v.
B E P C O L P
RECEIVED AUG 12 2019 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA OF LOUISIAN ALEXANDRIA DIVISION
KENNETH JAMES GUILBEAU CIVIL ACT. NO. 1:18-cv-551 -vs- JUDGE DRELL BEPCO, L.P., ET AL MAG. JUDGE PEREZ-MONTES
MEMORANDUM RULING Before the Court is a motion to dismiss (Doc. 14) filed by Defendant Hess Corporation (“Hess”), a motion to dismiss (Doc. 16) filed by Defendants Chisholm Trail Ventures, L.P. (“Chisholm”), BEPCO, L.P. (““BEPCO”), and BOPCO, LLC (f/k/a BOPCO, L.P.) (“‘BOPCO”), a report and recommendation (Doc. 56), an objection (Doc. 57) filed by Hess, an objection (Doc. 58) filed by Chisholm, BEPCO, and BOPCO, a reply to Defendants’ objections (Doc. 59) filed Plaintiff Kenneth James Guilbeau (“Guilbeau’’), an opposition to Defendants’ motions to dismiss (Doc. 65) filed by Guilbeau, a reply (Doc. 66) filed by Hess, and a reply (Doc. 67) filed by Chisholm, BEPCO, and BOPCO. For the following reasons, the Court ADOPTS the result but not the balance of the report and recommendation (Doc. 56), finds that it must ABSTAIN from further consideration of this case, DENIES AS MOOT the motions to dismiss (Docs. 14 & 16), and REMANDS the matter to the 19th Judicial District Court for the Parish of East Baton Rouge.
I. FACTS & PROCEDURAL HISTORY This is an oil and gas legacy suit in which a property owner is seeking an injunction requiring Defendants, who previously conducted oil and gas activities on or around his land, to remediate alleged present-day contamination caused by those historical activities.
Guilbeau owns property located in the Eola Oil & Gas Field in Avoyelles Parish, Louisiana.’ He alleges that Hess drilled and operated numerous oil and gas wells on his property, which included the construction and use of unlined earthen pits that have never been closed or have not been closed in conformance with state environmental laws and regulations, particularly 43 La. Admin. Code Pt XIX, § 101 ef seq (“Statewide Order 29-B”).” Guilbeau further alleges that Chisholm, BEPCO, and BOPCO drilled and operated numerous oil and gas wells on adjacent property that caused contamination of his property in violation of Statewide Order 29-B, among other regulations and state statutes. In a letter dated August 31, 2016, Guilbeau provided the Commissioner of the Louisiana Department of Natural Resources, Office of Conservation (“commissioner”), with formal notice of those alleged violations.* He stated that if the commissioner did not file suit under LA. REV. STAT. § 30:14 within ten days, then he would sue the responsible parties for injunctive relief pursuant to LA. REV. STAT. § 30:16.° In a subsequent letter to the commissioner dated September 27, 2016, Guilbeau reiterated his intention to file suit if the commissioner did not.® The commissioner ultimately failed to file suit. Guilbeau filed suit in the 19th Judicial District Court for the Parish of East Baton Rouge on September 15, 2017.’ Hess removed the suit on October 23, 2017, on the basis of diversity jurisdiction.® On November 10, 2017, Guilbeau filed a motion to remand arguing that the State of
1 120 acres, more or less, lying East and South of the Union Pacific Railroad, located in Section 6, Township 2 South, Range 3 East, Avoyelles Parish. Pet. (Doc. 1-2) at J 3. at 7 9. 11. 4 Pet. Ex. A (Doc. 1-2) at 15-18. Id. 6 Pet. Ex. B (Doc. 1-2) at 19-20. 7 Pet. (Doc. 1-2). § Notice of Removal (Doc. [1]). This case was removed to the United States District Court for the Middle District of Louisiana. The action was transferred to the United States District Court for the Western District of Louisiana on April 19, 2018. Order (Doc. 41).
Louisiana was the real party in interest in this action.? The Magistrate Judge issued a report and recommendation determining that the motion to remand should be denied,!° which the Court adopted.!! On November 20, 2017, Hess filed a Rule 12(b)(6) motion to dismiss.!? Chisholm, BEPCO, and BOPCO also filed a separate Rule 12(b)(b) motion to dismiss on the same day.'? The Magistrate Judge issued a report and recommendation on January 4, 2019, recommending that both motions to dismiss be denied.!* Il. LAW & ANALYSIS A. STANDARD OF REVIEW To survive a Rule 12(b)(6) motion to dismiss the plaintiff must plead enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). All well-pleaded facts shall be deemed as true and all reasonable inferences must be drawn in the plaintiff's favor. Lormand v. US Unwired, Inc., 565 F.3d 228, 232 (Sth Cir. 2009) (citations omitted). Nonetheless, Rule 12(b)(6) motions to dismiss are viewed with disfavor and rarely granted. Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 570 (Sth Cir. 2005).
° Mot. to Remand (Doc. 11). 10 Report & Recommendation (Doc. 53). 11 J. (Doc. 62). 2 Mot. to Dismiss (Doc. 14). 13 Mot. to Dismiss (Doc. 16). 4 Report & Recommendation (Doc. 56).
B. LOUISIANA NATURAL RESOURCES Hess argues that Guilbeau’s claims should be dismissed with prejudice because § 30:16 does not apply to past violations.!> Guilbeau responds that he is seeking remediation for present- day violations because the alleged contamination constitutes an ongoing violation. Thus, the dispositive issue is whether Guilbeau may use § 30:16 to compel remediation of present-day contamination caused by past oil and gas activities.
[*10]involve basic problems of [State] policy’ that the federal courts should avoid entanglement.” Aransas Project v. Shaw, 775 F.3d 641, 649 (Sth Cir. 2014) (citing Burford, 319 U.S. at 332). The Supreme Court explained when abstention under Burford is proper: Where timely and adequate state-court review is available, a federal court sitting in equity must decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are “difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar”; or (2) where the “exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.” New Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350, 361 (1989) (citation omitted). The Fifth Circuit considers the following factors in determining whether to exercise the Burford abstention: (1) whether the cause of action arises under federal or state law; (2) whether the case requires inquiry into unsettled issues of state law, or into local facts; (3) the importance of the state interest involved; (4) the state’s need for a coherent policy in that area; and (5) the presence of a special state forum for judicial review. Jefferson Cmty. Health Care Centers, Inc. v. Jefferson Par. Gov't, 849 F.3d 615, 623 (Sth Cir. 2017) (citation omitted). “Burford abstention may be raised at any time, including on appeal, and it may be raised by a court sua sponte.” Lentz v. Trinchard, 730 F. Supp. 2d 567, 587 (E.D. La. 2010) (collecting cases). Given the “comprehensive scheme for the enforcement of oil and gas obligations” Louisiana has established, Verona Entergy Inc. v. J. K. Petroleum Inc., No. CV 15-2893, 2016 WL 1436690, at *2 (W.D. La. Apr. 11, 2016), the Burford doctrine is implicated in this case.” First,
22 As discussed above, although Guilbeau is currently the plaintiff, this suit is fundamentally an administrative enforcement action initiated by an adversely affected person. Again, if this suit were to succeed on the merits, the commissioner would be made a party and would “be substituted for the person who brought the suit and the injunction [would] be issued as if the commissioner had at all times been the complaining party.” LA. STAT. ANN. § 30:16. Guilbeau could never receive an injunction or final judgment in his name or otherwise direct the course of remediation deciding whether § 30:16 applies to past violations will profoundly impact oil and gas legacy litigation, remediation of contaminated state land, and property sales throughout the state. These broad policy issues are of substantial public import and clearly transcend the question of who should pay for the remediation of this particular plot of land. Second, given the pending § 30:16 legacy suits throughout Louisiana, the Court’s review of this question could significantly disrupt state efforts to establish a coherent policy for the remediation of contaminated state land. The Court will analyze the relevant factors individually to fully explore whether abstention under Burford is required. [1]. State Law Cause of Action Guilbeau’s claims arise under § 30:16. This factor weighs in favor of abstention. [2]. Unsettled Issue of State Law The threshold issue in this case is whether § 30:16 applies to past violations. There is no final decision of a state appellate court that answers this question. This factor supports abstention. [3]. Important State Interest Two important and intertwined state interests are at issue in this case: (1) the future of oil and gas legacy litigation; and (2) the future of the remediation of contaminated land. Louisiana state courts spent years grappling with oil and gas legacy suits. If the Court were to rule that § 30:16 does apply to past violations, this could largely undo the limitations on oil and gas legacy suits put in place by the Louisiana Supreme Court. If the Court were to rule that § 30:16 does not apply to
[*11]while proceeding under § 30:16 because he would necessarily be substituted by the commissioner upon success on me analysis does not necessarily conflict with other rulings finding that the State of Louisiana was not the real party in interest. See, e.g., Watson, 2018 WL 1311208. Those rulings were issued in the context of motions to remand, which must be determined based on the facts at the time of removal. See Louisiana v. Am. Nat. Prop. Cas. Co., 746 F.3d 633, 636 (Sth Cir. 2014) (“[J]urisdictional facts are determined at the time of removal, and consequently post-removal events do not affect that properly established jurisdiction.”). The commissioner is not substituted until success on the merits.
[*12]past violations, this could hamper efforts at remediating contaminated land, a vital interest enshrined in the Constitution of Louisiana. This factor weighs in favor of abstention. [4]. Coherent State Policy As discussed above, there are § 30:16 claims before both state and federal courts throughout Louisiana. There is a strong possibility that a ruling by the Court could conflict with rulings in other courts. Such inconsistencies would create an uncertain, and thus unequitable, system for determining who bears the responsibility for remediation of contaminated land until the Louisiana Supreme Court ultimately ruled on the matter. This factor supports abstention. 5. Special State Judicial Forum Section 30:16 states that a suit may be brought “in the district court of any parish in which the commissioner could have brought the suit [under § 30:14].” LA. STAT. ANN. § 30:16. Section 30:14 provides that “[v]enue shall be in the district court in the parish of the residence of any one of the defendants or in the parish where the violation is alleged to have occurred or is threatened.” LA. STAT. ANN. § 30:14. Thus, there is no special state forum for judicial review of suits brought under § 30:16. This factor does not support abstention. 6. The Burford Factors Weigh in Favor of Abstention On balance, the Burford factors weigh in favor of abstention from this case. The Court is particularly cognizant of the important state interests in play and the need for a coherent state policy. The resolution of the issue at hand will have a monumental impact on the condition and value of state land. Moreover, Louisiana state courts are already examining whether § 30:16 applies to past violations, and the question will almost assuredly reach the Louisiana Supreme Court eventually. Given the extensive body of Louisiana case law on oil and gas legacy suits and the idiosyncratic statutory scheme of § 30:14 and § 30:16, the Court finds that a ruling on this matter at this point in time would be disruptive. Once the Louisiana Supreme Court has clearly indicated its position on the matter, the Court may exercise jurisdiction over future § 30:16 claims when appropriate. UWI. CONCLUSION The Court fully appreciates its duty to exercise its jurisdiction absent exceptional circumstances. However, this suit, which concerns a unique state statutory scheme designed to address interests that are uniquely important to the state, presents such exceptional circumstances. The fact that these novel claims began proliferating after Louisiana state courts carefully delineated the parameters of oil and gas legacy suits further warrants restraint from the Court to ensure it does not disturb a painstakingly developed body of law. Thus, the Court must abstain from further consideration of this matter. Accordingly, IT WILL BE ORDERED that the Court ADOPTS the result but not the balance of the report and recommendation (Doc. 56). IT WILL FURTHER BE ORDERED that the motions to dismiss (Docs. 14 & 16) be DENIED AS MOOT. IT WILL FURTHER BE ORDERED that this matter be REMANDED to the 19th Judicial District Court for the Parish of East Baton Rouge. SIGNED on this / 3 ay of August, 2019, at Alexandria, Louisiana. a ce JUDGE DEE D. DRELL UNITED STATES DISTRICT COURT
[*13][*14]