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.

New U.S. Supreme Court Decisions Clarify the Courts’ Authority to Compel Arbitration

By Thomas J. McGoey II and Philip Dore on January 17, 2019 Posted in Arbitration, Business, Business Law, Business Litigation, Construction, Contracts, Employment Law, Energy & Natural Resources, Energy Litigation, Environmental Business & Transactional, Exploration and Production, Labor & Employment, Litigation, Maritime, Oil & Insurance, Maritime, Oil & Insurance Business Law, Maritime, Oil & Insurance Litigation, Oil & Gas Contracts

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.

2019 Louisiana Investment Adviser Update

By John C. Anjier on January 16, 2019 Posted in Finance, Securities

Fingerprints

Effective January 1, 2019, Louisiana Senate Bill 416 requires all investment adviser representative (“IAR”) applicants to submit fingerprints for a criminal background check to the Louisiana Commissioner of Securities. La. R.S. 51:703(D)(5). Investment adviser representatives registered before January 1, 2019 (unless they change advisers) and IAR’s already registered with FINRA do not need to submit fingerprints. Fingerprint cards can be obtained from local law enforcement offices and submitted along with a completed Louisiana State Police Bureau of Criminal Identification and Information Form, and a completed and notarized Authority to Obtain Information from Outside Sources form. The forms are available from the Commissioner of Securities office.

US Government Shutdown

Although the US government, and the SEC, is shutdown, advisers should continue to meet all statutory and regulatory deadlines as set forth in the SEC’s Operations Plan Under Government Shutdown (Dec. 2018). The IARD is still operating and accepting filings, although the SEC will not approve new or pending adviser registration applications.

ADV Amendments

Advisers must file their annual Form ADV Amendment by March 31, 2019. You should make sure that your IARD account is funded and password is current in advance of the deadline. There were no significant amendments to Form ADV this year (the SEC made a number of amendments in 2018 relating to separately managed accounts and standing letters of authority). Continue Reading

Some Thoughts on Registration of CPA’s as Solicitors

By John C. Anjier on November 26, 2018 Posted in Securities

For many investment advisers, CPAs are a big source of referrals. Often these CPAs are compensated for the referrals. Most states now require registration of solicitors, including CPAs, as investment adviser representatives (“IAR”). This article provides some background on these requirements.

1. A Little Refresher

What is a solicitor? A solicitor is a person who, directly or indirectly, solicits or refers clients to an adviser. A solicitor relationship arises when an adviser pays an employee or third party for referring clients. The use of solicitors is regulated by the SEC under the Investment Advisers Act of 1940 and by the various states. Continue Reading

Expropriation ruling explains landowner’s burden to prove severance damages to a “legal certainty.”

By Laura Springer Brown on November 12, 2018 Posted in Expropriation, Jury Interrogatories, Pipeline

On November 8, the Louisiana First Circuit Court of Appeals added to the relatively sparse body of appellate rulings in pipeline expropriation matters. In an unpublished opinion, the court affirmed that landowners whose property is expropriated must prove their entitlement to severance damages to a “legal certainty.”

Under Louisiana law, owners of expropriated property can seek just compensation for the property taken. In addition, landowners can seek “severance damages” above and beyond the value of the expropriated property when the landowner has been deprived of the full potential of future development of the property due to the taking.

In Enterprise Products Operating, LLC, v. Southwood Terminal, L.L.C., Enterprise expropriated part of a large tract of undeveloped riverfront property for an NGL pipeline. The pipeline would then cross the Mississippi River, burrowing more than 100 feet below the riverbed.

At trial, the landowner sought millions in severance damages, arguing that the pipeline’s presence beneath the batture of the property (the land between the low-water level of the river and the levee) destroyed the property’s potential future use an industrial site with a dock to provide river access. However, Enterprise presented engineering testimony that the pipeline would not interfere with any potential dock. Continue Reading

Haynesville shale gas production is increasing again; Will Haynesville-related litigation increase again, too?

By Jonathan J. Fox and James E. Lapeze on October 4, 2018 Posted in Energy & Natural Resources, Energy Litigation, Exploration and Production, Louisiana Mineral Law, Louisiana Oil & Gas Law, Oil & Gas

In August 2018, dry natural gas production from the Haynesville shale averaged 6.774 billion cubic feet per day, which is the highest daily Haynesville production average since September 2012 when production averaged 6.962 billion cubic feet per day. August 2018 was not an anomaly. Instead, this year, the Haynesville has seen steady increases in production since January when production averaged 5.293 billion cubic feet per day. Although the recent Haynesville production increases are a positive sign for the Louisiana energy industry, the August 2018 daily production average is still below the previous Haynesville peak production average, which was 7.403 billion cubic feet per day in January 2012. However, if the current trend continues, the Haynesville could approach its prior peak production average in early 2019. Continue Reading

Louisiana Fifth Circuit Weighs in on Proper Application of Prescription and Contra Non in NORM Litigation

By Erin Bambrick on August 7, 2018 Posted in Energy & Natural Resources, Environmental, Toxic Tort & Environmental Litigation

In a case sure to be used as a sword by many defendants in the prevalent NORM (naturally occurring radioactive material) litigation in Louisiana and elsewhere, Patricia Lennie, et al. v. Exxon Mobil Corporation, et al., the Louisiana Fifth Circuit Court of Appeal concluded that plaintiffs’ survival and wrongful death actions were prescribed when plaintiffs brought suit almost four years after the diagnosis of cancer and subsequent death of their husband/father and failed to inquire as to the cause of illness and death. In doing so, the Fifth Circuit affirmed the judgment of the district court dismissing the survival and wrongful death claims of plaintiffs on an exception of prescription. Continue Reading

FIFTH CIRCUIT BEGINS TO CLEAN UP ITS JURISPRUDENCE ON HOW TO DETERMINE WHETHER A CONTRACT IS (OR IS NOT) MARITIME

By John Almy and William W. Pugh on July 20, 2018 Posted in Contracts, Energy & Natural Resources, Energy Litigation, Exploration and Production, Maritime, Maritime, Oil & Insurance, Maritime, Oil & Insurance Business Law, Maritime, Oil & Insurance Litigation, Offshore, Oil & Gas, Oil & Gas Contracts

After some thirty years of wrestling with the cumbersome six-part test set forth in Davis & Sons, Inc. v. Gulf Oil Corp.,[1] for determining whether a contract to perform services related to oil & gas exploration on navigable waters is maritime, the Fifth Circuit took up In re Larry Doiron, Incorporated[2] earlier this year in an effort to streamline the test and bring clarity to an area of the law mired in uncertainty. Continue Reading

Louisiana’s Third Circuit (Again) Affirms the Applicability of the Subsequent Purchaser Doctrine to Mineral Leases

By Kelly Brechtel Becker, Katie Seegers Roth and Kathryn Zainey Gonski on July 18, 2018 Posted in Appellate, Contracts, Energy & Natural Resources, Energy Litigation, Environmental, Legacy Litigation, Litigation, Louisiana Law, Louisiana Mineral Law, Louisiana Oil & Gas Law, Oil & Gas, Oil & Gas Contracts, Property Law, Subsequent Purchaser Doctrine

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

The Coastal Zone Management Act Litigation Removed to Federal Court (Again)

By Jonathan J. Fox and Dana M. Douglas on June 28, 2018 Posted in Energy Litigation, Environmental, Industry News, Litigation, Louisiana Mineral Law, Louisiana Oil & Gas Law, Oil & Gas

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. Continue Reading