LOGA Industry Report - Winter 2012 - (Page 25)

LEGACY LAWSUITS Louisiana Supreme Court Upholds Subsequent Purchaser Doctrine by Loulan J. Pitre, Jr. and Demarcus J. Gordon Gordon Arata McCollam Duplantis & Eagan, LLC This Louisiana Supreme Court decision will limit the scope of legacy lawsuits based upon historic contamination to property, while certainly not eliminating all such lawsuits. The Louisiana Supreme Court has recently upheld the Subsequent Purchaser Doctrine with its decision in Eagle Pipe and Supply, Inc. v. Amerada Hess Corporation, 2010 C 2267 (La. 10/25/11), ___ So.3d ___. While this decision relates to the contamination of a historic pipe yard associated with pipe cleaning operations, its breadth also encompasses Act 312 and oilfield exploration and production contamination matters. Within its decision, the Louisiana Supreme Court examined what is commonly known as the “subsequent purchaser doctrine” to determine if Eagle Pipe and Supply, Inc. (“Eagle Pipe”) had the right to sue for damages that occurred prior to its acquisition of property and absent a specific assignment of the right to pursue past damages to the property. The subsequent purchaser rule “is a jurisprudential rule which holds that an owner of property has no right or actual interest in recovering from a third party for damage which was inflicted on the property before his purchase, in the absence of an assignment or subrogation of the rights belonging to the owner of the property when the damage was inflicted.” Eagle Pipe purchased the subject property, located in Lafayette Parish, in 1988 from its previous owner, Union Pipe, who operated the property as a pipe yard from 1981-1988 where it bought, stored and sold used oilfield tubulars. Subsequent to Eagle Pipe’s purchase of the property, the Louisiana Department of Environmental Quality (“LDEQ”), following-up on an alleged field interview, found that the property was contaminated with Technologically Enhanced Naturally Occurring Radioactive Materials (“TENORM”). The LDEQ cited Eagle Pipe for violating TENORM exposure regulations and ordered that the property be remediated. After the alleged LDEQ actions, Eagle Pipe filed suit against four groups of defendants: (1) oil company defendants who either sold or tendered to Union Pipe used oil field equipment for cleaning or maintenance; (2) the previous landowners who leased the property to Union Pipe to clean, inspect and store a large number of used oilfield pipe; (3) the transporter defendants who transported TENORM contaminated pipe to the property; and (4) insurance companies liable for Eagle Pipe’s damages. Several defendants filed declinatory, dilatory and peremptory exceptions. Following a hearing on the exceptions, the trial court granted the exception of no right of action, dismissing Eagle Pipe’s claims with prejudice. On appeal, the Fourth Circuit Court of Appeal originally affirmed the trial court’s decision; however, on rehearing the Fourth Circuit vacated its previous judgment and reversed the trial court’s decision sustaining the exception of no right of action. The Louisiana Supreme Court granted writs to determine whether a subsequent purchaser of property has the right to sue a third party for property damages inflicted prior to its acquisition of the property in the absence of the assignment of or subrogation to that right. Within its plea (to both the Fourth Circuit Court of Appeal and the Louisiana Supreme Court), Eagle Pipe attempted to carve out an exception to the subsequent purchaser rule. Eagle Pipe contended that the subsequent purchaser rule only applies “where the prior damage to property was overt or apparent at the www.loga.la | 25 http://www.loga.la

Table of Contents for the Digital Edition of LOGA Industry Report - Winter 2012

Chairman’s Corner
President’s Perspective
North Louisiana Notes
Commissioner’s Comments
From the Secretary’s Desk
From the Pipeline…
Legacy Lawsuit Lottery Lands LA on Watch List for Judicial Hellholes
Court Upholds Subsequent Purchaser Doctrine
Indemnity and Insurance in the Louisiana Oil Patch
A View from the Trenches
Comments from Congress
The Tuscaloosa Marine Shale
2011 Election Results
2012 Legislative Outlook
Louisiana Gulf Coast Oil Expo
Louisiana Energy Golf Classic
Annual LAGCOE Golf Tournament
Gulf Coast Prospect & Shale Expo
Oilfield Service Auction
LOGA Annual Meeting 2012
Haynesville Shale Golf Classic
Natural Gas Goes Mobile
Red Ink Woes
A Victory in the 2012 Rules
Hobbling Toward Energy Mediocrity
Are You Minding Your Section 404 Permits?
Service Company Spotlight
LOGA Announces 2012 State of the Industry Series
Industry’s History Chronicled
Lawsuit Abuse
Legal Updates
Petroleum Facts
New Members
Index to Advertisers

LOGA Industry Report - Winter 2012