State v. Louisiana Land & Exploration Co.: Louisiana Revised Statutes Section 30:29 and Its Effect on the Amount of Remediation Damages Available to Plaintiffs

• Author: Julia L. Taylor
• Position: J.D./D.C.L., 2015, Paul M. Hebert Law Center, Louisiana State University.
• Pages: 581-611

State v. Louisiana Land & Exploration Co .: Louisiana Revised Statutes Section 30:29 and Its Effect on the Amount of Remediation Damages Available to Plaintiffs INTRODUCTION Within the past decade, Louisiana has witnessed a surge in land contamination litigation, particularly in regards to oil and gas exploration sites. 1 These types of cases are commonly referred to as “legacy litigation.” 2 In a typical legacy litigation case, a landowner discovers damage to his land that was caused by either a mineral lease on the property or by some other kind of toxic exposure. 3 The landowner naturally wants to hold someone responsible for the damage, and consequently the legacy litigation begins. The Louisiana Legislature first stepped into the legacy litigation debate in 2005. 4 Recognizing the negative environmental implications of land contamination, the Legislature passed a statute that encourages property cleanup. 5 Louisiana Revised Statutes section 30:29 requires that any damages awarded to a plaintiff for “the evaluation or remediation of environmental damage” must be paid into the registry of the court, rather than directly to the plaintiff. 6 This requirement reduces the chance that a plaintiff will keep the money for personal use instead of using it for the reason it was awarded. Copyright 2014, by JULIA L. TAYLOR. 1. See Loulan Pitre, Jr., Six Years Later: Louisiana Legacy Lawsuits Since Act 312 , 1 LSU J. ENERGY L. & RES. 93, 94 (2012) [hereinafter Pitre, Six Years Later ]. 2. Id. 3. In some circumstances, it is difficult to determine whether the landowner caused the damage or if it was the fault of a lessee. See Jim Magill, Louisiana Ruling Keeps Chevron in Lawsuit , PLATTS OILGRAM NEWS (Feb. 5, 2013), http://www.terraconsultores.com/descargas/platts-oilgram-news.pdf, archived at http://perma.cc/8HXN-AES6. Although this Note does not discuss the hardship in determining who caused the damage, it is an interesting question that should perhaps be addressed by another article. 4. See Act No. 312, 2006 La. Acts 1472. 5. See LA. REV. STAT. ANN. § 30:29(A) (Supp. 2014). 6. Id. § 30:29(D), (I)(1)–(2) (“‘Environmental damage’ shall mean any actual or potential impact, damage, or injury to environmental media caused by contamination resulting from activities associated with oilfield sites or exploration and production sites. Environmental media shall include but not be limited to soil, surface water, ground water, or sediment. ‘Evaluation or remediation’ shall include but not be limited to investigation, testing, monitoring, containment, prevention, or abatement.”). 582 LOUISIANA LAW REVIEW [Vol. 75 Furthermore, the statute requires the Louisiana Department of Natural Resources (DNR) to play a direct role in determining the amount of remediation damages. 7 The fact-finder first determines liability and damages, as is the case in typical litigation. After the fact-finder has determined damages, each party submits cleanup plans to DNR, which then adopts its own number—a number statutorily required under section 30:29 and based on the evidence submitted by the parties. 8 This number is part of a comprehensive cleanup plan called “the most feasible plan.” 9 The plan is then submitted back to the trial court, which oversees the distribution of the money and ensures that it is used to remediate the land. 10 Although section 30:29 was passed with the stated intent of protecting Louisiana’s resources, the language of the statute is dense and ambiguous. 11 The Louisiana Supreme Court has dealt with the statute a few times, but each time it has failed to clarify it in a way that guarantees uniform interpretation among the lower courts. 12 Most recently in State v. Louisiana Land & Exploration Co. , the Louisiana Supreme Court grappled with section 30:29 in determining the total amount of damages available to a plaintiff. 13 The Court addressed the issue of how to allocate the difference between a fact-finder’s determination of remediation damages and DNR’s statutorily required determination of remediation damages when the fact-finder’s determination is higher. 14 The majority in Louisiana Land held that judgments for environmental land damage are not limited to the cost of remediation as determined under the statute’s procedure. 15 Rather, the majority held that a landowner is entitled to recover damages in excess of DNR’s determination as to the cost of remediation, even if the original contract between the plaintiff-landowner and the defendant-lessee 7. See id. § 30:29(C). 8. See id. 9. Id. 10. See id. § 30:29(D)(2)–(4). 11 . See id. § 30:29(A). 12. See infra Part I.D. 13. State v. La. Land & Exploration Co., 110 So. 3d 1038, 1040 (La. 2013). 14. See id. at 1054. The Court ultimately held that the landowner is entitled to excess remediation damages “[i]f a court awards remediation damages pursuant to an express contract provision that is a greater amount than that ordered to be placed into the court’s registry to fund the remediation plan . . . . Likewise, ‘any award’ for ‘additional remediation’ may be kept by the landowner, as well.” Id. 15. Id. at 1049 (“The procedure under the Act does not prohibit the award of remediation damages for more than the amount necessary to fund the statutorily mandated feasible plan, nor does the procedure described in the Act intrude into the manner in which remediation damages are determined.”). 2014] NOTE 583 did not expressly contract for restoration of the land. 16 In other words, the fact-finder may determine that remediation damages should be higher than DNR’s determination of damages, with the excess award transferring directly to the plaintiff instead of to the court’s registry. This decision rested on the Court’s interpretation of section 30:29. Although the majority and dissent strongly disagreed on the interpretation of the statute’s language, both argued that the statute was clear and unambiguous. 17 However, with such diametrically opposed opinions on the proper statutory interpretation, this decision is a strong warning sign that the statute’s language is neither clear nor unambiguous. Given the difficulty in interpreting and applying section 30:29 and the frequency with which land contamination cases are litigated, 18 this Note urges the Legislature to revise the statute in a way that more accurately reflects the Legislature’s intent to remediate land to the extent necessary to protect the public. 19 The Legislature must act more effectively to protect Louisiana’s environment. To that end, Part I of this Note provides background information on legacy litigation in Louisiana. In addition, Part I describes Louisiana’s current law of damages in detail, revealing the shortcomings of section 30:29 and the Louisiana Supreme Court’s various interpretations of the statute. Part II explores the Court’s most recent interpretation of the statute in State v. Louisiana Land & Exploration Co. , discussing the facts, implications, and ensuing confusion of the decision. Part III analyzes Louisiana Land and its interpretations of section 30:29, parsing through its ambiguous language and stated legislative purpose. Finally, Part IV advocates that the Legislature revise the statute to more accurately reflect its original intent by explicitly recognizing that remediation damages in excess of DNR’s determination may be recovered, even in the absence of an express contractual provision providing for remediation damages. 16. Id. 17. See id. at 1063–64 (Victory, J., dissenting). 18 . See, e.g. , David E. Dismukes, The Impact of Legacy Lawsuits on Conventional Oil and Gas Drilling in Louisiana , LSU CTR. FOR ENERGY STUDIES, http://www.enrg.lsu.edu/files/images/presentations/2012/DISMUKES _LEGACY_RPT_02-28-12_FINAL.pdf, archived at http://perma.cc/XB5L-3NCV (last visited Sept. 29, 2014). In 2010, the number of active legacy litigation lawsuits was over 150. Id. 19. See LA. REV. STAT. ANN. § 30:29(A) (Supp. 2014) (“It is the duty of the legislature to set forth procedures to ensure that damage to the environment is remediated to a standard that protects the public interest.”). 584 LOUISIANA LAW REVIEW [Vol. 75 I. LEGACY LITIGATION AND ITS DIFFICULTIES By nature, legacy litigation cases usually present a myriad of problems. 20 The tracts of land at the center of these disputes have often been subject to numerous mineral leases over the years, 21 making it difficult to identify the party or parties responsible for damages. 22 Even when courts find a lessee responsible for the damage, they often struggle with how much money should be granted for remediation damages in the absence of an express contractual provision. 23 Such remediation damages include the costs of “investigation, testing, monitoring, containment, prevention, or abatement” of the contaminated tract of land. 24 Oftentimes the cost of repairing the land, or restoring it to the condition it was in before the lease was executed, is drastically more expensive than the value of the land itself. 25 A. Balancing Two Competing Public Policies Part of the struggle in determining remediation damages can be explained by two competing public policies: (1) courts want to award damages significant enough to deter defendants from engaging in risky, potentially environmentally damaging practices, but (2) courts do not want the plaintiff to receive a windfall. 26 On the environmental side of the public policy coin, courts are very much aware that oilfield operations can have negative 20. See Pitre, Six Years Later , supra note 1, at 93. 21. The Louisiana Mineral Code defines a “mineral lease” as “a contract by which the lessee is granted the right to explore for and produce minerals.” LA. REV. STAT. ANN. § 31:114 (2000). 22. Magill, supra note 3, at 11 (“In many cases, it is difficult for the landowners to identify the responsible party because of changes in company ownership and bankruptcies over the years.”). This Note does not discuss the potential for...