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What Happens Outside of Vegas?
The United States Supreme Court recently granted writs in a case that could affect the minimum contacts test used to find jurisdiction were a similar case brought in Louisiana. See Walden v. Fiore, 688 F. 3d 558 (2011). In Walden, the United States Supreme Court will decide whether to uphold the Ninth Circuit's ruling that a court may exercise personal jurisdiction over a defendant whose primary contact with the forum state was his knowledge that the plaintiffs had connections to that state.
In Walden, airline passengers sued a DEA agent who allegedly violated their Fourth Amendment rights in seizing $97,000.00 in cash. At least some of the cash was won on a gambling trip to San Juan, Puerto Rico. The plaintiffs boarded the plane in San Juan with a planned stop in Atlanta in route to Las Vegas.
Once in Atlanta, a drug-detection dog "alerted" to one of the plaintiff's bags. The bags were searched and the $97,000.00 was seized under suspicion of a connection to drug activity. Nevertheless, the plaintiffs were allowed to board their flight to Las Vegas and were promised return of the cash if they could establish its legitimacy.
It was alleged that one of the officers prepared and/or helped to prepare an allegedly false probable cause affidavit to facilitate the forfeiture of the cash to the government. Ultimately, the cash was returned.
The suit was filed in Nevada and was dismissed for lack of personal jurisdiction. In refusing jurisdiction, the District Court cited to the fact that the agent's conduct was "expressly aimed" at Georgia.
On appeal, the Ninth Circuit Court of Appeals, using a three-part test derived from Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802(9th Cir. 2004), held that the allegations were sufficient to satisfy the "forum-related conduct" prong of the test for specific jurisdiction. Therefore, Nevada jurisdiction was reasonable.
The Ninth Circuit agreed that the officer's seizure of the cash was "expressly aimed" at Georgia and did not support jurisdiction. However, the Ninth Circuit believed that the false probable cause affidavit aspect of the case supported jurisdiction in Nevada.
The Court reasoned that the officer was aware of the plaintiffs' significant connections with Nevada because: the plaintiffs had told the officer that they were going to Las Vegas; some of the funds originated from Las Vegas; and, background checks were run on the plaintiffs after they returned to Nevada. Under these facts, the Court concluded that the officer expressly aimed his conduct at Nevada when he prepared the affidavit and thus subjected himself to the jurisdiction of a Nevada Court.
The facts of Fiore set the stage for an important jurisdictional ruling.
Constitutional Law
Jurisdiction
Louisiana Supreme Court
Resource
MAY 2013 LEGAL UPDATE
MERCHANT LIABILITY- In Orr v. Academy Louisiana Co., LLC, 2012-1411 (La. App. 3 Cir. 5/1/13), - So.3d-, the Third Circuit held that La. R.S. 9:2800.6 (the "merchant liability statute") is "not all inclusive with relation to merchant negligence liability." The defendants argued that the lower court erred when it did not examine the facts of the case under the terms of the merchant liability statute, and instead awarded the plaintiff damages based upon general negligence principles. The Court highlighted that a merchant has a general duty to exercise reasonable care for the safety of its patrons. Therefore, under Orr, a case can be decided after conducting a duty-risk analysis without mention of La. R.S. 9:2800.6, at least when the case does not involve keeping "aisles, passageways and floors in a reasonably safe condition."Nevertheless, the Court reversed the trial court's decision and granted summary judgment for the defendant merchant. In Orr, the plaintiff/shopper was injured when another customer took a bicycle test ride in the store. The Court held that it was not foreseeable that a customer would ride a bicycle from the bike display to the other side of the store where the plaintiff was injured. As such, the defendant/merchant was not negligent.INSURANCE- In Wiley v. Cornerstone National Insurance Company, 2012-0909 (La. App. 1 Cir. 4/25/13), the First Circuit examined an insurer's obligation to inform its insured of a cancellation of its policy under LSA-R.s. 22:166. Cornerstone argued that its policy had been cancelled for non-payment of premium prior to the underlying incident. Cornerstone contended that the "anticipatory" "Notice of Cancellation" included in its billing invoices was sufficient to provide its insured notice of cancellation as required by statute. The Court disagreed.The notice statute was enacted to protect the insured and the public from unnoticed termination of insurance coverage. To meet this end, it requires "an unconditional, unequivocal notice of cancellation." Notices of cancellation for nonpayment sent with every premium invoice, when there is not yet a basis for cancellation, do not satisfy the terms of the statute. When Cornerstone sent the "notice of cancellation," it was sending a bill for payment, not initiating cancellation of the policy. As such, the policy at issue had not been validly cancelled.SUMMARY JUDGMENT PROCEDURE- In Christakis v. Clipper Const., LLC, 2012-1638 (La. App. 1 Cir. 4/26/13), - So. 3d -, the First Circuit upheld the trial court's grant of summary judgment because the plaintiff could not establish that the defendant knew or should have known that a floor mat created anunreasonably dangerous condition. The plaintiff's affidavit included only conclusory allegations of fact and did not show that the plaintiff could carry his burden of proof at trial.On appeal, the plaintiff argued that summary judgment was premature because discovery was not complete. The Court noted that, while parties must have a fair opportunity to conduct discovery, "there is no absolute right to delay action on a motion for summary judgment until discovery is complete." Suit was filed over three years prior to the hearing on the motion for summary judgment.
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A Presumption of Constitutionality
The Louisiana Supreme Court recently upheld as constitutional two statutes requiring the registration of sex offenders even when applied to a person who was found not guilty by reason of insanity. See State of Louisiana v. Isaiah Overstreet, Jr., 12 - 1854 (La. 3/19/13). While an ultimate resolution of this issue would cause the Court to measure the asserted personal interests of the defendant against the public's interest in safety, the defendant's challenges were rejected because he failed to properly raise and brief the constitutional issues.
In Overstreet, it was factually established that the defendant attempted to force himself upon co-eds at two universities. After his arrest, he was diagnosed as schizophrenic and consistently denied any recollection of the crimes. Overstreet was found not guilty by reason of insanity and continued in state-run mental facilities for over a decade until filing a Motion to be Released in 2010. The motion was denied as a consequence of his refusal to participate in sex offender treatment.
When he inquired about the potential release to a group home, he was advised that he would have to register as a sex offender. He then moved to declare LSA-R.S. 15:541(7) and 15:542 (the sex offender registration statutes) unconstitutional.
The Trial Court struck down the statutes as an affront to the Louisiana Constitution, giving conflicting oral and written reasons in support of the ruling. The Trial Court later explained in a per curiam opinion that the primary concern is one of capacity and that it would be unjust to require registration from one lacking capacity to do so.
At the Supreme Court, the defense attorney argued that an application of the registration statutes to Overstreet would violate due process and equal protection because he had not been convicted as a sex offender. In response, the State argued that a finding of not guilty by reason of insanity is not equivalent to an acquittal and that the registration statutes are not punitive but instead are designed to protect the public. The State contended that the defendant was a "sex offender" irrespective of the not guilty by reason of insanity defense.
The Louisiana Supreme Court did not address the merits of these positions. Instead, the Court held that the defendant had not sufficiently particularized the grounds for a constitutional challenge. The Court reasoned that legislation is presumed constitutional. As a result, if a party desires to challenge the constitutionality of a statute, that party must raise the unconstitutionality and specifically plead the basis of the alleged unconstitutionality.
The Overstreet Court reversed the Trial Court because it is the challenger's duty to sufficiently raise the constitutional objections. In so doing, the Court disregarded the Trial Court's sua sponte ruling ("on its own motion") that the sex offender registration statutes were unconstitutional because the Trial Court did not have the authority to raise these challenges.
While Overstreet did not resolve the ultimate issues of the constitutionality of the sex offender statutes in this setting, it did define the issues which would likely guide its decision should the issue ever be properly raised before the Court.
Constitutional Law
Louisiana Supreme Court
Insight
Impact of Supreme Court's Recent "Open and Obvious" Ruling not Obvious
The Louisiana Supreme Court recently issued a ruling on the application of the "open and obvious" doctrine in slip and fall cases. The facts of Broussard v. State of Louisiana, 2012-1238 (La. 4/5/13), presented problems for both sides. A UPS driver tripped and fell over an offset between the floor and an elevator. The elevator in a State building had problems for years. One problem was that the elevator would not align properly between floors causing an offset between the floor and the elevator. However, the UPS driver delivered products to this particular State building daily and was well aware of the problem. At the time of the incident, he noticed that the elevator was not properly aligned but nevertheless attempted to pull a dolly with approximately 300 pounds of computer paper over the offset. The inertia created caused the plaintiff to lose control. Plaintiff sued the State, the owner of the building, for injury to his back.
To recover damages from an owner of a building for a slip and fall, a plaintiff must prove: 1) ownership of the building; 2) owner's knowledge of the defect; 3) that damage could have been prevented by reasonable care; 4) that the owner failed to exercise reasonable care; 5) causation of damages; and 6) that the defect in the building created an unreasonable risk of harm. La. C.C. art. 2322; Entrevia v. Hood, 427 So. 2d 1146 (La. 1983). It was the "unreasonable risk of harm" element that was at issue before the Broussard Court.
Louisiana jurisprudence has created a risk-utility balancing test to determine if a defect in a building poses an unreasonable risk of harm. The risk-utility balance test consists of four factors: 1) the utility of the complained-of condition; (2) the likelihood and magnitude of harm, including the obviousness and apparentness of the condition; (3) the cost of preventing the harm; and (4) the nature of the plaintiff's activities in terms of its social utility or whether it is dangerous by nature. Dauzet v. Curnest Guillot Logging, Inc., 08-0528 (La. 12/2/08), 995 So. 2d 1184.
In applying this balancing test, the jury found the State 62% liable and Plaintiff 38% liable for Plaintiff's damage. The court of appeal reversed that decision. It found that, where the Plaintiff knew of the defect, the defect was "open and obvious" such that the State had no duty to protect against the condition.
The Louisiana Supreme Court disagreed. Under the specific facts of the case, the Court found that Plaintiff's knowledge of the defect was insufficient to meet the open and obvious test. According to the Court, for a defect to be considered open and obvious it must be open and obvious to all. "Thus, in order to be open and obvious, the risk of harm should be apparent to all who encounter the dangerous condition." Broussard, p. 17.
The Supreme Court reasoned that the open and obvious question is not based upon the plaintiff's particular state of mind. Such an analysis is akin to assumption of the risk - a theory of law that was omitted when Louisiana enacted its comparative fault regime. Instead, the open and obvious to all standard is, according to Broussard, "sensible . . . and does not undermine the comparative fault regime by allowing a plaintiff's negligence to operate as a bar to recovery in a case where the defendant's conduct poses a risk of harm to the hypothetical blameless plaintiff." Id. p. 18.
The true impact of the Broussard decision remains to be seen. Under one reading, the opinion's impact should be limited to its specific facts. Under any interpretation, Broussard preserves the rule that an allegedly defective condition which is obvious to all will bar recovery to the plaintiff.
Louisiana Supreme Court
Negligence
Slip and Fall
News
Mary Anne Wolf presents at a seminar entitled BUILDING CODES in LOUISIANA
Mary Anne Wolf will present at a seminar entitled BUILDING CODES in LOUISIANA on April 12th in Scott, LA. The seminar offers CE credit for architects, engineers, and contractors. For information, visit www.lorman.com/ID373571.
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Class Actions in a State of Undress
Almost no litigation grabs attention and headlines more than a high-profile class action. The Louisiana Supreme Court's recent class action ruling was no exception in a case involving salacious conduct and a violation of privacy.
The plaintiff in Jane Doe v. Southern Gyms, LLC, 2012-1566 (La. 3/19/13) was an unnamed victim of a "peeping tom." She contended that an employee of a popular gym placed a pen camera in the women's bathroom where he would tape unsuspecting women in various states of undress. The pen camera could hold only 1-2 hours of film. The perpetrator testified that, after viewing, he would immediately delete the footage. The images of only four women were seen on the footage when it was discovered. After the employee was arrested, one of the victims filed the class action lawsuit. At issue before the Louisiana Supreme Court was whether the class action was properly certified by the Trial Court.
Class action is a nontraditional litigation procedure that was introduced into Louisiana civil procedure in 1961. Louisiana class action procedure is modeled after the original federal rule and has been extensively revised since its inception. Louisiana Code of Civil Procedure Article 591 provides the elements that must be met before a class action can be certified. Failure to meet one of the threshold requirements of Article 591 precludes class action treatment. Once of these threshold requirements is numerosity, i.e. a class of potential plaintiffs "so numerous that joinder of all members is impractical." La. C.C.P. art. 591(a)(1). The requirement of numerosity was at issue in Jane Doe.
In its analysis, the Supreme Court stressed that courts must perform a rigorous analysis to determine whether the proposed class action meets the requirements of Article 591. Simply pleading a class action is insufficient. Instead, the plaintiff "must be prepared to prove in fact" that the Article 591 requirements are met. Id. at p. 9. To establish the "numerosity" requirement, the class representative cannot simply allege that several persons were affected by the defendant's bad acts. She must be able to offer some proof of a definable group of aggrieved persons so numerous that joinder is impractical.
In Jane Doe, the Supreme Court held that the plaintiff did not satisfy numerosity. The employee's testimony revealed that he may have recorded approximately 20 women. However, because the footage was deleted, most of the potential class members could not show that their privacy had been violated. Only nine women had positive knowledge that they were on video. According to the Jane Doe Court, nine class members did not meet the numerosity requirement and the class was decertified. While the Court did not reveal a "magic number" to meet numerosity, we now know it may be higher than nine.
There is an old adage that "bad facts make bad law." In Jane Doe, the Louisiana Supreme Court did not let the egregious nature of the conduct impact its view that the requirements of Article 591 must be met in every circumstance.
Class Actions
Louisiana Supreme Court
Resource
APRIL 2013 LEGAL UPDATE
INSURANCE- In Byrnside v. Hutto, 2013 WL 692474, the Second Circuit affirmed a decision excluding insurance coverage for injuries sustained by the plaintiff in a bar fight. The Court held that, where the actions of the defendant were intentional and reasonably calculated to produce harm or injury, coverage for such injuries is excluded under the intentional acts exclusion contained in the policy. The Court indicated that the intentional acts exclusion would not have applied in the case of self-defense. However, the factual finding that the defendant ordered the persons holding the plaintiff to release him, only to then "immediately hit Byrnside in the face" offered ample factual support for the rejection of self-defense.PRESCRIPTION- In Howard v. Mamou Health Resources, 2013 WL 811676, the Third Circuit affirmed an exception of prescription in favor of a "qualified health care provider" as defined in Louisiana Revised Statutes title 40, section 1299 et seq, where the plaintiff filed suit in district court against the health care provider within a year of the incident, but failed to file a claim with the Patient's Compensation Fund within that time period. The Court found that the timely filing of suit against a qualified health care provider in the district court neither suspends nor interrupts the one-year prescriptive period for the filing of medical malpractice claims.PUNITIVE DAMAGES- In Rachal v. Brouillette, 2013 WL 950355, the Third Circuit was presented with evidence that the defendant/tortfeasor was under the influence of hydrocodone and marijuana and that his impairment caused him to strike a mother and her two children walking near the roadway. The jury awarded substantial damages including $100,000 in punitive (exemplary) damages.The Third Circuit cited to the principle that an award of punitive damages will not be disturbed on appeal absent a showing that the jury's decision was manifestly erroneous or clearly wrong. Nevertheless, the Court held that the award of $100,000 was abusively low under the facts presented and increased the punitive award to $500,000. The defendants argued that no punitive damages were recoverable because the tortfeasor had only a "small amount" of drugs in his system and was not impaired. In rejecting this argument, the Court stated:"This 'small amount of drugs' was apparently enough to cause Mr. Brouillette to drive erratically at a high speed, kill three people, and not remember any of it."In support of its decision, the Court cited to a wide range of facts including the fact that the tortfeasor's prior conviction for driving while intoxicated had not served as a sufficient deterrent.
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Volunteer Firemen "On the Hook" in Louisiana
The Louisiana Supreme Court recently held that the workers' compensation tort immunity provided by LSA-R.S. 23:1032 does not apply to suits by one volunteer fireman against another volunteer. See Champagne v. American Alternative Insurance Corp., 12-1697 (La. 3/19/13), -- So.3d ---. LSA-R.S. 23:1036 provides that workers' compensation is the sole and exclusive remedy provided to a volunteer fireman against a fire company. Champagne clarified that this immunity does not similarly apply to claims for personal injury brought by one volunteer fireman against another.
The last sentence of LSA- R.S. 23:1036(A) states as follows:
The remedies provided herein shall constitute the exclusive remedy of the volunteer member against the fire company as provided in R.S. 23:1032.
In Champagne, the attorney for the defendants argued that the legislature's incorporation of LSA-R.S. 23:1032 reflected the intent to extend immunity beyond the language provided by LSA-R.S. 23:1036(A). The defendants asserted that this last sentence has internal inconsistencies; the first portion of the sentence "standing in isolation, can be read to limit workers' compensation immunity solely to the fire company, whereas its last phrase specifically incorporates La. R.S. 23:1032, which applies workers' compensation tort immunity to officers and employees of the employer or principal." Defendants further argued that, "to not include co-volunteers as co-employees under La. R.S. 23:1032 is to render the phrase, 'as provided in La. R.S. 23:1032,' superfluous and meaningless."
The Supreme Court disagreed with the defendants' statutory interpretation arguments. The Court stated: "[t]he fundamental question in all cases of statutory construction is legislative intent and the reasons that prompted the legislature to enact the law." In assessing the legislative intent, the Court gave a "narrow construction" of the statute because the statute sought to provide immunity in derogation of "the delictual rights of injured workers existing in the Louisiana Civil Code." Under this narrow construction, "every presumption should be on the side of preserving the general tort or delictual rights of an injured worker..."
Utilizing a narrow (or "strict") construction of LSA-R.S. 23:1036, the Court found that the legislature did not expressly provide immunity to volunteer firemen. Further, the Court did not find intent to provide such immunity in the legislative history.
Champagne is not the first time a Louisiana court has commented on the application of Louisiana's Workers' Compensation Law to volunteer firemen. In 1994, the First Circuit held that a volunteer fireman was not an "employee" of the fire district and therefore was not eligible for workers' compensation benefits. See Genusa v. Pointe Coupee Volunteer Fire Dist. No. 4, 93-2214 (La. App. 1 Cir. 10/7/94); 644 So.2d 851. The Genusa Court reasoned that workers' compensation did not apply when there was no employer-employee relationship, and that an employer-employee relationship does not exist without compensation.
The Champagne Court expressed its belief that LSA-R.S. 23:1036 was likely enacted in response to Genusa. However, the statute only granted volunteer members of fire companies "some workers' compensation benefits" and did not change "the law to define a volunteer member... as an 'employee' of the fire company for the purposes of immunity under the workers' compensation law." Emphasis added.
Both the Supreme Court and the appellate court in Champagne observed that a denial of immunity to volunteer firemen "may make members of the community reluctant to act as volunteers at their local department." However, the legislature did not clearly provide for such immunity according to Champagne. It would not be surprising to see the Louisiana legislature address the issue of immunity for volunteer firemen moving forward.
Louisiana Supreme Court
Supreme Court
Workers' Compensation
Insight
Sentencing Juveniles in Louisiana after Miller v. Alabama
The Louisiana Supreme Court recently held that a district court must reconsider a case involving a seventeen year old who was sentenced to life in prison without the possibility of parole for second degree murder under a mandated penalty provision of a statute. See State of Louisiana v. Darrius R. Williams, 12-1723 (La. 03/08/13), --So.3d---. The defendant's application for review to the Louisiana Supreme Court was pending when, Miller v. Alabama, 567 U.S. ___, 132 S.Ct. 2455, 183 L.Ed.2d 407 (2012), was decided by the United States Supreme Court.
In Miller, the United States Supreme Court found that "the Eighth Amendment forbids a sentencing scheme that mandates life in prison without possibility of parole for juvenile offenders." The Miller Court additionally stated that "[a]lthough we do not foreclose a sentencer's ability to make that judgment in homicide cases, we require it to take into account how children are different, and how those differences counsel against irrevocably sentencing them to a lifetime in prison." Miller, 567 U.S. at ____, 132 S. Ct. at 2469.
The Williams Court found that "the Miller court did not establish a categorical prohibition against life without parole for juveniles" in homicide cases but did establish the requirement "that a sentencing court consider an offender's youth, and attendant characteristics as mitigating circumstances before deciding to impose" a life sentence without the possibility of parole on a juvenile." The requirement to consider the age and attendant characteristics of juveniles as mitigating circumstances before sentencing is the Williams Court's interpretation of Miller's mandate that the sentencer "take into account how children are different, and how those differences counsel against irrevocably sentencing them to a lifetime in prison." Id.
On remand, the district court is to reconsider the sentence of a juvenile to life in prison without the possibility of parole "after conducting a new sentencing hearing in accordance with the principles enunciated in Miller v. Alabama." State v. Williams, (La. 03/08/13), -- So.3d at ---.
Louisiana Supreme Court
Supreme Court
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Case on a Wire - Last Minute Fax Filing
The Louisiana Supreme Court recently held that a request for service of process made by facsimile filing within ninety days from the filing of the petition, but not perfected until after the ninety days has passed, is a timely request for service of process under LSA-C.C.P. art. 1201. See Brenda Morales and Jerson Rodriguez v. State of Louisiana Through the Board of Supervisors of LSU Through Earl K. Long Medical Center, 12-2301 (La. 1/11/13), --So.3d---.
In reaching its decision, the Morales court addressed whether Louisiana's Facsimile Filing Statute, LSA- R.S. 13:850, required both the payment of fees and the receipt of the original request for service before service is considered to have been requested. Under Louisiana procedure, the petitioner has 90 days to request service upon all defendants. See LSA-C.C.P. art. 1201. When service is not timely requested, the case can be involuntarily dismissed without prejudice on the motion of another party. See LSA-C.C.P. art. 1672(C). This dismissal can result in a later bar to the claim if the re-filed suit is then prescribed and the defendants can show bad faith in the failure to request service or the suit involves a claim against the state or a political subdivision of the state.
In Morales, the Louisiana First Circuit had found that the request for service was not timely because the fax filing fees were not paid by the attorney until after the ninetieth day. The First Circuit relied on the Louisiana Supreme Court's previous ruling in Trachant v. State of Louisiana, Louisiana State University Health Sciences Center, 08-0978 (La. 1/21/09), 5 So.3d 832 which stated that "[a] valid request for service under La. R.S. 13:6107(D)(1) is made when the clerk receives the request for service and can then act on it." The First Circuit reasoned that a clerk cannot act upon a request for service when there is no original request and the corresponding fees had not been paid. However, Trachant did not involve fax filing and instead considered whether a request for service is effective when it is placed in the mailbox or when it is received by the clerk. This is sometimes referred to as the "mailbox rule." The Trachant court held that actual receipt of the request was required.
The Louisiana Supreme Court in Morales disagreed with the First Circuit and found that the clerk can "act upon" receipt of the facsimile filing. The Court emphasized that LSA- R.S. 13:850(A) provides that a facsimile filing "shall be deemed complete at the time that the facsimile transmission is received and a receipt of transmission has been transmitted to the sender by the clerk of court." The Morales Court harmonized its ruling with Trachant by finding that the Court has always held that the receipt of the request must occur within the 90 day period.
Even after Morales, a request for service of process should be followed by the prompt mailing of the original signed document and the required transmission fee. However, Morales indicates that Louisiana's highest court is likely to give consideration to preserving a claim when interpreting the otherwise strict requirements of Louisiana's Facsimile Filing Statute.
Louisiana Supreme Court
Supreme Court
Insight
Oil & Gas Clean-Up Not "Capped"
Louisiana's long relationship with oil and gas has been profitable for both the oil and gas industry and Louisiana's citizens. However, the nature and extent of the duty to restore the land after drilling has often been a disputed and litigated issue. Recently, the Louisiana Supreme Court's decision in State v. Louisiana Land and Exploration Co., 2012-0884 (La. 1/30/13), - So.3d - added clarity to the law by establishing that the presence of a Court-approved remediation plan does not create a "cap" on damages.
The Louisiana Legislature passed La. R.S. 30:29 to provide a procedure for the clean-up, or "remediation," of oilfield, exploration and production sites. Before this statute, a plaintiff who was awarded monetary "remediation" damages to restore land was not obligated to actually use the money to perform remediation work. The purpose of La. R.S. 30:29 was to ensure that any money awarded to remediate polluted sites be used for this purpose. By the statute, any such award is to be deposited with the Court and spent under a Court-approved plan.
Even after the statute, it remained unclear whether a Court's approval of a remediation plan created a "damages cap" whereby the plaintiff landowner could not recover in excess of the plan. This issue was resolved in State v. Louisiana Land and Exploration Co.
The suit involved the State's action for remediation of land owned by the State and managed by the Vermilion Parish School Board. The property was allegedly polluted by oil and gas exploration performed pursuant to a mineral lease. Consistent with recovery allowed in earlier cases, the State sought to recover damages in excess of the remediation costs. Attorneys for one of the defendants filed a motion for partial summary judgment and argued that, under La. R.S. 30:29, the plaintiffs did not have a right to seek damages in excess of the amount necessary to complete the Court's remediation plan
The trial court held the plaintiffs could only recover damages equal to the amount listed in the Court's remediation plan. The appellate court overturned the trial court's decision and held that the landowner could recover damages in excess of the Court's plan, whether those damages are based on a contract or tort law. The Supreme Court affirmed the appellate court's decision and confirmed that there is no "cap" on damages.
Before and after State v. Louisiana Land and Exploration Co., an award for damages in excess of the remediation plan is available and arises from a private right in either contract or tort law. Contract damages are permitted if they are expressly provided by the contract. If contract damages are not available, tort damages may be recovered if the plaintiff shows that the defendant acted unreasonably or excessively in its exploration of gas, oil or minerals. See Terrebonne Parish School Bd. v. Castex Energy, Inc., 2004-0968, p. 10 (La. 1/9/05), 893 So.2d 789.
In view of the State v. Louisiana Land and Exploration Co. decision, oil and gas companies should be aware that they face exposure in excess of the statutory remediation plan, making them potentially liable for far more than just clean-up.
Oil & Gas
Supreme Court