Federal District Judge Dismisses Coastal Erosion Lawsuit filed in LA Against Oil and Gas Industry

Case:Board of Commissioner of the Southeast Louisiana Flood Protection Authority –
East et al. v. Tennessee Gas Pipeline Company, LLC et al.
Federal District Court, Eastern District of Louisiana
2015 U.S. Dist. LEXIS 18461 (2/13/15)

As reported in an earlier edition of the newsletter, in July 2013, the Southeast Louisiana Flood Protection Authority – East filed a Petition in state court in the Civil District Court for the Parish of Orleans, which was later removed to federal court for the Eastern District of Louisiana in New Orleans, against 97 energy company Defendants, claiming hundreds of thousands of acres of the coastal lands that once protected south Louisiana are now gone as a result of oil and gas industry activities. The suit proclaimed, unless immediate action is taken to reverse the land losses and restore the region's natural defense, many of Louisiana's coastal communities will “vanish into the sea.” The suit demanded the defendants repair the damage done from decades of digging, dredging and drilling in the coastal marshes that form the New Orleans region’s first line of defense against hurricanes, pay damages and fund future storm surge protection projects.

Recall, hurdles were presented to halt the progress of the lawsuit when Louisiana’s general legislative session began in March 2014, culminating in the passage of Act 544, which prohibits state governmental entities, purportedly including the Southeast Louisiana Flood Protection Authority, from filing lawsuits to enforce environmental protection laws by declaring such actions as contrary to Louisiana public policy. However, in late 2014, a Louisiana state court judge declared Act 544 unconstitutional, making continuance of the litigation unclear pending an appeal to the Louisiana Supreme Court on the constitutionality of the new law.

On February 13, 2015, Federal Judge Nanette Jolivette Brown granted Defendants’ Joint Motion to Dismiss the Southeast Louisiana Flood Authority’s suit for failure to state a claim under Rule 12(b)(6) and issued an order dismissing the suit in its entirety. Judge Brown did not address the applicability or constitutionality of Act 544 to Plaintiffs’ claims.

Judge Brown found the following regarding the merits of the claim. First, Judge Brown opined the oil company Defendants were not negligent under the terms of three federal laws cited by the Flood Authority and could not be held to a greater standard of “strict liability.” Judge Brown found that while the energy companies agreed they might have a duty to abide by the federal Rivers and Harbors Act, Clean Water Act and Coastal Zone Management Act, all of which govern coastal erosion, the Flood Authority “has not demonstrated that it is the intended beneficiary of any duties imposed upon Defendants” under any of those laws. Stated another way, the duties imposed upon Defendants pursuant to those statutes do not extend to protect the Flood Authority.

Judge Brown also disagreed with the Flood Authority's attempt to find the energy companies liable under provisions of Louisiana law governing the flow of water over property, which is called the “natural servitude of drain.” The Flood Authority contended the energy companies were responsible for storm surge posing an increased threat to the levees because of the erosion the companies caused. However, according to Judge Brown, the state law is written to protect downstream landowners from problems caused by upstream users, and the levees are on higher ground. Judge Brown rejected several cases cited by the Authority, finding they did not adequately support the Authority’s position.

Judge Brown also ruled the Authority's claims that the energy companies’ actions amounted to a private or public nuisance under state law were not proven, in part because the Authority “has not sufficiently alleged that it is a ‘neighbor,’ within any conventional sense of the word to any property of Defendants.” Finally, Judge Brown found that the Flood Authority failed to show the energy companies were in breach of contract resulting from violations of permits issued by the Army Corps of Engineers for dredging canals since the Authority failed to prove that the dredging permits were contracts.

Plaintiffs have filed a Notice of Appeal, which will proceed before the federal Fifth Circuit Court of Appeals in New Orleans.