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Plaquemines Parish v. Bepco, LP

United States District Court, E.D. Louisiana

July 7, 2015

BEPCO, L.P., et al., SECTION: G(5)



Before the Court is Plaintiff Plaquemines Parish's (the "Parish") "Motion to Remand."[1] Having considered the motion, the memoranda in support and in opposition, the record, and the applicable law, the Court will grant the motion.

I. Background

This case is one of several filed by the Parish against various defendants for alleged violations of permits issued pursuant to the State and Local Coastal Resources Management Act of 1978 ("SLCRMA"). The Parish filed a petition in the 25th Judicial District Court for the Parish of Plaquemines on November 8, 2013, wherein it seeks damages and other relief for violations of SLCRMA and the state and local regulations, guidelines, ordinances, and orders promulgated thereunder (collectively, the "CZM Laws").[2] The Parish asserts that Defendants' oil and gas exploration, production, and transportation operations within the Plaquemines Parish Coastal Zone were conducted in violation of the CZM laws, and that these activities caused substantial damage to the land and water bodies located in that area.[3] The Parish disavows at great length any other type of claim, cause of action, or legal theory potentially cognizable on the facts alleged, including any that could form the basis for jurisdiction in a federal court.[4]

Defendants BEPCO, L.P. ("BEPCO") and BOPCO, L.P. ("BOPCO") (together with Campbell Energy Corp. and Paxton Oil Company, L.L.C., "Defendants")[5] removed the case to this Court on December 18, 2013, alleging the following bases for original jurisdiction in federal court: (1) diversity jurisdiction; (2) Outer Continental Shelf Lands Act ("OCSLA"); and (3) general maritime law.[6] The Parish filed the pending motion to remand on January 15, 2014.[7] On July 25, 2014, the Court issued an Order staying the case and deferring its ruling on the motion to remand until another section of this Court resolved a motion to remand presenting similar issues.[8] On December 1, 2014, that court granted remand in the case before it.[9] On January 9, 2015, Defendants filed a supplemental memorandum in opposition to remand, [10] and on January 29, 2015, the Parish filed a supplemental memorandum in support of remand.[11] Accordingly, the pending motion is ripe for decision at this time.

II. Parties' Arguments

A. Defendants' Notice of Removal

In their Notice of Removal, Defendants argue that this lawsuit is removable first because diversity jurisdiction exists under 28 U.S.C. § 1332.[12] Defendants contend that the State of Louisiana is not a real party to this litigation, and the Parish lacks statutory authority to bring an action on behalf of the State.[13] Next, Defendants argue that diversity of citizenship exists in this case because the Parish has improperly joined the non-diverse Defendants in an attempt to defeat diversity jurisdiction.[14] Defendants rely on a misjoinder theory established in Tapscott v. MS Dealer Service Corp ., "wherein the Eleventh Circuit recognized that improper joinder may have occurred where a diverse defendant is joined with a non-diverse defendant with whom it does not have joint, several, or alternative liability, and the claims have no real connection to each other."[15] According to Defendants, the Fifth Circuit and district courts therein have recognized the Tapscott rule of fraudulent misjoinder, which involves a two-step analysis: (1) a determination as to whether there has been "procedural misjoinder" pursuant to the relevant state or federal joinder law, and (2) a determination as to whether the misjoinder was egregious.[16] Defendants contend that Louisiana state law provides that two or more parties may be joined in the same lawsuit if there is a community of interest between them.[17] A "community of interest, " Defendants aver, exists where there is enough factual overlap between the different actions or parties to make it "commonsensical" to litigate them together, and where there is shared or common liability with respect to the subject matter at issue.[18] In this case, Defendants contend, the claims asserted in this single lawsuit against four different Defendants "are so factually disconnected that the misjoinder here was clearly egregious."[19]

Next, Defendants argue that removal jurisdiction is appropriate because this action arises "in connection with" oil and gas operations conducted on the outer Continental Shelf (the "OCS").[20] According to Defendants, 43 U.S.C. § 1349(b)(1) provides that "the district courts of the United States shall have jurisdiction in cases and controversies arising out of, or in connection with, any operation conducted on the outer Continental Shelf which involves exploration, development, or production of minerals, of the subsoil and seabed of the outer Continental Shelf, or which involves rights to such minerals."[21] This case falls under OCSLA, Defendants aver, because the allegedly violated permits at issue here involve offshore pipelines that transport oil and gas products from the OCS to the Operational Area.[22] Additionally, Defendants argue that the Parish's requested relief includes the return of the Operational Area to its original condition, which would require Defendants to dismantle the pipeline infrastructure and "would threaten and impair the efficient exploitation of the minerals of the [OCS]."[23]

Finally, Defendants argue that removal is proper under 28 U.S.C. §§ 1333 and 1441(a) because the Petition asserts general maritime claims.[24] According to Defendants, a party seeking to invoke federal admiralty jurisdiction must demonstrate that (1) the conduct complained-of occurred on navigable water or that injury suffered on land was caused by a vessel on navigable water, and (2) that the incident has a potentially disruptive impact on maritime commerce and shows a substantial relationship to traditional maritime activity.[25] Defendants state that both elements of this test are satisfied here because the Parish "claims damages under permits issued for dredging by vessels on navigable water."[26] Further, Defendants state that general maritime claims are removable absent an independent basis for federal jurisdiction under the 2011 amendments to 28 U.S.C. § 1441(a).[27]

B. The Parish's Arguments in Support of Remand

The Parish argues that this Court does not have removal jurisdiction for several reasons. First, the Parish contends that there is no diversity jurisdiction because the State of Louisiana is a plaintiff to this lawsuit pursuant to Louisiana Revised Statute 49:214.36(D), which provides:

The secretary, the attorney general, an appropriate district attorney, or a local government with an approved program may bring such injunctive, declaratory, or other actions as are necessary to ensure that no uses are made of the coastal zone for which a coastal use permit has not been issued when required or which are not in accordance with the terms and conditions of a coastal use permit.[28]

According to the Parish, this provision authorizes a parish with an approved coastal zone program to sue on behalf of the State, regardless of whether the uses or permits at issue pertain to uses of state or local concern.[29] If the Louisiana legislature had intended to limit the authority of local governments under subsection D to uses of local concern, the Parish argues, it would have included such a limitation in the statute.[30] The Parish contends that when a political subdivision is statutorily authorized to bring a claim on behalf of the state, and the state is a real party in interest, removal jurisdiction premised upon diversity does not exist.[31]

Next, the Parish contends that the Tapscott rule of fraudulent misjoinder has not been adopted by the Fifth Circuit but, even under Tapscott, there is no fraudulent misjoinder in this case.[32] According to the Parish, Tapscott has been applied in this district court by analyzing joinder rules under Louisiana Code of Civil Procedure Article 463, which states that cumulation of claims is proper when the parties named as defendants have a "community of interest."[33] Here, the Parish argues, the requirement of a "community of interest" is easily met because the claims alleged against all of the defendants are based on identical causes of action and identical legal theories.[34] Moreover, according to the Parish, there is enough factual overlap in this case "to make it commonsensical" to litigate the claims together.[35] The Parish explains that it purposefully cumulated its claims in this case based on the oil and gas field involved.[36] Drilling and production activities within a single field, according to the Parish, are governed by a common set of Fieldwide Orders promulgated by the Louisiana Department of Natural Resources ("LDNR"), most of the operations within a field employ the same technology and methods, and oil and gas production within a field is typically supported by common or shared infrastructure and processing facilities.[37] Moreover, the Parish contends, because all of the wells in a particular field produce from a common reservoir or formation, the chemical makeup of the petroleum and the produced water extracted within a field will be the same or very similar, and will cause the same or very similar pollution if released to the environment.[38] These commonalities, according to the Parish, will result in numerous issues of highly technical science and fact, the litigation of which on a case-by-case basis would be cost prohibitive for both parties to this lawsuit.[39] Moreover, the Parish argues that de-cumulation of its claims may result in hundreds, perhaps thousands, of individual actions, and would ignore "the fact that many of the regulatory violations have extended for decades and caused extensive damage and contamination in the coastal zone."[40]

Turning to whether this Court has removal jurisdiction under OCSLA, the Parish argues that neither the complained-of activity nor the resulting damage occurred on an OCSLA situs.[41] The Parish cites Barker v. Hercules Offshore, Inc . to support its argument that OCSLA jurisdiction requires that the facts underlying the complaint occur on the Outer Continental Shelf (the "OCS").[42] Under 42 U.S.C. § 1331(a), the Parish argues, Congress defined the term "Outer Continental Shelf" to include all submerged lands lying seaward and three miles outside state waters, "and of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control."[43] The Parish states that in this case, all of the exploration, production, and transportation activities complained of in the petition occurred in the Louisiana Coastal Zone; none occurred on the OCS.[44]

With respect to whether this Court has maritime removal jurisdiction, the Parish first contends that a general maritime claim does not present a federal question, and that the saving to suitors clause of 28 U.S.C. § 1333 prevents removal of general maritime claims.[45] The Parish contends that, under the Supreme Court's holding in Romero, the purpose of the saving to suitors clause is to preserve the role of the States in the administration of maritime law, so any interpretation of federal jurisdiction that would render all maritime actions removable would subvert the intent of the original savings clause.[46] The Parish cites the Fifth Circuit's decision in Barker to support its argument that the savings clause, of its own force, prevents removal absent diversity.[47]

Even if this Court should find that maritime claims are removable, the Parish argues, remand would still be appropriate because its claims are not maritime tort claims.[48] According to the Parish, the Grubart test for maritime tort jurisdiction provides:

The connection test raises two issues. A court, first, must "assess the general features of the type of incident involved" to determine whether the incident has "a potentially disruptive impact on maritime commerce." Second, a court must determine whether "the general character" of the "activity giving rise to the incident" shows a "substantial relationship to traditional maritime activity."[49]

The Parish contends that the petition disclaims any intent to pursue maritime tort claims, so "the application of the Grubart test to the present facts is suspect."[50] But even under Grubart, according to the Parish, maritime jurisdiction would not exist because "it is well established in the federal jurisprudence that oil and gas exploration and production activities are not traditional maritime activities."[51] The Parish avers that the "general character" of the complained-of activity in this case is the failure of Defendants to comply with coastal zone permitting regulations, and such activity bears no "substantial relationship to traditional maritime activity."[52]

Finally, the Parish argues that if the Court finds that its claims trigger maritime jurisdiction and are removable to federal court, the Court should consider abstention under Burford v. Sun Oil . [53] According to the Parish, federal courts are required to abstain under Burford when the State's interests in maintaining uniformity in the treatment of an essentially local problem and retaining local control over difficult questions of state law bearing on policy problems of substantial public import outweigh the strong federal interest in having certain classes of cases, and certain federal rights, adjudicated in federal court.[54] Here, the Parish contends, Louisiana's interest in maintaining uniformity in the application of the CZM Laws outweighs the federal interest in adjudication of this lawsuit in federal court.[55]

C. Defendants' Arguments in Opposition to Remand

In reply, Defendants argue first that remand is not appropriate because diversity jurisdiction exists in this case.[56] Defendants contend that the Parish has improperly joined in one lawsuit independent actions against both diverse and non-diverse defendants, and that the Parish cannot evade diversity jurisdiction by joining claims against the diverse defendants with claims against the non-diverse defendants where the claims are distinct and the Defendants are not jointly liable.[57] Defendants argue that the Parish has improperly joined four separate actions in one suit, each with its own particular facts and evidentiary burdens.[58] According to Defendants, the amount, type, and specific cause of the damage alleged will differ among defendants, considering that their activities occurred in different locations, at different times, and utilizing different policies, practices, technologies, and equipment.[59] Defendants contend that the 57 permits at issue in this case authorize a variety of unrelated activities, and that the applicable laws and regulations differ depending on the activity and the time period in which each defendant operated.[60] Defendants argue that the Parish's reference to Fieldwide Orders is a red herring because the Parish does not assert a single claim based on an alleged violation of an LDNR Fieldwide Order.[61] Moreover, according to Defendants, the "glaring absence of shared or common liability further reflects the egregious misjoinder of the Parish's claims."[62]

Defendants also argue that the Parish cannot escape this Court's diversity jurisdiction by merely claiming to represent the State of Louisiana with no authority to do so. Defendants contend that the Parish lacks authority - statutory or otherwise - to assert claims under the coastal zone management laws on behalf of Louisiana.[63] The State has not made an appearance in this lawsuit, Defendants argue, and the Parish lacks statutory authority to represent the State for any claims arising under SLCRMA.[64] Additionally, Defendants contend that the only claims the Parish purports to make "on behalf of the State" relate to permits issued by the State for "uses of state concern, " which SLCRMA expressly prohibits the Parish from regulating.[65] Finally, Defendants argue that the State has never been found to be a real party in interest to a lawsuit brought by a party who is not authorized to act on the State's behalf or protect the State's rights, if any, in that dispute.[66]

Turning to whether OCSLA provides an independent basis for this Court's exercise of jurisdiction, Defendants argue that this case involves an "operation" on the OCS because the permits at issue are associated with the modification and maintenance of pipelines that form part of an OCS operation.[67] Additionally, Defendants argue that the suit arises out of, or in connection with, an OCS operation because the dispute affects the efficient exploitation of minerals from the OCS.[68] Next, Defendants contend that OCSLA does not contain a situs requirement or a general jurisdictional grant.[69]

Defendants next argue that remand should be denied because this Court has maritime jurisdiction over this lawsuit.[70] Defendants contend that the Parish's claims based on Defendants' operations and dredging activities in and around the canals, marshes, and waters bordering Louisiana's coast give rise to this Court's maritime jurisdiction.[71] Defendants additionally aver that maritime claims are removable under 28 U.S.C. § 1441, as amended in 2011, regardless of the citizenship of the parties.[72] According to Defendants, the amended verison of section 1441 allows removal of all claims that fall within the federal court's original jurisdiction without requiring diversity or imposing any other caveats or restrictions.[73] Defendants contend that the saving to suitors clause merely preserves a plaintiff's right to file a case in state court, but says nothing about the circumstances under which the case can be removed to federal court.[74]

According to Defendants, the Parish's claims arise under general maritime law because both the "location" and "connection" tests of Grubart are satisfied here.[75] First, with respect to the location test, Defendants argue that the Petition, on its face, alleges injuries suffered on land purportedly caused by vessels on navigable waters, including the erosion of marshes, the degradation of the Operational Area, and the increased risk of damage from storm-generated surges and other flooding damage.[76] Defendants contend that dredges are vessels, and that the activities causing injury occurred on navigable waterways because at least some of the permits were issued to "[p]erform work in or affecting navigable waters of the United States."[77] Next, Defendants argue that the connection test is satisfied because the Parish's claims based on dredging activities are potentially disruptive to maritime commerce.[78] Defendants cite In re Ingram Barge Co. to support their argument that dredging affects maritime commerce.[79]

Finally, Defendants contend that if abstention were appropriate, the proper result under Burford would be dismissal, not remand, due to the "substantial federal interest and multiple grounds for federal jurisdiction involved here."[80] According to Defendants, Burford permits, but does not require, a federal court to abstain from actions that present difficult questions of state law.[81] Defendants aver that Burford does not generally apply to cases, like this one, in which damages are sought.[82]

D. The Parish's Supplemental Authority

The Parish argues that Louisiana Act No. 544, which was signed into law on June 6, 2014, confirms that local government entities with approved programs have the right to bring enforcement actions under LA. REV. STAT. 49:214.36 for the violation of state permits within their respective jurisdictions.[83] According to the Parish, when an action filed by a local governmental entity under LA. REV. STAT. 49:214.36, as amended by Act 544, alleges damages arising from violations of state ...

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