Often times during a lawsuit, cases involve a classic “battle of experts,” where each side presents an expert with an opinion which differs from their respective opponent’s side. The recent Jefferson Davis Parish case involved this exact situation.
Hayes Fund for the First United Methodist Church of Welsh, L.L.C. and other groups brought a lawsuit against a group of defendants including Kerr-McGee Rocky Mountain, LLC, alleging monetary losses which resulted from defendants’ mismanagement of two oil and gas wells in which the plaintiffs’ had royalty interests. Nevertheless, when it reached the Louisiana Supreme Court, it was mainly about the standards of appellate review.
The wells in question were both located in Jefferson Davis Parish. Plaintiffs alleged that defendants, when drilling the wells, did not follow the customary and industry-wide accepted protocols. For example, one of the well’s drill pipe was stuck, and later abandoned. Because of the remaining drill pipe, the hole could not properly be cemented, resulting in extraneous water to enter the reservoir and damage it, and causing loss of production and royalties for the plaintiffs. In another of the wells, the use of triple permanent packer caused the well to be “sanded up,” and resulted in the loss of lower zones. Overall, the alleged royalty loss of plaintiffs from both wells was $13.4 million.
Both parties invited experts to prove their positions. In response to plaintiffs’ expert witness, the defendants invited nine witnesses, including five expert witnesses to prove that their drilling practices were reasonable. The District Court preferred the defendants’ experts, upholding their position that the defendants did not cause a loss of oil or gas by their actions. Plaintiffs appealed and the case went to the Third Circuit Court of Appeal, which reversed the District Court’s findings as manifestly erroneous. The case was then appealed to the Louisiana Supreme Court.
There are different standards of appellate review, one such standards being the manifest error for factual determinations in civil cases. The purpose of this standard is to avoid having the reviewing court decide whether it would have found the case facts differently. Cenac v. Public Access Water Rights Ass’n, 851 So.2d 1006, 1023 (La. 2003). Instead, the trial court’s findings of fact may be put aside only if clearly wrong, lacking any reasonable basis. Thus, the reviewing court engages in a two-step process, rather than just reverse the trial court’s findings. The fact that the record contains evidence enough to support the trial court’s findings or the opposite is not enough; the entire record shall be reviewed. However, it is not required to weigh the entire evidence again. Instead of making judgments about the fact-finder’s findings, the reviewing courts are concerned with whether the findings were reasonable, avoiding substituting them with their own. Parish National Bank v. Ott, 841 So.2d 749, 753-54 (La. 2003).
The Louisiana Supreme Court, aimed to resolve the issue of whether the Court of Appeal erred in reversing the lower court’s decision by examining the District Court’s record and factual conclusions regarding each oil well. The Louisiana Supreme Court also underlined how the Court of Appeal approached the issue of manifest error, and noted how it should have done it instead. In particular, instead of trying to find a reasonable basis for the District Court’s factual conclusions, the Court of Appeal searched for evidence to disprove the lower court’s factual findings. Further, instead of concentrating on the evidence that supported the District Court’s findings, it focused on evidence that conflicted with the lower court’s holdings.
Based on this record, the Louisiana Supreme Court concluded that there was a reasonable basis for the District Court’s findings of fact. On multiple occasions the plaintiffs’ expert could not provide sufficient basis for the plaintiffs’ theory, while the record evidence supported the defendants’ position. The Louisiana Supreme Court noted that the role of the reviewing court is to correct errors rather than advance its preferred view as opposed to the one of the lower court. The Third Circuit’s judgment was reversed and the judgment of the District Court was reinstated.
As this case demonstrates, there are many intricacies of trial, including using expert witnesses but also procedural aspects such as a standard of review. An experienced attorney can help in these circumstances by providing guidance and insight into the process.
Written by Berniard Law Firm Blog Writer: Vartan Ramazyan
Additional Berniard Law Firm Articles on Appellate Review of Factual Determinations: The Role of the Appellate Court and Specific Case Facts in Awarding General Damages