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Labarre v. Occidental Chemical Co.

Court of Appeals of Louisiana, First Circuit

May 2, 2018

GUSTAVE J. LABARRE, JR., ET AL,
v.
OCCIDENTAL CHEMICAL COMPANY AND TEXAS BRINE COMPANY, LLC, ET AL.

          On Appeal from the 23rd Judicial District Court In and for the Parish of Assumption State of Louisiana No. 33, 796 Honorable Jason M. Verdigets, Jr., Judge Presiding

          Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Jeffrey D. Kessler New Orleans, Louisiana and Robert Ryland Percy, III Gonzales, Louisiana and Travis J. Turner Gonzales, Louisiana and Eric J. Mayer Houston, Texas Attorneys for Appellant/ Defendant/Third-Party Plaintiff, Texas Brine Company, LLC

          Roy C. Cheatwood Kent A. Lambert Adam B. Zuckerman Paul C. Thibodeaux Colleen C. Jarrott Mathew S. Chester Matthew C. Juneau New Orleans, Louisiana and Tony M. Clayton Port Allen, Louisiana Attorneys for Appellee/Third-Party Defendant, Legacy Vulcan, LLC

          BEFORE: HIGGINBOTHAM, HOLDRIDGE, AND PENZATO, JJ.

          PENZATO, J.

         This is an appeal from a trial court judgment granting a motion for summary judgment filed by Legacy Vulcan, LLC on behalf of Vulcan Chloralkali, LLC (collectively referred to as VC), and dismissing the third-party demands of Texas Brine Company, LLC (Texas Brine) against VC. For the reasons that follow, we affirm.

         FACTS AND PROCEDURAL HISTORY

         The underlying litigation involves the appearance of a sinkhole near Bayou Corne in Assumption Parish, Louisiana, in August 2012, which resulted when the brine production well known as Oxy Geismar Well No. 3 (OG3) collapsed. The plaintiffs owned property in the area, and filed suit against Texas Brine, the operator of OG3, among others, for damages to their property. In response to plaintiffs' suit, Texas Brine filed a third-party demand against VC, alleging that the sinkhole would not have occurred but for VC's negligent decision to increase brine production with reckless disregard to any risks or dangers that may have been attendant to that decision.

         The following facts are not in dispute. In 1968, Vulcan Materials Company, now known as Legacy Vulcan, LLC (Vulcan), completed construction of a chlorinated organic chemicals plant in Geismar, Louisiana, which was expanded in the mid-1970's to add a chlorine manufacturing facility. Vulcan contracted with Texas Brine to supply brine to its Geismar plant by pipeline utilizing salt mined by Texas Brine from the Napoleonville Salt Dome located in Assumption Parish, including from OG3, which was drilled in 1982. In June of 1998, VC was formed as a joint venture between Vulcan Chemicals Investment, LLC ("VCI"), a company wholly owned by Vulcan, and Victory Chlor-Alkali and EDS Company, Inc., an affiliate of Mitsui & Co., Ltd., to construct and own a new chemical facility at a site adjacent to Vulcan's Geismar plant. VC contracted with Vulcan to operate the new facility. In addition, VC contracted with Vulcan for Vulcan to supply treated brine to VC's facility, VC had no contractual privity with Texas Brine related to the production or delivery of raw brine mined from the Napoleonville Salt Dome. VC had no control over the upstream drilling, development, maintenance, or operation of any brine mining wells or related production facilities owned and/or operated by Texas Brine. In 2005, the assets of VC were sold to Basic Chemicals Company, LLC, an affiliate of Occidental Chemical Corporation.

         The summary judgment evidence indicated the following facts. In April 1998, RE/SPEC Inc. issued a report prepared at Vulcan's request for the purpose of ensuring that there were sufficient brine reserves to supply Vulcan's existing plant as well as the expansion through the formation of VC. The RE/SPEC report indicated that OG3 cavern was "very close to the salt edge." There was deposition testimony as to discussions between Vulcan and Texas Brine regarding the 1998 RE/SPEC report; Texas Brine acknowledged receipt of a final RE/SPEC report in 2005.

         VC filed a motion for summary judgment contending that the undisputed evidence established that VC, a manufacturer and distributer of chemical products, had no contractual privity with Texas Brine, had no dealings or direct interaction with Texas Brine, and otherwise neither assumed nor owed any duty to Texas Brine that could give rise to any claim or cause of action. Texas Brine opposed the summary judgment, contending that VC is liable under La. C.C. arts. 660, 667, 2315, 2317, 2317.1, and 2322 for damages resulting from its negligence in requiring or encouraging increased brine production from existing brine caverns in order to meet the brine requirements of its facility.

         Following a hearing on January 25, 2017, the trial court granted the summary judgment, concluding that VC owed no legal duty to Texas Brine. The trial court signed a judgment in accordance with that ruling on March 23, 2017, which provided that:

         IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Motion for Partial Summary Judgment filed by Legacy Vulcan, LLC on Behalf of Vulcan Chloralkali, LLC is hereby GRANTED.

         Texas Brine appealed, alleging that the trial court erred in granting summary judgment finding that VC ...


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