In May 2018, oil and gas industry defendants removed a docket of 42 cases alleging violations of Louisiana’s coastal zone management laws to federal court in the Eastern and Western Districts of Louisiana (“CZM cases”).  One year later, the Eastern District granted motions to remand filed by Plaquemines Parish and the State of Louisiana in Parish of Plaquemines v. Riverwood Production Company, et al. (“Riverwood”), No. 18-5217, 2019 WL 2271118 (E.D. La. May 28, 2019).  The Western District recently joined the Eastern District and granted similar remand motions filed by Cameron Parish and the State of Louisiana in Parish of Cameron, et al. v. Auster Oil & Gas Incorporated, et al. (“Auster”), No. 18-677, 2019 WL 4734394 (W.D. La. Sept. 26, 2019), —F. Supp. 3d—.  Although there are procedural differences between Riverwood and Auster, both district courts found no federal officer or federal question jurisdiction over the CZM cases.  The Fifth Circuit is poised to resolve these jurisdictional issues in the upcoming year. 

Generally, the Auster plaintiffs allege defendants violated the Louisiana State and Local Coastal Resources Management Act of 1978 (“SLCRMA”) by violating state-issued coastal use permits or failing to obtain such permits.  Defendants removed Auster (and 11 other Western District CZM cases) based on federal officer jurisdiction (28 U.S.C. § 1442) and federal question jurisdiction (28 U.S.C. § 1331).  Defendants claimed they learned of these grounds for removal from the first plaintiffs’ expert report issued in the docket on April 30, 2018 (“the Report”).  According to defendants, the Report shows, for the first time, that plaintiffs allege damages based on World War II-era exploration and production activities that were controlled, directed, and regulated by the federal government.  Defendants argued these federally regulated wartime activities were directed by federal officials and require resolution of substantial and disputed questions of federal law.  In addition, the Report advocated a theory that defendants’ historic operations where not “lawfully commenced,” and therefore these pre-SLCRMA operations were not exempt from the SLCRMA’s requirements.

Unlike Riverwood, the Auster court found defendants’ removal was timely based on the Report.  While plaintiffs’ prior pleadings vaguely referenced pre-SLCRMA activities, defendants were not required to investigate and uncover every possible basis for removal.  The Report—not plaintiffs’ petition(s) or prior pleadings—was the first document that clearly and unambiguously challenged defendants’ WWII-era activities.  Since defendants filed their notice of removal within 30 days of this “other paper,” the removal was timely under 28 U.S.C. § 1446(b)(3).

The district court, however, rejected defendants’ substantive arguments.  First, the court found no federal officer jurisdiction because defendants were not “acting under” the direction or control of a federal office or officer.  The court found that, unlike a typical government-contractor scenario, no federal agency directed or mandated how defendants’ WWII-era activities were conducted.  According to the court, at most, defendants’ activities were subject to federal regulatory oversight, which is not enough for federal officer removal.  Second, the court found no “arising under” jurisdiction because the determination of whether defendants’ pre-SLCRMA conduct was lawfully commenced is a fact issue, not an actually disputed or substantial question of federal law.

After granting plaintiffs’ remand motions, the Auster court stated defendants could immediately appeal the ruling as it pertained to federal officer jurisdiction and further certified for interlocutory appeal its ruling on the issue of federal question jurisdiction.  The remand order in Auster, along with Riverwood, is now on appeal before the Fifth Circuit.[1]  The Fifth Circuit issued a stay of the remand order in Auster and enjoined plaintiffs from proceeding in state court while the appeal is pending.  The Fifth Circuit also designated Auster and Riverwood as “related” and granted defendants’ motion to consolidate the cases for oral argument.  At this time, no oral argument date is scheduled, but the Fifth Circuit will likely hear arguments in the consolidated appeals in Spring 2020.

For more information about this Article or related issues, please contact attorneys Cheryl Kornick (cmkornick@liskow.com), Kathryn Gonski (kzgonski@liskow.com), or Mark Deethardt (mrdeethardt@liskow.com).

[1]In the Fifth Circuit, Riverwood is captioned, Parish of Plaquemines v. Chevron USA, Inc., Case No. 19-30492.  Auster is captioned, Parish of Cameron v. BP Am. Produc. Co., Case No. 19-30829.

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