# State of Louisiana v. Louisiana Land & Exploration, Co.

> Louisiana Court of Appeal · May 6, 2020

URL: https://www.frixlaw.com/law-library/cases/11294219

## Case

- **Court:** Louisiana Court of Appeal
- **Decided:** May 6, 2020
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

19-248

STATE OF LOUISIANA, ET AL.

VERSUS

LOUISIANA LAND & EXPLORATION CO., ET AL.

**********

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

**********

JOHN D. SAUNDERS
JUDGE

**********

Court composed of John D. Saunders, Elizabeth A. Pickett, and Van H. Kyzar,
Judges.

AFFIRMED, IN PART, REVERSED, IN PART,
AND REMANDED.
Thomas E. Balhoff
Rodell, Parsons, Koch, Blache, Balhoff & McCollister
A Law Corporation
8440 Jefferson Hwy., Suite 301
Baton Rouge, LA 70809
(225) 929-7033
COUNSEL FOR DEFENDANT/APPELLEE:
Louisiana Department of Natural Resources

Russell K. Zaunbrecher
Edwards, Stefanski & Zaunbrecher
P.O. Drawer 730
Crowley, LA 70527-0730
(337) 783-7000
COUNSEL FOR PLAINTIF/ APPELLANT:
Vermilion Parish School Board
State of Louisiana

K. Wade Trahan
Ottinger Hebert, L.L.C.
P. O. Drawer 52606
Lafayette, LA 70505-2606
(337) 232-2606
COUNSEL FOR DEFENDANT/APPELLEE:
Chevron U.S.A., Inc.
Union Oil Company of California
Chevron Midcontinent, L.P.
Carrollton Resources, LLC
Union Exploration Partners, LP

Michael R. Phillips
Louis M. Grossman
Claire E. Juneau
Jeffrey J. Gelpi
Kean Miller, LLP
909 Poydras Street, Suite 3600
New Orleans, LA 70112
(504) 585-3050
COUNSEL FOR DEFENDANT/APPELLEE:
Chevron U.S.A., Inc.
Union Oil Company of California
Chevron Midcontinent, L.P.
Carrollton Resources, LLC
Union Exploration Partners, LP
L. Victor Gregoire
Alan J. Berteau
Kean Miller, LLP
400 Convention Street, Suite 700
Baton Rouge, LA 70802
(225) 387-0999
COUNSEL FOR DEFENDANT/APPELLEE:
Chevron U.S.A., Inc.
Union Oil Company of California
Chevron Midcontinent, L.P.
Carrollton Resources, LLC
Union Exploration Partners, LP

Grady J. Abraham
Attorney at Law
5040 Ambassador Caffery Parkway
Lafayette, LA 70508
(337) 234-4523
COUNSEL FOR PLAINTIFF/APPELLANT:
Vermilion Parish School Board
State of Louisiana

Jerold Edward Knoll
The Knoll Law Firm, L.L.C.
233 South Main Street
Marksville, LA 71351
(318) 253-6200
COUNSEL FOR PLAINTIFF/APPELLANT:
State of Louisiana
Vermilion Parish School Board

Ryan M. Seidemann
Assistant Attorney General
P. O. Box 94005
Baton Rouge, LA 70804-9005
(225) 326-6085
COUNSEL FOR PLAINTIFF/APPELLANT:
State of Louisiana

Donald T. Carmouche
Victor L. Marcello
John H. Carmouche
William R. Coenen, III
Brian T. Carmouche
Todd J. Wimberley
Ross J. Donnes
D. Adele Owen
Leah C. Poole
Caroline H. Martin
Christopher D. Martin
Talbot, Carmouche & Marcello
17405 Perkins Road
Baton Rouge, LA 70810
(225) 400-9991
COUNSEL FOR PLAINTIFF/APPELLANT:
Vermilion Parish School Board
State of Louisiana

Kathy S. Boudreaux
Attorney at Law
220 S. Jefferson Street
Abbeville, LA 70510
(337) 898-5777
COUNSEL FOR PLAINTIFF/APPELLANT:
Vermilion Parish School Board
State of Louisiana

Robert E. Meadows
Carol M. Wood
Andrew M. Stakelum
King & Spalding LLP
1100 Louisiana, Suite 4000
Houston, TX 77002
(713) 751-3200
COUNSEL FOR DEFENDANT/APPELLEE:
Chevron U.S.A., Inc.
Union Oil Company of California
Chevron Midcontinent, L.P.
Carrollton Resources, LLC
Union Exploration Partners, LP
SAUNDERS, Judge.

This case involves the State of Louisiana (the state) and the Vermilion Parish

School Board (VPSB) suing various defendants including Union Oil Company of

California (Unocal) seeking remediation of the Sixteenth Section School Lands in

Vermilion Parish. The land is owned by the State and is managed by VPSB.

Unocal admitted it was responsible for environmental damage to the property

under the 2006 version of La.R.S. 30:29, i.e., Act 312. This admission was

specifically for the purpose of Act 312’s goal of assuring that funds awarded for

damaged property were used to actually repair the property to a suitable status under

state environmental regulations. This admission by Unocal was not an admission

relative to any damage claims brought against it. In May of 2015, a jury returned a

verdict awarding damages to the plaintiffs in addition to remediation. In accordance

with the 2006 version of La.R.S. 30:29, the matter was referred to the Louisiana

Department of Natural Resources, Office of Conservation (LDNR), for a public

hearing. LDNR rejected both parties’ plans and structured its own plan, which was

subsequently adopted by the trial court. The initial cost estimate for the Plan was

$1,411,190.00.

Additionally, the jury found Unocal strictly liable for damage to the lands and

awarded $1,500,000.00. The jury denied plaintiffs’ remaining claims. Both Unocal

and VPSB appeal.

FACTS AND PROCEDURAL HISTORY

VPSB on its behalf, and that of the state, filed a petition for damages to

Sixteenth Section School Lands on September 2, 2004, seeking damages and

remediation of property owned by the state and managed by VPSB. The property at

issue was allegedly polluted by oil and gas exploration and production performed

pursuant to an oil, gas, and mineral lease originally granted on the property in 1935
and a surface lease granted in 1994. The plaintiffs claim damages to the land’s soil,

surface waters, and ground waters.

The plaintiffs urge various causes of action in their petition including

negligence, strict liability, unjust enrichment, trespass, breach of contract, and other

violations of both the Mineral Code and the Civil Code. The plaintiffs seek money

damages for a comprehensive evaluation of the contamination of the property,

remediation of the property, diminution in the property’s value, mental anguish, and

inconvenience. Further, the plaintiffs seek punitive and stigma damages.

Several defendants were named in the original petition and in supplemental

and amending petitions as companies which conducted, directed, controlled, or

participated in various oil and gas exploration and production activities as operators

and/or working interest owners, and/or joint venturers in the East White Lake Field.

The defendants are: Unocal, Carrollton Resources, LLC, Chevron, U.S.A., Inc.

(“Chevron, U.S.A.”), and Chevron Midcontinent, L.P.

The defendants removed the matter to federal court in the Western District of

Louisiana based on diversity jurisdiction under 28 U.S.C. § 1332. VPSB filed

motions to remand, arguing that diversity jurisdiction does not exist because the state

is a plaintiff. The district court denied the motions to remand because it concluded

that the state is a nominal party with no real interest in the controversy. After

denying the motions to remand, the district court granted the plaintiffs permission to

immediately appeal the decision under the authority 28 U.S.C. § 1292(b).

The plaintiffs filed an appeal with the United States Fifth Circuit. The Fifth

Circuit concluded that “the State of Louisiana is a real party in interest . . . the

presence of which defeats diversity jurisdiction.” The court reversed the order of

the district court and remanded the matter to federal district court with instructions

to remand the entire case to state court.
2
Thereafter, for purposes of Act 312 of 2006, under La.R.S. 30:29(C), Unocal

admitted that it was responsible for environmental damage on the property and filed

a motion to refer the case to the LDNR as required by the Act. The plaintiffs objected,

arguing that such a referral to LDNR could not take place until all the defendants

admitted responsibility, and the private claims were tried by a jury. The trial court

agreed with the plaintiffs. Unocal sought writs in this court and the supreme court.

These writ applications were denied.

On October 28, 2008, defendants filed a peremptory exception of prescription,

noting that VPSB’s tort claims are untimely and barred. In response, VPSB filed a

motion to refer prescription to the merits. VPSB argued at the time that the evidence

necessary to prove the case is the same as that to prove entitlement to relief.

Accordingly, according to VPSB, although issues of prescription are ordinarily

decided by a court prior to trial, this case fell into an exception for cases where “the

evidence on the merits and on prescription is intertwined, and where judicial

resources would be wasted by holding separate trials on the prescription exception

and the merits.” VPSB urged the Court to defer defendants’ exceptions of

prescription to the merits of the case. Further, VPSB pointed out that the state was

a party to the proceedings, and prescription does not run against the state.

On June 1, 2009, the trial court granted the VPSB’s motion. Thus, it deferred

the exception of prescription to after the trial on the merits.

Unocal then filed a motion for partial summary judgment limiting the

plaintiffs’ remediation damage claims to the amount needed to fund the “feasible

plan” mandated by Act 312. Unocal argued that Act 312 acts as a substantive cap on

remediation damages resulting from a tort or the implied restoration obligation of a

mineral lease. The trial court agreed.

3
The plaintiffs filed a writ application to this court on this issue. While the writ

application was under consideration, the plaintiffs filed a motion in the trial court

seeking to have Act 312 declared unconstitutional as applied. The trial court denied

this motion and this court, likewise, denied a writ on the constitutionality of Act 312,

based on the potential for the question of constitutionality be rendered moot by a

successful appeal of the prior ruling regarding application of Act 312. Thereafter,

the trial court’s rulings on the motion for partial summary judgment and the motion

to have Act 312 declared unconstitutional were certified as final judgments, and the

plaintiffs lodged an appeal.

While that appeal was pending, the plaintiffs filed a writ to this court, alleging

that the trial court erred in allowing Chevron U.S.A. to amend its answer to reverse

its prior admission that it was a successor in interest to Unocal. Prior to this court

acting on that writ, the trial court ordered a limited deposition concerning the

relationship between Chevron U.S.A. and Unocal. After the deposition, the trial

court granted Chevron U.S.A.’s motion for summary judgment and dismissed it from

the suit. The plaintiffs filed a suspensive appeal from the trial court’s judgment

dismissing Chevron U.S.A. This court granted the plaintiffs’ writ application

regarding Chevron U.S.A.’s allowed amendment to its answer for the sole purpose

of consolidating it with the already pending plaintiffs’ suspensive appeal of the trial

court’s grant of summary judgment dismissing Chevron U.S.A. Thereafter, all of

these pending matters were consolidated with the plaintiffs’ appeal from the partial

summary judgment in favor of Unocal regarding Act 312 limiting damages.

In State v. Louisiana Land & Expl.Co., 10-1341 (La.App. 3 Cir. 2/1/12), 85

So.3d 158, this court found the language of La.R.S. 30:29 to be clear and

unambiguous, notwithstanding the judgment of the trial court and the defendants’

arguments. Relying on Section H of the statute, this court held: “La.R.S. 30:29, by
4
its clear language, provides for a landowner to recover damages in excess of those

determined in the feasible plan whether they are based on tort or contract law.” Id.,

at 162. In so finding, this court reversed the judgment of the trial court granting

partial summary judgment in favor of the defendants on that issue. Because this

determination overturned the lower court’s judgment regarding application of Act

312 to limit damages, this court found it unnecessary to address VPSB’s argument

that Act 312 is unconstitutional as applied by the trial court.

This court further found the trial court erred in granting summary judgment

dismissing Chevron U.S.A. from the suit and reversed the trial court’s ruling on this

issue. This court held:

It seems, at the very least, that there is a genuine issue of material fact
as to whether Chevron U.S.A., Inc. is a successor in interest to Unocal.
It took Chevron U.S.A. Inc. three years to determine that it had erred in
its initial declaration that it was a successor in interest to Unocal. In
making its determination, Chevron U.S.A., Inc. relied, at least in part,
on the contents of service agreements that it maintained with Unocal.
The School Board has not had access to these agreements and was
allowed only a very limited deposition regarding the successor status of
Chevron U.S.A., Inc.

Id. at 163.

Defendants filed a writ seeking review of this court’s ruling in both regards.

The Louisiana Supreme Court granted defendants’ writ to determine the correct

interpretation of Act 312 and whether Chevron U.S.A. should be dismissed from suit.

The Supreme Court interpreted La.R.S. 30:29, in pertinent part, as follows:

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
5
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.

State v. Louisiana Land & Expl. Co., 12-884, p. 16 (La. 1/30/13), 110 So.3d 1038,

1049.

The supreme court affirmed this court’s judgment reversing the trial court’s

grant of partial summary judgment on the issue of remediation damages. In addition,

the supreme court affirmed this court’s judgment reversing the trial court’s grant of

summary judgment dismissing Chevron U.S.A. from the suit and remanded the

matter to the trial court for further proceedings.

After being remanded, this case was tried before the jury in April and May

2015. Consistent with the court’s earlier order, defendants proposed a jury

instruction on prescription. At the start of the trial, however, the plaintiffs argued

that the evidence on prescription would not be extensive and the issue should not be

considered by the jury. The trial court chose not to instruct the jury on prescription.

Instead, the trial court instructed Unocal to re-urge its exception. Thereafter, once

the jury reached its verdict, the trial court then overruled Unocal’s re-urged

exception.

In its verdict, the jury found Unocal responsible for environmental damage

and awarded $3.5 million to remediate the property under Act 312 in compliance

with the applicable standards and regulations of the State of Louisiana. In addition,

the jury found Unocal strictly liable to the plaintiffs and awarded $1,500,000.00 for

the claim.

6
The jury rejected the VPSB’s other claims finding no liability of Unocal for

the plaintiffs’ claims for breach of contract, negligence, or trespass. The jury also

rejected the plaintiffs’ claims against all other defendants.

Next, in accordance with the provisions of Act 312, on August 5, 2015, the

trial court signed an order referring the case to the LDNR so that the agency could

develop a feasible plan for the remediation of the environmental damage on the

property at issue. In July 2016, the LDNR issued a feasible remediation plan, and

the trial court adopted the plan in November 2016. Plaintiffs appealed to this court

regarding the propriety of the trial court’s adoption of LDNR’s remediation plan. A

split panel upheld the trial court, and the supreme court denied writs on the issue.

See State v. Louisiana Land & Expl. Co., 17-830 (La.App. 3 Cir. 3/14/18), 241 So.3d

1258, writ denied, 18-476 (La. 9/28/18), 252 So.3d 924,

In 2018, before commencing work on LDNR’s most feasible plan, the

plaintiffs filed a motion to assess costs against Unocal for the overseeing of the

project. The trial court denied the plaintiffs’ motion, and this court denied plaintiffs’

writ application on the issue.

The plaintiffs filed another motion seeking to have the trial court assess its

oversight costs against Unocal for implementation of the most feasible plan. The

plaintiffs contend that while its prior motion to assess oversight costs focused on

work that Unocal intended to perform, its next motion was to assess costs pertaining

to work that has actually been performed so far and costs that have already been

incurred by the plaintiffs. The plaintiffs maintain that the purpose for its latest

motion to tax Unocal with specific oversight costs was for the plaintiffs to recover

expenses that they have incurred in investigating and delineating environmental

damage and conducting oversight of the implementation of the most feasible plan.

7
The trial court denied the plaintiffs’ latest motion to assess oversight costs and writs

were denied on the issue.

The appeal before us addresses the propriety of the trial court’s denial of

Unocal’s exceptions of no right of action and prescription as well as the plaintiffs’

assertions of improprieties in the jury trial and with the trial court’s judgment

implementing the jury’s verdict. Following the verdict in the jury trial, both Unocal

and the plaintiffs filed motions for judgment notwithstanding the verdict. Both

motions were denied. Both parties appeal and assign errors.

UNOCAL ASSIGNMENTS OF ERROR

1. The trial court erred in overruling UNOCAL’s exception of no
right of action because the School Board did not have statutory
authority or approval from the Attorney General to bring a strict
liability claim in the name of and on behalf of the State.
2. The trial court erred in overruling UNOCAL’s exception of
prescription because the School Board filed its strict liability claim in
its individual capacity more than one year after it knew of the claim,—
indeed, more than one year after it retained counsel to file suit— and
the School Board is not entitled to immunity from prescription under
Article 12 § 13 of the Louisiana Constitution.

PLAINTIFFS’ ASSIGNMENTS OF ERROR

The trial court committed error in:

1. Signing a judgment based on an inconsistent jury verdict;

2. Denying plaintiff’s JNOV and alternative new trial motions;

3. Instructing the jury on plaintiff’s Mineral Code article 11 and
single business enterprise claims and then refusing to include
such claims on the verdict form;

4. Including language on the jury verdict form stating that Unocal’s
admission of liability did not extend to “Plaintiff’s claims for
private damages;”

5. Adopting a prejudicial and improper Act 312 jury charge and
verdict form;

8
6. Instructing the jury to provide an advisory opinion regarding
defendants’ responsibilities under La. R.S. 30:29 (Act 312 of
2006);

7. Denying plaintiff’s requests for discovery of documents and
witnesses;

8. Denying plaintiff’s motion for new trial based on newly
discovered evidence;

9. Failing to find defendants Carrollton and Mid-Continent liable
under the 1935 Mineral Lease;

10. Failing to find that defendants breached the mineral and surface
leases;

11. Failing to find that defendants were negligent;

12. Failing to find that defendants trespassed in disposing of offsite
saltwater;

13. Awarding inadequate damages for defendants’ violation of
private law;

14. Finding no liability under La. R.S. 30:114 and for single business
enterprise.
UNOCAL ASSIGNMENT OF ERROR NUMBER ONE

Unocal asserts in its first assignment of error that the trial court erred in

overruling its exception of no right of action because VPSB did not have statutory

authority or approval from the Attorney General to bring a strict liability claim in

the name of and on behalf of the State. We note that the only claim Unocal asserts

that VPSB had no right to bring is that of the single claim which VPSB successfully

brought, a claim under La.Civ.Code art. 2317, which states, in pertinent part, the

following: “[w]e are responsible, not only for the damage occasioned by our own

act, but for that which is caused by the act of persons for whom we are answerable,

or of the things which we have in our custody.

“The function of the exception of no right of action is to
determine whether the plaintiff belongs to the class of persons to whom
the law grants the cause of action asserted in the suit.” Hood v. Cotter,

9
2008-0215, p. 17 (La.12/2/08), 5 So.3d 819, 829. An appellate court
reviewing a lower court’s ruling on an exception of no right of action
should focus on whether the particular plaintiff has a right to bring the
suit and is a member of the class of persons that has a legal interest in
the subject matter of the litigation, assuming the petition states a valid
cause of action for some person. Id.; Badeaux v. Southwest Computer
Bureau, Inc., 2005-0612, p. 6-7 (La.3/17/06), 929 So.2d 1211, 1217;
Turner v. Busby, 2003-3444, p. 4 (La.9/9/04), 883 So.2d 412, 415-416;
Reese v. State, Dept. of Public Safety and Corrections, 2003-1615, p. 3
(La.2/20/04), 866 So.2d 244, 246.

The determination whether a plaintiff has a right to bring an
action raises a question of law. A question of law requires de novo
review. Holly & Smith Architects, Inc. v. St. Helena Congregate
Facility, Inc., 2006-0582, p. 9 (La.11/29/06), 943 So.2d 1037, 1045.

Eagle Pipe & Supply, Inc. v. Amerada Hess Corp., 10-2267, 10-2272, 10-2275, 10-

2279, 10-2289, pp. 6-7 (La. 10/25/11), 79 So.3d 246, 255-56.

Unocal argues that VPSB did not have authority to bring a strict liability claim

on behalf of the State. Unocal bases its argument on La.R.S. 41:961, which states

(emphasis added):

The school boards of the various parishes of the state may
contract with and employ on the part of the State of Louisiana, attorneys
at law, to recover for the state, damages for trespass to the sixteenth
section known as school lands the title to which is still in the state. Each
of the boards may make these contracts for the lands situated in its own
parish and no others. The school boards may also sue for and recover
the sixteenth section known as school lands.

According to Unocal, the clear and unambiguous statutory language

authorizes school boards to bring claims only for trespass and recovery of title. Thus,

Unocal asserts that VPSB lacked statutory authority, and, as such, had no right of

action to bring its non-trespass tort claims in the State’s name.

VPSB counters by pointing out that school boards have previously been

permitted to bring claims other than trespass or recovery of title. The school board

in this very case, VPSB, was permitted to bring claims other than trespass and

recovery of title in the state’s name in Vermilion Parish School Board v.

10
ConocoPhillips Co. et al., 11-999 (La.App. 3 Cir. 2/1/12), 83 So.3d 1234, writs

denied, 12-514, 12-515, 12-516 (La. 6/22/12), 91 So.3d 968.

In ConocoPhillips, a school board brought breach of contract claims in the

state’s name for nonpayment or underpayment of royalties under a mineral lease.

There, the trial court found that the state had no cause of action for the claims

because the school board was the sole lessor under the mineral lease so the school

board was the only proper party that could bring the breach of contract claims. The

school board countered that it brought the action in the state’s name as agent and

administrator of the Sixteenth Section lands and mineral interests.

This court did not specifically address whether the school board in

ConocoPhillips had a right of action to bring the claims. However, it did find that

the state had a cause of action to the mineral rights’ claim based on a contract

confected between a school board and an oil and gas company.

Likewise, in the case before us, VPSB’s inclusion of the state was found

necessary by the U. S. Fifth Circuit. It held, “[t]he State of Louisiana is a real party

in interest to this suit, not a mere depositary, due to its ongoing ‘moral obligation.’”

La. v. Union Oil Co. of Cal., 458 F.3d 364, 367 (citing State v. Humble Oil & Ref.

Co., 195 La. 457, 197 So. 140, 143 (1940) wherein the supreme court stated “there

is a moral, if not a clear legal obligation, resting upon the State to dedicate the

revenues derived from such lands to public education.”).

The U.S. Fifth Circuit recognized the importance of protecting Sixteenth

Section lands by pointing out the moral obligation the state has per Humble Oil. This

court has a history in agreeance with the moral obligation the state and school boards

have to protect of Sixteenth Section lands. In Ebey v. Avoyelles Parish School Board,

03-765 (La.App. 3 Cir. 12/17/03), 861 So.2d 910, this court defined the relationship

between Sixteenth Section lands, the State, and school boards as that of a public trust
11
for the benefit of public education. Assigning roles in a trust relationship relative to

Sixteenth Section lands, the United States is a settlor that grants Sixteenth Section

lands to the state. The state holds these lands as trustee, with the school board

functioning as the state in the state’s capacity as trustee when the school board enter

into juridical acts involving Sixteenth Section lands.

As such, we find that the La.Civ.Code art. 2317 strict liability tort claims

brought by VPSB were in furtherance of its duty to function as the state in the state’s

capacity as trustee of Sixteenth Section lands. Therefore, VPSB has a right of action

to bring any action to protect Sixteenth Section lands from any damages resulting

from activities related to those juridical acts either in its name or in the name of or

on behalf of the state. This finding is in line with the “moral obligation” of the state,

and the necessity of protecting and conserving Sixteenth Section lands, an economic

resource for the benefit of public education. Accordingly, we find no merit to the

assertion by Unocal that the trial court erred as a matter of law in denying its

exception of no right of action.

UNOCAL ASSIGNMENT OF ERROR NUMBER TWO

In its second assignment of error, Unocal contends that the trial court erred in

overruling its exception of prescription because VPSB filed its La.Civ.Code art.

2317 strict liability claim in its individual capacity more than one year after it knew

of the claim —indeed, more than one year after it retained counsel to file suit— and

VPSB is not entitled to immunity from prescription under Article 12, § 13 of the

Louisiana Constitution. We disagree.

Unocal and VPSB disagree on the standard of review applicable to this

assignment of error. VPSB contends that when evidence is introduced regarding the

merits of an exception of prescription, the factual determinations of the trial court

are reviewed via the manifest error standard of review. Unocal points out that this
12
court need not give the deference present in a manifest error review to the legal

conclusions made by the trial court. Rather, according to Unocal, this court must

conduct a de novo review of the trial court’s ruling.

In this case, the trial court deferred ruling on Unocal’s exception of

prescription until after the jury trial was conducted. Thus, we find that any factual

findings by the trial court related to Unocal’s exception of prescription are entitled

to the deference present in a manifest error review rather than simply taking any

allegations made in the petition as true. However, any finding of law must be

reviewed de novo to determine whether it was legally correct.

Prescription is a peremptory exception which is provided for in
La.Code Civ.P. art. 927. Evidence in support or contravention of the
exception may be introduced if the grounds are not apparent from the
petition. La.Code Civ.P. art. 931. An appellate court reviews the
exception under the manifest error standard of review if evidence is
introduced in support or contravention of the exception. Dugas v.
Bayou Teche Water Works, 10-1211 (La.App. 3 Cir. 4/6/11), 61 So.3d
826. If not, the appellate court “simply determines whether the trial
court’s finding was legally correct.” Id. at 830.

Allain v. Tripple B Holding, LLC, 13-673, pp. 9-10 (La.App. 3 Cir. 12/11/13), 128

So.3d 1278, 1285. “Generally, prescription statutes are strictly construed against

prescription and in favor of the claim sought to be extinguished by it; thus, of two

possible constructions, that which favors maintaining, as opposed to barring an

action, should be adopted.” Nickel v. Ford Motor Co., 18-1035, p. 1 (La. 10/15/18),

254 So.3d 1199, 1199 (citing Wells v. Zadeck, 11-1232 (La. 3/30/12) 89 So.3d 1145).

At the outset, we acknowledge that school boards and the oil and gas industry

have been embroiled in legal controversy regarding what prescriptive period, if any,

applies to claims made by school boards relative to Sixteenth Section lands. Indeed,

this issue is at the heart of conflicting jurisprudence.

Here, VPSB included the state as a party, a prudent inclusion given the

established jurisprudence that it must do so or potentially face prescription. See
13
ConocoPhillips, 83 So.3d 1234, where the state was included as a party and the

claims were held immune from prescription, as opposed to Terrebonne Par. Sch. Bd.

v. Mobil Oil Corp., 310 F.3d 870 (5th Cir.2002) and Terrebonne Par. Sch. Bd. v.

Southdown, Inc., 03-402 (La.App. 1 Cir. 7/14/04), 887 So.2d 8, where the claims

were held prescribed because immunity from prescription only applies to the state.

See also Bd. of Com’rs of Port of New Orleans v. Toyo Kisen Kaisha, 163 La. 865,

113 So. 127 (La. 1927) and Bd. of Com’rs of Caddo Levee Dist. v. Pure Oil Co., 167

La. 801, 120 So. 373 (La.1928), where the supreme court held that state immunity

from prescription does not apply to state agencies unless the state was included in

the action as a party. Prior to deliberation of the issue before us, in order to give a

proper perspective of how this conflicting caselaw came to fruition, we look at the

history of prescription relative to the state and state agencies.

In State v. F. B. Williams Cypress Co., 131 La. 62, 58 So. 1033 (La.1912),

judgment amended on other grounds, 132 La. 949, 61 So. 988 (1913), a school board

filed suit a timber company for unlawful conversion of timber on Sixteenth Section

land. The defendant in the case argued that because the suit was brought under Act

No. 158 of 1910, which authorized school boards, and not the state, to sue for

damages to Sixteenth Section lands, the applicable prescriptive period was one year.

Thus, the state’s constitutional immunity from prescription afforded it in any civil

matter did not apply to these claims. The supreme court rejected this argument

stating:

We do not find that the act thus quoted changes the attitude or
obligations of the state with respect to school lands, save in the respect,
which is unimportant, that it contemplates that the school boards which
are nearer to and more directly interested in the sixteenth sections in
their respective parishes shall aid the state in the execution of her trust.
The proposition that the rule of prescription established by the
Constitution does not apply to the state in her capacity as trustee is
untenable. Everything that the state holds in her capacity as sovereign
she holds as trustee; and, if the rule in question does not apply for the
14
protection of land donated and held in trust for the public schools, it
does not apply to the beds of navigable streams and tide water, which
are also held in trust.

F. B. Williams Cypress Co., 58 So. at 1037.

Likewise, in State v. New Orleans Land Co., 143 La. 858, 79 So. 515

(La.1918), the supreme court dealt with whether acquisitive prescription tolled when

the subject land was Sixteenth Section lands. In this case, the Orleans Parish board

of directors of public schools sued to reclaim Sixteenth Section lands previously

purchased. There, the supreme court focused on the land and its relationship to the

State and schools relative to prescription when it stated:

There is also something said about prescription having accrued
as against the state and the schools. Prescription acquirendi causa does
not run against the state for her own property. State v. Buck, 46 La. Ann.
667, 15 South. 531; 17 R. C. L. 689. Still less could it be allowed to run
against the state for school land. Inherent in the state’s title to such
school land is a condition imposed by the act of Congress (Act Feb. 15,
1843, c. 33, 5 Stat. at L. p. 600) that the state cannot alienate same
without the consent of the inhabitants of the township in which the land
is situated. If, then, the state cannot alienate same by express statute to
that effect without such consent, she is in no better position to do so by
her laws of prescription acquirendi causa.

New Orleans Land Co., 79 So. at 519.

Of note, F. B. Williams Cypress Co., 58 So. 1033, and New Orleans Land Co.,

79 So. 515, dealt with timber and recovery of title, the two instances directly

addressed in La.R.S. 41:961. In these two cases, the supreme court’s analysis of

whether a state agency could benefit from the state’s immunity from prescription

focused on the object the actions sought to protect, i.e. school lands, more than the

relationship the entity bringing the action had with the State. The court’s focus

changed in the 1920’s.

The first step to separating the entity from the state relative to prescription

was the court distinguishing state agencies from the state. In Toyo Kisen Kaisha, 113

So. 127 and Pure Oil Co., 120 So. 373, the supreme court held that prescription ran
15
against levee boards because, as state agencies, levee boards have a right to sue and

be sued in their own name, are a separate entity from the State, and are distinct from

the State. The supreme court went on to state that the exception to prescription

running against the state does not apply state agencies unless the action was “brought

by and in the name of the [s]tate itself.” Id. at 377 (quoting Toyo Kisen Kaisha, 113

So. at 127).

The supreme court extended this line of reasoning and applied it to school

boards in Stokes v. Harrison, 238 La. 343, 115 So.2d 373 (1959). In Stokes, the

Beauregard Parish School Board purchased (non-Sixteenth Section) land and,

thereafter, sold it. After the land changed hands several times over a thirty-five-year

period, the owner of the land executed a mineral lease. Soon thereafter, the school

board executed a separate mineral lease on the land. The oil and gas company placed

the proceeds from the mineral in concursus. The school board argued that its lease

was valid and trumped the other because the land became State-owned when the

school board purchased it prior selling it years earlier. As such, the mineral rights

were retained by the State given Louisiana’s constitutional prohibition against the

State alienating its mineral rights. The court ruled against the school board and stated,

“a parish school board is an agency of the State, a corporate body, a political

corporation, the recipient from the Legislature of certain delegated powers. . . .”

Nowhere, however, do we find a parish school board called the ‘State.’” Stokes, 115

So. at 377-78, Id. at 375.

The Stokes court relied on an applicable portion of Article IV of the Louisiana

Constitution of 1921, which stated, “[i]n all cases the mineral rights on any and all

property sold by the State shall be reserved, except where the owner or other person

having the right to redeem may buy or reclaim property sold or adjudicated to the

state for taxes.” The court noted that the word “State” appeared alone whereas the
16
language “the state, or any political corporation thereof” was present in other

sections of the Articles. Stokes, Id. at 379 (quoting Stokes v. Harrison, 109 So.2d

506, 510 (La.App. 1 Cir. 1959). As such, the court reasoned that the school boards

and other political corporations of the State were purposefully excluded from the

mineral rights reservation.

Some years later, the language of Louisiana Constitution of 1974 Article 9 §

4(B) specifically included school boards when considering prescription and mineral

rights. It states, “[l]ands and mineral interests of the state, of a school board, or of

a levee district shall not be lost by prescription.” La.Const. art. 9, § 4(B)(emphasis

added).

In 1978, the supreme court, in Dynamic Exporation, Inc. v. LeBlanc, 362

So.2d 734 (La.1978), acknowledged the additional language of La.Const. art. 9, §

4(B). It found that Stokes was overruled by this additional language that included

school boards.

However, in 1981, the supreme court again differentiated a state agency from

the state in dealing with prescription. In State, through Department of Highways v.

City of Pineville, 403 So.2d 49 (La.1981), the Department of Highways loaned the

City of Pineville funds to perform public works. The city did not repay the funds

timely. Six years after the loan, the Department of Highways sued for repayment.

Suit on repayment of a loan is subject to a three-year prescriptive period. The

Department of Highways argued it was immune from prescription per La.Const. art.

12, §13, which states, “[p]rescription shall not run against the State in any civil

matter, unless otherwise provided in this Constitution or expressly by law.” The

supreme court rejected this argument, stating:

[T]he “State,” for the purposes of the constitutional immunity from
prescription, does not include a state agency which is a body corporate
with the power to sue and be sued and which, when vested with a cause
17
of action, is the sole party capable of asserting it. Regardless of its status
as an instrumentality of the state, such an agency remains a distinct
legal entity subject to claims of prescription except where the law
provides otherwise.

City of Pineville, 403 So.2d at 52.

This line of reasoning differentiating a state agency from the state in dealing

with prescription was adopted by the United States Fifth Circuit in Terrebonne

Parish School Board v. Mobil Oil Corp., 310 F.3d 870 (5th Cir.2002). In this case,

the Terrebonne Parish School Board, in its name only, sued Mobil Oil Corporation

for environmental damage resulting from Mobil’s dredging of a canal some forty-

two years earlier in order to access a well located on Sixteenth Section land owned

by the State and managed by the school board. Mobil filed a summary judgment

alleging the school board’s claims were prescribed. The school board argued that it

was the State for purposes of La.Const. art. 12, §13, and, therefore, immune from

prescription. The court conducted an extensive analysis of Louisiana’s statutes

regarding school lands. In rejecting the school board’s argument, the court stated,

“Louisiana’s statutory provision addressing precisely the same kind of restoration

claims that the School Board now seeks to prosecute in its own right requires that

such suit be brought in the name of the state.” Mobil Oil Corp., 310 F.3d at 882

(citing La.R.S. 41:963, “[s]uit in all cases shall be brought in the name of the State

of Louisiana”).

More recently, our sister court, in Southdown, 887 So.2d 8, dealt with yet

another case wherein a school board, solely in its own name, filed suit against an oil

and gas company for environmental damages to Sixteenth Section lands. In

discussing whether the school board could invoke the State’s immunity, the school

board argued that the following excerpt from City of Pineville, 403 So.2d at 52

(citing State v. F. B. Williams Cypress Co., 131 La. 62, 58 So. 1033 (1912)) was

18
controlling: “when the state holds title to property, prescription cannot run,

notwithstanding the fact that the property is administered by a state agency.” The

first circuit rejected the notion that the state’s immunity from prescription is confined

to actions brought only by the state itself.

Finally, this court dealt with prescription relative to Sixteenth Section lands

in ConocoPhillips, 83 So.3d 1234. In this case, the very school board party to the

case before us sued multiple oil and gas companies for underpayment of royalties

derived from the minerals of Sixteenth Section lands but included the state as a

nominal party. The trial court granted exceptions of prescription filed by the

defendants because the state was not a party to the mineral leases and the school

board was not the state, and, therefore, the school board’s claims were subject to

prescription. Our court reversed the trial court. We found that actions involving

Sixteenth Section lands were an exception to applying prescription to a state agency

because the school board was an agent for the state acting on the state’s behalf. We

reiterated that the State owned Sixteenth Section lands and the minerals from those

lands. We distinguished Southdown on the basis that the school board in that case

included the State as a nominal party.

The conflict between our court in ConocoPhillips and our sister court in
Southdown has been acknowledged by at least one law review article. See Howser,
Zachary, A Binding and Perpetual Obligation: Protecting Louisiana’s Sixteenth
Section Land as a Natural Resource, 2 LSU Journal of Energy Law & Resources
(2014). This law review article suggests that Sixteenth Section lands need
classification by a court under civilian law in order help resolve conflicting
jurisprudence relative to prescription. We agree and endeavor to do so.
“Things are divided into common, public, and private; corporeals and

incorporeals; and movables and immovables.” La.Civ. Code art. 448. “Corporeals

are things that have a body, whether animate or inanimate, and can be felt or touched.”

19
La.Civ. Code art. 461. “Tracts of land, with their component parts, are immovables.”

La.Civ. Code art. 462.

Based on the articles above, we find that these Sixteenth Section lands are

corporeal, immovable things. Next, we look to whether these lands are common,

public or private.

“Common things may not be owned by anyone. They are such as the air and

the high seas that may be freely used by everyone comformably with the use for

which nature has intended them.” La.Civ Code art. 449. Under La. R.S. 41:961, in

pertinent part, Sixteenth Section lands are “known as school lands the title to which

is still in the state.” Therefore, while these lands are not common things for various

other reasons, a plethora of jurisprudence and clear legislative expression establishes

that Sixteenth Section lands are owned by the state, and common things may not be

owned.

“Public things are owned by the state or its political subdivisions in their

capacity as public persons.” La.Civ. Code art. 450. “Private things are owned by

individuals, other private persons, and by the state or its political subdivisions in

their capacity as private persons.” La.Civ. Code art. 453. Therefore, the state may

own these Sixteenth Section lands in its public or private capacity.

Public things are property “out of commerce. . . . dedicated to public use, and

held as a public trust, for public uses.” Kline v. Parish of Ascension, 33 La.Ann 562,

566 (1881). Sixteenth Section lands are not “out of commerce.” The fact that they

are in commerce and how to conduct that commerce is the subject of extensive

caselaw. Further, La. R.S. 41:961 contemplates school boards entering into

contracts in order to conduct commerce on these lands. Accordingly, it is clear that

Sixteenth Section lands are not public things under La.Civ. Code art. 450, but, rather,

are private things owned by the State in its private capacity.
20
Next, we need to determine whether these lands are subject to any restrictions

regarding their use. “Private things may be subject to public use in accordance with

law or by dedication.” La.Civ.Code art. 455. Louisiana has not passed any

applicable law mandating that Sixteenth Section lands are subject to public use. We

do note the “School Dedication Statutes,” La.R.S. 41:638 and 41:639, which state,

respectively, the following:

Whenever any real property has been acquired by the state of
Louisiana, any municipality, parish school board, or any other
subdivision or agency of the state of Louisiana by virtue of a deed, act
of sale, donation, or other form of transfer, which contains a stipulation
that such property is to be used for public school or public educational
purposes, said deed, act of sale, donation, or other form of transfer, shall
constitute a dedication of such property to the public for such purposes
and the school board in whose district the property lies shall have the
right to administer and use the property for public school purposes.

La.R.S. 41:638; and

Unless the deed, act of sale, donation, or other form of transfer
by which said property is conveyed, contains specific provisions
prohibiting the same, such school board may sell or dispose of any such
property which is unused and unnecessary or is unsuitable for public
school purposes, provided the mineral rights are reserved therein to the
state of Louisiana and use the proceeds thereof to procure one or more
new public school sites. In such event, the former owner, his heirs,
successors and assigns shall have no claim by right of reverter to the
property originally dedicated or to the proceeds thereof.

La.R.S. 41:639. However, “No Section of the Revised Statutes is retroactive unless

it is expressly so stated.” La.R.S. 1:2. “In the absence of contrary legislative

expression, substantive laws apply prospectively only.” La.Civ.Code art. 6. Neither

of La.R.S. 41:638 nor La.R.S. 41:639 are expressly retroactive, and both are

substantive.

Here, both La.R.S. 41:638 and La.R.S. 41:639 were passed in 1960. See Acts

1960, No. 527. Sixteenth Section lands were given to Louisiana by approval of the

Sixty-second Congress of the United States on April 23, 1912. Thus, their

application of La.R.S. 41:638 and La.R.S. 41:639 to Sixteenth Section lands is not
21
appropriate. See also Orleans Par. Sch. Bd. v. City of New Orleans, 96-2664

(La.App. 4 Cir. 9/3/97), 700 So.2d 870, writ denied, 97-3094 (La. 3/13/98), 712

So.2d 877.

There is, however, jurisprudence that indicates Congress’ Act granting school

lands to the State of Louisiana would qualify as a formal dedication under Louisiana

Law. In Cenac v. Public Water Rights Ass’n, 02-2660 (La. 6/27/03), 851 So.2d 1006,

1011 the supreme court stated:

Our legislature has never enacted a comprehensive scheme
governing dedication to public use. St. Charles Parish Sch. Bd. v. P &
L Inv. Corp., 95-2571, p. 4 (La.5/21/96), 674 So.2d 218, 221; Garrett
v. Pioneer Prod. Corp., 390 So.2d 851, 854 (La.1980). . . .In the
absence of such a comprehensive scheme, our courts have recognized
four modes of dedication to public use: (1) formal, (2) statutory, (3)
implied, and (4) tacit. P & L Inv. Corp., 95-2571 at p. 4-5, 674 So.2d at
221.

Professor A. N. Yiannopoulos discusses formal dedication in his scholarly

writings, namely his property treatise. He writes:

In a strict sense, a formal dedication is a donation of a thing or of
its use to the public for designated public purposes. As a donation, a
formal dedication ought to conform with the requirements of substance
and form governing gratuitous dispositions. For example, the act of
dedication ought to be made in authentic form and it ought to be
accepted by the public. Examples of this form of dedication are found
in Louisiana jurisprudence.

However, strict compliance with the requirements governing
donations would be cumbersome. It would discourage or even defeat
dedication in many cases. For these reasons Louisiana courts have taken
a much broader view of formal dedication that has no foundation in
legislative texts. According to the jurisprudence, a formal dedication is
a donation to the public that may be made by a written juridical act.
Accordingly, neither authentic form nor acceptance of the donation by
the public is required. There must be, however, a clear intent to dedicate.

A.N. YIANNOPOULOS, PROPERTY § 97, at 211-12 (2 Louisiana Civil Law Treatise

2001) (footnotes omitted) (emphasis added). Accordingly, in order to find that the

Sixteenth Section lands are for public use by formal dedication, a written juridical

act must exist with a clear intent to dedicate the lands for a public use.
22
“A juridical act is a lawful volitional act intended to have legal consequences.”

Comment (B) of the 2000 Revision Comments to La.Civ.Code art. 395; comment

(b) of the 1982 Revision Comments to La.Civ.Code art. 3471. In 1912, Congress’

Act granting school lands to the State of Louisiana states that school lands “are

hereby, fixed, reserved, and confirmed to that State for the benefit of public school.”

(Sixty-second Congress Sess. II CH 88 1912). This act is clearly “a written juridical

act,” as it was lawful with intent to have legal consequences, i.e., conveying

ownership of Sixteenth Section lands to the State of Louisiana. Further, Congress’

Act indicates a clear intent to dedicate that Sixteenth Section land for a public

purpose, public education. Accordingly, we find that Sixteenth Section lands are for

public use by formal dedication.

To recapitulate, we classify Sixteenth Section lands under Louisiana’s civilian

law as corporeal, immovable things owned by the State in its private capacity for the

benefit of a public use, public education. Next, we look how the relationship

between the United States, the State, and a school board is defined.

First, we note that one possible civil definition of the relationship between the

United States, the State, and a school board relative to school lands is that of mandate.

In Board of School Directors of Concordia v. Ober, 32 La.Ann. 417, the supreme

court stated (emphasis added):

The title to this land has never been in the parish Board of School
Directors. The title was in the State, under the donation of the general
government, and she held it for a specific purpose, with authority to sell
the lands and a mandate to hold the proceeds and invest them for the
benefit of the schools.

This jurisprudence could be interpreted to define the relationship between

state and school board regarding school lands as one of mandate. Defining the

relationship as such does not fit under Louisiana law.

23
“A mandate is a contract by which a person, the principal, confers authority

on another person, the mandatary, to transact one or more affairs for the principal.”

La.Civ.Code art. 2989 (emphasis added). “A contract is an agreement by two or

more parties whereby obligations are created, modified, or extinguished.”

La.Civ.Code art. 1906 (emphasis added). Here, a school board’s relationship to

school lands is delineated by statute, La.R.S. 41:638. However, there is no existing

contract between the state and school boards establishing a contract of mandate. The

school boards did not consent to or agree to anything with the state regarding these

lands. Thus, we find that the relationship between the state and school boards

regarding school lands is not one of mandate.

An alternative to a mandate relationship, and one that has been found to exist

by this court, is that of a trust relationship. In Ebey, 861 So.2d at 912-15, this court

stated:

State ex rel. Plaquemines Parish School Board v. Plaquemines
Parish Government, 93-2339 (La.App. 4 Cir. 12/15/94), 652 So.2d 1,
writ denied, 95-1049 (La.6/23/95), 656 So.2d 1015 provides an
historical background:

In 1785, the Continental Congress set aside
Sixteenth Section lands for the exclusive use of public
education (1 Stat. 563). In 1789, Article IV Section 3
Clause 2 of the United States Constitution was adopted
providing that “. . .Congress shall have the power to
dispose of and make all needful Rules and Regulations
respecting the Territory or other Property belonging to the
United States . . .” (emphasis added). On May 18, 1796,
Congress passed the act creating a rectangular survey
system (1 Stat. 464). On April 30, 1803, France sold the
Louisiana territory to the United States upon execution of
the Treaty of Cession. The reservation of Sixteenth
Section lands attached to the Louisiana territory at this
point. On April 21, 1806, Congress authorized the
President of the United States to sell lands within the
Louisiana territory, subject to a reservation of Sixteenth
Section lands for public education purposes, specifically
stating that the Sixteenth Section “shall be reserved in each
township for the support of the schools within the same”
(2 Stat. 391). On March 3, 1811, Congress again
24
authorized the President of the United States to sell further
lands within the Louisiana territory, again subject to a
reservation of Sixteenth Section lands for public education
purposes, specifically stating that the Sixteenth Section
“shall be reserved in each township for the support of the
schools within the same” (2 Stat. 662). The Louisiana
territory was admitted to the United States by three
Congressional Acts, to-wit: 2 Stat. 641 of February 20,
1811, 2 Stat. 701 of April 8, 1812, and 2 Stat. 708 of April
14, 1812.

Id. at. 2-3.

Nowhere in any of these grants was the word “trust” or “trustee
relationship” used. However, various states, including Louisiana, began
using trust language in statutes regulating the use of Section 16 lands.
Riedel v. Anderson[,] 70 P.3d 223 (Wy.2003) discusses the evolution
in the use of trust language in the various state constitutions and statutes
including Louisiana.

The specific language of the grants varied
somewhat among the early states’ enabling laws, but
generally was “for the use of schools” with no mention of
trusts, fiduciary obligations, or restrictions on the sale,
lease, or other use of the lands. See, Sally K. Fairfax, et al.,
The School Trust Lands: A Fresh Look at Conventional
Wisdom, 22 Envtl. L. 797, 810 (1992). Substantially the
same pattern was used for land grants in the admission of
Louisiana, Indiana, Mississippi, Illinois, Alabama,
Missouri and Arkansas, See, Budge, supra, at 226. Courts
have consistently ruled that Congress had not encumbered
these early land grants with a common law trust, but had
merely entered into a “solemn agreement” with the states
that the lands would be used as intended. See, e.g.,
Branson Sch. Dist. Re–82 v. Romer, 161 F.3d 619, 633
(10th Cir.1998)(citing Alabama v. Schmidt, 232 U.S. 168,
173-74, 34 S.Ct. 301, 58 L.Ed. 555 (1914), and Cooper v.
Roberts, 59 U.S. (18 How.) 173, 181-82, 15 L.Ed. 338
(1855)).

However, beginning with Michigan in 1837, a
pattern evolved by which the states through their own
constitution imposed restrictions on the use of the land or
its sale proceeds. . . .

With the admission of Colorado in 1876, Congress
began to include in the states’ enabling acts some of the
same restrictions on the use of the school lands that prior
states had constitutionally imposed upon themselves.

Id. at 227 (footnote omitted).
25
The concept that Section 16 lands are held by Louisiana in trust
was recognized in State ex rel. Plaquemines Parish School Board, 652
So.2d 1, where in the court stated:

[T]he existence of a school trust has long been established
in both Louisiana and Federal jurisprudence and it has
been consistently held that the school trust lands can be
alienated only where it is of benefit to school in some
manner such as payment of the sale or lease price to the
school fund or school board.

Id. at 4.

In so holding, the Plaquemines court cited the United States
Supreme Court case of Andrus v. Utah, 446 U.S. 500, 100 S.Ct. 1803,
64 L.Ed.2d 458 (1980) in which the Court stated:

Congress also imposed upon the States a binding perpetual
obligation to use the granted lands for the support of public
education. All revenues from the sale or lease of the school
grants was impressed with a trust in favor of the public
schools. No State could divert school lands to other public
uses without compensating the trust for the full market
value of the interest taken.

Id. at 1814-15(emphasis deleted).

Regardless of whether the Enabling Act intended to create a
common law trust over Section 16 lands in Louisiana, the concept of a
trust has been written into Louisiana statutes and recognized by the
courts. State ex rel. Plaquemines Parish Sch. Bd., 652 So.2d 1; City of
Baker Sch. Bd. v. East Baton Rouge Parish Sch. Bd., 99-2505 (La.App.
1 Cir. 2/18/00), 754 So.2d 291.

La.R.S. 41:981(A) provides in relevant part:

[Lands] granted, appropriated, or reserved by Congress in trust
to the state of Louisiana, for school purposes.

La.R.S. 41:642(A) provides in relevant part:

The trustee title of the State of Louisiana to those
16th Section or indemnity lands granted by Congress to
the State of Louisiana as trustee for the benefit of school
children. . . .

The management of these trust lands is vested by the State in the
local school boards. See La.R.S. 17:100.6 and La.R.S. 41:638. In City
of Baker School Board, 754 So.2d at 293, the court stated:

26
Public education is a function of the sovereign. La.
Const. art. 8, § 1; see also Terrebonne Parish School
Board v. St. Mary Parish School Board, 131 So.2d 266,
270 (La.App. 1 Cir.1961). School boards perform the
function of the sovereign implementing the constitutional
mandate to provide public schools and to administer
public education. Shaw v. Caddo Parish School Board,
347 So.2d 39,41 (La.App. 2 Cir.) writ denied, 350 So.2d
676 (1977). School boards are agencies of the state.
Rousselle v. Plaquemines Parish School Board, 93-1916,
p. 6 (La.2/28/94), 633 So.2d 1235, 1241. The task of
educating the children of Louisiana rests with the
individual school boards throughout the state. See Drouin
v. Board of Directors of Public Schools of Parish of
Avoyelles, 136 La. 393, 398, 67 So. 191, 192 (1915). The
ownership, management and control of property within a
school board’s district is vested in the district, in the
manner of a statutory trustee, for the accomplishment of
its duty. See Orleans Parish School Board v. City of New
Orleans, 56 So.2d 280, 284 (La.App.Orleans 1952). The
general rule of ownership of property of school districts
was stated in 68 Am.Jur.2d, Schools § 74 (1993), as
follows:

The ownership of school property is generally in the local
district or school board as trustee for the public at large.
School property is thus considered public property and is
not to be regarded as the private property of the school
district by which it is held or in which it is located
[footnotes omitted].

In State v. Humble Oil & Refining Co., 195 La. 457, 197 So. 140
(La.1940), the court stated that “the right of a school board to control
and administer, for the benefit of the public schools, the sixteenth
section lands situated in its parish was never questioned.” Id. at 144.

Thereafter, based on this analysis, this court, in Ebey, held that “Section 16

lands are held in trust by the State and managed by school boards ‘in the manner of

a statutory trustee’ for the benefit of public education.” Id. at 915. In defining the

school board’s rights, we stated in Ebey that school boards ‘“shall have the right to

administer and use the property for public school purposes,’ subject to statutory

regulations regarding its sale or lease. La.R.S. 41:638; La.R.S. 41:631 et seq.” Id.

We reiterate these findings in Ebey, and define the relationship between Sixteenth

27
Section lands, the State, and school boards is that of trust for the benefit of public

education.

This finding of a trust relationship not only comes from our finding in Ebey.

In F. B. Williams Cypress Co., 58 So. at 1037, the supreme court stated (emphasis

added):

We do not find that the act thus quoted changes the attitude or
obligations of the state with respect to school lands, save in the respect,
which is unimportant, that it contemplates that the school boards which
are nearer to and more directly interested in the sixteenth sections in
their respective parishes shall aid the state in the execution of her trust.
The proposition that the rule of prescription established by the
Constitution does not apply to the state in her capacity as trustee is
untenable. Everything that the state holds in her capacity as sovereign
she holds as trustee; and, if the rule in question does not apply for the
protection of land donated and held in trust for the public schools, it
does not apply to the beds of navigable streams and tide water, which
are also held in trust.

Next, we address what role the State and a school board undertake in

facilitating the use of Sixteenth Section lands.

The history of the sixteenth section lands reveals that the Federal
Government set aside and dedicated them for the use of public
education. . . . [T]here is a moral, [if] not a clear legal obligation,
resting upon the State to dedicate the revenues derived from such lands
to public education. The framers of the various State Constitutions have
clearly recognized the State’s moral obligation and have embodied in
the various constitutions provisions dealing with sixteenth sections,
expressly dedicating the revenues from those sections to public
education. At a number of sessions of the legislature, statutes have been
enacted providing for the sale, leasing and operation of the sixteenth
sections. From the first constitutional or legislative pronouncement up
to and including the legislative session of 1934, sixteenth sections have
been continuously recognized as school lands, and as such, separate and
distinct from other kinds of public lands.

State v. Humble Oil and Refining Co., 195 La. 457, 197 So. 140, 143

(La.1940)(emphasis added).

Given this obligation the supreme court found both moral and legal, the

question arises how this court can best ensure that VPSB fulfills its duty to function

as the state in the state’s capacity as trustee of Sixteenth Section lands. We do so by
28
finding that Sixteenth Section lands are natural resources of the State. As such, these

lands are subject to the public trust doctrine.

While there is no specific definition of the public trust doctrine in Louisiana

law, “[e]lements of the doctrine are scattered throughout the Louisiana Civil Code,

the Revised Statutes, the Louisiana Constitution of 1974, and several Louisiana

judicial decisions. No single Louisiana law clearly defines the public trust doctrine

and delineates its elements.” Wilkins, James G., and Wascome, Michael, “The

Public Trust Doctrine in Louisiana,” 52 La.Law.Rev 861, 862 (1992). However, a

national study of the doctrine by the Coastal States Organization defined the public

trust doctrine as follows:

The Public Trust Doctrine provides that public trust lands, waters
and living resources in a State are held by the State in trust for the
benefit of all of the people, and establishes the right of the public to
fully enjoy public trust lands, waters and living resources for a wide
variety of recognized public uses. The Public Trust Doctrine is
applicable whenever navigable waters or the lands beneath are altered,
developed, conveyed, or otherwise managed or preserved. It applies
whether the trust lands are publicly or privately owned. The doctrine
articulates not only the public rights in these lands and waters. It also
sets limitations on the States, the public, and private owners, as well as
establishing duties and responsibilities of the States when managing
these public trust assets. The Public Trust Doctrine has been recognized
and affirmed by the United States Supreme Court, the lower federal
courts and State courts from the beginning days of this country to the
present.

Coastal States Organization, PUTTING THE PUBLIC TRUST DOCTRINE TO WORK, at 3-

4 (1990) (emphasis added).

Louisiana Constitution Article 9, § 1 states (emphasis added):

The natural resources of the state, including air and water, and
the healthful, scenic, historic, and esthetic quality of the environment
shall be protected, conserved, and replenished insofar as possible and
consistent with the health, safety, and welfare of the people. The
legislature shall enact laws to implement this policy.

This article shows that our legislature is committed to protect natural

resources of the state. Further, our supreme court has recognized the public trust
29
doctrine at least twice. Once in Save Ourselves, Inc. v. Louisiana Environmental

Control Comm’n, 452 So.2d 1152 (La.1984), and a second time in Avenal v. State,

03-3521 (La. 10/19/04), 886 So.2d 1085.

In Save Ourselves, Inc., the supreme court gave notice to the presence of the

public trust doctrine in La.Const. art. 9, §1 when it found that Louisiana coastal

wetlands were a protected natural resource under La.Const. art. 9, § 1. In doing so,

the supreme court held that determining whether an action was constitutional under

La.Const. art. 9, § 1 required application of a “a rule of reasonableness” that required

a balancing test between “environmental costs and benefits” and “economic, social

and other factors.” Save Ourselves, Inc., 452 So.2d at 1157.

Thereafter, in Avenal, the supreme court applied this balancing test to

deliberate whether freshwater introduction from the Mississippi River into saltwater

marshes to combat coastal erosion was permitted by La.Const.art. 9, § 1. This

introduction of saltwater would have an adverse economic impact on oyster farmers.

The supreme court found that the “coastal diversion project fits precisely within the

public trust doctrine,” balanced its public benefit with the economic hardships the

project would cause to oyster farmers, and found that the project was constitutional

under La.Const.art. 9, § 1. Avenal, 886 So.2d at 1101.

In this case, we have classified Sixteenth Section lands as corporeal,

immovable things owned by the State in its private capacity for the benefit of public

use, public education. While these lands are not threatened by disappearance like

those of our coastline, they are nevertheless threatened by the environmental impact

of outdated practices by the oil and gas industry with becoming no longer suitable

for use as an economic resource to help fund the public education of this state’s

children.

30
Therefore, we find that Sixteenth Section lands fall squarely within the public

trust doctrine and recognize these lands as a natural resource of this state. The public

benefit of preserving suitable use of these lands in order to help fund quality

education for the children predates the United States Constitution. Two years before

the adoption of the U. S. Constitution of 1787, the Congress of the Confederation

provided support for public schooling by establishing the land grants in the Land

Ordinance of May 20, 1785, which granted one square mile, in Section 16 of every

township, to be used for the maintenance of public schools. In 1789, Article IV

Section 3 Clause 2 of the United States Constitution was adopted providing that “. . .

Congress shall have the power to dispose of and make all needful Rules and

Regulations respecting the Territory or other Property belonging to the United

States.” France sold the Louisiana territory to the United States via the Treaty of

Cession on April 30, 1803. The reservation of Sixteenth Section lands applied to the

Louisiana territory and has also applied to this State since its inception.

Accordingly, while we do recognize that there is some economic impact on

oil and gas companies to hold that prescription does not apply to actions involving

these lands. However, a finding that VPSB’s claims are immune from prescription

would not impact all lands owned by the state and administered by state agencies. It

would only apply to Sixteenth Section lands.

Therefore, we find that Sixteenth Section lands are natural resources of this

state. We apply the public trust doctrine and find that the state’s interest in funding

the public education of children outweighs the potential economic hardship endured

by oil and gas companies. These lands “shall be protected, conserved, and

replenished insofar as possible and consistent with the health, safety, and welfare of

the people” under La.Const. art. 9, § 1. Accordingly, we find that any proper action

31
taken for their protection, conservation, or replenishment are immune from

prescription under La.Const. art 12, § 13.

We do not reach this result without various considerations as to its adherence

to legislative will, to jurisprudence of other courts, and to jurisprudence of our

supreme court.

The result aligns with the legislature’s tendency to include school boards as

the state with regards to prescription on issues dealing with land. The language of

Article 4 of the Louisiana Constitution of 1921 did not include school boards in its

reservation of mineral rights. The Stokes, 115 So. 2d 373, court noted this omission

and based its ruling on that omission. Our legislature overruled Stokes by correcting

this omission some years later when the language of Louisiana Constitution of 1974

Article 9 § 4(B) specifically included school boards when considering prescription

and mineral rights.

It is also in line with established jurisprudence that the state must be included

as a party in order for claims to be held immune from prescription on property it

owns, because we find above that school boards are acting as the state when

administering Sixteenth Section lands. See ConocoPhillips, 83 So.3d 1234, Mobil

Oil Corp., 310 F.3d 870, Southdown, 887 So.2d 8, Toyo Kisen Kaisha, 163 La. 865,

113 So. 127, and Pure Oil Co., 167 La. 801, 120 So. 373.

Finally, this result parallels a multitude of iterations made by our supreme

court. First, it adheres to the principle of strictly construing prescription statues as

stated by the supreme court in Nickel, 254 So.3d 1199.

Next, this result and analysis heeds State v. New Orleans Land Co., 143 La.

868, 79 So. 515 (La.1918). There, the supreme court stated,

[I]nherent in the state’s title to such school land is a condition imposed
by the act of Congress (Act Feb. 15, 1843, c. 33, 5 Stat. at L. p. 600)
that the state cannot alienate same without the consent of the inhabitants
32
of the township in which the land is situated. If, then, the state cannot
alienate same by express statute to that effect without such consent, she
is in no better position to do so by her laws of prescription acquirendi
causa.

New Orleans Land Co., 79 So. at 519. This language recognized the state’s inability

to circumvent its duty to hold and protect Sixteenth Section lands by laws of

prescription.

Additionally, our finding furthers the supreme court’s view recognizing that

“[t]he proposition that the rule of prescription established by the Constitution does

not apply to the state in her capacity as trustee is untenable.” F. B. Williams Cypress

Co., 58 So. at 1037. Finally, this result honors the supreme court’s words in Humble

Oil & Refining Co., 197 So. at 143, wherein it found a “moral, if not a clear legal

obligation, resting upon the State to dedicate the revenues derived from such lands

to public education.” A moral obligation recognized and expressed in this very case

by the United States Fifth Circuit in Union Oil Co. of California, 458 F.3d 364.

Accordingly, we find that this assignment of error lacks merit. When it comes

to protection of Sixteenth Section lands, as natural resources of this state, VPSB

functions as the state in the state’s capacity of trustee for the benefit of public

education. Therefore, the La.Civ.Code art. 2317 action by VPSB is not subject to

prescription under Article 12, § 13 of the Louisiana Constitution.

PLAINTIFFS’ ASSIGNMENTS OF ERROR

VPSB’s assigned errors, while numbering fourteen, can be grouped into four

categories: the jury’s verdict is inconsistent and, as such, the trial court committed

legal error warranting reversal when it entered a judgment based on that inconsistent

verdict; the trial court erroneously instructed the jury; and the trial court allowed

Unocal to thwart VPSB’s discovery such that discovery was not complete, especially

given new evidence obtained by VPSB post trial. VPSB had requested relief in the

33
form of reversal and rendering judgment in its favor for more damages.

Alternatively, VPSB requests that the judgment be reversed, in part, and remanded

for additionally discovery and a new trial.

PLAINTIFFS’ ASSIGNMENT OF ERROR NUMBER ONE

VPSB, in its first assigned error, contends that the trial court committed error

in signing a judgment based on an inconsistent jury verdict. We find merit to this

contention.

The manifest error standard of review provides that a jury’s
verdict cannot be reversed unless the court, after reviewing the record
in its entirety, finds there to be no reasonable factual basis for the jury’s
findings and determines them to be manifestly erroneous or clearly
wrong. Stobart [v. State, Through DOTD], 617 So.2d 880 [(La.1993)].
Where, however, legal error interdicts the fact-finding process, the
manifest error standard no longer applies. Ferrell v. Fireman’s Fund
Ins. Co., 94-1252 (La.2/20/95), 650 So.2d 742. In such instances, if the
record is complete, the appellate court is charged to make its own
independent de novo review of the record. Id.

The supreme court has recognized that inconsistent jury verdicts
may, in certain circumstances, constitute such legal error, requiring the
appellate court to conduct a de novo review. See Green v. K–Mart Corp.,
03-2495 (La.5/25/04), 874 So.2d 838. . . . [T]he reviewing court must
determine whether the jury’s finding is “so inconsistent as to constitute
an abuse of discretion.” Id. (citing Wainwright v. Fontenot, 00-492
(La.10/17/00), 774 So.2d 70). If so, a de novo review is warranted.

Clement v. Citron, 13-63, pp. 4-5 (La.App. 3 Cir. 6/19/13), 115 So.3d 1260, 1264.

Here, as was the case in Clement, we cannot find many factual conclusions

drawn by the jury from the face of the jury verdict form. However, the jury found,

as fact, that Unocal contaminated the Sixteenth Section lands when conducting its

mineral activities, is responsible for any damages from that contamination, and that

contamination did cause environmental damage to the properties.

We observe these findings of fact from the jury’s answers on its verdict form.

The first three questions the jury answered on the verdict form are as follows:

REMEDIATION DAMAGES UNDER ACT 312

34
1. Does environmental damage exist on the property in question?

Yes ✓ No ____

2. If environmental damage exists on the property, which of the
following entities, if any, are responsible for that environmental
damage?

a. Union Oil Company of California Yes ✓ No ____

....

3. What amount of money, if any, do you believe is needed to clean
up the property in compliance with the standards and regulations
of the State of Louisiana to adequately protect the environment
and public health, safety, and welfare?

$ 3,500,000

These factual findings are supported by the record. First, Unocal filed an

admission, which states, “[f]or purposes of La. R.S. 30:29(C), UNOCAL admits that

‘environmental damage,’ as defined in La. R.S. 30:29(I)(1), exists on the Subject

Property, and UNOCAL further admits that it is ‘responsible’ under La. R.S. 30:29

for ‘environmental damage’.”

Louisiana Revised Statutes 30:29(I)(1), which has since been redesignated as

La.R.S. 30:29(I)(2), states, “‘Environmental damage’ shall mean any actual or

potential impact, damage, or injury to environmental media caused by contamination

resulting from activities associated with oilfield sites or exploration and production

sites. Environmental media shall include but not be limited to soil, surface water,

ground water, or sediment.”

We acknowledge that Unocal’s admission is limited for legal purposes and is

excluded from VPSB’s private law claims. However, the jury was faced with

deciding whether Unocal contaminated the land causing environmental damage.

Limiting the purpose of the admission does not change the fact that Unocal’s

35
admission, regardless of the limited purpose, supports the jury’s finding that it

happened.

Second, both Unocal and VPSB’s experts testified that Unocal contaminated

the land causing environmental damage. As such, the jury awarded VPSB some

damages due to that environmental damage caused by the contamination. Thus, it is

clear from the jury verdict form that the jury found this as fact, and this finding of

fact is supported by the record.

VPSB argues, inter alia, that given this factual finding, no reasonable jury

could have found that Unocal or its predecessors did not breach the 1935 Lease or

the 1994 Lease. Contrarily, the jury found no breach by Unocal of these Leases.

According to VPSB, this is in direct contradiction to awarding VPSB restoration

damages from Unocal under Act 312. We agree.

In an earlier decision dealing with this case, State v. La. Land & Explor. Co.,

12-884, pp. 10-11 (La. 1/30/13) 110 So.3d 1038, 1045-1046, the supreme court

stated:

The parties agree the 1935 oil, gas and mineral lease does not
contain an express provision regarding the lessee’s remediation
obligation. However, an implied obligation “to return the thing at the
end of the lease in a condition that is the same as it was when the thing
was delivered to him, except for normal wear and tear,” unless
otherwise provided, is one of the principle obligations of a lessee. La.
C.C. art. 2683(3). This implied obligation existed under Articles 2719
and 2720 of the Civil Code of 1870 at the time the 1935 lease was
entered into. After the 2004 revisions to the Civil Code, the implied
obligation to repair or restore the thing leased has not been changed,
but the Civil Code articles defining the implied obligation are now
found in La. C.C. arts. 2683, supra, 2686, 2687, and 2692.

Further, the trial court, in its jury instructions, stated the following:

The 1935 mineral lease contains no language that addresses the
remediation and restoration obligations of the lease. Under these
circumstances a lessee has the remediation obligations imposed upon
him by our law, which include restoration of the property to its original
pre-lease condition, less normal wear and tear, as set forth in our Civil
Code.
36
Therefore, it is established that Unocal had a duty under the 1935 Lease to

restore VPSB’s land to its previous condition minus “normal wear and tear.” A party

breaches a lease when it undertakes an obligation to perform, and when that party

fails to perform that obligation. A Caring Home Care Servs., LLC v. de la Houssaye,

17-31 (La.App. 3 Cir. 7/5/17), 224 So.3d 422, writ denied, 17-1328 (La. 11/6/17),

229 So.3d 474. Thus, it is clear that Unocal, under the 1935 Lease, had an obligation

to restore VPSB’s land to its previous condition minus normal wear and tear and that

failure to do so is a breach of that 1935 Lease.

Calvin Barnhill, certified by the court as an expert in petroleum engineering,

oilfield operations, oil and gas industry standards and regulations, application and

implementation of mineral and other leases and provisions, testified on behalf of

Unocal. He testified as follows, in clarifying what encompasses “normal wear and

tear:”

A. [I]f it’s under regulatory requirements, then that would fit in my
definition of wear and tear. If it’s over regulatory requirements,
then it something that needs to be addressed in a common sense
fashion.

....

Q. [T]he 1935 lease didn’t give Unocal or anybody else the right to
violate any of the state regulations, state laws, state standards,
did it?

A. It does not.

The above excerpt indicates that Unocal did not have the right to contaminate

VPSB’s Sixteenth Section lands under the 1935 Lease. Moreover, a finding that

Unocal did have the right to contaminate VPSB’s land under the 1935 Lease is

contrary to law. The cause of an obligation must be lawful. La.Civ. Code art. 1966.

“The cause of an obligation is unlawful when the enforcement of the obligation

would produce a result prohibited by law or against public policy.” La.Civ. Code

37
art. 1968. La.Civ.Code art. 1971 (emphasis added) states, “[p]arties are free to

contract for any object that is lawful, possible, and determined or determinable.”

Here, VPSB could not have granted Unocal the right to act unlawfully in the 1935

Lease.

On the jury verdict form, the jury found as follows:

BREACH OF CONTRACT—THE 1935 OGM LEASE

4. Do you find that any of the following entities breached the 1935
Oil, Gas and Mining Lease (1935 OGM Lease) by engaging in
unreasonable or excessive use of the leased property?

a. Union Oil Company of California Yes No ✓

This is in direct contradiction to the jury’s findings in questions 1, 2, and 3

that that Unocal did contaminate VPSB’s Sixteenth Section lands in awarding

damages to VPSB under Act 312 remediation damages. This is also contrary to our

finding above that Unocal failed to restore the land to its previous condition minus

“normal wear and tear,” which can only be reasonably found to be a breach of the

1935 Lease. This inconsistency is patent on the face of the jury verdict form and

finding that Unocal did not breach the 1935 Lease is clearly wrong.

Additionally, regarding the 1994 Lease, Unocal had an even more

burdensome duty to VPSB than under the 1935 lease. Under the 1994 Lease, Unocal

had to be in compliance with all applicable governmental rules, regulations, and

orders. It also had a duty to restore the property to the same or similar condition

existing at commencement of the lease as nearly as practicable.

Unocal operated salt water disposal wells on the Sixteenth Section lands under

both leases. Unocal’s expert, Mr. Barnhill, testified as follows.

Q. Let’s talk about salt water disposal wells. You talked about quite
a few documents, but I want to first right off the bat, you admit
that the problems that Unocal experienced with number 12, the
number 16 and some of the others, that those were serious
problems, right?
38
A. They were.

Q. Breaching of water to the surface from a salt water disposal well
is not the way it’s supposed to work?

A. It is not. You do not want the water to come up -- if it comes up,
you would like it to come up inside the casing. But you certainly
don’t want it to come up outside the casing.

Q. And we know, do we not, that it happened with the number 16
right here?

A. Right. We know we had an issue with the 16.

Q. It happened within the 12 as well, didn’t it?

A. It did. Now, on the 16, we know for a fact it got outside the
conductor. The 12 doesn’t tell us, but it may have.

Q. It said water was communicated to the surface for both of these,
right?

A. It was.

Q. For the number 16, the document said the water was channelling
to the surface outside of the conductor pipe?

A. It did.

Q. It means totally outside of the well, right?

A. It’s outside of the well.

Q. And contaminating the fresh water canal system?

A. Well, it’s going into the canal system. I think part of the debate
is whether that’s a fresh water system or not, but that’s for
somebody else to answer.

Q. Well, the document itself, Let’s pull up the document. The
document itself for number 16 says it was a fresh water canal
system, right?

A. That’s what whoever wrote that document said, yes.

Q. Go to P-1794.002. “It was recently discovered that salt water is
apparently escaping through a hole in the casing.”

A. The conductor casing.

39
Q. “And channelling to the surface outside of the conductor pipe
contaminating the fresh water canal”?

A. Correct.

Q. You’re not a marsh expert, you’re not going to dispute whether
he was correct about that or not?

A. No. Whoever wrote this said a fresh water canal. Whether that’s
true or not, somebody else will come talk to y’all about that.

Q. If that sort of things happens, do you think it's a good idea to
report is to the Department of Natural Resources?

A. If you were actually releasing produced water into a fresh water
system, then that -- you should report that, in my opinion, yes.

Q. You have to acknowledge it could have contaminated the fresh
water supply, correct?

A. Depends on how much we're talking about, but there’s that
potential, yes.

The above excerpt from Barnhill states that salt water from a disposal well is

not supposed to escape the conductor casing and that salt water did, in fact, escape

conductor casings on at least two sites. While Barnhill deferred to other experts as

to whether this saltwater damaged a nearby fresh-water canal, he clearly testified

that the escape of this salt water violates state regulations. Thus, Unocal’s failure to

abide by state regulations dictates that it breached the 1994 Lease.

Despite this testimony, inexplicably, the jury verdict form regarding the 1994

Lease is as follows:

BREACH OF CONTRACT—THE 1994 SURFACE LEASE

7. As to each entity that had an interest in the 1994 Surface Lease,
do you find that it operated unreasonably or excessively and/or
violated the written terms of the lease?

a. Union Oil Company of California Yes No ✓

Again, as was the case with the 1935 Lease, this finding is in direct

contradiction to the jury’s findings in in questions 1, 2, and 3 that that Unocal did

40
contaminate the Sixteenth Section lands and in awarding remediation damages to

VPSB under Act 312. As such, the jury verdict form and finding that Unocal did

not breach the 1994 Lease is clearly wrong. Here, Barnhill, Unocal’s expert, admits

contamination exceeds State Regulations, and the jury found that $3,500.000.00 is

needed to remediate the property up to State Regulations. Thus, it is clearly

inconsistent for the jury to also find no breach of the leases by Unocal.

After the trial court read the jury’s remaining answers to interrogatories aloud

and polled the jury, Unocal’s counsel stated, “Your Honor. We renew our motion

that the Court accept the verdict of the jury as the judgment.” The trial court then

recorded the verdict.

Based on the above, we find that the jury’s failure to find Unocal breached

both the 1935 and 1994 Lease on the jury verdict form is clearly inconsistent with

its finding of fact that Unocal contaminated the Sixteenth Section lands and with its

awarding damages for restoration of that land. “When the answers [to jury

interrogatories] are inconsistent with each other and one or more is likewise

inconsistent with the general verdict, the court shall not direct the entry of judgment

but may return the jury for further consideration of its answers or may order a new

trial.” La. Code Civ.P. Art. 1813(E) (emphasis added).

Despite the inconsistent answers by the jury, the trial court in the present case

followed neither prescribed course but, rather, entered a judgment based on those

inconsistent jury answers to interrogatories. This is legal error.

Louisiana Code of Civil Procedure Article 2164 which states, in pertinent part,

“[t]he appellate court shall render any judgment which is just, legal, and proper upon

the record on appeal.” This court, in Sweet Lake Land & Oil Company, LLC v.

Oleum Operating Company, L.C., 16-429, p. 13 (La.App. 3 Cir. 3/8/17), __ So. 3d

__, __, found the record to fall “woefully short of establishing with any measure of
41
reasonable certainty the amount of damages required to remediate the two areas at

issue.” Accordingly, the Sweet Lake court, citing La. Code Civ.P. art. 2164,

remanded the case to gather more evidence and conduct further proceedings

consistent with the opinion.

We are faced with a similar situation in the case sub judice. In State v. La.

Land & Explor. Co., 17-830 (La.App. 3 Cir. 3/14/18), 241 So.3d 1258, writ denied,

18-476 (La. 9/28/18), 252 So.3d 924, an earlier appeal, this court dealt with the issue

of whether LDNR’s plan was appropriately adopted by the trial court. Chief Judge

Thibodeaux, dissenting, stated the following:

[T]he final plan submitted to the trial court contains far too many
contingencies with no estimate of the cost of the contingencies. In short,
the LDNR plan was incomplete; it repeatedly described more work that
had to be done before remediation would be complete, including at least
two years of monitoring, but the trial court did not require cost estimates
on the additional work. As a result, no one knows, or even has a good
estimate of, how much it will take to remediate the land to the level
required to protect the public; and no one knows how long it will take
to finish the remediation.

Id., at 1269. Thereafter, Chief Judge Thibodeaux went on to point out numerous

issues with LDNR’s adopted plan relative to its incompleteness or uncertainty. Our

purpose of highlighting this dissent is not to relitigate the issue of the appropriateness

of LDNR’s adopted plan. Rather it is to show that there are issues within the record

in this case that can reasonably be deemed incomplete.

VPSB, in Assignments of Error numbers seven and eight, asserts that the trial

court erred in denying its requests for discovery of documents and witnesses, and

motion for new trial based on newly discovered evidence. This alleged evidence

was discovered after the trial in another pending matter against Unocal.

Further, VPSB raises several assignments of error alleging improper jury

charges, improper jury instructions, improper denial of motions for JNOV and new

trial, and, of note, assertions that discovery was not complete due to alleged Unocal
42
improprieties and evidence discovered after trial. While we are not opining as to the

validity to any of the assertions by VPSB, given the length that this case has been

pending, and the complexities of such, to rush to judgment now is not judicially

prudent. Accordingly, we find that the proper course of action in this matter is to

remand the case for a new trial with further proceedings consistent with this opinion.

PLAINTIFFS’ ASSIGNMENTS OF ERROR NUMBERS TWO THROUGH
FOURTEEN

This court’s finding that the jury verdict was inconsistent and the trial court

erroneously entering judgment on that inconsistent verdict was legal error

necessitating a new trial renders the plaintiffs’ assignments of error number two

through fourteen moot given that these assignments detailed allegations of improper

denial of motions for additional discovery and/or a new trial, and for corrections of

alleged errors by the trial court in instruction of the jury.

CONCLUSION

We find that Sixteenth Section lands are a natural resource of this state and

the school boards function as the state in the state’s capacity of trustee for the benefit

of public education. Further, due to classification of the Sixteenth Section lands and

the relationship of the school board and state relative to those lands, we find that the

La.Civ.Code art. 2317 action by the Vermilion Parish School Board is not subject to

prescription under Article 12, § 13 of the Louisiana Constitution. Accordingly, we

find no merit to Union Oil Company of California’s two assignments of error

alleging that the Vermilion Parish School Board had no cause of action and/or its

claims for strict liability were prescribed.

Further, we find merit to the Vermilion Parish School Board’s assigned error

that the trial court committed legal error in entering judgment on an inconsistent jury

verdict. Finally, we find that the most prudent course of action in this matter is to

43
remand the case for a new trial and proceedings consistent with this opinion. Costs

are assessed to Union Oil Company of California.

AFFIRMED, IN PART, REVERSED, IN PART, AND REMANDED.

44

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11294219. Public record. Not legal advice.