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Alford v. Chevron USA Inc.

United States District Court, E.D. Louisiana

January 12, 2015

CATHERINE P. ALFORD, ET AL.
v.
CHEVRON U.S.A. INC., ET AL. Section: R. No. 13-5464.

ORDER AND REASONS

SARAH S. VANCE, District Judge.

Defendant Exxon Mobil Corporation moves to dismiss several of plaintiffs' claims against it.[1] Defendants Chevron U.S.A. Inc., Chevron Pipe Line Company, and Gulf Oil Corporation (collectively "Chevron") also move to dismiss several of plaintiffs' claims against them.[2] For the following reasons, the Court grants Exxon's motion in part and denies it part, and grants Chevron's motion.

I. BACKGROUND

A. Procedural History

This "legacy litigation" lawsuit centers on property that plaintiffs allegedly own and/or use in Township 18 South, Range 15 East, Plaquemines Parish, Louisiana, in the Potash Field, [3] which defendants allegedly harmed with their oil and gas exploration and production activities.[4] On May 2, 2013, plaintiffs brought a host of claims in Louisiana state court based on these alleged harms; defendants removed the suit to this Court several months later.[5] The Louisiana Supreme Court has dubbed this type of lawsuit "legacy litigation" because it "arise[s] from [oilfield] operations conducted many decades ago" that left "an unwanted legacy' in the form of actual or alleged contamination." Marin v. Exxon Mobil Corp., 48 So.3d 234, 238 n.1 (La. 2010) (citing Loulan Pitre, Jr., "Legacy Litigation" and Act 312 of 2006, 20 Tul. Envt. L.J. 347, 348 (2007)).

The motions currently before the Court are second round motions to dismiss. The Court issued an earlier order[6] in which it dismissed all of plaintiffs' claims against Chevron except for their claims under Civil Code articles 2683(2), 2686, and 2692, and Mineral Code articles 11 and 122. In that order, the Court also accepted plaintiffs' concession that Chevron had not conducted any operations on or near plaintiffs' property and that plaintiffs had not alleged any specific conduct by Chevron in their complaint. The order also dismissed all of plaintiffs' claims again Exxon except for the following claims:

• Claims for breach of implied obligations owed by mineral lessees under La. Civ. Code arts. 2683(2), 2686, and 2692, and Mineral Code articles 11 and 122
• Claims for breach of implied obligations owed by servitude holders under La. Civ. Code arts. 576 and 577
• A negligence claim under La. Civ. Code art. 2315 and a claim under § 324A of the Restatement (Second) of Torts, as interpreted by Louisiana jurisprudence
• A trespass claim
• A claim under La. Civ. Code art. 667, which restricts the manner in which neighbors may use their property

At issue in the motions to dismiss now before the Court is whether plaintiffs have successfully re-pled two claims against Chevron and three claims against Exxon that the Court dismissed in the earlier order: (1) a claim against Chevron and Exxon for damages for land loss, subsidence, and backfilling of canals;[7] (2) a claim that Chevron and Exxon are strictly liable for violations of Civil Code article 667[8] and of Civil Code articles 2317 and 2322;[9] and (3) a claim against Exxon for punitive damages under former Civil Code article 2315.3 for wanton or reckless conduct in connection with the handling of hazardous and toxic substances.[10]

After examining the allegations relevant to these claims, the Court determines that plaintiffs have succeeded in pleading their claim against Exxon for punitive damages under former article 2315.3, but only for damages relating to well serial number 93246 for operations that occurred during the period when article 2315.3 was in effect. Plaintiffs' other claims against Chevron and Exxon fail for the reasons set out in this order.

B. 1950 Mineral Lease, 1960 Servitude, and Operator History

Plaintiffs attached to their original complaint several documents relating to mineral operations in the Potash field.[11] These documents include an "Oil, Gas, and Mineral Lease" on the subject property in the name of Humble Oil & Refining Company (alleged predecessor-in-interest to Exxon) and Gulf Refining Company (alleged predecessor-in-interest to Chevron), dated December 14, 1950, [12] as well as various amendments to and conveyances of the 1950 lease.[13] The Mineral lease "grants, leases, and lets" the Potash field to Exxon's and Chevron's predecessors-in-interest

for the purposes of investigating, exploring, prospecting, drilling and mining for and producing oil [and] gas, laying pipe lines, building... structures thereon to produce, save, take care of, treat, transport and own said products and for housing its employees, and for dredging and maintaining canals, constructing and maintaining roads and bridges, and, in general, for all appliances or structures, equipment, servitudes and privileges which may be necessary, useful or convenient to or in connection with any such operations conducted by Lessee....[14]

The documents attached to the complaint also include evidence of a servitude granted to Humble Oil on the property, dated February 17, 1960[15] and documentation of Humble Oil's merger into Exxon in 1973.[16] The servitude agreement grants Humble Oil two pipeline servitudes "twenty (20) feet in width" "to lay, maintain, operate, replace, change and remove any and all pipe lines for the transportation of oil, gas and/or water and/or their products, with all incidental equipment."[17] The two pipeline servitudes were to follow two routes across the property that are described using coordinates in the servitude agreement and illustrated in a diagram attached to the servitude agreement.[18] The servitude agreement also grants Humble Oil a servitude "over, across and through" an irregularly shaped portion of the Potash field, which is described by coordinates in the servitude agreement and illustrated in a diagram attached to the servitude agreement.[19] Within this irregularly shaped portion of the Potash field, the servitude permitted Humble Oil

to install, maintain, operate, replace, change and remove pipe lines, tanks, tank batteries, compressors, dehydration facilities and appurtenances for the treating, transportation and storage of oil, gas, ... and other minerals..., and/or their products; and to dredge, dig, maintain and use canals together with the right to deposit spoil along side of same; and to build, maintain, use and operate any other facilities and appurtenances useful and convenient to Grantee's general business.[20]

Because plaintiffs have alleged no facts plausibly suggesting that there are any other leases, servitudes, or other agreements applicable to the property, the Court limits its focus in this order to the 1950 mineral lease and the 1960 servitude agreement.

Plaintiffs have also attached to the complaint the Operator History of the property.[21] That document reflects that Humble Oil and Exxon have operated two different wells on plaintiffs' property.[22] Operations on well number 46753 were permitted on September 11, 1952, and concluded on December 28, 1973, when the well was plugged and abandoned.[23] Operations on well number 93246 were permitted on November 14, 1962, and concluded on October 23, 1985, when that well also was plugged and abandoned.

II. LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead enough facts "to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts that allow the court to "draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239 (5th Cir. 2009). But the Court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.

A legally sufficient complaint must establish more than a "sheer possibility" that the plaintiff's claim is true. Id. It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Id. In other words, the face of the complaint must contain enough factual matter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiff's claim. Lormand, 565 F.3d at 257. If there are insufficient factual allegations to raise a right to relief above the speculative level, or if it is apparent from the face of the complaint that there is an insuperable bar to relief, the claim must be dismissed. Twombly, 550 U.S. at 555.

III. DISCUSSION

A. Claim for Damages for Canal Backfilling ...


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