On January 8, 2007, a Louisiana trial judge held Act 312 of 2006 to be unconstitutional.  The Louisiana Attorney General’s office immediately filed notice that it will take a suspensive appeal directly to the Louisiana Supreme Court.  M.J. Farms, Ltd v. ExxonMobil Corporation 24,055 (La. 7th J.D.C. Jan. 8, 2007).  Act 312, which became effective June 8, 2006, requires involvement of the Louisiana Department of Natural Resources (DNR) in litigation alleging environmental contamination, including submission of any remediation plan to DNR for approval, and the deposit of remediation funds into the registry of the court for expenditure on actual remediation rather than payment of those funds to the plaintiffs.  For further information on Act 312, click here

The plaintiff in M.J. Farms argued that retroactive application of the Act to a suit pending at the time the statute was promulgated unconstitutionally divests the plaintiff of a property right, that is, the cause of action to recover money damages for environmental contamination.  The Louisiana Attorney General opposed that motion, asserting that the statute only concerns remediation of public harm, and does not deprive landowners of claims for redress of private harm.  The January 8, 2007 ruling by Judge Johnson of the Louisiana Seventh Judicial District Court held Act 312 to be unconstitutional and unenforceable.  The opinion is available here.

Noting that a cause of action that has actually been asserted in litigation is a vested property right under Louisiana law, the plaintiff argued that Act 312 "takes away monies due and owing Plaintiff for said damage" and instead causes those funds to be spent on remediation of the property.  The Attorney General took the position that to the extent the Act "impinges on a party’s right to obtain damages for public harms," such an "impingement" is not unconstitutional because "these are rights that are within the ambit of the government to protect and not individual citizens."  The State is not concerned with enforcement of private claims or contractual claims, such as contractual remediation provisions that exceed regulatory standards.  (The implication of this is that remediation approved by DNR for funding under the statute will be remediation to state regulatory standards.)  The State’s position is that landowners are free to pursue any claims involving private interests, "if such continue to exist when separated from the public harms."  

The court has not issued reasons for judgment, but Judge Johnson’s one-page order is not limited to a finding that the statute cannot be applied retroactively to litigation pending when the statute was enacted.  Rather, she held the Act unconstitutional in its entirety.