The Eastern District of Louisiana recently held that insurance claims for damage to a Gulf of Mexico production facility will not support federal court jurisdiction under the Outer Continental Shelf Lands Act. Accordingly, the district court remanded the case of LLOG Exploration Co. v. Certain Underwriters at Lloyd’s, 2007 WL 854307 (E.D. La. 3/16/07), to state court for lack of federal jurisdiction. LLOG sued its insurers for property damage and business interruption losses to several Gulf of Mexico production facilities resulting from Hurricanes Katrina and Rita. The insurers removed to federal court, asserting federal jurisdiction under the OCSLA, which provides that “the district courts of the United States shall have jurisdiction of cases and controversies arising out of, or in connection with … any operation conducted on the outer Continental shelf which involves exploration, development, or production of the minerals, of the subsoil and seabed of the outer Continental Shelf, or which involves rights to such minerals.” 43 U.S.C. § 1349(B)(1). The insurers argued that the case affected the production of minerals because LLOG sought recovery under its business interruption coverage for loss of production during the period of recovery from the storms. Judge Livaudais ruled that OCSLA jurisdiction was unavailable because “[t]he insurance coverage dispute does not affect or alter the progress of production activities on the OCS, nor does it threaten to impair the total recovery of federally owned minerals from the OCS.” Click here to view the opinion.