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Watson v. Arkoma Development, LLC

United States District Court, W.D. Louisiana, Monroe Division

February 5, 2018

W. BROOKS WATSON, et al.
v.
ARKOMA DEVELOPMENT, LLC, et al.

          ROBERT G. JAMES JUDGE.

          REPORT AND RECOMMENDATION

          KAREN L. HAYES, UNITED STATES MAGISTRATE JUDGE.

         Before the undersigned Magistrate Judge, on reference from the District Court, is a Plaintiffs' motion to remand [doc. # 12]. The motion is opposed. For reasons explained below, it is recommended that the motion to remand be DENIED.

         Background

         On June 27, 2017, Plaintiffs[1] filed the instant oilfield contamination suit in the 6th Judicial District Court for the Parish of Tensas, State of Louisiana against eight defendants arising out of decades-long oil and gas exploration and production activities conducted on Plaintiffs' properties by the defendants and/or their predecessors in title. See Notice of Removal, doc. # 1, p. 1. The eight entities named as defendants are: Arkoma Development LLC, Arkoma Louisiana LLC, Atlantic Richfield Company, BP America Production Company, ConocoPhillips Company (“ConocoPhillips”), Kabco Oil & Gas Company, Kabco Production Company, and Southern Natural Gas Company, LLC (“SNG”).

         On October 17, 2017, defendants SNG and ConocoPhillips removed this suit to this Court on the sole basis of diversity jurisdiction, 28 U.S.C. § 1332. Notice of Removal, doc. #1. Plaintiffs timely filed the instant motion to remand asserting that this Court lacks subject matter jurisdiction because the State of Louisiana is a party. See Motion to Remand, doc. #12.

         On July 31, 2017, defendants, SNG and ConocoPhillips, filed their Memorandum in Opposition to Motion to Remand [doc. # 16]. SNG and ConocoPhillips argued that Plaintiffs lack authority to bring suit in the name of the State of Louisiana and, alternatively, the State of Louisiana is, at most, a nominal party. Plaintiffs filed a reply in support of remand on December 14, 2017 [doc. # 21]. Removing defendants filed a sur-reply on January 5, 2018. [doc. # 24]. Thus, the matter is ripe.

         Discussion

         A defendant may remove an action from state court to federal court, provided the action is one in which the federal court may exercise original jurisdiction. Manguno v. Prudential Property and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (citing 28 U.S.C. § 1441(a)). The removing defendant bears the burden of establishing federal subject matter jurisdiction and ensuring compliance with the procedural requirements of removal. Id. Because federal courts are courts of limited jurisdiction, a suit is presumed to lie outside this limited jurisdiction unless and until the party invoking federal jurisdiction establishes to the contrary. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001) (citation omitted). The removal statutes are strictly construed in favor of remand. Manguno, supra.

         Defendants SNG and ConocoPhillips invoked this court's diversity jurisdiction, which requires an amount in controversy greater than $75, 000, and complete diversity of citizenship between plaintiffs and defendants, 28 U.S.C. § 1332(a). Plaintiffs do not contest that the amount in controversy exceeded $75, 000 at the time of removal. See generally Memorandum in Support of Motion to Remand, doc. # 12-1. The undersigned concludes that it is facially apparent that the claimed damages exceed $75, 000. See Notice of Removal, doc. #1. Plaintiffs also do not contest that all plaintiffs, excluding the State of Louisiana, are citizens of Louisiana only, and all defendants are not citizens of Louisiana. The undersigned concludes that it is facially apparent that, excluding the State of Louisiana, complete diversity exists. See Id. Thus, the jurisdictional issues are whether the State of Louisiana was properly made a party to this actions and whether it is a real party in interest.

         I. Whether the State of Louisiana Was Properly Made a Party.

         The diversity jurisdiction statute presupposes a civil action between "citizens of different states, " where all plaintiffs are diverse from all defendants. 28 U.S.C. § 1332; Farrell Const. Co. v. Jefferson Parish, La., 896 F.2d 136, 139-140 (5th Cir. 1990). "Ordinarily ‘[i]n an action where a state is a party, there can be no federal jurisdiction on the basis of diversity of citizenship because a state is not a citizen for purposes of diversity jurisdiction.'" Louisiana v. Union Oil Co. of Cal., 458 F.3d 364, 366 (5th Cir. 2006) (quoting Tex. Dep't of Hous. & Cmty. Affairs v. Verex Assurance, Inc., 68 F.3d 922, 926 (5th Cir. 1995)). Accordingly, excluding the exception discussed below, if the State of Louisiana is a party to this litigation, this Court would not have subject matter jurisdiction.

         Plaintiffs named the State of Louisiana ex rel. W. Brooks Watson, Ben W. Watson, Scott H. Watson and Touchdown Holdings, LLC as a plaintiff in this action. Plaintiffs argue that they had authority to bring suit on behalf of the State of Louisiana pursuant to La. R.S. § 30:16. Defendants argue that Plaintiffs La. R.S. § 30:16 grants no such authority.

         A party may only sue in the name of the State of Louisiana if that party has statutory authority to do so. See In re Louisiana Riverboat Gaming Comm'n, 659 So.2d 775, 779 (La.App. 1 Cir. 1995); Par. of Plaquemines v. Total Petrochemical & Ref. USA, Inc., 64 F.Supp.3d 872, 889 (E.D. La. 2014) (“Louisiana law does not brook self-appointed interlopers who institute legal action on behalf of the State without the legal authority to do so.”). La. R. S. § 30:14 grants the Commissioner of Conservation (the “Commissioner”) the duty to sue to restrain a violation or threatened violation of Louisiana's oil and gas regulations or orders made thereunder. La. R. S. § 30:16 allows persons in interest to notify the Commissioner of a violation or threatened violation of Louisiana's oil and gas regulations and request that the Commissioner sue to enjoin the violation. If the Commissioner does not bring suit within 10 days of receiving the notice, “any person in interest adversely affected by the violation . . . may bring suit to prevent any or further violations . . . .” La. R. S. § 30:16. However, if the ...


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