By Lou Grossman
In a recent decision, the Louisiana Second Circuit Court of Appeals upheld the application of the longstanding subsequent purchaser doctrine to an oilfield legacy case. The decision Wagoner v. Chevron U.S.A. Inc., et. al., No. 10-45507 (La. 2. Cir. 2010) affirmed the legal principle that the right to recover for property damages is a personal right that does not pass to subsequent purchasers of the property. According to the Second Circuit, this right is a personal right even when the harm is subsurface environmental contamination.
In reaching its decision, the Second Circuit rejected multiple theories advanced by the plaintiffs. Most significantly, the Second Circuit rejected plaintiffs’ contention that the existence of a mineral lease created a real obligation to restore the leased premises to its original condition.
The right to damages conferred by a lease, whether arising under a mineral lease or a predial lease, is a personal right, not a property right; and, as a personal right, it does not pass to the new owners of the land when there is no specific conveyance of that right in the instrument of sale.
The Second Circuit’s decision creates a further divide among the Circuit Courts of Appeal on the subsequent purchaser doctrine. Plaintiffs have sought Writs of Supervisory Review from the Louisiana Supreme Court and this is one of several, similar decisions currently on review.