On or about May 23, 2018, several Defendants in the Coastal Zone Management Act (“CZMA”) Litigation filed Notices of Removal in 42 lawsuits filed against 212 oil and gas companies by six different parishes (Plaquemines, Jefferson, Cameron, Vermilion, St. Bernard, and St. John the Baptist), removing the cases to federal court. The timing of the removal was based on Plaintiffs’ expert report, which was produced on April 30, 2018. In their Notices of Removal, Defendants allege that Plaintiffs’ expert report purportedly identifies state “permitting violations,” which revealed for the first time in the CZMA Litigation that Plaintiffs’ claims primarily attack activities undertaken before the state permitting law at issue was effective and that were instead subject to extensive and exclusive federal direction, control, and regulation.
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Litigation
Louisiana Supreme Court’s reversal of Gloria’s Ranch clarifies calculation of damages for unpaid mineral royalties, provides relief for holders of security interests in mineral rights
The Louisiana Supreme Court’s reversal of Gloria’s Ranch, L.L.C. v. Tauren Exploration, Inc., hands a victory to financiers of oil and gas operations and settles a long-running controversy over the amount of damages available for failure to pay mineral royalties.
The Gloria’s Ranch trial court held two mineral lessees and a mortgagee (Wells Fargo) solidarily liable for more than $20 million in damages resulting from failure to release a mineral lease in North Louisiana. The Second Circuit affirmed the finding of solidarity on the basis that Wells Fargo became an owner of the mineral lease because it “controlled the bundle of rights that make up ownership, i.e., the rights to use, enjoy, and dispose of the lease.” However, a vigorous dissent warned that the majority’s “control theory” to impose solidarity between a mortgagee and a mineral lessee could have “[d]evastating economic repercussions” for the lending industry, and “[s]erious and harmful impact on the oil and gas industry.”Continue Reading Louisiana Supreme Court’s reversal of Gloria’s Ranch clarifies calculation of damages for unpaid mineral royalties, provides relief for holders of security interests in mineral rights
Supreme Court Validates Employer’s Right to Require Class and Collective Action Waivers in Employment-Related Arbitration Agreements
The United States Supreme Court ruled today that contracts requiring individualized arbitration of employment-related disputes are enforceable and do not violate Section 7 of the National Labor Relations Act (NLRA).
Background
Some employers require their employees to enter into agreements binding the parties to arbitrate employment-related disputes. In recent years, many of those employers have drafted their mandatory arbitration agreements to prohibit employees from pursuing class or collective actions, which can be costly and eliminate the informality and speed of arbitration. For example, the plaintiffs in the three cases decided by the Supreme Court today agreed not to pursue unpaid overtime claims under the Fair Labor Standards Act (FLSA) on behalf of other employees in class or collective actions.
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Federal Circuit Holds U.S. Army Corps of Engineers Not Liable for Hurricane Katrina Flood Damage
By Liskow & Lewis on
The United States Court of Appeals for the Federal Circuit recently issued a significant opinion in a case in which a takings claim was asserted to redress Hurricane Katrina-related flood damage. On April 20, 2018, it reversed a decision of the United States Court of Federal Claims (“Claims Court”), which had held the U.S. Army Corps of Engineers liable under the Tucker Act for flood damage to the Plaintiffs’ properties.
In 1968, the Corps completed construction of the Mississippi River Gulf Outlet (“MRGO”) in New Orleans. The purpose of this navigation channel was to increase commerce between the port of New Orleans and the Gulf of Mexico. Around the same time, Congress authorized funding for flood control through the Lake Pontchartrain and Vicinity Hurricane Protection Project (“LPV”). This project was instituted to reduce the risk of flooding in New Orleans, and it resulted in the construction of levees and floodwalls along the banks of MRGO.
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Third Circuit Issues Long-Awaited Ruling in OPA Liability Case
By Raymond T. Waid on
On March 29, 2018, the United States Court of Appeals for the Third Circuit issued its ruling in In re: Petition of Frescati Shipping Co., Ltd., as Owner of the M/T ATHOS I, Nos. 16-3552, 16-3867 & 16-3868 (3d Cir. Mar. 29, 2018). ATHOS I had its genesis in a 2004 vessel allision and oil spill on the Delaware River between New Jersey and Pennsylvania. The decision has particular relevance to the types of defenses that may be maintained against reimbursement claims brought by the United States Oil Spill Liability Trust Fund (OSLTF) to recover funds expended in responding to an oil spill.
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Louisiana Third Circuit Issues Decision on the Procedure for Settlements in Cases Governed by Act 312
In a decision issued today, the Louisiana Third Circuit Court of Appeal issued the first appellate court opinion addressing the procedure for approval of settlements in cases governed by Act 312 (La. R.S. 30:29). Britt v. Riceland Petroleum Corp., is a “legacy” lawsuit in which landowners sued Riceland Petroleum Company and BP America Production Company—the current and former operators on a certain tract of plaintiffs’ property. Riceland and BP ultimately chose to settle all of the claims that Plaintiffs brought against them, and as part of the settlement they agreed to remediate the landowners’ property to the necessary state standards. The settling parties then complied with the express mandates of Act 312 as they: (1) provided notice of the settlement to the Department of Natural Resources (“LDNR”) and Attorney General (“AG”); (2) allowed the LDNR at least thirty days to review the settlement and provide any comments to the trial court; and, (3) sought and obtained the trial court’s approval of the settlement.
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Louisiana Supreme Court Upholds Expropriation of Commercial Venture
In a decision announced this week, the Louisiana Supreme Court ruled on the constitutionality and method of compensation for the expropriation by a governmental body of property owned by an ongoing commercial venture. In St. Bernard Port, Harbor & Terminal District v. Violet Dock Port, Inc., LLC, the St. Bernard Port, Harbor & Terminal District (the “Port”), a government-owned public cargo facility, sought to expand its operations along the Mississippi River. The Port unsuccessfully negotiated the purchase of 75 acres of property owned by Violet Dock Port, Inc., LLC (the “Landowner”) which utilized the property to layberth and service oceangoing ships for the United States Navy. The Port subsequently expropriated the property under the quick-take expropriation provisions of LA. R.S. 19:141, et seq., for a purported compensation of $16 million.
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Ninth and Fifth Circuits Split on Issue of Punitive Damages Under Maritime Law
By Liskow & Lewis on
The stage appears to be set for intervention by the United States Supreme Court following the Ninth Circuit’s recent panel decision in Batterton v. Dutra Group, No. 15-56775 (9th Cir. Jan. 23, 2018). In Batterton, the Ninth Circuit expressly disagreed with the Fifth Circuit in holding that an injured seaman may recover punitive damages in a claim for unseaworthiness against a vessel owner under the general maritime law. Compare McBride v. Estis Well Service, 768 F.3d 382 (5th Cir. 2014) (en banc). The circuit split, which follows disagreement among the lower courts, hinges on differing views of the impact of the Supreme Court’s decision in Miles v. Apex Marine Corp., 498 U.S. 19 (1990) on this area of law.
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The Dusky Gopher Frog is Heading to the United States Supreme Court
By Mark McNamara on
In July 2017, Weyerhaeuser Company, a Louisiana landowner and timber lessee, filed a Petition for a writ of certiorari asking the United States Supreme Court to overturn the U.S. Fish and Wildlife Service’s (“FWS”) designation of private land in St. Tammany Parish, Louisiana as “critical habitat” for the endangered dusky gopher frog. The FWS made this “critical habitat” designation under the Endangered Species Act. Weyerhaeuser Company argues that the property has not been a habitat for the gopher frog since the 1960s, the land lacks certain habitat features for the gopher frog to survive in the area, and the designation drastically reduces the value of the property by preventing certain commercial development projects. (A prior article posted on The Energy Law Blog discussing the Petitioner’s writ of certiorari is available here).
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U.S. Fifth Circuit Issues CAFA Opinion in Mass Action Addressing Two Issues of First Impression
In Warren Lester, et al. v. Exxon Mobil Corp., et al., No. 14-31383, ___ F.3d ___ (5th Cir. 1/9/2018), the U.S. Fifth Circuit Court of Appeals issued an opinion addressing two issues of first impression involving the Class Action Fairness Act of 2005 (“CAFA”).[1] A full copy of the opinion can be accessed here.
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