LOGA Industry Report - Winter 2009 - (Page 27) court review and approve an appropriate cleanup plan to ensure that the property is remediated to state standards. The court then issues any orders necessary to ensure that the funds are actually expended in a manner consistent with the adopted plan and that the property is actually remediated with those funds. Several plaintiffs challenged the constitutionality of Act 312, arguing that it divests a plaintiff of vested rights. However, the Louisiana Supreme Court recently declared Act 312 constitutional in M.J. Farms, LTD. v. Exxon Mobil Corp., et al.3 Two legacy cases have gone to trial under the provisions of Act 312 - Tensas Poppadoc, Inc. v. The responsible party, et al. (“Poppadoc”) and Larry Davie Meaux, et al. v. Hilcorp Energy Co., et al. (“Meaux”). The Poppadoc matter arose out of the alleged contamination of a landowner’s property in the Lake St. John oilfield in Concordia Parish, while the Meaux matter arose out of the alleged contamination of several landowners’ property in the Tigre Lagoon oilfield in Vermilion Parish. In both cases, one of the key issues to be resolved was whether there had been environmental damage to the landowners’ property as a result of defendants’ oil and gas exploration and production activities. The matter of Poppadoc came to trial on May 19, 2008. It was the first case to be tried under the provisions of Act 312. The jury rendered a verdict on June 3, 2008, making one award – for remediation of the property to state standards in the amount of $1 million. Judge Boothe, on September 10, 2008, issued an order requiring the responsible party to submit a plan to the Louisiana Department of Natural Resources (LDNR) for a remediation of the subject property that will comply with regulatory standards. The responsible party was also ordered to deposit funds into the registry of the court to cover the cost of the review of such a plan by the LDNR. A judgment has not yet been signed by the court, but if the procedure follows that laid out by the Louisiana Legislature in Act 312, then once a plan is approved by LDNR and the court, the court will then order the responsible party to undergo that remediation as specified in the plan, subject to the court’s ability to determine that another plan is more appropriate. The $1 million awarded by the jury will be placed in the registry of the court to fund that remediation, and any money left over after the remediation is completed should go back to the responsible party, rather than to the landowner or its counsel. This was generally viewed as a favorable result for the oil companies, because there is no multi-million dollar award for the plaintiff or their counsel. In Poppadoc, the plaintiff will receive exactly what it asked for in trial, the remediation of the contaminated property to state standards. The plaintiff has filed a motion for a new trial, stating that no reasonable jury could have concluded on the evidence in the record that $1 million was an adequate award for remediation damages. This motion has not yet been ruled on by the court. The matter of Meaux came to trial on August 11, 2008, and was the second case to be tried under the provisions of Act 312. The jury rendered a verdict on August 29, 2008. During jury deliberations, the jury sent a question to the judge and counsel requesting the definition of “environmental damage” as stated by Act 312. In response, the court copied the language from the statute and sent it to the jury. The jury found that no environmental damage under Act 312 occurred. Based upon the jury verdict, a judgment was issued dismissing all claims against all defendants. The plaintiffs filed a motion for a new trial, which was denied. If these two cases are any indication, then Act 312 did in fact help to address the concerns expressed by the Louisiana Supreme Court in Corbello, that the former law “did not implement a procedure to ensure that the landowners will in fact use the money to clean the property.” Landowners and their lawyers will no longer be able to use legacy litigation as a tool to win a large monetary award without ever cleaning up the contaminated property. There is now a procedure, through Act 312, that requires landowners to use a monetary award for the remediation of property proven to have been contaminated due to oil and gas exploration and production activities to clean up that property. ● Loulan J. Pitre, Jr. is a partner in the Gordon Arata law firm. He is a graduate of Harvard Law School and former member of the Louisiana House of Representatives. Michelle C. Purchner is an associate in the Gordon Arata law firm. She is a graduate of Tulane University Law School where she also received an Environmental Law Certificate. 1 Corbello v. Iowa Production, 2002-0826 (La. /25/03), 850 So.2d 686, 699. 2 Id. 3 07-0450 (La. 4/27/07), 956 So.2d 573. www.loga.la | 27 http://www.loga.la
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