In State v. Louisiana Land & Exploration Co., the Louisiana Supreme Court Retreats from Progress in Oil Field Contamination Litigation

In the ongoing saga of Louisiana “legacy litigation,” the Louisiana legislature and Louisiana Supreme Court have together taken several cautious steps along an uneasy tightrope strung between the competing interests of private landowners and oil and gas exploration and production companies accused of environmental contamination. The most recent opportunity for advancing the resolution of oil field contamination disputes arose in the matter of State v. Louisiana Land & Exploration Co., in which the state of Louisiana and the Vermilion Parish School Board haled into court a dozen exploration and production companies to answer for alleged contamination resulting from oil and gas operations performed on lands owned by the state and managed by the school board. Though it was undisputed that the original 1935 oil, gas, and mineral lease lacked any express provision for environmental remediation, the plaintiffs nevertheless alleged, inter alia, that they were entitled to “excess remediation damages” in spite of the procedural mechanisms for administering remediation awards put in place by Act 312. The defendant companies—admitting responsibility for the contamination, but objecting to the plaintiffs’ contention that they were liable for damages above and beyond the amount required for a statutory cleanup—moved for partial summary judgment. They sought dismissal of the plaintiffs’ claims for excess remediation damages in light of the procedural requirements established under Louisiana Revised Statute (La. R.S.) section 30:29, which, they argued, acted as a substantive cap on remediation damages. The trial court granted the defendants’ motion for partial summary judgment, and the state and school board appealed. The Louisiana Court of Appeal for the Third Circuit agreed with the plaintiffs, reversing the trial court’s granting of partial summary judgment and holding, “La. R.S. 30:29, by its clear language, provides for a landowner to recover damages in excess of those determined in the feasible plan whether they are based on tort or contract law.” The defendant companies sought review of the appellate court’s determination, and the Louisiana Supreme Court held that Act 312 does not prohibit plaintiffs from pleading for and receiving awards for remediation damages in excess of the amount needed to fund the statutorily required cleanup plan. State v. Louisiana Land & Exploration Co., 2012-0884, p. 16 (La. 1/30/13); 110 So. 3d 1038, 1049.