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State v. The Louisiana Land And Exploration Co.

Court of Appeals of Louisiana, Third Circuit

March 14, 2018

STATE OF LOUISIANA, ET AL.
v.
THE LOUISIANA LAND AND EXPLORATION CO., ET AL.

         APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF VERMILION, NO. 82162 HONORABLE JEROME M. WINSBERG, DISTRICT JUDGE

          Court composed of Ulysses Gene Thibodeaux, Chief Judge, Shannon J. Gremillion, and John E. Conery, Judges.

          Thibodeaux, Chief Judge, dissents and assigns written reasons.

          Jerold Edward Knoll The Knoll Law Firm, L.L.C. COUNSEL FOR PLAINTIFFS/APPELLANTS: State of Louisiana Vermilion Parish School Board

          Russell Karl Zaunbrecher Edwards, Stefanski & Zaunbrecher COUNSEL FOR PLAINTIFFS/APPELLANTS: State of Louisiana Vermilion Parish School Board

          Grady Joseph Abraham Attorney at Law COUNSEL FOR PLAINTIFFS/APPELLANTS: State of Louisiana Vermilion Parish School Board

          William R. Coenen, III Talbot, Carmouche & MarcelloCOUNSEL FOR PLAINTIFFS/APPELLANTS: State of Louisiana Vermilion Parish School Board

          Calvin Eugene Woodruff, Jr. Cooper & Woodruff COUNSEL FOR PLAINTIFF/APPELLANT: Vermilion Parish School Board

          Louis Victor Gregoire, Jr. Kean, Miller LLP COUNSEL FOR DEFENDANTS/APPELLEES: Chevron Midcontinent, L.P. Chevron USA, Inc. Carrollton Resources, LLC Union Exploration Partners, LP Union Oil Company of California (collectively, "UNOCAL")

          Kevin Wade Trahan Ottinger, Hebert, L.L.C. COUNSEL FOR DEFENDANTS/APPELLEES: Chevron Midcontinent, L.P. Chevron USA, Inc. Carrollton Resources, LLC Union Exploration Partners, LP Union Oil Company of California (collectively, "UNOCAL")

          Michael R. Phillips Kean, Miller LLP COUNSEL FOR DEFENDANTS/APPELLEES: Chevron Midcontinent, L.P. Chevron USA, Inc. Carrollton Resources, LLC Union Exploration Partners, LP Union Oil Company of California (collectively, "UNOCAL")

          Robert E. Meadows

          King & Spalding, LLP COUNSEL FOR DEFENDANTS/APPELLEES: Chevron Midcontinent, L.P. Chevron USA, Inc. Carrollton Resources, LLC Union Exploration Partners, LP Union Oil Company of California (collectively, "UNOCAL")

          Thomas E. Balhoff Roedel Parsons Koch Blache Balhoff & McCollister COUNSEL FOR DEFENDANT/APPELLEE: Louisiana Department of Natural Resources

          JOHN E. CONERY JUDGE

         In this oilfield remediation case, the Vermilion Parish School Board (VPSB), in its own right and on behalf of the State of Louisiana, appeals a judgment dated November 3, 2016, adopting the Louisiana Department of Natural Resources' (LDNR) most feasible plan for remediation of property damaged by oil and gas exploration and production on Section 16 property in Vermilion Parish owned by the State of Louisiana and managed by VPSB.[1] Additionally, the judgment attaches as Exhibit B, by reference only, twenty-seven written questions VPSB sent to LDNR about the plan and LDNR's answers, and makes them part of the record. The LDNR final plan obligates the defendant/appellee, Union Oil Company of California (UNOCAL), to pay for and perform the remediation work required by the plan. VPSB argues that the twenty-seven questions and answers should have been made part of the LDNR plan itself and part of the judgment, not simply part of the record. VPSB further argues that it is the proper party to be obligated to perform the remedial work ordered in the judgment. For the following reasons, we affirm the trial court judgment in its entirety.

         Facts and Procedural History

         The property at issue is owned by the State of Louisiana and managed by VPSB. The property consists of 1200 acres of mostly submerged wetlands located in the southern part of Vermilion Parish, approximately twelve miles north of the Gulf of Mexico and one-half mile east of White Lake and can only be accessed by boat. UNOCAL or its assigns performed oil and gas exploration and production activity for over fifty years on the property.

         VPSB filed suit against UNOCAL and others in 2004 for environmental damage to the property.[2] VPSB included in its suit, and subsequent amended petitions, a demand for specific performance seeking to have the court order UNOCAL, et al. to remediate or "clean up" oil field waste and contamination on the property. In 2013, this case was before us on an appeal from a partial summary judgment limiting damages to the actual cleanup costs. See State v. La. Land and Exploration Co., 10-1341, 11-843, 11-1016 (La.App. 3 Cir. 2/1/12), 85 So.3d 158. Pertinent to this discussion, a panel of this court held that a landowner could "recover remediation damages in excess of those provided under the feasible plan" for remediation. Id. at 162. Our opinion was affirmed by the supreme court in State v. La. Land and Exploration Co., 12-884 (La. 1/30/13), 110 So.3d 1038, and the case was remanded to the trial court for trial on the merits on all issues.

         Background

         The factual background of this case and the legislative history and purpose of the Oilfield Remediation Statute, commonly referred to as "Act 312" and codified in 2006 as La.R.S. 30:29, which we are applying herein, was covered in detail in our and the supreme court's earlier decisions and were reviewed at some length in the supreme court opinion.[3] The supreme court stated in La. Land and Exploration Co., 110 So.3d at 1048-53 (footnotes omitted) (alteration in original):

We noted [in Corbello v. Iowa Prod., 02-826 (La. 2/25/03), 850 So.2d 686');">850 So.2d 686, ] the legislature had not implemented "a procedure to ensure that landowners will in fact use the money [for remediation costs] to clean the property." [Corbello, 850 So.2d at 699.] We recognized the two opposing public policy concerns which the then-existing state of the law created. At that time, a landowner suing for remediation of contaminated land could sue and receive remediation damages, yet was under no obligation to use the damage award to restore the property. At the same time, there was a strong possibility that land would remain polluted if landowners could not bring suit for remediation. Id. [at 701].

         Interpretation of La. R.S. 30:29

In Corbello, we observed plaintiffs who were awarded remediation damages were under no statutory obligation to perform remediation work. The purpose of Act 312 was to create such an obligation. In Act 312, the legislature provided a mechanism whereby the landowner does not receive that portion of the remediation award needed to fund the statutorily mandated plan to remediate the property to a point that protects the public's interest. As the following analysis will show, Act 312 ensures the damages awarded for remediation will be used only for remediation to the extent necessary to fund the statutorily required plan, into which the La. DNR has input, and which is ultimately approved by the court.
We agree with the court of appeal the language of Act 312 is clear and unambiguous. We will presently describe each section of the Act, but its overall effect is this: The procedure described under the Act does not interfere with private rights, whether they arise contractually or by law. 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. The Act makes no changes to the normal trial procedures established by the Code of Civil Procedure. The only change accomplished by Act 312 is how the damages to remediate property are spent. Under Act 312, landowners do not receive that portion of the remediation damages award needed to fund the statutorily mandated feasible plan; these funds must be deposited into the registry of the court. Finally, although the La. DNR has input into the plan to remediate the property, the final decision as to the remediation plan adopted rests with the court. Throughout the remediation process, the court remains the gatekeeper to ensure the purpose of the Act is accomplished-remediation of the property to the extent of the public's interest. . . .
Subsection C of the statute sets forth the additional, mandated procedures to be used for the determination of a remediation plan post-trial, as well as the appellate review of those determinations. . . . If at trial the finder of fact determines environmental damage exists and determines the party or parties who caused the damage or who are otherwise legally responsible for the damage, the court orders the party or parties responsible to develop a remediation plan to be submitted to the court and the department. Deadlines are provided for such submissions in the statute. Id. The plaintiff and any other party are allowed to submit remediation plans to the department. Id.
Thereafter, the department holds a public hearing on the submissions. La. R.S. 30:29(C)(2). Within a time set by the statute, the department determines, based on evidence submitted, the most feasible plan to accomplish the evaluation/remediation of the environmental damage while protecting the health, safety and welfare of the public. Id. By mandating that "applicable standards" shall be used and applied in approving or structuring the most feasible plan to evaluate or remediate the environmental damage, the legislature has not limited the department to any one standard in its development of the most feasible plan. La. R.S. 30:29(C)(3). The plan approved by the department is not to be considered an adjudication subject to appellate review. La. R.S. 30:29(C)(4).
Instead, the plan approved by the department is sent to the court for its review. The plaintiff or any other party may submit its own plan, comment or input in response, within a certain time frame. La. R.S. 30:29(C)(1). Unless a party proves by a preponderance of evidence that another plan is a more feasible plan, the court shall adopt the plan approved by the department. If the court enters a judgment adopting a plan other than the one approved by the department, the court shall assign written reasons. Once a plan is determined, the court shall order the party or parties admitting responsibility or found legally responsible by the court to fund the implementation of the plan. In making this determination, the court will decide how much of the damages are to be used for remediation of the property. La. R.S. 30:29(C)(5). (Emphasis added.)
The court's judgment adopting a plan of evaluation or remediation and ordering the legally responsible parties to deposit funds into the court's registry shall be considered a final judgment for appeal purposes. La. R.S. 30:29(C)(6)(a).

         UNOCAL conceded it caused environmental damage to the property.[4] After a lengthy jury trial on damages and remediation costs in April and May of 2015, the jury returned a 3.5 million dollar verdict in favor of VPSB and against UNOCAL for environmental damages to the property. We do not have the trial court record of that decision and the merits of that decision are not before us. The issues in this appeal concern only the procedural implementation of the remediation obligation of UNOCAL pursuant to Act 312, La.R.S. 30:29, which governs how monetary awards for environmental damages are spent.[5]

         As discussed by the supreme court, infra, and as specifically set forth in the 2006 version of the statute at issue, first, a defendant who has admittedly caused, or has been found to have caused, environmental damage to property must submit a plan for remediation of the damage to the LDNR. La.R.S. 30:29(C)(1). The plaintiff may also submit a plan for the LDNR's consideration. La.R.S. 30:29(C)(1). The LDNR then conducts a public evidentiary hearing.[6] La.R.S. 30:29(C)(2)(a). After the hearing, the LDNR considers any plans properly submitted and ultimately issues its own plan, which may or may not approve and adopt all or part of either submitted plan. The LDNR plan must be the plan it finds to be the "most feasible plan" within the meaning of La.R.S. 30:29(C)(2)(a).[7]

         In July 2016, the LDNR panel released its final remediation plan for the property in question. The plan addressed six separate areas of soil and sediment contamination and seven areas of groundwater contamination. In areas where data was sufficient, the plan recommended how and to what degree each section was to be remediated. In areas where the data was insufficient, the plan required additional testing and evaluation. It also estimated the cost of implementing the plan as written at one million four hundred eleven thousand, one hundred and ninety dollars ($1, 411, 190.00). Its estimate did not include costs of remediation once the required additional evaluations were performed and sufficient data was received. The plan ordered UNOCAL to fund and perform the remediation work as set forth in the plan.

         VPSB did not directly challenge the LDNR plan or request an additional preponderance hearing under La.R.S. 30:29(C)(5).[8] Instead, VPSB sent twenty-seven written questions to LDNR after the plan was released that sought interpretation and clarification of the plan. The LDNR panel answered these questions in writing and specifically conditioned their use as a clarification tool only. LDNR made clear that "[w]hile these answers do not alter the MFP [(most feasible plan)] in any way, we are hopeful they will provide the requested and desired clarity to the MFP." (Emphasis added).

         The parties then filed competing motions to adopt their respective proposed judgments as the court's most feasible plan. Both proposed judgments adopted the LDNR plan as the judgment of the court. However, the parties disputed specific language in the proposed judgments, and their motions to adopt were set for hearing. At the "judgment hearing, " the pertinent issues presented to the trial court for its consideration were: (1) whether and/or how to incorporate the written questions and answers between VPSB and LDNR into the judgment and; (2) which party should perform the remediation and evaluations recommended in the plan. Counsel for both parties participated in the hearing and were given more than ample opportunity to argue their respective positions to the trial court. During the hearing, the trial judge made clear that the questions and answers provided by LDNR to Plaintiffs, at their request, "should be part of the record, but they do not alter the plan as indicated by LDNR. They do not alter the plan in any way." (Emphasis added).

         Ultimately, the trial court rendered judgment on November 3, 2016, adopting the LDNR plan as written and attached the written questions and answers as Exhibit B to the judgment and made them part of the record. The judgment further obligated UNOCAL to fund and perform the remedial work and evaluations set forth in the plan. VPSB filed a timely appeal. Finding the trial court's ruling was legally correct, we affirm.

         Assignments of Error

         VPSB alleges the trial court erred by:

1) Denying the Motion to Adopt VPSB's Proposed Form of Judgment Regarding Most Feasible Plan.
2) Granting Unocal's Motion to Enter Judgment Regarding Most Feasible Plan.
3) Entering a Judgment on November 3, 2016 allowing Unocal to implement the work identified in the [M]ost [F]easible [P]lan.
4) Denying the VPSB's request to implement the work identified in the Most Feasible Plan.
5) Failing to comply with the [s]upreme [c]ourt's ruling in State v. Louisiana Land and Exploration Co.[, 12-884 (La. 1/30/13), 110 So.3d 1038.]

         Standard of Review

         We review La.R.S. 30:29 cases under the de novo standard of review. La.R.S. 30:29(C)(6)(b). In performing a de novo review, "the appellate court must review the record in its entirety, giving no special weight to the trial court's determinations." Kyle v. Kier, 17-134, 2017 WL 5477806, at *8-9 (La.App. 3 Cir. 11/15/17). "[U]nder the de novo standard of review, the appellate court . . . review[s] the record in its entirety to determine whether the trial court's decision was legally correct in light of the evidence." Domingue v. Bodin, 08-62, p. 2 (La.App. 3 Cir. 11/5/08), 996 So.2d 654, 656 (citations omitted). In our review, we may either "affirm the trial court's adoption of a plan or may adopt a feasible plan in conformity with this Section and shall issue written reasons for [our] decision." La.R.S. 30:29(C)(6)(c).

         Law and Discussion

         Assignments of Error Numbers 1-4 all address the same legal issue and will be considered together. Louisiana Revised Statutes ...


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