The Louisiana Third Circuit Court of Appeal recently issued an opinion involving issues of prescription and breach of contract claims in the context of Act 312 and “legacy lawsuits” that oil and gas companies must remain cognizant of going forward. In State of Louisiana, et al. v. Louisiana Land & Exploration Co., et al., the Third Circuit affirmed the Vermilion Parish School Board’s authority to sue on behalf of the state, rejected a prescription defense on the basis of prescription immunity under the Louisiana Constitution, and concluded that a finding of “environmental damage” as defined under Act 312 is sufficient to trigger a breach of contract claim.
Continue Reading Third Circuit Issues New Act 312 Decision Involving Prescription and Breach of Contract

Day-to-day life has been dramatically impacted by the coronavirus disease 2019 (COVID-19), and many businesses have been forced to close or limit their service to slow the spread of COVID-19. In response, Congress has passed several pieces of legislation to assist individuals and businesses affected by the virus.


Continue Reading COVID-19 Federal Legislative Response

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

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

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.
Continue Reading Louisiana Third Circuit Issues Decision on the Procedure for Settlements in Cases Governed by Act 312

On Friday, December 15, the Louisiana Supreme Court granted three separate writ applications filed by each of the defendants in Gloria’s Ranch, L.L.C. v. Tauren Exploration, Inc.  These applications sought review of the Louisiana Second Circuit’s June 2, 2017 decision affirming the trial court’s ruling that Wells Fargo, a mortgage lender with a security interest in a mineral lease, was solidarily liable with its borrowers (the mineral lessees) for a breach of the mineral lessees’ contractual and statutory obligations to produce in paying quantities, pay royalties, and respond to the mineral lessor’s demands regarding those obligations. 
Continue Reading Louisiana Supreme Court Grants Writs from Second Circuit Decision Finding Holder of Mortgage Encumbering a Mineral Lease Solidarily Liable with Mineral Lessees for Damages Resulting from the Mineral Lessees’ Breach of Contractual and Statutory Obligations

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). 
Continue Reading Third Circuit Affirms Trial Court’s Refusal to Adopt DNR’s Most Feasible Plan in Sweet Lake Land & Oil Co. v. Oleum Operating Company

The White House has announced the nominees to fill four vacant seats on the U.S. Fifth Circuit and two seats in the Eastern District of Louisiana.
Continue Reading Nominees Announced for U.S. Fifth Circuit and Eastern District of Louisiana Seats

A recent decision from the Eastern District of Louisiana provides a mixed bag for pipeline companies or others whose operations involve canals.  Significantly, the decision from Judge Milazzo holds that during the existence of a right-of-way/servitude, Louisiana servitude law imposes a continuing duty to prevent canals from expanding and widening over time, unless unambiguous contractual language allows otherwise.
Continue Reading Federal Court Finds A Continuing Duty Under Louisiana Law To Prevent The Erosion of Pipeline Canals

In Gloria’s Ranch, L.L.C. v. Tauren Exploration, Inc., the Louisiana Second Circuit upheld a trial court’s ruling that Wells Fargo, a mortgage lender with a security interest in a mineral lease, was solidarily liable with its borrowers (the mineral lessees) for a breach of the mineral lessees’ contractual and statutory obligations to produce in paying quantities, pay royalties, and respond to the mineral lessor’s demands regarding those obligations.  A detailed summary of that decision is available here.
Continue Reading Strong Dissent Warns of “Devastating Economic Repercussions” of Second Circuit’s Decision in Oil & Gas Case