By Michael A. Mahone, Jr.
On October 19, 2010, the Louisiana Supreme Court issued its opinion in Marin v. Exxon Mobil Corp., a “legacy” lawsuit involving damage to property located in St. Mary Parish caused by historical oil and gas operations. The 4-3 ruling authored by Justice Victory clarified the law applicable to these lawsuits in a number of significant ways.
First, the Supreme Court found that the plaintiffs’ tort claims were prescribed. The courts below had held that, as a result of contra non valentem, prescription did not begin to run until plaintiffs received expert testing data showing contamination existed on their land and/or had full knowledge of the damage at issue. The Supreme Court, however, reaffirmed existing law and held that prescription begins to run when a plaintiff has sufficient information, which, if pursued, would have put him on notice that further inquiry and investigation was necessary, where such inquiry would have led to knowledge that contamination existed. Based on this standard, the Court found that plaintiffs’ knowledge of apparent damage triggered prescription without regard to when expert testing occurred. In addition, the majority rejected the argument that the plaintiffs were “lulled” into inaction by ExxonMobil’s representations. As for the applicability of the continuing tort doctrine, the Court held that prescription began to run on tort claims when the pits at issue were closed. Further, because plaintiffs’ tort claims were prescribed, plaintiffs were not entitled to recover punitive damages.
The Court also found that some claims for cleanup based upon breach of a mineral lease do not expire while the lease is in effect, given that some restoration obligations on lessees arise when a lease expires. As result, the Court held that some of the breach of lease claims, those brought by the Marin plaintiffs, were not prescribed because the surface lease and mineral lease were still in effect. On the other hand, the Breaux plaintiffs’ claims were prescribed because the lease on their land expired before suit was filed. The Breaux plaintiffs were also aware of damage more than 10 years before suit was filed while the Marin plaintiffs arguably would not have discovered damage until 1994, less than 10 years before suit was filed.
Regarding the restoration claims, the Court held that, in circumstances where a lease has excess wear and tear due to contamination, the remedy is clean up to regulatory standards absent an express lease provision requiring additional remediation. In addition, the majority reversed the lower courts and found that a surface lease on one of the pieces of property at issue in the case did not require cleanup to original condition because a 1994 amendment imposing such a requirement was a novation of an earlier lease and therefore the cleanup obligation did not apply to the contamination at issue because it predated 1994.
Lastly, the majority denied the plaintiffs’ claim for groundwater remediation and upheld the lower courts’ finding that remediation was not required since useable groundwater was not at issue. The Court further noted that it was illogical to award money to a landowner to remediate unusable groundwater, with no oversight by Louisiana’s Department of Natural Resources, when the Louisiana statute enacted to protect groundwater did not require such a cleanup.
For more information, see www.lasc.org/opinions/2010/09c2368.opn.pdf