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The Louisiana Legislature passed “Act 312,” La. R.S. 30:29, in 2006 to provide a procedure for ensuring that amounts awarded to remediate environmental damage are actually spent on remediation.  Act 312 sets forth a multi-step scheme that is triggered once a party is found responsible for environmental damage, culminating with Department of Natural Resources (“DNR”) approving a plan “to evaluate or remediate” the environmental damage. La. R.S. 30:29(C)(2)(a). Thereafter the trial court “shall adopt the plan approved by the [DNR] unless another party proves by a preponderance of the evidence that another plan is more feasible,” id. 30:29(C)(5). 

On October 18, 2017, the Court of Appeal, Third Circuit, issued an opinion that discards the mandate of this final step, affirming the trial court’s refusal to adopt DNR’s most feasible plan, even though, indisputably, there was no evidence in the record that another plan was more feasible.  Years earlier, Sweet Lake sued multiple oil and gas operators, including four BP entities (collectively, “BP”), alleging environmental damage to property caused by exploration and production activities.  In May 2015, a jury found BP was responsible for the damage.

In September 2015, the trial court ordered BP to submit a remediation plan to DNR, and it also referred the matter to DNR for a public hearing and development of a most feasible plan.  DNR held a public hearing the following year, and, in late 2016, it filed its most feasible plan and supporting written reasons.  BP moved to adopt DNR’s plan, but the trial court denied the motion.  The court also ordered DNR to perform additional work, reasoning that the plan was only partially remedial in nature, inasmuch as some aspects of the plan called for evaluation in the form of further testing.  Its order required DNR to supplement the plan to address the questionable areas and provide a remediation plan for them.

BP sought supervisory writs, which the Third Circuit granted for briefing and opinion.  BP’s primary argument in the Third Circuit was that the trial court’s failure to adopt the DNR plan violated the plain terms of La. R.S. 30:29(C)(5).  According to BP, the DNR’s plan was final under the statutory scheme, which, by its express terms, includes plans for “evaluation or remediation.” Any plan, argued BP, whether for evaluation or remediation or both, that is submitted to the trial court should be considered final and must be adopted, unless another party proves by a preponderance of the evidence that another plan is more feasible.

The Third Circuit panel defined the issue before it as “whether the trial court can order LDNR to resubmit a plan for remediation when the judgment called for such a plan and the originally submitted plan still requires evaluation.”  The panel conceded that Act 312 does not provide for such a resubmission but rather explicitly mandates adoption of the plan, and also acknowledged that the record contained no evidence, much less a preponderance of the evidence, that Sweet Lake’s plan was more feasible.  Nonetheless, the Court ignored the express statutory language and held that the trial court did not err in rejecting DNR’s plan and issuing its order.  Citing La. R.S.30:29(F), M.J. Farms, Ltd. v. Exxon Mobil Corp., 07-2371 (La. 7/1/08), 998 So. 2d 16, and State v. Louisiana Land & Exploration Co., 12-884 (La. 1/30/13), 110 So. 3d 1038, it observed that the trial judge acts as a gatekeeper to ensure that property is remediated to the extent of the public’s interest.  Inherent in its authority as gatekeeper, reasoned the panel, is the power to reject a DNR plan it determines is incomplete—i.e., not wholly remedial but partially evaluative.  The Court held, “Based on our interpretation of the statute and the authority granted to the trial court under the statute, we find no error in the trial court’s failure to approve the final plan or in its order to supplement the plan.”

The Third Circuit’s decision is at odds with the plain language of Act 312, which expressly contemplates that final plans may be wholly or partially “for evaluation.”  Moreover, it casts doubt on plans calling solely for monitoring and whether they would be subject to the mandatory adoption provision of La. R.S. 30:29(C)(5).

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