LOGA Industry Report - Fall 2008 - (Page 19)

Constitutional, Supreme Court Says in M.J. Farms by Loulan Pitre, Jr. In a long-anticipated decision, on July 1 the Louisiana Supreme Court upheld the constitutionality of Act 312 of 2006 (“Act 312”), which regulates the procedure in litigation claiming environmental damage arising from oilfield operations. The matter was before the Louisiana Supreme Court on direct appeal of a ruling of the district court in the M.J. Farms case, in which the district judge had held that Act 312 was unconstitutional on the grounds that it deprived the landowner of property without due process in violation of the Fifth Amendment to the United States Constitution; divested the district courts of original jurisdiction in violation of Article V, Section 16 of the Louisiana Constitution; and divested the landowner’s right to acquire, own, control, use, enjoy, protect and dispose of property in violation of Article I, Section 4 of the Louisiana Constitution. The unanimous Louisiana Supreme Court found that that district judge had erred in finding Act 312 unconstitutional. In 2003, the Louisiana Supreme Court’s landmark Corbello decision held that damage awards in contractual claims for restoration of leased property were not “tethered” to the value of the property, and further held that existing law did not obligate the landowner receiving such an award to actually use the funds to remediate the property. In the Corbello opinion, the Louisiana Supreme Court suggested that the Louisiana Legislature had the power to require remediation, but had not passed any law to do so. In immediate response to Corbello, the Louisiana Legislature passed Act 1166 of the 2003 Regular Session of the Louisiana Legislature, but this legislation was limited to claims “to recover damages for the remediation and evaluation of any contamination or pollution that is alleged to impact or threaten usable groundwater.” When the 2003 legislation did not stop the tide of environmental legacy claims, the Louisiana Legislature revisited the issue in 2006, enacting a similar law that extended to a broader range of claims of environmental damage arising from oilfield operations. Act 312 is comprised of six basic components applicable to litigation claiming environmental damage arising from oilfield operations. First, the act requires timely notice of such litigation to the State. La. Rev. Stat. § 30:29(B)(1). Second, the act stays the litigation until 30 days after notice is given. Id. Third, the act permits the state to intervene in the litigation. La. Rev. Stat. § 30:29(B) (2). Fourth, the act provides a role for the Office of Conservation with the Louisiana Department of Natural Resources (“LDNR”) in the determination of the most feasible plan for evaluation and/ or remediation of environmental damage. La. Rev. Stat. § 30:29(C). Fifth, the act provides for the payment of all damages for the evaluation or remediation of environmental damages and further provides that the court shall oversee actual implementation of the plan adjudicated to be “most www.loga.la | 19 http://www.loga.la

Table of Contents for the Digital Edition of LOGA Industry Report - Fall 2008

LOGA Industry Report - Fall 2008
Chairman's Corner
President's Perspective
Commissioner's Comments
From the Pipeline...
Supreme Court Upholds Act 312
LOGA Challenges Commission's Ad Valorem Tax Rules
The Haynesville Shale - Waiting for the Gas to Come In
2008 Legislative Recap
Gulf Coast Prospect Expo 2008
2nd Annual LAGCOE Open Golf Tournament
Conservationist by Trade
Katrina Relief Fund Update
DNR Intent
Natural Gas Production Surges: A Free Market At Work
IPAA Washington Report
Legal Updates
New Members
Index to Advertisers

LOGA Industry Report - Fall 2008