LOGA Industry Report - Winter 2009 - (Page 26)

Act up 312 Cleaning Legacy Litigation by Loulan J. Pitre, Jr. and Michelle C. Purchner, Gordon Arata Law Firm Legacy litigation in Louisiana has received substantial attention in the last few years due to judgments rendered for many millions of dollars against oil and gas exploration and production companies. Legacy litigation refers to suits filed by landowners who desire to recover the alleged cost of restoring their property following oil and gas exploration and production activities. These types of actions are termed legacy litigation because they often arise from operations conducted many decades ago, and plaintiffs allege that oil and gas companies left behind an unwanted legacy in the form of actual or alleged contamination. Unfortunately, some plaintiffs have used alleged contamination of property from exploration and production activities as a litigation tool to obtain large awards for their own enrichment, never actually using the money for restoration of the property. Before 2006, Louisiana law did not require that a landowner who received a monetary award for the cleanup of contaminated property actually use the award for that purpose. In the landmark 2003 Louisiana Supreme Court decision, Corbello v. Iowa Production, the plaintiffs were awarded $33 million for the remediation of property damaged due to oil and gas exploration and production activities, which amounted to 300 times greater than the fair market value of the land.1 Even though the monies were awarded for restoration of that property, the plaintiffs had absolutely no duty to actually restore the property and could just walk away with the $33 million and leave the property contaminated. The Corbello court acknowledged the problem: “There is no indication as to whether the legislature contemplated the fact that private landowners may or may not use the money from judgment to restore land, but it is clear that it did not implement a procedure to ensure that the landowners will in fact use the money to clean the property.”2 The state had no recourse against a landowner if he or she chose not to conduct the remedial work, even though that was the whole reason for which the landowner claimed that damages were due. In response to that problem, the Louisiana Legislature during the 2006 Regular Session passed Act 312, which became effective on June 8, 2006. Act 312 sets forth procedures to be followed to ensure that the funds awarded for environmental damage to property due to exploration and production activities will in fact be used to remediate that property. Now, under the procedures of Act 312, monetary judgments for environmental damage go into the registry of the court rather than to the plaintiff. Also, the regulatory agencies and the 26 | LOGA INDUSTRY REPORT | WINTER 2009

Table of Contents for the Digital Edition of LOGA Industry Report - Winter 2009

LOGA Industry Report - Winter 2009
Chairman’s Corner
President’s Perspective
North Louisiana Notes
Commissioner’s Comments
From the Pipeline…
The Future of the EPA
Louisiana ‘Renewed’ – A Brief Practical Analysis of 2008 Ethics Reforms
2008 Election Results
Act 312 – Cleaning Up Legacy Litigation
Taxpayers Voices Make A Difference
Claiming Obsolescence for Ad Valorem Tax Purposes
Non-consenters Beware: Your Pockets Just Got Shallower
2008 Louisiana Energy Golf Classic
Gulf Coast Prospect Expo
2008 Oilfield Service Auction
Natural Gas Market Conditions
Annual Meeting Preview
DNR Appointments
Legal Updates
New Members
On the Hill
Index to Advertisers

LOGA Industry Report - Winter 2009