Posted on December 11, 2007 by Cheryl Kornick

Res Judicata Bars Relitigation of 1938 Buras Levee District Lease's Validity

      On November 21, 2007, the Louisiana Fourth Circuit Court of Appeal affirmed the trial court’s ruling in favor of Chevron U.S.A., Inc. (“Chevron”), the Plaquemines Parish Government (“PPG”), and others in a dispute with the State of Louisiana over the validity of a 1938 mineral lease granted by the Buras Levee District (“BLD”). The State of Louisiana had previously created the BLD and transferred to it all lands belonging to the State within its geographic borders, including the tract involved in the instant matter (Tract 1). In 1975, the BLD merged and consolidated with the PPG. The State of Louisiana asserted, among other arguments, that the merger and consolidation of the BLD with the PPG constituted an impermissible alienation of state minerals and that the State was entitled to the mineral revenues attributable to Tract 1 as an unleased owner. Faced with competing claims for royalty payments from the PPG and State of Louisiana, Chevron, as sublessee of the 1938 BLD lease, filed a petition for concursus and deposited royalty payments into the court registry.

            Ultimately, the Fourth Circuit affirmed the trial court’s finding that the State’s claims were barred by res judicata. Previously, in 1990, Chevron had filed a concursus to seek a resolution of competing claims made by the PPG and the State of Louisiana as to royalties applicable to a separate tract covered by the 1938 BLD Lease, Tract 87. In that prior litigation, the Louisiana Fourth Circuit affirmed a judgment in favor of PPG, finding that the 1938 BLD Lease was valid. 

            Here, the Fourth Circuit found that the instant case was barred by the doctrine of res judicata, since the present action concerning Tract 1 arose out of the same transaction or occurrence as the litigation concerning Tract 87. The court observed that the 1938 BLD Lease’s validity had been recognized by courts since 1943. Further, the real “cause of action” for res judicata purposes in both the Tract 87 litigation and the instant case was the immovable known as the 1938 BLD Lease, not any single tract of land contained therein. The court concluded that “[t]his is exactly the type of case to which res judicata applies” and “[t]o find otherwise would permit the State to file a series of separate actions challenging the ownership of mineral rights in each and every tract contained in the 1938 BLD Lease.”  Chevron U.S.A., Inc. v. State of Louisiana, et al., No. 2007-CA-0673, pp. 7-8 (La. App. 4th Cir. 11/21/07).    

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Posted on December 3, 2007 by Cheryl Kornick

Pipeline Right of Way

By Katie Caswell

In Rose v. Tennessee Gas Pipeline Co., plaintiff, owner of an undivided interest in property across which Defendant Tennessee Gas Pipeline Co. (“TGP”) held a pipeline “easement” or “right of way” obtained in an expropriation proceeding, appealed from the district court’s dismissal of her claims against TGP as time barred by prescription. 2007 WL 4111191 (5th Cir. Nov. 20, 2007). The United States District Court for the Eastern District of Louisiana concluded that TGP did not owe plaintiff a duty to maintain the canal it constructed pursuant to the 1964 expropriation judgment. As a result, the district court held that no continuing tort was at issue and the case therefore prescribed. On appeal, plaintiff argued that TGP did have a continuing duty to maintain and thus the prescriptive period was interrupted. TGP asserted that because it was granted a “right of way and easement” pursuant to the expropriation proceedings rather than by means of a conventional agreement, no servitude existed and thus Louisiana’s suppletive law on servitudes was not implicated. The 5th Circuit disagreed and concluded that the expropriation judgment did in fact create a servitude, implicating Louisiana’s suppletive rules; specifically, that the dominant estate owner “must not ‘aggravate’ the condition of the servient estate.” In reaching this conclusion, the 5th Circuit found that the use of the common law terms “right of way” and “easement” in the expropriation judgment did not work any substantive change in the law because it is well-know that “myriad common law terms have seeped interstitially into Louisiana judicial opinions…” Further guiding the 5th Circuit’s opinion was the conclusion that the interest granted to TGP met the definition of a servitude. Moreover, TGP only resorted to expropriation when it was unable to negotiate a conventional servitude with the plaintiff’s predecessor-in-interest. Therefore, the 5th Circuit held that Louisiana’s suppletive rules applied and if implicated by plaintiff’s claims, such rules would impose duties upon TGP. As such, the 5th Circuit remanded the case to the district court to determine whether the judgment of expropriation disposed of any applicable provisions or whether the parties did or did not contract out of Louisiana’s suppletive law on servitudes; specifically, whether TGP was under a continuing duty to conduct preventative maintenance with respect to the width of the canals in which its active pipelines lay so as to prevent the erosion on plaintiff’s property. 

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