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Pontchartrain Natural Gas System v. Texas Brine Company, LLC

Court of Appeals of Louisiana, First Circuit

December 21, 2018

PONTCHARTRAIN NATURAL GAS SYSTEM, K/D/S PROMIX, L.L.C., ANDACADIAN GAS PIPELINE SYSTEM
v.
TEXAS BRINE COMPANY, LLC

          On Appeal from the 23rd Judicial District Court In and for the Parish of Assumption State of Louisiana Trial Court No. 34, 265 Honorable Thomas J. Kliebert, Jr., Judge Presiding

          Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Neal J. Kling Jeffrey D. Kessler Amanda R. Schenck New Orleans, LA Attorneys for Appellant/Defendant, Third -Party Plaintiff, Texas Brine Company, LLC

          Theodore L. Jones Baton Rouge, LA Travis J. Turner Gonzales, LA Robert Ryland Percy, III Gonzales, LA Eric J. Mayer Houston TX Joseph L. Shea, Jr. Katherine Smith Baker Ashley G. Gable Joshua S. Chevallier Shreveport, LA Attorneys for Appellee/Third-Party Defendant, Reliance Petroleum Corporation

          Sidney W. Degan, III Julia A. Dietz Wade B. Hammett Matthew F. Morgan New Orleans, LA Catherine N. Thigpen Baton Rouge, LA Attorneys for Appellee/Third-Party Defendant, Chicago Insurance Company

          Martin A. Stern Leigh Ann Schell Raymond P. Ward Sara Valentine Alexandra Roselli New Orleans, LA Brad D. Brian Daniel B. Levin Bethany W. Kristovich Los Angeles, CA Kathy Patrick Angus J. Dodson Laura J. Kissel Houston, TX Attorneys for Appellees/ Third-Party Defendants, Occidental Chemical Corporation, Occidental Petroleum Corporation, Basic Chemicals Company, LLC, and Occidental VCM, LLC

          Frank H. Spruiell, Jr. Reid A. Jones Seth M. Moyers Shreveport, LA Attorneys for Appellee/ Third-Party Defendant, Sol Kirschner

          Matthew J. Randazzo, III Christopher B. Bailey Will Montz Lafayette, LA Attorneys for Appellees/ Third-Party Defendants, LORCA Corporation and Colorado Crude Company

          BEFORE: PETTIGREW, McCLENDON, AND HIGGINBOTHAM, JJ.

          HIGGINBOTHAM, J.

         This appeal relates to one of several lawsuits surrounding the Bayou Corne sinkhole that developed on August 3, 2012, following the collapse of a salt mine cavern connected with Texas Brine Company, LLC's operation of a brine production well known as Oxy Geismer #3 Well ("OG3"). Texas Brine appeals the district court's summary judgment dismissal of its third-party tort claims, as well as its indemnity and contribution claims, against the non-operators of an adjacent oil and gas well known as the Adams-Hooker #1 Well ("AH1"). The dismissed non-operators of the oil and gas well are Reliance Petroleum Corporation, LORCA Corporation, Colorado Crude Company, and Sol Kirschner.[1]

         PERTINENT FACTS AND PROCEDURAL HISTORY

         The plaintiffs, Pontchartrain Natural Gas System, K/D/S Promix, L.L.C., and Acadian Gas Pipeline (collectively "Pontchartrain"), own and operate natural gas pipelines and storage facilities in the vicinity of property affected by the Bayou Corne sinkhole near the Napoleonville Salt Dome in Assumption Parish. After the sinkhole developed, Pontchartrain and other pipeline companies brought several lawsuits against Texas Brine, seeking recovery for damage to their pipelines due to the alleged negligence of Texas Brine in operating the OG3 brine well.

         In reply, Texas Brine filed incidental demands against various parties in all of the lawsuits, seeking recovery of its own damages in the form of reimbursement for environmental-response costs paid out by Texas Brine after the sinkhole appeared, litigation expenses, and lost profits, along with claims for indemnity and/or contribution for the damages allegedly sustained by Pontchartrain and the other pipeline companies. The relevant third-party defendants sued by Texas Brine include the owners of the land where the sinkhole occurred, Occidental Chemical Corporation, Occidental Petroleum Corporation, Basic Chemicals Company, LLC, and Occidental VCM, LLC (collectively "Oxy"), and the non-operators of the AH1 oil well: Reliance, LORCA, Colorado Crude, and Kirschner (collectively "the non-operators").

         In its incidental demands and attachments to its pleadings filed against Oxy and the non-operators, Texas Brine alleged that some of the acts of negligence that caused the sinkhole occurred as early as 1983, when Oxy first leased property for the commercial oil and gas drilling operations of the AH1 oil well, resulting in the AH1 well's reservoir sharing a common wall with the cavern related to Texas Brine's OG3 brine production well. The non-operators were assigned various working interests in the AH1 oil well and the drilling of the AH1 oil well began in early 1986. Texas Brine contends: (1) that the non-operators jointly shared the "garde" and controlled the operation of the AH1 oil well along with the operators, until the AH1 oil well was plugged and abandoned in 2010; (2) that the non-operators breached their duty to control the AH1 oil well operators; and (3) that the non-operators negligently delegated specific duties to various operators related to pressure monitoring in the AH1 oil well's reservoir. Because some of Texas Brine's negligence claims allegedly ...


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