsible, not only for the damage occasioned by our own act, but for that which is caused by the act of persons for whom we are answerable, or of the things which we have in our custody.” The following Code article, 2317.1, specifies the scope of premises liability for ruin, vices, or defects in property: “[t]he owner or custodian of a thing is answerable for damage occasioned by its ruin, vice, or defect, only upon a showing that he knew or, in the exercise of reasonable care, should have known of the ruin, vice, or defect which caused the damage, that the damage could have been prevented by the exercise of reasonable care, and that he failed to exercise such reasonable care.”

Under these Code articles, landowners have a legal duty to discover dangerous conditions on their property and to either correct the condition or warn patrons of its existence. There is no doubt that landowners who fail to mitigate or warn the public of unreasonably dangerous conditions are liable for resulting injuries to patrons on the property. But landowners asserting the open and obvious defense argue that hazardous conditions that are “open and obvious to all” are not unreasonably dangerous, so liability should not follow.

In several pre-Farrell decisions dating back to the 1990s, the Louisiana Supreme Court inconsistently applied the open and obvious analysis. The problematic question was whether the hazardous condition at issue was “unreasonably dangerous.” In Pitre v. Louisiana Tech University, 95-1466 (La. 5/10/96), 673 So.2d 585, the considered this inquiry as part of the “duty” analysis. By tethering the open and obvious determination to the duty element, the Court effectively rendered it a question of law to be decided by the court, not the fact finder. The Court granted summary judgment for the defendant, holding that the hazardous condition at issue was open and obvious, and thus that the defendant owed no duty to the plaintiff.

But in Broussard v. State, 2012-1238 (La. 4/15/13), 113 So.3d 175, the Court parted ways with its Pitre analysis. The Court criticized its prior open and obvious decisions for improperly classifying the open and obvious determination as a legal issue of duty—thus “confus[ing] the role of the judge and jury in the unreasonable risk of harm inquiry and arguably transferr[ing] the jury’s power to determine breach to the court to determine duty or no duty.” Instead, the Court suggested that the question of whether a hazard presents an unreasonable risk of harm is a pure question of fact reserved for the fact finder.

The following year, in the Court granted certiorari in the case of Bufkin v. Felipe’s Louisiana, LLC, 14-288 (La. 10/15/14), 171 So. 3d 851, and changed its open and obvious analysis yet again—seemingly abandoning the breach-based approach from Broussard and re-adopting the duty-based approach from Pitre. The Bufkin Court reversed the district court’s decision and granted summary judgment in favor of the defendant based on its determination that the hazardous condition at issue was not unreasonably dangerous, thus the defendant owed no duty to the plaintiff.

The Pitre, Broussard, and Bufkin line of cases blurred the line between the duty and breach elements of Louisiana’s negligence analysis, causing uncertainty among courts and litigants. Even more concerning was the effect: the Pitre/Bufkin duty-based approach and the Broussard breach-based approach could yield drastically different outcomes in otherwise similar cases, especially in the summary judgment context. Issues of fact as to the risks posed by the injury-causing condition that could preclude summary judgment under the breach-based approach were left up to the court under the duty-based approach, arguably making summary judgment more likely under the latter than the former. Pitre and Bufkin are perfect examples.

Farrell involved a plaintiff who decided to walk her dog in a grassy area near a gas station. In order to reach the grassy area, the plaintiff attempted to step over a pool of water and fell. The plaintiff filed suit against the owner of the gas station and the City of Pineville, Louisiana. The Defendants then filed a Motion for Summary Judgment arguing that the pool of water was open and obvious to the plaintiff.

The Farrell Court scrutinized its prior open-and-obvious decisions one-by-one and openly acknowledged the resulting confusion. Writing for the majority, Justice Genovese explained that the Court undertook review of Farrell to “rectify” the open and obvious defense. The remainder of the opinion clearly explains the role of the open and obvious inquiry within the broader negligence framework and explains its implications in the summary judgment context.

First, Justice Genovese explained that the open and obvious inquiry has no bearing on the question of duty. Instead, the question must be considered as part of the breach inquiry—specifically, the second factor of the risk/utility balancing test—which considers the likelihood and magnitude of the harm using a reasonable person standard. The court advised that the condition, size and location of the hazard are factors for consideration,
but the plaintiff’s subjective awareness of the condition has no bearing on the analysis.

Finally, Justice Genovese clarified that the breach-based approach is not an outright bar to summary judgment, which remains the appropriate remedy in open and obvious cases where the defendant makes a showing that reasonable minds could only agree that the injury-causing condition was not unreasonably dangerous. Proving this point, the Farrell court concluded that the gas station-defendant met this burden and granted its summary judgment motion, reversing the trial court’s decision.

Farrell seems to clarify years of inconsistent caselaw concerning the open and obvious defense. While renewed breach-based approach may yield fewer summary judgments for defendant-property owners, the Farrell decision exemplifies that it does not preclude summary judgment altogether.

This blog is an update to “Legal Issues with Using AI to Create Content – Written with Help from AI” by Devin Ricci on April 28, 2023

On August 18th, the United States District Court for the District of Columbia issued an opinion stating that Artificial Intelligence (AI) generated artwork lacks “human authorship,” thus it cannot be the subject of a valid copyright claim. This decision raises many issues regarding copyright ownership that will require further court involvement and/or policy reform.

The primary challenge arising from AI-generated artwork pertains to copyright existence and ownership. Copyright law traditionally assigns authorship to individuals who create original works. However, in the case of AI, determining authorship becomes complex. Some argue that since AI systems are essentially tools programmed by humans, the programmers should retain authorship rights. Others believe that if AI can autonomously create something new without direct human intervention, it should be granted certain rights. This debate challenges the very essence of copyright law, which is built around the concept of human creativity.

Case Summary

The plaintiff, Stephen Thaler, used the “Creativity Machine,” a generative AI technology, to generate a piece of artwork. Thaler was unsuccessful with obtaining a copyright registration for the AI-generated artwork. In the copyright application, Thaler identified “Creativity Machine” as the author. The United States Copyright Office (“USCO”) denied the application because the work “lack[ed] the human authorship necessary to support a copyright claim.” Thereafter, Thaler filed a complaint in the D.C. District Court against the USCO and its director requesting the refusal be set aside and the AI-generated artwork be registered.

Thaler filed a motion for summary judgment arguing that AI-generated work is copyrightable because the Copyright Act provides protection to “original works of authorship.” This argument was premised on Thaler’s assertion that “author” is not explicitly defined in the Copyright Act and that the ordinary meaning of “author” encompasses generative AI. Ultimately, the D.C. District Court disagreed. The Court held the Copyright Act plainly requires human authorship. As explained by the Court, an “author” is “an originator with the capacity for intellectual, creative, or artistic labor,” which is necessarily a human being.

Implications and Considerations

This decision raises a host of questions and demonstrates that a more comprehensive legal framework is required as AI generated content becomes more sophisticated and prevalent. AI has revolutionized various industries, and the realm of creative expression is no exception. AI-generated artwork has gained significant attention in recent years, raising fascinating questions about the intersection of technology, creativity, and intellectual property rights. As AI systems create artwork independently, it becomes imperative to analyze the implications of this emerging trend on copyright, ownership, and the very definition of creativity. The legal framework is continually evolving and there are many issues that content creators, artists, and marketing companies need to be cognizant of as the legal framework develops.

If this ruling is upheld, a work created solely by AI theoretically is not susceptible to copyright protection at all. Because copyright law is preemptive, meaning it exclusively governs the subject matter of claims that fall within the purview of the Copyright Act, this could severely limit the ability to prevent infringement of an AI-generated work. In theory, because the work would not be protectable, there is no property right to infringe and may not be a legal basis to prevent third party use of the material. 

It is important to note that this recent decision may not stretch to underlying works created by a human, or to the extent a human could be considered a co-author of AI-generated content. In any event, it does implicate works where AI is fully creating the work with little to no human involvement. For example, if you use a program similar to the Creativity Machine and type into the program: “create a picture of Santa getting run over by a reindeer with cookies flying everywhere and a dog laughing,” the resulting image would not be protectable under this decision. In particular, advertising companies should be aware that AI-generated advertisements may not be subject to copyright protection.

However, there must be some middle ground between complete human authorship and complete AI-generated content. AI might be utilized in developing a work, but if there is enough human involvement it should be fair to say there is human authorship. Perhaps a photographer snaps a photograph and uses an AI editing tool to filter/edit the photo. Is the photographer’s involvement enough to make the edited photo a human-authored work? How much human involvement is required to constitute authorship? Courts will have to wrestle with the intersection of AI’s involvement in creative works to sort out these questions. Otherwise, it will be up to Congress to create a new framework for addressing AI generated or augmented works.

Conclusion

AI-generated artwork represents a groundbreaking fusion of technology and creativity that challenges established norms in the art and legal worlds. The complex questions it raises about copyright, authorship, and the essence of creativity underscore the need for collaborative efforts among legal experts, artists, programmers, and policymakers. Balancing the rights of human creators and the capabilities of AI will shape the future landscape of artistic expression and intellectual property rights.

On August 18, 2023, in Hamilton v. Dallas County,[1] the United States Fifth Circuit Court of Appeals, sitting en banc, handed down a significant Title VII ruling that has far-reaching implications for future employment discrimination cases in Louisiana, Mississippi, and Texas. Employees seeking to bring a discrimination claim no longer need to meet the high burden of proving they suffered an “ultimate employment decision.” Instead, the Fifth Circuit has aligned with its sister circuits, and plaintiffs need only show they suffered from a discriminatory act related to hiring, firing, compensation or the terms, conditions, or privileges of employment. Indeed, in Hamilton, the Fifth Circuit initially applied the ultimate employment decision standard before rehearing the case en banc and ultimately reversing 27 years of precedence.

For many years, the Fifth Circuit limited actionable Title VII cases to those cases involving ultimate employment decisions. An ultimate employment decision is a decision that affects hiring, granting leave, discharging, promoting, or compensation. Employment decisions that did not impact at least one of the five enumerated categories did not rise to a level to sustain a claim under Title VII. [2]  

Hamilton arose from a Dallas County Sheriff’s Department (“the County”) employment policy pursuant to which officers were allowed to select their off-day preference, but only men could select two consecutive weekend days.[3] Consequently, female officers were not allowed time off for a full weekend. On its face, the policy was gender-based and discriminatory, but the County attempted to justify the policy by asserting that “it would be safer for male officers to be off during the weekends as opposed to during the week.”[4]  

In its initial August 3, 2022 panel opinion, consistent with its prior holdings, the Fifth Circuit held the gender-based scheduling policy was not an ultimate employment decision and affirmed the district court’s summary judgment and dismissal in favor of the County. The policy did not involve an ultimate employment decision and was, therefore, not actionable. To be actionable, the conduct must have impacted one of the enumerated categories and risen to the level of an ultimate employment decision. In the panel opinion authored by Judge Carl Stewart, the Court acknowledged its holding was contrary to its sister circuits and the express language of Title VII. But, absent an amendment to Title VII, a decision by the Court en banc, or a Supreme Court decision, the Court was bound by existing Fifth Circuit precedent. In the panel opinion, Judge Stewart recognized that the allegation against the County was within the scope of the express language of Title VII but not within the narrower requirements of Fifth Circuit precedent. In some circuits, to survive summary judgment, employees need only show that they are members of a protected class and an employment decision impacted their compensation, terms, conditions, or privileges of employment. In those circuits, claims are not limited to ultimate employment decisions. In the panel opinion, Judge Stewart expressly stated that the Hamilton case was ideal for an en banc review by the Court and would give the Court an opportunity to align the Fifth Circuit with its sister circuits and achieve fidelity with Title VII.[5]

Sitting en banc, in an opinion by Judge Don Willett, the Fifth Circuit overturned its original August 3 panel decision. Judge James Ho concurred, and Judges Edith Jones, Jerry Smith, and Andrew Oldham concurred with the judgment only. In its en banc opinion, the Court detailed the history of the phrase “ultimate employment decision” and the impact the phrase had on its past ruling. Applying the language of Title VII, the Court determined that although the County’s actions did not rise to the level of an ultimate employment decision under the Court’s prior interpretation of Title VII and was not actionable (as reflected in the original panel opinion), the en banc Court determined that because the County’s actions were linked to the female officers’ terms, conditions, and privileges of employment, their claims were actionable under Title VII. The gender-based scheduling policy had an adverse impact on female officers, and there was enough to survive summary judgment. The en banc Court held that “employees need only show that they were discriminated against because of a protected characteristic with respect to hiring, firing, compensation, or the terms, conditions, or privileges of employment to state a claim under Title VII.”[6] The judges concurring with the judgment reasoned that the conduct in Hamilton was actionable under the current standard. The concurring judges opined that the majority decision left ambiguity for employees and employers to determine what is an actionable Title VII claim and ultimately disagreed with the majority’s interpretation of the express language of Title VII.  Instead of changing the standard, the concurring judges suggested that the Court should continue applying the ultimate employment decision standard until the Supreme Court resolved the circuit split in a similar case.

The Fifth Circuit’s en banc decision in Hamilton changed the standard for Title VII discrimination claims by eliminating the need for an ultimate employment decision to sustain a Title VII claim and focused on whether an adverse decision had impacted the terms, condition, and/or privileges of employment. Yet, as reflected in the concurring opinion, the Court did not provide guidance regarding the types of adverse decisions effecting terms, conditions, or privileges of employment that could constitute actionable claims. The door has been left open for the Court to refine the scope of an adverse employment decision. What is clear is that employees no longer must satisfy the higher burden of showing an adverse employment decision. Because the standard has been lowered, there may be more cases brought under Title VII and more Title VII cases may survive summary judgment (like the plaintiffs in Hamilton). However, more suits does not mean more wins by plaintiffs. Plaintiff employees still must prove their case.


[1] Hamilton v. Dallas County, 21-10133, 2023 WL 5316716 (5th Cir. Aug. 18, 2023).

[2] 42 U.S.C. § 2000e-2(a) (“It shall be an unlawful employment practice for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”) 

[3] Hamilton v. Dallas County, 42 F.4th 550, 552 (5th Cir. 2022), reh’g en banc granted, opinion vacated, 50 F.4th 1216 (5th Cir. 2022), and on reh’g en banc, 21-10133, 2023 WL 5316716 (5th Cir. Aug. 18, 2023).

[4] Id.

[5] Id. at 557.

[6] Hamilton, 21-10133, 2023 WL 5316716 at *8 (emphasis added).

The 2023 Regular Legislative Session’s enactment of HB 196 brings robust changes to Louisiana’s summary judgment procedure, set forth in Louisiana Code of Civil Procedure Article 966. The newest amendment to Article 966 focuses primarily on summary judgment evidence, and these changes demand strict adherence to the newly amended summary judgment procedure.

Expansion of Documents Permissible for Summary Judgment

One of the most noteworthy changes to Article 966 lies in the expansion of documents that can be used to support or oppose a motion for summary judgment. Article 966(A)(4)(a) now states in pertinent part:

(A)(4)(a) The only documents that may be filed or referenced in support of or in opposition to the motion are pleadings, memoranda, affidavits, depositions, answers to interrogatories, certified medical records, certified copies of public documents or public records, certified copies of insurance policies, authentic acts, private acts duly acknowledged, promissory notes and assignments thereof, written stipulations, and admissions. (Underlined language is added by HB 196.)

These changes enhance the pool of records available for use in summary judgment proceedings, shifting away from previous reliance on affidavit testimony to validate similar evidence.

Reference to Previously Filed Evidence

Additionally, any evidence provided for in Article 966(A)(4)(a) that is already present in the record can be cited to by reference in summary judgment briefing under a newly enacted provision. Article 966(A)(4)(b) provides:

(A)(4)(b) Any document listed in Subsubparagraph (a) of this Subparagraph previously filed into the record of the cause may be specifically referenced and considered in support of or in opposition to a motion for summary judgment by listing with the motion or opposition the document by title and date of filing. The party shall concurrently with the filing of the motion or opposition furnish to the court and the opposing party a copy of the entire document with the pertinent part designated and the filing information. (Underlined language is added by HB 196.)

Failure to adhere to the specifications of Subsubparagraph (A)(4)(b) may now serve as grounds for objecting to the court’s consideration of the referenced document. While this modification doesn’t negate the option to attach full documents, it introduces a streamlined method for citing existing records.

While it is now permissible to cite to documentary evidence present in the record, practitioners must remember that appellate courts still require evidence to be submitted and entered into the summary judgment record—as opposed to simply a reference to those documents in briefing—to be considered when supervisory review of a motion for summary judgment is requested.

Mandatory Electronic Service of Documents

In a nod to the digital age, amendments to Article 966(B)(1), (2), and (3) now mandate electronic service of all motion-related documents in accordance with Louisiana Code of Civil Procedure Article 1313(A(4). As such, electronic service for motions for summary judgment, oppositions, reply memoranda, and any supporting documents is now mandatory.

Trial Courts are Precluded from Considering Untimely Filed Evidence

The newest amendments to Article 966(D)(2) precludes the trial court from considering any documents that are filed untimely in support of, or in opposition to, the motion for summary judgment. Article 966(D)(2) now reads:

(D)(2) The court [may] shall consider only those documents filed or referenced in support of or in opposition to the motion for summary judgment [and shall consider any documents to which no objection is made] but shall not consider any document that is excluded pursuant to a timely filed objection. Any objection to a document shall be raised in a timely filed opposition or reply memorandum. The court shall consider all objections prior to rendering judgment. The court shall specifically state on the record or in writing [which documents, if any, it held to be inadmissible or declined to consider] whether the court sustains or overrules the objections raised. (Underlined language is added by HB 196; bold underlined language in brackets is removed by HB 196.)

These changes to Subparagraph (D)(2) now clarify that trial courts essentially lack discretion to consider any document or objection that is untimely filed in summary judgment proceedings, including any evidence supporting summary judgment that is filed in a reply memorandum rather than the motion itself.

New Procedure for Challenging Expert Evidence in Summary Judgment

Another new provision to Article 966 provides for a procedural barrier to summary judgment when objections are made to an expert’s qualifications or methodologies by filing a Daubert motion in accordance with Louisiana Code of Civil Procedure article 1425(F). A timely filed Daubert motion challenging expert evidence in support of or opposition to summary judgment now dictates that the Daubert proceedings be completed prior to the summary judgment hearing, as Article 966(D)(3) provides:

(D)(3) If a timely objection is made to an expert’s qualifications or methodologies in support of or in opposition to a motion for summary judgment, any motion in accordance with Article 1425(F) to determine whether the expert is qualified or the expert’s methodologies are reliable shall be filed, heard, and decided prior to the hearing on the motion for summary judgment. (Underlined language is added by HB 196.)

Legal Holidays Now Count Towards Delays for Reply Memoranda

Lastly, Subparagraph (B)(3) now clarifies that legal holidays are “counted” towards the five-day filing requirement for reply memoranda. Article 966(B)(3) now reads:

(B)(3) Any reply memorandum shall be filed and served in accordance with Article 1313(A)(4) not less than five days inclusive of legal holidays notwithstanding Article 5059(B)(3) prior to the hearing on the motion. No additional documents may be filed with the reply memorandum. (Underlined language is added by HB 196.)

It is important to note that this change merely affects the time calculation and does not require filing and service on a legal holiday, as clarified by the drafters’ comments to the 2023 amendment of Article 996:

(d)  Subparagraph (B)(3) clarifies that legal holidays are included in the calculation of time within which the mover shall file the reply memorandum. Subparagraph (B)(4) continues to apply in this situation. For example, if the hearing on the motion for summary judgment is set on Friday, the fifth day to file the reply memorandum falls on the preceding Sunday. Accordingly, under Subparagraph (B)(4), the mover would have the entirety of the preceding Monday to file the reply memorandum. The court should be aware of this requirement when setting hearings on motions for summary judgment.

Thus, Subparagraph (B)(4) still applies, giving parties the next business day to file if the fifth day deadline falls on a legal holiday.

The property tax “open rolls” period is here for Louisiana taxpayers. While this annual inspection period is important in any year, legislation which took effect in 2022 has altered the process of appealing a parish assessor’s valuation determination. Therefore, it is critical for taxpayers to take early and appropriate action.

The “open rolls” period in any Louisiana parish is the annual opportunity for taxpayers to check property tax assessments and determine whether they are correct. More importantly, it is a time to act quickly or lose your rights to contest property tax valuations. The property tax rolls are scheduled to be “open” for public inspection in selected Louisiana parishes as follows:

PARISHOPEN ROLLS DATES
Caddo08/17-08/31/2023
Calcasieu08/15-08/29/2023
East Baton Rouge08/24-09/08/2023
Jefferson08/22-9/6/2023
Lafayette08/17-09/01/2023
Lafourche08/31-9/15/2023
Livingston08/15-08/29/2023
Orleans07/15-08/15/2023
Plaquemines08/16-09/01/2023
St Bernard08/15-9/2/2023
St Charles08/15-08/29/2023
St Mary08/15-08/29/2023
St Tammany08/15-08/29/2023
Terrebonne08/21-9/5/2023
Washington08/15-9/8/2023

Open rolls dates for other parishes can be found on the Louisiana Tax Commission website. The current property tax year for Orleans Parish is 2024. For all other Louisiana parishes, the current property tax year is 2023.

In evaluating a property tax assessment during “open rolls,” information for prior tax years can be useful in determining whether there has been a change, and this information may be included on a parish assessor’s website. However, note that some parishes may not have current or accurate information online, and in those cases, it will be necessary to contact or meet with the assessor’s office for updated information. The compressed “open rolls” time window requires diligence and quick work. In addition, the property tax assessments in some parishes can be viewed through the Louisiana Tax Commission website. The website for Orleans Parish is: www.nolaassessor.com.

It is important to know that if you or your client wishes to challenge the correctness (i.e., dispute the value) of a property tax assessment and preserve rights to challenge it, the “open rolls” period is your only chance to do so. During this time (if not earlier), it’s important to review the assessor’s data and conclusions, discuss the assessor’s stance on valuation, and provide all available information to the assessor that supports the correct value. Under recent statutory changes (La. Acts 2021, No. 343, eff. January 1, 2022), a taxpayer must furnish the assessor with all information that supports the taxpayer’s valuation prior to the deadline for filing an appeal with the local Board of Review. Although the deadline date varies by parish, it is typically just a few days after the “open rolls” period closes. Beware of this very short time frame! Under the new law, which governs property tax appeals filed on or after January 1, 2022, the Tax Commission may allow additional evidence that was not provided to the assessor to be presented at the property tax hearing before the Commission. However, the recommended course is to provide the assessor all available evidence to support the correct value during, or prior to, the open rolls inspection period.

In short, August brings a different kind of heat to Louisiana property taxpayers. If you or your clients have questions or need assistance with these and other property tax matters, contact Kean Miller’s State and Local Taxation group.

On May 25, 2023, the United States Supreme Court ruled in favor of landowners seeking to build a modest home on “wetlands” in Sackett v. EPA. This ruling represents not only a clarification of a major law relevant to companies seeking to develop land near water bodies, but also a significant limitation on the EPA’s and Army Corps of Engineer’s power to regulate wetlands. The Supreme Court’s clarification of the Clean Water Act’s jurisdictional reach significantly benefits landowners from the standpoint of concerns over federal regulation of their property. However, the landowners must still comply with state and local requirements.

In 2004, the Sacketts purchased a plot of land near Priest Lake in Idaho. In preparation for building their home, they began backfilling their property with dirt and rocks. A short while later, the EPA sent the Sacketts a compliance order informing them their backfilling violated the CWA because their property contained protected wetlands. The EPA demanded the Sacketts to immediately restore the site and threatened the Sacketts with penalties of over $40,000 per day if they did not comply, despite their lot being worth only $23,000.[1]

The Sacketts filed suit alleging that the EPA lacked jurisdiction because any wetlands on their property were not “waters of the United States.” The District Court entered summary judgment for the EPA and the Ninth Circuit affirmed, holding that the CWA covers adjacent wetlands with a significant nexus to traditional navigable waters and that the Sacketts’ lot satisfied that standard. The United States Supreme Court granted certiorari to decide the proper test for determining whether wetlands are “waters of the United States.”

The Supreme Court recognized the need for clarification of the definition of “wetlands” under the CWA, due to the Act’s severe consequences even for justifiably ignorant violations. Property owners who unknowingly violate the CWA can face criminal penalties, including imprisonment, or fines of over $60,000 per day.  

Before the Court’s recent opinion, agency guidance instructed officials to assert jurisdiction over wetlands “adjacent” to non-navigable tributaries when those wetlands had “a significant nexus to a traditional navigable water.” In looking for evidence of a “significant nexus,” field agents were told to consider a wide range of open-ended hydrological and ecological factors.[2]  The significant nexus test and other obscure rules promulgated by the agencies over the years resulted in decades of uncertainty for permit applicants. Without a uniform rule established by the Court, the EPA and the Corps were free to implement a system of vague rules granting themselves broad jurisdictional reach. These interpretations led to rulings such as United States v. Deaton, where the Court held that a property owner violated the CWA by piling soil near a ditch 32 miles from navigable waters.[3]

In Sackett, the Court rejected the “significant nexus” test (from earlier decisions) in favor of a more objective rule. A five-Justice majority held that “the CWA extends to only those wetlands that are as a practical matter indistinguishable from waters of the United States. This requires the party asserting jurisdiction over adjacent wetlands to establish “first, that the adjacent [body of water constitutes] . . . ‘water[s] of the United States,’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”[4] Note that a wetland must be affirmatively connected to, not just close to, a navigable waterway in order to qualify. The Court acknowledged that a surface connection could be interrupted by “low tides or dry spells” without precluding an area from qualifying as a wetland, but the text of the opinion makes clear that, in the Court’s view, a continuous surface connection to a navigable waterbody must be maintained the majority of the time in order for an area to so qualify.

The EPA attempted to argue that “wetlands are “adjacent” when they are “neighboring” to [CWA] covered waters, even if they are separated from those waters by dry land.” The Court rejected this interpretation as “inconsistent with the text and structure of the CWA,” and also stated that such a broad scope of authority would “give[] rise to serious vagueness concerns in light of the CWA’s criminal penalties.”

The Supreme Court’s new interpretation of wetlands covered under the CWA will effectively limit the geographical reach of the EPA’s jurisdiction. Obviously, the Sackett decision does not impact state and local wetlands regulations. We encourage the reader to carefully evaluate all of the applicable requirements when dealing with wetlands issues.


[1] Sackett v. EPA Case Story | Pacific Legal Foundation

[2] Rapanos v. United States, 547 U.S. 715 (2006).

[3] United States v. Deaton, 332 F.3d 698, 702 (C.A.4 2003).

[4] Sackett, 143 S. Ct. at 1324 (quoting Rapanos, 547 U.S., at 755, 742, 126 S.Ct. 2208. Pp. 1338–41).

The 2023 Regular Session of the Louisiana Legislature wrapped on June 8, 2023. During this session, the Louisiana Legislature enacted a number of bills in the energy and environmental sector of the law. Below is a brief summary of all new relevant adopted provisions:

Energy

Act 150 (SB 103) changes the name of the Department of Natural Resources to the “Department of Energy and Natural Resources.”[1] Act 150 has an effective date of January 1, 2024. Act 455 (SB 154) establishes a new statutory framework for “renewable energy leases” and regulates leases for wind, solar, and hydroelectric energy production. The Act outlines the rights and obligations of the parties involved in said leases. Act 455 enacts new statutory provisions, R.S. 30:1161-1179,[2] and has an effective date of June 28, 2023.

DEFINITION OF RENEWABLE ENERGY LEASE

Per Act 455, a “renewable energy lease” is a defined term described as:

A lease of immovable property that is entered for the primary purpose of the lessee’s engaging in the production of wind, solar, or hydroelectric energy using the leased immovable, and any other lease pursuant to which the lessee’s primary activity on the leased immovable is the production of wind, solar, or hydroelectric energy.[3]

Act 455 further provides that the lessee’s rights in a renewable energy lease are susceptible of mortgage, as well as his rights in the buildings, improvements, and other constructions.[4] The provisions of the Act explicitly state that a renewable energy lease is not a mineral lease; however, it is evident that many provisions are similar in nature to those found in the Mineral Code.[5]

RIGHTS AND OBLIGATIONS OF PARTIES INVOLVED

Reasonable regard is required to be exercised between the owner of land burdened by a renewable energy lease and the lessee of a renewable energy lease, and the lessee of a renewable energy lease shall not unreasonably interfere with the rights of others lawfully exercising their rights in the land, subject to the laws of registry.[6] The language of the new law also establishes an obligation for the lessee to act as a reasonably prudent operator.[7]

TERMINATION AND REMEDIES FOR VIOLATION

Act 455 establishes that a renewable energy lease terminates at the expiration of the agreed term or upon the occurrence of an express resolutory condition, and if the lease is violated, the aggrieved party has a right to relief for violation.[8] The law further adopts substantially similar written notice requirements and remedies to the provisions found in the Mineral Code which govern the violation of a mineral lease. As such, the lessor is required to provide written notice of the asserted breach of performance and allow a reasonable time for performance prior to a judicial demand for damages or dissolution of the lease.[9] The lessee thereafter has 30 days after the receipt of notice to pay the rent or respond in writing stating a reasonable cause for non-payment.[10]

Moreover, dissolution is unavailable when the lessee pays the rent or royalties due within 30 days of receiving notice unless it is found that the original failure to pay was fraudulent.[11] The court has discretion to award additional damages in an amount not to exceed the amount of rent or royalties that were not timely or properly paid, interest on that sum from the date due, and reasonable attorney fees if the lessee pays the rent or royalties due within thirty days of receiving the required notice but the original failure to pay rent or royalties was either fraudulent or willful and without reasonable grounds.[12] In all other cases, damages shall be limited to interest on the rent or royalties computed from the date due, and reasonable attorney fees if such interest is not paid within thirty days of the written demand.[13] The court may dissolve the lease if the lessee fails to pay rent or royalties due and fails to inform the lessor of a reasonable cause for failure to pay, and, additionally, the court may award as damages the amount of rent or royalties due, interest on that sum from the date due, and reasonable attorney fees regardless of the cause for the original failure to pay.[14]

LESSOR’S PRIVELGE

The lessor of a renewable energy lease has a privilege on all equipment, machinery, and other property of the lessee on or attached to the property leased for the payment of his rent and other obligations of the lease.[15] This right also extends to equipment, machinery, and other property of a sublessee on or attached to the property leased, but only to the extent that the sublessee is indebted to his sublessor at the time the lessor exercises his right.[16] The lessor may also seize the property subject to his privilege before the lessee removes it from the released premises, or within 15 days after it has been removed by the lessee without consent, if: (1) it continues to be the property of the lessee and (2) it can be identified.[17]

Act 378 (HB 571) requires revenue sharing for carbon capture sequestration projects on state lands or water bottoms as follows: 30% to parishes, 30% to the Mineral and Energy Board, and 40% to the state general fund. It also increases funding for the Carbon Dioxide Geologic Storage Trust Fund.[18] Act 378 requires proper notice to parishes when the Mineral and Energy Board, the Department of Natural Resources, or Department of Wildlife and Fisheries receive an application for a permit related to carbon capture and sequestration.[19] An environmental analysis must be submitted as part of the application for a Class VI injection well permit.[20] Lastly, the enacted law also increases reporting requirements and further aligns liability provisions with current Department of Natural Resources practices and Environmental Protection Agency standards.[21]

SR 123 requests the U.S. Environmental Protection Agency to take actions necessary to timely review and grant the state of Louisiana’s application for primacy in the administration of Class VI injection well permitting.[22]

Coastal Protection and Restoration Authority (CPRA)

SCR 17 approves the comprehensive master plan for integrated coastal protection. Importantly, the “coastal master plan” must include a list of projects and programs required for the protection, conservation, enhancement, and restoration of the coastal area.[23] It must also include the action required of each agency to implement said project or program and a schedule and estimated cost for the implementation of each included in the plan.[24] In addition, the state’s “coastal master plan” must be updated every six years and outlines the strategy to combat coastal land loss and storm surge flood risk.[25] The 2023 state master plan projects include: 65 restoration; 12 structural risk reduction; $11 billion for nonstructural risk reduction; and $19 billion for dredging.[26] Lastly, SCR 6 approves the annual integrated coastal protection plan for Fiscal Year of 2024.

Conclusion

In conclusion, the legislature has enacted several additions to Louisiana’s energy and environmental laws — including adopting a new framework for “renewable energy leases.” These new laws affect the rights and obligations of owners, lessors, lessees, and operators in these developing areas of the law. Kean Miller will continue to monitor these developments. For questions or to discuss any of the foregoing, please contact Kean Miller’s Energy/Environmental Litigation Team.


[1] (Emphasis added).

[2] Although Act 455 enacts the new statutory provisions comprised of R.S. 30:1161-1179, the final statutory numbers may be redesignated by the Louisiana State Law Institute as necessary.

[3] Section 1161. Renewable energy lease.

[4] Id.

[5] Id. (Emphasis added).

[6] Section 1162. Preservation of rights.

[7] Section 1163. Lessee’s obligation to act as a reasonably prudent operator.

[8] Section 1167. Termination of renewable energy lease; Section 1168. Right to relief for violation.

[9] Section 1170. Written notice; requirements and effect on claims for damages or dissolution of lease.

[10] Section 1172. Required response of lessee to notice; effect of response.

[11] Section 1172(A). Required response of lessee to notice; effect of response.

[12] Section 1172(B). Required response of lessee to notice; effect of response.

[13] Id.

[14] Section 1172(C). Required response of lessee to notice; effect of response.

[15] Section 1176. Lessor’s privilege.

[16] Id.

[17] Section 1177. Right to seize property on premises or within fifteen days of removal.

[18] Title 30, Section 1109(A)(4). Cessation of storage operations; limited liability release.

[19] HB 571.

[20] Title 30, Section 1104.1. Environmental analysis.

[21] Title 30, Section 1107.1. Reporting; record keeping.

[22] Senate Resolution No. 123.

[23] Senate Concurrent Resolution No. 17.

[24] Id.

[25] Id.

[26]https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwi8uJmDyoeAAxVFlWoFHd_pBDUQFnoECB4QAQ&url=https%3A%2F%2Fhouse.louisiana.gov%2FAgendas_2023%2FSession%2520Wrap%2520-%25202023%2520RS.pdf&usg=AOvVaw1gAmGUkgPMd-GvadHIjE4r&opi=89978449.