Today the United States Supreme Court issued its decision in this landmark case concerning punitive damages. The six justices in the majority opinion reversed the Ninth Circuit and resolved a circuit split on this issue. The question presented was whether punitive damages may be awarded to a Jones Act seaman in a personal injury suit alleging a breach of the general maritime duty to provide a seaworthy vessel. Justice Alito wrote the majority opinion, joined by Chief Justice Roberts, Justices Thomas, Kagan, Gorsuch, and Kavanaugh. Justice Ginsburg dissented, joined by Justices Breyer and Sotomayor.Continue Reading SCOTUS Decides Dutra Group v. Batterton
Supreme Court Holds State Wage and Hour Laws are Inapplicable to Offshore Drilling Platforms
In a decision that could have far-reaching implications, the United States Supreme Court issued a June 10 opinion holding that California’s wage-and-hour laws do not apply to workers on oil and gas platforms located in open water on the Outer Continental Shelf. The plaintiffs in Parker Drilling Management Services, Ltd. v. Newton, were offshore rig workers who filed a class action asserting that their employer violated California’s minimum wage and overtime laws by failing to pay them for stand-by time while they were on the drilling platform. Both parties agreed that the platforms were governed by the Outer Continental Shelf Lands Act (“OCSLA”), but they disagreed regarding whether the California’s wage-and-hour laws were incorporated into OCSLA and therefore applicable to workers on the platform.
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Motion to Remand Granted in One Coastal Zone Management Act Case But Federal Appellate Options Remain Viable
On May 28, 2019, United States District Judge Martin Feldman issued a sixty-four page Order and Reasons which granted motions to remand filed by Plaquemines Parish and the State of Louisiana in The Parish of Plaquemines v. Riverwood Production Co., et al. That case is one of forty-two Coastal Zone Management Act (“CZMA”) cases that were removed to Federal court in May 2018. Those cases generally allege that more than 200 oil and gas companies violated Louisiana’s State and Local Coastal Resources Management Act of 1978 (“SLCRMA”) by either failing to obtain or violating state coastal use permits. The cases were removed to Federal court by Defendants pursuant to 28 U.S.C. § 1442 (the federal officer removal statute) and 28 U.S.C. § 1331 (the federal question statute) on the basis that Plaintiffs’ claims (1) implicate wartime and national emergency activities undertaken at the direction of federal officers, and (2) necessarily require resolution of substantial, disputed questions of federal law. In response, Plaintiffs filed motions to remand. In those motions, Plaintiffs argued that (1) the removal was not timely because Defendants had notice of the grounds alleged in the removal notice more than thirty days before the cases were removed, (2) the Defendants could not satisfy the elements of the jurisdictional test for “federal officer” removal jurisdiction, and (3) Defendants could not satisfy the test for substantial federal question jurisdiction set forth by the United States Supreme Court.
5th Circuit Grants En Banc Rehearing to Address Federal Officer Removal
After years of inconsistent rulings, the Fifth Circuit is poised to address a removal issue with significant ramifications for Louisiana tort cases. The previous version of 28 U.S.C. § 1442 authorized removal to federal court of a suit against a federal officer “only when the state suit was ‘for any act under color of such office.’” The Fifth Circuit, interpreting this language, held that the removing party must show a causal connection between its actions and the plaintiff’s claims. The causal connection requirement demands more than “mere federal involvement[;] instead, the defendant must show that its actions taken pursuant to the government’s direction or control caused the plaintiff’s specific injuries.”Continue Reading 5th Circuit Grants En Banc Rehearing to Address Federal Officer Removal
Louisiana Supreme Court Limits Effect of Collateral Source Rule in Personal Injury Cases
On May 9, 2019, the Louisiana Supreme Court issued an important opinion restricting application of the collateral source rule in personal injury lawsuits. In Simmons v. Cornerstone Investments, LLC, et al., 2018-CC-0735 (La. 5/8/19), the Court held the collateral source rule inapplicable to medical expenses charged above the amount actually paid by a workers’ compensation insurer pursuant to the workers’ compensation medical fee schedule.
Liskow Obtains Victory for the Oil and Gas Industry in the Louisiana Third Circuit
In a victory for the oil and gas industry, the Third Circuit rendered a decision rejecting attempts by the Louisiana Department of Revenue to impose severance taxes on crude oil production based on index pricing. The Third Circuit reaffirmed that severance taxes should be based on the “gross proceeds” obtained in an arm’s length sale at the lease. The Department had sought additional severance taxes from numerous Louisiana producers that sold crude oil in arm’s length sales at the lease. The contracts provided that the sales price of the crude oil was based on index pricing, less an amount sometimes designated as a “transportation differential” or simply as a deduction. The Department argued that this “differential” or deduction must be “disallowed” when computing severance taxes, effectively imposing severance taxes on the index pricing. The Louisiana Board of Tax Appeals, faced with numerous cases raising this same issue, heard a “test case” involving Avanti Exploration, LLC. The BTA held that the Department’s theories were invalid, and severance tax properly was based on the actual “gross receipts” received by the producer in an arm’s length sale. In a decision issued on April 17, 2019, the Louisiana Third Circuit Court of Appeal affirmed, holding that, pursuant to the Louisiana Constitution, the severance tax statutes, and the Department regulations, in the absence of any “posted field price,” severance taxes must be based on the actual “gross receipts” received by the producer in an arm’s length sale at the lease.Continue Reading Liskow Obtains Victory for the Oil and Gas Industry in the Louisiana Third Circuit
City of New Orleans Sues Oil and Gas Companies for Allegedly Damaging Coastal Wetlands
On Friday, March 29, 2019, the City of New Orleans filed a lawsuit in Civil District Court against eleven oil and gas companies seeking damages for alleged harm to Louisiana’s coastal wetlands. Introducing its lawsuit with statements that “New Orleans is imperiled” and its “people are in danger,” the City contends that the defendants’ failure to maintain access canals, spoil banks, and earthen pits created in the course of exploration and production has destroyed the coastal zone. The City’s allegations mirror those levied in recent years by the parishes of Plaquemines, Jefferson, and St. Bernard, among others: that the defendants’ activities constitute coastal “uses” under the Louisiana State and Local Coastal Resources Management Act (“SLCRMA”) and that they violate coastal use permits issued pursuant to that statute. The City has requested a trial by jury, from which it seeks damages, “restoration costs,” restoration of “disturbed areas,” sanctions, costs, attorneys’ fees, and/or declaratory and injunctive relief.
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U.S. Supreme Court Addresses Circuit Split Regarding “Bare Metal” Defense in Products Liability Action Under General Maritime Law
In Air & Liquid Systems Corp. v. Devries, No. 17-1104, — S. Ct. —, 2019 WL 1245520 (U.S. March 19, 2019), the U.S. Supreme Court resolved a circuit split regarding maritime law and the “bare metal” defense, namely whether manufacturers have a duty to warn when their bare metal product requires later incorporation of a dangerous part in order for the integrated product to function as intended. Justice Kavanaugh wrote the opinion for a 6-3 court, with Justices Gorsuch, Thomas, and Alito dissenting.
“Bare Metal” Products at Issue
In Air and Liquid Systems Corp v. Devries, the defendant manufacturers produced shipboard equipment such as pumps, blowers, and turbines for various Navy ships on which the plaintiffs, two Navy veterans, were employed. The equipment required asbestos insulation or asbestos parts to function as intended. However, the defendant manufacturers did not always incorporate the asbestos into their products; they delivered much of the equipment to the Navy without asbestos. The defendants’ equipment was delivered in a condition known as “bare metal,” and the Navy later added the asbestos to the equipment.Continue Reading U.S. Supreme Court Addresses Circuit Split Regarding “Bare Metal” Defense in Products Liability Action Under General Maritime Law
New U.S. Supreme Court Decisions Clarify the Courts’ Authority to Compel Arbitration
Commercial and employment agreements often include provisions requiring arbitration of disputes between the parties. Some of these agreements contain “delegation clauses” requiring the arbitrator (as opposed to a court) to decide whether the dispute is subject to arbitration. Despite such provisions, one party may sue the other because it perceives an advantage to proceeding in court or wants to test the outer limits of the arbitration provision. The first battle in these suits is over who—the court or an arbitrator—decides whether the dispute must be arbitrated. In unanimous decisions issued over the last week, the Supreme Court addressed two scenarios where the parties fought over this question, despite having delegated questions of “arbitrability” to an arbitrator. Read together, the Court’s decisions clarify that a court should first decide whether the Federal Arbitration Act (“FAA”) applies to the parties’ agreement. If so, the court must honor the delegation clause and refer the matter to arbitration.Continue Reading New U.S. Supreme Court Decisions Clarify the Courts’ Authority to Compel Arbitration
Louisiana’s Third Circuit (Again) Affirms the Applicability of the Subsequent Purchaser Doctrine to Mineral Leases
While oil and gas company-defendants—and several courts alike—have deemed the applicability of the subsequent purchaser doctrine to mineral leases a settled issue of law, plaintiff-landowners have continued to argue otherwise. In a unanimous opinion issued July 18, 2018 in Grace Ranch, LLC v. BP America Production Company, et al., the Third Circuit not only provides yet another example of the uniform application of the doctrine in cases involving mineral rights under Louisiana law, but expressly and thoroughly rejects the numerous arguments on which plaintiffs-landowners have continued to rely.
Continue Reading Louisiana’s Third Circuit (Again) Affirms the Applicability of the Subsequent Purchaser Doctrine to Mineral Leases