Louisiana’s Third Circuit Overturns Decision Limiting Landowners’ Recovery of Damages in Vermillion Parish Pollution Case

In Louisiana v. Louisiana Land and Exploration, the State of Louisiana and the Vermilion Parish School Board brought suit against Union Oil Company of California (“Unocal”) and other oil companies for remediation of polluted state property in Vermilion Parish. Unocal admitted that it was responsible for environmental damage on the property and filed a motion to refer the case to the Louisiana Department of Natural Resources (LDNR) pursuant to Act 312 of 2006, La.R.S. 30:29. Plaintiffs objected, arguing that such a referral could not take place until all Defendants admitted responsibility and the private claims were tried to the jury. The trial court agreed with Plaintiffs.

Unocal filed a motion for partial summary judgment limiting Plaintiffs’ remediation damage claims to the amount determined by LDNR to be “the most feasible plan to evaluate or remediate the environmental damage” under La.R.S. 30:29(c)(3). Unocal argued that this language served as a cap on remediation damages resulting from a tort or the implied restoration obligation of a mineral lease. The trial court agreed.Plaintiffs appealed to the Louisiana Third Circuit Court of Appeals, which issued a decision on the case on February 1, 2012.

In considering whether La.R.S. 30:29 limited Plaintiff’s recoverable remediation damages to the cost of a “feasible plan,” the appeals court first looked to the language of the statute. The court quoted the first sentence of La.R.S. 32:29(H): “This section shall not preclude an owner of land from pursuing a judicial remedy or receiving a judicial award for private claims suffered as a result of environmental damage, except as otherwise provided in this Section.” The court found that this language clearly contemplated the landowner receiving an award in addition to that provided by the feasible plan.

Unocal focused on the second sentence of La.R.S. 32:29(H):”Nor shall [this section] preclude a judgment ordering damages for or implementation of additional remediation in excess of the requirements of the plan adopted by the court pursuant to this Section as may be required in accordance with the terms of an express contractual provision.” Unocal argued that “additional remediation” damages described in this sentence were the only additional damages a landowner could recover. The court found that this argument completely ignored the first words of the second sentence: “Nor shall it preclude.” The court explained that the first sentence in La.R.S. 32:29(H) guaranteed the landowners’ right to pursue a private claim in court, while the second sentence protected the landowners’ rights to recover additional damage under the terms of a contract.

The court noted that since the language of the statute was clear, it did not need to consider legislative intent. Nevertheless, the court observed, La.R.S. 30:29(A) & (G) clearly indicated the legislature’s intent to protect the public interest in the remediation of oilfield lands. The court found that limiting landowners’ damages could reduce their incentive “to engage in the costly and extended litigation necessary to resolve this type of claim.”

The appeals court thus reversed and remanded the trial court’s order granting partial summary judgment in favor of Unocal.

The Berniard Law Firm represents plaintiffs whose land has been contaminated by oil and gas operations. For assistance pursuing a land contamination claim or a personal injury, please call the Berniard Law Firm today to speak with an attorney immediately.