Petition for Writ of Certiorari — Frank C. Minvielle, LLC v. Atlantic Refining Co. (No. 09-493)
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“@e CO mm a Le mA a a
Supremes Couit, U.S.
i y (\) FILED
om 09-493 0CT 22 2009
OFFICE OF THE CLERK
In The
Supreme Court of the United States
e
FRANK C. MINVIELLE, LLC,
Petitioner,
versus
ATLANTIC REFINING COMPANY, OXY U.S.A. INC.,
PACIFIC ENTERPRISES OIL CO. (USA), and
MOSAIC GLOBAL OPERATIONS, INC.,
Respondents.
6
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Fifth Circuit
%
PETITION FOR A WRIT OF CERTIORARI
o— 4
ViIcTOR L. MARCELLO
Counsel of Record
TALBOYV, CARMOUCHE & MARCELLO
P.O. Box 759
Gonzales, LA 70707-0759
(225) 644-7777
PATRICIA E. WEEKS
JOHN P. GONZALEZ
WEEKS & GONZALEZ, APLC
400 Mayazine Street, Suite 200
New Orleans, LA 70130-2444
(504) 799-2888
QUESTIONS PRESENTED FOR REVIEW
Does the dismissal without prejudice of a re-
moved action for lack of standing preclude a
second action when the plaintiff acquires stand-
ing after the dismissal?
Does a district court have ancillary or supple-
mental jurisdiction to dismiss a removed action
on grounds of res judicata if the plaintiff does not
otherwise have standing under Article III and
state law?
Is a federal court required to remand an action
removed on grounds of diversity when the plain-
tiff has no standing under Article IJI or state
law?
Should Burford abstention be applied to a sui
generis Louisiana statute governing private
claims for oilfield remediation that: (1) requires
substantial involvement of the state’s natural
resources agency in the judicial decision making
process; and (2) mandates an expedited de novo
appeal that is incompatible with federal appel-
late rules and standards of review?
PARTIES TO THE PROCEEDING
The parties to the proceeding in the Honorable
United States Court of Appeals for the Fifth Circuit
whose judgment is sought to be reviewed are:
Frank C. Minvielle, LLC, Petitioner
Atlantic Refining Company, Respondent
OXY U.S.A. Inc., Respondent
Pacific Enterprises Oil Company (USA),
Respondent
Mosaic Global Operations, Inc., Respondent
111
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED FOR REVIEW...... | i
PARTIES TO THE PROCEEDING ..................... ii
TPR CP COREG ee 0 os vcp tse scceseeenscnvssesscacenes ili
TABLE OF AUTHOR Cie oessesssvccccesscnrsssescesescens V
PETITION FOR WRIT OF CERTIORARI .......... 1
CFR EIT r eee Wee WF ssid uh sag nisetersctnrancvansueaavs l
CONSTITUTIONAL AND STATUTORY PRO-
Fee BO te Been ga tccsdcecciesiccsessss oiseesneees
APPENDIX
Opinion of the U.S. Court of Appeals for the
Fifth Circuit filed July 24, 2009.............0.00... App. 1
Judgment of the U.S. Court of Appeals for the
Fifth Circuit filed July 24, 2009.................... App. 17
Memorandum Ruling on Motions for Sum-
mary Judgment from the U.S.D.C. for the
Western District of Louisiana filed September
i Ee hs vennekereouiceniacs plipaitanasauabest sy yeeat eeu App. 19
Judgment from the U.S.D.C. for the Western
District of Louisiana filed September 6, 2007 ... App. 37
TABLE OF CONTENTS — Continued
Page
Memorandum Ruling on Motion for New Trial
and/or to Amend Judgment from the U.S.D.C.
for the Western District of Louisiana filed
Be iy Se iiiiniatasi ccvenrdsensescoseieenis App. 39
Memorandum Opinion — Ruling on Motion
from the U.S.D.C. for the Western District of
Louisiana filed January 12, 2005.................. App. 50
Memorandum Opinion — Ruling on Motions
from the U.S.D.C. for the Western District of
Louisiana filed October 19, 2004................... App. 61
Judgment from the U.S.D.C. for the Western
District of Louisiana filed October 19, 2004...App. 100
28 U.S.C.A. §1332. Diversity of Citizenship;
amount in controversy; costs
SI os ceca sidiiencensapasicoeaaceagastubaacenier merepenecnuenal App. 112
La. Rev. Stat. Ann. §30:29. Remediation of
oilfield sites and exploration and production
as daedtgetasecksapdcsons capnessecaccsesseiandcaeoasavsuuecteds App. 116
TABLE OF AUTHORITIES
Page
CASES
Abortion Rights Mobilization Inc. v. Baker, 885
ee I SE Gite IE oo bs cv eiés cna ssdcvncduseisns cuxcdecactsece 9
Boone v. Kurtz, 617 F.2d 435 (5th Cir. 1980)............. 11
Brereton v. Bountiful City Corp., 434 F.3d 1213
SN Nr II cud. cs naterseckoniesescavcbslacenenieeesecneeee 13
Burford v. Sun Oil, 319 U.S. 315 (1943)............ passim
Garamendi v. Allstate Ins. Co., 47 F.3d 350 (9th
Se I ross cn evar cavaecoxuy sa eacanoeeanox ie caaeecaronrasaiina vad 17
International Primate Protection League uv.
Administrators of Tulane Education Fund,
ee eee Fe BE Py sa ncy sd tusbacdcndusaamraeyeiionenendtenirolies 9
Jepsen v. Texaco, Inc., 1995 WL 607630 (10th
Re WY ra Se gnccois oiics cactescaseusop aioe ncavsciontasiisats Dae 9
Lejeune Bros., Inc. v. Goodrich Petroleum Co.,
LLC, 961 So.24 ZS (Lia. App. ZO0T)......scsccccessessoese 6,7
Maine Ass'n of Interdep. Neighborhoods uv.
Comm’r, Maine Dep't of Human Servs., 876
ee ee © Re Ge Biv <oeincdnvcivedsuccavasviaseecovnaeionns 9
McCarney v. Ford Motor Co., 657 F.2d 230 (8th
Car. 06) ).......: dias baciatetescapen tune taieneae eae 12
Melahn v. Pennock Ins., Inc., 965 F.2d 1497
oe A SEE ©... os cavacscceusevendutanssiese ct eeaiema een 21
Perry v. Globe Auto Recycling, Inc., 227 F.3d
UP CME NET. DOOD co sspns ness exsscxissiastnmsnsccenviersateaienssnael 7
V1
TABLE OF AUTHORITIES — Continued
Page
Postal Telegraph Cable Co. v. Alabama, 155
cs dls sen nupueunenuedadaes skeen 21
Quackenbush v. Allstate Ins. Co., 517 U.S. 706
PRE antkcnkeneussaasesend Recsdinakidaaneneensecbeatenes 15, 16, 17, 18
Richards v. Jefferson County, 517 U.S. 793
A os ae eee chs e ca caucbasdags acahardexelnauasssceen 12
Royal Ins. Co. of Am. v. Quinn-L Capital Corp.,
OGO0 F.2d 1286 (Gth Cir, LOOZ) ..cccscccccscssscscvsrsceas 10, 11
TAVLOr VU. SlUMMOL, TZS GS. Cl. ZUG .....ccccoscorsccscsvcssssvsobe
Thomas v. Ashley Inv. Co., Docket No. 38839,
(5th Jud. Dist. Ct. for Richland Parish, LA)..........21
Wheeler v. Travelers Inc. Co., 22 F.3d 534 (3d
Aa at oh akg cps guwebavecaucevncsedess Y
STATUTES
28 U.S.C. § 1254 3
Set 5 6 Ok Ae eee nan ee
A Is es aa a dabuiveesaavandaacas uaa
28 U.S.C. §$ 1447(c) .. 9
OE a i ae Re Ll) 19
LA. REV. STAT. ANN. § 30:29 passim
CONSTITUTIONAL PROVISIONS
United States Constitution. Article IT] 3 8
TABLE OF AUTHORITIES — Continued
Page
RULES
go ee CR Me Re Sl) er eer aera Ar
—
OTHER AUTHORITIES
17A CHARLES ALAN WRIGHT & ARTHUR R.
MILLER, FEDERAL PRACTICE AND PROCEDURE
§ 4245 (3d ed.)............ AG , | 21
PETITION FOR WRIT OF CERTIORARI
Petitioner Frank C. Minvielle, LLC respectfully
petitions for a writ of certiorari to review the judg-
ment of the United States Court of Appeals for the
Fifth Circuit entered on July 24, 2009. This judgment
affirmed a dismissal of this case on summary judg-
ment by the United States District Court for the
Western District of Louisiana.
¢
OPINIONS BELOW
Frank C. Minvielle, LLC v. Atlantic Refining Co.,
formerly known as Atlantic Richfield Co.; OXY U.S.A.
Inc., formerly known as Cities Service Oil Co.; Pacific
Enterprises Oil Co. (USA), formerly known as Sabine
Production Co. Inc.; Mostac Global Operations, Inc.,
formerly known as IMC Global Operations Inc.,
United States Court of Appeal for the Fifth Circuit,
Civ. A No. 08-30399, July 24, 2009, not selected for
publication in the Federal Reporter, reprinted in the
appendix, App. 1-18.
Frank C. Minvielle, LLC v. Atlantic Refining Co.,
OXY U.S.A. Inc., Pacific Enterprises Oil Co. (USA),
Mosiac Global Operations, Inc., United States District
Court, Western District of Louisiana, Civ. A No. 05-
1312, Memorandum Ruling on Motion for New Trial
And/Or To Amend Judgment, entered March 24,
2008, not reported in F. Supp. 2d, Unpublished, re-
printed in the appendix, App. 39-49.
Frank C. Minvielle, LLC v. Atlantic Refining Co.,
OXY U.S.A. Inc., Pacific Enterprises Oil Co. (USA),
Mosiac Global Operations, Inc., United States District
Court, Western District of Louisiana, Civ. A No. 05-
1312, Memorandum Ruling on Motions for Summary
Judgment, entered September 6, 2007, not reported
in F. Supp. 2d, Unpublished, reprinted in_ the
appendix, App. 37-38.
Frank C. Minvielle, LLC v. IMC Global Opera-
tions, Inc., United States District Court, Western Dis-
trict of Louisiana, Civ. A No. 03-1908, Memorandum
Opinion — Ruling on Motion, entered January 12,
2005, not reported in F. Supp. 2d, Unpublished,
reprinted in the appendix, App. 50-60.
Frank C. Minvielle, LLC v. IMC Global Opera
tions, Inc., United States District Court, Western Dis-
trict of Louisiana, Civ. A No. 03-1908, Memorandum
Opinion — Ruling on Motions, entered October 19,
2004, reported in F. Supp. 2d at 380 F. Supp. 2d 755,
reprinted in the appendix, App. 100-02.
«
CONSTITUTIONAL AND
STATUTORY PROVISIONS INVOLVED
The judicial Power shall extend to all Cases,
in Law and Equity, arising under this
Constitution, the Laws of the United States,
and Treaties made, or which shall be made,
under their Authority; — to all Cases affecting
Ambassadors, other public Ministers and
Consuls; — to all Cases of admiralty and
maritime Jurisdiction: to Controversies to
which the United States shall be a Party;
to Controversies between two or more States;
—- between a State and Citizens of another
State; — between Citizens of different States;
between Citizens of the same State
claiming Lands under Grants of different
States, and between a State, or the Citizens
thereof, and foreign States, Citizens or
Subjects.
U.S.C. Const. Art. III § 2, el. 1.
28 U.S.C. § 1332, reprinted in the appendix, App.
103-11.
28 U.S.C. § 1441, reprinted in the appendix, App.
112-15.
——— @ ——————EEE
JURISDICTIONAL STATEMENT
The judgment of the Court of Appeals was
entered on July 24, 2009. The jurisdiction of this
Court is invoked under 28 U.S.C. § 1254.
STATEMENT OF THE CASE
Frank Minvielle, LLC (“Minvielle”) owns prop-
erty located in Iberia Parish, Louisiana in the Loisel
Oil and Gas Field. Minvielle alleges that its property
(hereinafter “Property”) was polluted by the defen
dants’ oil and gas operations
Minvielle’s ancestor in title, Juliet Delcambre,
entered into an Oil, Gas, and Mineral Lease with
defendant Atlantic Refining Company (“ARCO”) in
1961 (“1961 Lease”). The oil and gas operations
alleged to have damaged the plaintiff’s property were
conducted under this 1961 Lease. Defendants IMC
(Mosaic), Oxy, and Pacific are successors-in-interest
to ARCO by means of sub-leases or assignments of
the 1961 Lease.
Juliet Delcambre died in 1988. Her ownership of
the Property passed by succession to her daughter,
Juliet D. Cowan, and her grandchildren, Eleanor
Cowan Brown, Finis Ewing Cowan, III, Tomas Disney
Cowan, Virginia Cowan Richards, and Kathleen
Cowan Shanfield (collectively, “the Cowans”). Juliet
Cowan's husband, Finis, Jr., is a former federal
district judge who handles the family’s legal business.
In August, 1998, the Cowans sold the Property to
plaintiff Frank C. Minvielle, LLC. The act of sale to
plaintiff did not contain a specific assignment of the
right to sue for remediation damages.
Minvielle first filed suit for remediation damages
in 2003 (“Minvielle I”). The suit was removed to
federal court and thereafter dismissed without preju-
dice for lack of standing. The district court held that
for Minvielle to have standing to sue for pre-
acquisition property damages under Louisiana law, it
must have an assignment of the Cowans’ rights to sue
because: (1) the Property was damaged during the
period of the Cowans’ ownership; and, (2) under
Louisiana law, the right to sue for property damage is
a personal right that is not transferred upon transfer
of the property absent a specific assignment in the
Act of Sale. During the pendency of Minvielle 1, Judge
Cowan, seeking to protect his family from suit, agreed
to obtain the required assignment from his family
members. However, despite the best efforts of Judge
Cowan and plaintiff, the required document was not
signed until after Minvielle ] had been dismissed. The
dismissal entered in Minvielle I was without preju-
dice.
After obtaining the completed assignment, plain-
tiff re-filed its suit in the same state court in which
Minvielle I was filed. This second suit (“Minvielle I”)
was promptly removed and dismissed for lack of
standing. Minvielle appealed. At oral argument be-
fore the Fifth Circuit, plaintiff challenged federal sub-
ject matter jurisdiction on grounds of lack of standing
and Burford abstention. The Fifth Circuit denied
these jurisdictional challenges and affirmed the dis-
trict court, finding that the federal district court had
ancillary jurisdiction over Minvielle II] and that the
district court’s Minvielle I decision precluded Min-
vielle from arguing in Minvielle II that it has stand-
ing to sue for environmental damages. The Fifth
Circuit rejected Minvielle’s Burford abstention ar
gu-
ments as “inapplicable” and untimely
6
REASONS FOR GRANTING THE WRIT
I. Lack of standing in Minvielle I does not
preclude a suit on the same grounds be-
cause Minvielle acquired standing after
Minvielle I was dismissed without preju-
dice.
An amendment to the Act of Sale between Juliet
Delcambre and Minvielle was signed by the Cowans
and Minvielle after the judgment was entered dis-
missing Minvielle I without prejudice. In this amend-
ment, the Cowans recited that they intended in the
original sale to transfer their right to sue to Min-
vielle. Under Louisiana law, the amendment to the
Act of Sale was sufficient to confer standing on
Minvielle to sue for environtmnental damage to its
property. Lejeune Bros., Inc. v. Goodrich Petroleum
Co., LLC, 981 So. 2d 23, 29-30 (La. App. 2007) (“It is
established that this right can be transferred to the
succeeding property owner, but a specific assignment
of this right is required to accomplish such a
transfer.”).’
' The Fifth Circuit disingenuously seeks to create Louisiana
law out of whole cloth by seizing upon an inartfully drafted
sentence from the Louisiana Third Circuit’s LeJeune decision,
which states, “Two federal cases have expounded on the affect of
the Hopewell decision upon Louisiana’s longstanding rule that
the right to damages conferred by a lease is a personal right that
must be specifically assigned at the time of sale.” Leyeune Bros.,
Inc. v. Goodrich Petroleum Co., LLC, 981 So. 2d 23, 31 (La. App.
2007). The Fifth Circuit points to this sentence as evidence that
a landowners’ right to sue cannot be assigned after a property
(Continued on following page)
7
This Court has yet to decide whether an assignee
who has his own claims dismissed for lack of standing
is precluded from establishing standing to bring a
new action on claims he later acquires from a third
party. In apparently the only Circuit decision directly
on point, the Seventh Circuit in Perry v. Globe Auto
Recycling, Inc., 227 F.3d 950 (7th Cir. 2000), held that
an assignee who lost his own case for lack of standing
was not precluded from bringing a new action on
claims he later acquired.
The facts of the present case are even stronger
than the facts before the court in Perry. Perry’s prior
suit was dismissed on the merits with prejudice,
whereas Minuvielle I was dismissed without prejudice
for lack of subject matter jurisdiction. Federal Rule of
Civil Procedure 41(b) provides that a dismissal for
lack of jurisdiction is not an adjudication on the
sale is completed. There is no Louisiana case that has held that
the right to sue for property damages cannot be assigned to the
vendee after the sale. Reading the quoted sentence from the
LeJeune opinion in context, the Third Circuit was merely allud-
ing to the fact that property sales containing only a traditional
transfer of warranties do not convey the personal nght to sue for
damages. No court in Louisiana has ever decided that a post-
sale assignment of the right to sue for property damages is with-
out effect. The Louisiana Civil Code provides that “All rights
may be assigned with the exception of those pertaining to obli-
gations that are strictly personal.” The right to sue for property
damages is a personal right, not a “strictly personal” right.
Lastly, the quoted sentence from the LeJeune decision refers
only to rights to damages conferred by a lease. The amendment
to the Act of Sale at tssue here purports to transfer both con-
tractual and tort rights to sue
8
merits. Fed. R. Civ. Proc. R. 41(b). The Fifth Circuit
acknowledges that the judgment in Minvielle I was
not a judgment on the merits. Yet, in Minvielle I, the
district court and Fifth Circuit treated the dismissal
of Minvielle I as if it were a dismissal on the merits.
II. The district court did not have ancillary or
supplemental jurisdiction to dismiss this
removed action on grounds of res judicata
because the district court determined that
plaintiff did not have standing under Arti-
cle III or state law.
This case was removed on grounds of diversity
removal jurisdiction. The district court dismissed for
lack of subject matter jurisdiction based on Min-
vielle’s purported lack of standing.’ At oral argument
in the Fifth Circuit, Minvielle asserted that the dis-
trict court lacked subject matter jurisdiction and
requested that the case be remanded to state court.
The Fifth Circuit denied Minvielle’s request, finding
that the district court had “ancillary jurisdiction.”
The propriety of removal turns upon the original
jurisdiction of the district court. If the district court
* Minvielle IT, 05-cev-1312, Rec. Doc. 87 at 13. The district
court in Minvielle I] stated: “It is well settled that unless a
plaintiff has standing, a federal district court lacks subjcci mat-
ter jurisdiction to address the merits of the case. In the absence
of standing, there is no “case or controversy” between the
plaintiff and defendant which serves as the basis for the exercise
of judicial power under Article III of the constitution.” Jd. at 8.
9
lacked subject matter jurisdiction, the present case
should have been remanded to state court: “If at any
time before final judgment it appears that the district
court lacks subject matter jurisdiction, the case shall
be remanded.” 28 U.S.C. § 1447(c)(emphasis added). A
district court does not have the discretion to dismiss a
removed case for lack of subject matter jurisdiction.
International Primate Protection League v.
Administrators of Tulane Educational Fund, 500 U.S.
72, 89 (1991) (noting that literal words of § 1447(c)
permit district court no discretion to dismiss). In
other words, when a district court lacks subject mat-
ter jurisdiction, it must remand even in instances
where it believes the case will likely be dismissed by
the state court.’ Because the district court determined
that it lacked standing in Minvielle IJ, it was con-
stitutionally required to remand. Instead, it dis-
missed the case.
* The jurisprudence is replete with cases holding that the
lack of standing in a removed case is a jurisdictional defect that
requires remand. Wheeler v. Travelers Ins. Co., 22 F.3d 534, 537
(8d Cir. 1994)(“if a district court finds that a plaintiff in a
removed case does not have standing, it will remand the case
to state court”); Abortion Rights Mobilization Inc. v. Baker, 885
F.2d 1020, 1023 (2d Cir. 1989)(lack of standing to bring a suit
divests the district court of jurisdiction); Maine Ass’n of Interdep.
Neighborhoods v. Comm’r, Maine Dep't of Human Servs., 876
F.2d 1051, 1053 (1st Cir. 1989)(holding that determination of no
standing is a determination of no subject matter jurisdiction
requiring remand); see also Jepsen v. Texaco, Inc., 1995 WL
607630, 2 (10th Cir. 1995).
10
In an effort to justify the district court’s failure to
remand, the Fifth Circuit re-framed the jurisdictional
issue as one involving an attempt by Minvielle to
collaterally attack an adverse judgment. The Fifth
Circuit reasoned that “[i]f the Minvielle I court should
have remanded rather than granted summary judg¢g-
ment, its judgment could have been reversed on ap-
peal, but Minvielle chose not to appeal. Accordingly,
the judgment became final and is now insulated from
Minvielle’s collateral attack.” Ship Op. at 6; App. at 6.
However, the adverse judgment against Minvielle in
Minvielle I was a judgment adverse to his standing to
bring his own claim, not to his standing to bring the
Cowans’ claim that is alleged in Minvielle IJ. Further,
the Fifth Circuit acknowledges that Minvielle I was
dismissed without prejudice. In deciding not to appeal
Minvielle I, Minvielle was entitled to rely on the fact
that a dismissal without prejudice is, indeed, a dis-
missal without prejudice. Minvielle could not have
reasonably foreseen that a dismissal of its own claims
without prejudice would later result in a dismissal of
the Cowans’ claims.
Despite its acknowledgment that Minvielle’s lack
of standing in Minvielle 11 would ordinarily deprive
the court of subject matter jurisdiction, the Fifth Cir-
cuit determined that the district court could nonethe-
less exercise its “ancillary jurisdiction” in Minvielle II
“to secure or preserve the fruits and advantages of a
judgment or decree rendered” in Minvielle I. Slip Op.
at 7; App. at 7 (quoting Royal Ins. Co. of Am. v.
Quinn-L Capital Corp., 960 F.2d 1286, 1292 (Sth Cir.
11
1992)). However, these “fruits and advantages” are
limited to the district court’s determination that
Minvielle did not have standing to assert its own
claim. The merits of the Cowans’ claims were not
determined in Minvielle J, nor was Minvielle’s right to
assert the Cowans’ claims.
The Fifth Circuit, again relying on its own prece-
dent in Royal Insurance, concluded that ancillary
jurisdiction was appropriate because “Minvielle’s sec-
ond suit, if successful, would nullify the district court
judgment in Minvielle I.” This statement is plainly
wrongheaded. A judgment finding that Minvielle has
standing to bring the Cowans’ claims cannot under
any reasonable scenario nullify a judgment finding
that Minvielle does not have standing to bring its own
claims.
Ill. The Fifth Circuit misapplied the doctrine
of res judicata.
Realizing that a lack of standing would require
remand, the Fifth Circuit was forced to resort to res
judicata as the linchpin of its decision to affirm the
district court. However, res judicata in Minvielle II
cannot bar a claim that was never asserted in
Minvielle I. The Fifth Circuit notes that “‘a second
complaint cannot command a second consideration of
the same jurisdictional claims.’” Slip Op. at 10; App.
at LO (quoting Boone v. Kurtz, 617 F.2d 435, 436 (5th
Cir. 1980)). However, the jurisdictional claim asserted
12
by Minvielle in Minvielle I] is different from the juris-
dictional claim asserted in Minvielle J. In Minvielle J,
Minvielle claimed standing to assert its own claims,
whereas in Minvielle I], it seeks to assert the Cowans’
claims.
A court’s “decision to dismiss based on any of the
doctrines under the justiciability heading [such as
standing] should preclude relitigation of the same
justiciability issue but not a second suit on the same
claim even if arising out of the identical set of facts.”
McCarney v. Ford Motor Co., 657 F.2d 230, 233-34 (8th
Cir. 1981). In the present case, the Fifth Circuit cor-
rectly held that res judicata precludes relitigation of
Minvielle’s standing to bring its own claim. However,
it incorrectly concluded that Minvielte’s standing to
assert the Cowans’ claim was also precluded.
Last year, this Court observed that the broad ap-
plication of claim and issue preclusion to nonparties
“runs up against the ‘deep rooted historic tradition
that everyone should have his own day in court.’”
Taylor v. Sturgell, 128 S. Ct. 2161, 2171 (2008)(quot-
ing Richards v. Jefferson County, 517 U.S. 793, 798
(1996)). The Cowans have not. had their day in court
to assert their claims. The Cowans were not parties
in Minvielle I. The district court in Minvielle I held
that the Cowans as former owners of the Property,
not Minvielle, had the right under Louisiana law to
seek remediation damages. It stands logic on its head
to conclude, as the Fifth Circuit did, that Minvielle I
can now be used to defeat the very claim that the
13
district court in Minvielle J found to be actionable but
unasserted.
It is of critical importance to the Cowans that
they have their day in court. The Cowans have as-
signed their rights to Minvielle. If Minvielle is denied
the right to seek remediation by asserting these
assigned rights against the defendants, the Cowans
will be at risk of exposure to remediation claims by
Minvielle. By dismissing Minvielle’s claims in the
present case, the Fifth Circuit has effectively denied
the Cowans their day in court by means of an overly
broad application of the doctrine of res judicata. The
merits of the Cowans’ claims will have been disposed
of by dint of jurisdictional acrobatics. Muinvielle |
should not be allowed to serve as a de facto deter-
mination of the merits of the Cowans’ claims. The
district court concluded in Minvielle I that it lacked
standing and was thereby prohibited from entering a
judgement on the merits. Brereton v. Bountiful City
Corp., 434 F.3d 1213, 1218 (10th Cir. 2006).
IV. Burford abstention applies to the Louisi-
ana Oilfield Remediation Act.
For the first time on appeal, Minvielle asserted
that Burford abstention applies and that, as a conse-
quence, this case should be remanded. See Burford v.
Sun Oil, 319 U.S. 315 (1943). Minvielle’s Burford ab-
stention claim is based on a 2006 Louisiana statute
adopted specifically to regulate private claims for
remediation of the State’s innumerable oilfield sites
14
See generally LA. REV. Stat. ANN. § 30:29-:29.1 (2008)
(hereinafter “Louisiana Oilfield Remediation Act”).
The Louisiana Oilfield Remediation Act is
structured so that the state oilfield environmental
agency and the courts are working partners with
regard to the resolution of private claims for oilfield
remediation damages. The statute requires that any
private lawsuit seeking damages for remediation of
an oilfield site be served on the Louisiana Depart-
ment of Natural Resources (“LDNR”), the agency
charged with the administration of state regulations
concerning oil and gas sites, including the environ-
mental regulations that pertain to those sites. The
LDNR has a right to intervene in the case after it is
served. After the judge or jury determines the respon-
sible party or parties and awards damages, the case
is referred to the LDNR for the determination of
a “feasible plan” to remediate the property. This
determination is made after an agency hearing. The
case is then referred back to the district court. The
district court must adopt the feasible plan approved
by the LDNR, unless a party proves that another
plan is more feasible. After a final feasible plan is
determined, the court orders that the portion of the
damages judgment needed to fund the feasible plan
be deposited in the registry of the court. The money
deposited in the registry of the court can only be used
to fund the implementation of the feasible plan. Any
unused funds are returned to the oil company de-
fendants. Any appeal of the judgment of the trial
court regarding the feasible plan is required to be
15
handled on an expedited basis by the appellate court.
The statute mandates an appellate de novo review of
the record. Once the judgment becomes final, the
district court and the LDNR jointly supervise the
implementation of the feasible plan.
This is a classic case for Burford-type abstention.
In Burford, the plaintiff Sun Oil attacked an oilfield
permit granted to Burford by the Texas Railroad
Commission. This Court held that abstention was
proper because under Texas law, “the Texas courts are
working partners with the Railroad Commission in
the business of creating a regulatory system for the
oil industry.” Jd. at 326 (emphasis added). This is
identical to the situation presented here. The state
district and appellate courts in Louisiana are now
“working partners” with the Louisiana Department of
Natural Resources (““LDNR”) in the resolution of
private oilfield remediation claims.
A. Burford/Quackenbush require that the
case involve a claim that is equitable in
nature.
The powers accorded the district courts and
LDNR in developing and implementing the “feasible
plan” required by the Louisiana Oilfield Remediation
Act are essentially equitable in nature. A plaintiff in a
Louisiana oilfield remediation case no longer has the
option to pursue a “damages only” remedy under
Louisiana law. The equitable nature of the relief
16
sought by the plaintiff —- the determination and imple-
mentation of the “feasible plan” — supports Burford
abstention. Quackenbush v. Allstate Ins. Co., 517 U.S.
706 (1996).
While state regulation serves as a minimum re-
quirement in the formulation of the feasible plan
under the Louisiana Oilfield Remediation Act, the
trial court is accorded considerable discretion to
depart upward from the state regulation in adopting
the final feasible plan: “The court shall adopt the plan
approved by the department, unless a party proves by
a preponderance of the evidence that another plan is
a more feasible plan to adequately protect the envi-
ronment and the public health, safety, and welfare.”
LA. REv. STAT. ANN. § 30:29(C)(5) (2008). Further, the
trial court is accorded considerable discretion in the
implementation and oversight of the final feasible
plan.’
* The Act provides:
The court shall retain jurisdiction over the funds
deposited and the party or parties admitting respon-
sibility or the party or parties found legally
responsible by the court until such time as the
evaluation or remediation is completed. If the court
finds the amount of the initial deposit insufficient to
complete the evaluation or remediation, the court
shall, on the motion of any party or on its own motion,
order the party or parties admitting responsibility or
found legally responsible by the court to deposit
additional funds into the registry of the court. Upon
completion of the evaluation or remediation, the court
shall order any funds remaining in the registry of the
(Continued on following page)
17
The remediation damages remedy that existed in
Louisiana law during the pendency of Minvielle I -
and prior to the passage of Act 312 of 2006 — has, to a
significant degree, been replaced by a remedy that is
similar to mandatory injunctive and declaratory re-
lief. Accordingly, the present case is not a traditional
damages case where the only relief sought is non-
discretionary. Rather, there is considerable discretion
accorded the trial court in awarding the relief sought.
Thus, the “discretionary relief” requirement of Bur-
ford abstention is satisfied. Quackenbush, supra, 517
U.S. at 730.
Burford abstention has been denied in cases
where the plaintiff’s “sole” remedy is damages. I/d.;
Garamendi v. Allstate Ins. Co., 47 F.3d 350, 354 (9th
Cir. 1995). The remedy in the case sub judice is not
solely damages and is substantially equitable and
discretionary in nature. In fact, the trial judge’s adop-
tion of a particularly robust remediation plan might, in
some circumstances, swallow entirely the plaintiff’s
court to be returned to the depositor. The department
and the parties shall notify the court of the completion of
any evaluation or remediation
LA. REV. STAT. ANN. § 30:29(D\(4) (2008).
It continues: “The court and the department shall retain
oversight to ensure compliance with the plan. The party or
parties admitting responsibility or the party or parties found
legally responsible by the court shall file progress reports
periodically as the court or the department may require.” Jd
§ 30:29(F)
18
damage award. See generally LA. REv. STAT. ANN.
§ 30.29.
B. Louisiana’s strong interest in uniform
application of environmental standards
outweighs federal interest in having
diversity cases tried in federal court,
and exercise of federal jurisdiction
would potentially disrupt state statu-
tory scheme.
This Court has required federal courts to abstain
under Burford when the State’s interests in “main-
taining ‘uniformity in the treatment of an ‘essentially
local problem’ and retaining local control over ‘diffi-
cult questions of state law bearing on policy problems
of substantial public import’” outweigh “the strong
federal interest in having certain classes of cases, and
certain federal rights, adjudicated in federal court.”
Quackenbush, supra, 517 U.S. at 728. Louisiana’s in-
terest in maintaining uniformity in the application of
remediation standards in oilfield contamination cases
is reflected in the requirement that Louisiana envi-
ronmental standards he applied in the development
and implementation of the “feasible plan” adopted
pursuant the Louisiana Oilfield Remediation Act:
“Feasible Plan” means the most reasonable
plan which addresses environmental damage
in conformity with the requirements of Louisi-
ana Constitution Article [X, Section 1 to pro-
tect the environment, public health, safety
and welfare, and ts in compliance with the
19
specific relevant and applicable standards
and regulations promulgated by a state agency
in accordance with the Administrative Pro-
cedure Act in effect at the time of clean up to
remediate contamination resulting from oil-
field or exploration and production opera-
tions or waste.
LA. Rev. Stat. ANN. § 30:29(1)(3) (2008) (emphasis
added). The regulations adopted pursuant to the
Louisiana Oilfield Remediation Act are set forth in
Chapter 6 of Statewide Order 29-B. See generally LA.
ADMIN. CODE tit. 43, § 101. These regulations require
the application of the environmental standards set
forth in Statewide Order 29-B in the development of
feasible plans under the Louisiana Oilfield Remedi-
ation Act. See id. § 607.
The principal reasons for the enactment of the
Louisiana Oilfield Remediation Act were: (1) to
ensure that s/a/e environmental regulations are uni-
formly applied to the remediation of legacy oilfield
sites in Louisiana; and, (2) to ensure that the state
constitutional mandate to protect the public safety
and health is carried out. LA. Rev. Star. ANN.
§ 30:29(A), (C3) & (13) (2008). The “feasible plan”
mandated by the statute is the plan that both sat-
isfies state regulatory standards and “protect{s| the
environment, public health, safety and welfare” of
Louisiana citizens. /d. § 30:29(1\(3).
Additionally, and similar to the Texas statutory
permitting scheme in Burford, the Louisiana Oilfield
Remediation Act gives Louisiana a unified scheme for
20
review of its administrative orders rendered in
oilfield remediation cases. State district court review
of the LDNR’s orders relating to the feasible plan is
governed by a special statutory provision set forth in
the Act. Jd. § 30:29(C)(5). No final judgment can be
rendered in a remediation case without first sub-
mitting the case to the agency for review after the
trial on the merits in the district court. Jd. § 30:29(C).
Further, the normal appeals process in state court is
substantially modified in that the state intermediate
appellate court must conduct a de novo expedited
appeal and is empowered to render its own version
of the feasible plan if it deems the plans developed
by the court and the LDNR to be deficient. /d.
§ 30:29(C)(6)(b) & (c).
This type of appellate treatment is unavailable in
the federal system. Federal intervention in Louisiana’s
Louisiana Oilfield Remediation Act cases on grounds
of diversity would have a disruptive effect on the
Louisiana statutory scheme and on the state’s efforts
to establish a coherent policy on a matter of
substantial public concern.
C. State participation as an intervening
party would cause further disruption.
The Louisiana Oilfield Remediation Act accords
the State the right to intervene in this proceeding.
LA. Rev. Stat. ANN. § 30:29(B\2) (2008). The State
has the option to intervene before the merits trial,
during the agency proceeding (to seek a declaratory
21
ruling by the judge), or prior to the post-trial con-
tradictory hearings wherein the court determines the
final remediation plan. Also, the State might inter-
vene at the conclusion of the case to seek its fees and
costs. Id. § 30:29(E)(2). In other words, the State can
intervene at any time. If the State does decide to
intervene, the federal district court would lose its
jurisdiction because a state cannot be a citizen of
itself for diversity purposes. Postal Telegraph Cable
Co. v. Alabama, 155 U.S. 482 (1894). It would
constitute a waste of judicial resources for the district
court to hear a substantial part of a remediation case
only to find that it cannot complete the case due to
the State’s decision to intervene at the latter stages of
the proceeding.”
D. Abstention should result in remand.
If this Court determines that Burford abstention
applies, this case must be remanded to state court.
Melahn v. Pennock Ins., Inc., 965 F.2d 1497, 1501 (8th
Cir. 1992); see also 17A CHARLES ALAN WRIGHT &
* This risk of a late intervention by the State is not merely
theoretical. For instance, the case captioned Thomas v. Ashley
Inv. Co., Docket No. 38839, (5th Jud. Dist. Ct. for Richland
Parish, LA), was filed on November 17, 2005. The State
intervened recently, after 55 depositions had been taken and the
case had been pending for three and a half years.
22
ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE
§ 4245 (3d ed.).
CONCLUSION
Minvielle had standing in Minvielle II to assert
the claims of the Cowans that were assigned to Min-
vielle after Minvielle I was dismissed without preju-
dice. The district court in Minvielle I determined that
under Louisiana law, the Cowans, not Minvielle, had
the mght to claim remediation damages. Therefore,
the judgment in Minvielle I cannot logically preclude
the assertion of the Cowans’ claims by Minvielle in
Minvtelle 11.
Further, if Minvielle had no standing to assert
the claims of the Cowans, the district court did not
have jurisdiction to dismiss the case. A lack of
justiciability requires remand even in cases where it
is likely that the state court on remand will dismiss
the case. The Fifth Circuit’s reliance on the doctrine
of ancillary jurisdiction was misplaced, as the fruits
and advantages of the district court’s judgment in
Minvielle I do not include the preclusion of claims
that were never asserted in Minvielle I.
23
Finally, this case should have been remanded on
the basis of Burford abstention.
Respectfully submitted,
VicToR L. MARCELLO
Counsel of Record
TALBOT, CARMOUCHE & MARCELLO
P.O. Box 759
Gonzales, LA 70707-0759
(225) 644-7777
PATRICIA E. WEEKS
JOHN P. GONZALEZ
WEEKS & GONZALEZ, APLC
400 Magazine Street, Suite 200
New Orleans, LA 70130-2444
(504) 799-2888
App. 1
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 08-30399
FRANK C MINVIELLE LLC
Plaintiff-Appellant
v.
ATLANTIC REFINING CO, formerly known as
Atlantic Richfield Co; OXY USA INC, formerly known
as Cities Service Oil Co; PACIFIC ENTERPRISES
OIL CO (USA), formerly known as Sabine Production
Co Inc; MOSAIC GLOBAL OPERATIONS INC,
formerly known as IMC Global Operations Inc
Defendants-Appellees
Appeal from the United States District Court
for the Western Distmct of Louisiana
USDC No. 6:05-cev-1312
(Filed Jul. 24, 2009)
Before JOLLY, PRADO, and SOUTHWICK, Circuit
Judges.
PER CURIAM:*
* Pursuant to 5TH CiR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
(Continued on following page)
App. 2
Plaintiff-Appellant Frank C. Minvielle, LLC
(“Minvielle”) appeals the district court’s order award-
ing summary judgment to Defendants-Appellees
Atlantic Refining Co. (“Atlantic Refining”), OXY USA,
Inc. (“Oxy”), Pacific Enterprises Oil Co. (“Pacific Oil”),
and Mosaic Global Operations, Inc. (“Mosaic”) (collec-
tively “Appellees”) on the ground of res judicata. For
the following reasons, we AFFIRM.
I. FACTUAL AND PROCEDURAL BACK-
GROUND
A. Factual Background
This appeal arises from the second of two
lawsuits in which Minvielle has asserted materially
identical claims for alleged environmental damage
stemming from a nearly fifty-year-old oil lease.
In September 1961, Juliet Bourgeois Delcambre
(“Delcambre”) entered into an oil, gas, and mineral
lease (the “1961 lease”) with Atlantic Refining to
explore and drill for oil on land that she owned in
Ioeria Parish, Louisiana (“the property”). Pursuant to
the lease, a well was drilled on the property, and
various companies operated the well according to the
terms of an Operating Agreement between Atlantic
Refining and the other companies. Appellees in this
case are former parties to or the assignees and/or
except under the limited circumstances set forth in STH Cir. R.
47.5.4
App. 3
successors-in- interest of the parties to _ this
agreement.
In 1974, Petro-Lewis Funds, Inc. (“Petro-Lewis”)
purchased an interest in the property and became the
operator of the well. In December 1977, it plugged
and abandoned the well and the lease expired. When
Delcambre died over a decade later, her daughter and
grandchildren (“the Cowans”) inherited the property.
In 1998, the Cowans sold the property to Minvielle &
Segura, LLC by an Act of Cash Sale, retaining a one-
half mineral interest. In November 2001, Frank C.
Minvielle acquired full ownership of Minvielle &
Segura, LLC and changed its name to Frank C.
Minvielle, LLC.
B. Minvielle I
In August 2003, Minvielle sued, among others,
IMC Global Operations, Inc. (“IMC”) — Petro-Lewis’s
successor and Mosaic’s predecessor — in Louisiana
state court, bringing both contract and tort claims for
alleged contamination of the property. The defen-
dants removed to the Western District of Louisiana
on the basis of diversity, see Frank C. Minvielle,
L.L.C. v. IMC Global Operations, Inc. (Minvtelle 1),
380 F. Supp. 2d 755 (W.D. La. 2004), after which all
remaining defendants except IMC were dismissed.
IMC filed various motions to dismiss, including one
under Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim, which the district court
converted to a motion for summary judgment. The
App. 4
court granted the motion. As to the contract claims,
the court explained that under Louisiana law the
right to sue for the property damage is a personal
right, and it found both that Minvielle did not receive
an assignment of the right to sue for prior damages
from the Cowans at the time of the sale and that the
1961 lease did not create a stipulation pour autrie in
Minvielle’s favor. Jd. at 766, 770. It therefore held
that Minvielle lacked standing to bring the contract
claims against IMC. Id. at 770. As to the tort claims,
the court noted that under Louisiana law, “the owner
of land at the time of the alleged damages is the
person with the real and actual interest to assert the
claim for damages to the land,” id. at 770, and that
Minvielle sought damages arising from operations
that occurred prior to its purchase of the property, !d.
at 772. Accordingly, it found that Minvielle lacked
standing to bring the tort claims against IMC.’ Jd.
Minvielle moved for reconsideration, arguing
that at the time of the 1998 Act of Cash Sale, the
Cowans intended to convey all rights to Minvielle &
Segura, including the right to sue for past damages to
the property. In support, Minvielle asserted that it
had procured an amendment to the Act of Cash Sale
|
On the same day that the court granted [MC's motion for
summary judgment, IMC filed a third-party complaint against
Atlantic Refining, Oxy, and Pacific Oil, among others, asserting
claims for contribution on the ground that each was a former
party to or successor-in-interest of a party to the Operating
Agreement. Because of the court’s decision in its favor, however,
IMC never served this complaint
App. 5
reflecting this purported agreement, and it informed
the court that it would file the document with the
court. Minvielle, however, never filed the purported
amendment. On January 12, 2005, the district court
denied Minvielle’s motion for reconsideration, reit-
erating its previous ruling and noting that Minvielle
had neither amended the Act of Cash Sale nor
demonstrated that a Louisiana court would allow
such an amendment. Minvielle did not appeal the
judgment, and it became final.
C. Minvielle II
In June 2005, Minvielle again filed suit in
Louisiana state court, alleging claims identical to
those in Minvielle I, against, among others, Atlantic
Refining — an original party to the 1961 lease — and
IMC, Oxy, and Pacific Oil, each of which it concedes is
a successor-in-interest by sublease or assignment of
the 1961 lease. Mosaic was substituted for LMC, and
it removed the case to the Western District of
Louisiana on the basis of diversity. See Frank C.
Minvielle, LLC v. Atl. Ref. Co. (Minvielle II), Civil
Action No. 05-1312, 2007 WL 2668715 (W.D. La. Sept.
6, 2007). Minvielle expressly stated in its complaint
that the claims in this suit were identical to those in
Minvielle I and further agreed with the district court
that “there’s nobody who sits at the table in
[Minvielle II| that didn’t sit [at] the table [in
Minvielle 1}.” However, Minvielle argued that it now
had standing to assert its claims because, after the
final judgment in Minvielle J. it executed an
bn)
App. 6
amendment to the Act of Cash Sale — the same
purported amendment discussed in Minvielle I
which provided that the parties to that agreement
intended to assign to Minvielle the right to sue for
previous damage to the property. Notably, the alleged
amendment, by its very terms, did not amend the Act
of Cash Sale or confer any new rights upon Minvielle;
rather, as Minvielle acknowledged, it purported only
to clarify the original intentions of the parties to the
agreement. Minvielle nonetheless argued that the
amendment gave it standing to sue.
Appellees moved to dismiss on the ground of res
judicata, arguing that Minvielle could not relitigate
the question of its standing to assert contract and tort
claims against them, as this was the exact same issue
the court decided in Minvielle I. The district court
converted the motion into one for summary judgment
and granted it. In so doing, the district court
explained that “[t|he claims asserted are identical to
those asserted in Minvielle I, there is commonality of
parties, and the court’s jurisdictional ruling in
Minvielle I is a final and valid judgment.” Jd. at *7." It
* Under Louisiana law, an actual amendment attempting to
change the original agreement would have been ineffective. See
Lejuene Bros. v. Goodrich Petroleum Co., 981 So. 2d 23, 31 (La.
Ct. App. 2007) (noting “Louisiana’s longstanding rule that the
right to damages conferred by a lease is a personal right that
must be specifically assigned at the time of sale”)
~ Although the district court’s opimon in Minvielle II
analyzes only the question of Minvielle I's res judicata effect on
(Continued on following page)
App. 7
further noted that the amendment to the Act of Cash
Sale — which by its terms did not convey new rights
and which even Minvielle’s counsel acknowledged
was merely an “act of correction” and “clarification” —
did not cure the res judicata effect of the Minvielle 1
judgment. See id. at *6.
II. JURISDICTION AND STANDARD OF
REVIEW
At oral argument, Minvielle challenged, for the
first time, the subject-matter jurisdiction of the
district court in Minvielle J and IJ and of this court in
this appeal, and we ordered supplemental briefing.
Having reviewed the briefing, we find Minvielle’s
contentions to lack merit.
As a preliminary matter, although the district
court in Minvielle I certainly had jurisdiction to
determine its own jurisdiction, see United States v.
Minvielle 11, the court appears to have ruled for Appellees on two
grounds:
Accordingly, defendants’ motions for summary judg-
ment based on res judicata are GRANTED. Because
the Minvielle I finding that plaintiff did not have
standing has res judicata effect, the court in the
instant case does not have subject matter jurisdiction
Minvielle IT, 2007 WI, 2668715, at *7. Given that the district
court addressed the entirety of its opinion to the question of res
judicata and expressly granted Appellees’ motion on that
ground, we agree with Appellees that the court's single mention
of jurisdiction in its concluding statement can be disregarded as
erroneous and unnecessary dicta.
App. 8
Ruiz, 536 U.S. 622, 628 (2002); Habetz ex rel. Habetz
v. La. High Sch. Athletic Ass’n, 915 F.2d 164, 167 (5th
Cir. 1990), Minvielle challenges the propriety of
removal in Minvielle I, arguing that the case should
have been remanded to state court. The Supreme
Court has explained, however, that “[a] party that has
had an opportunity to litigate the question of subject-
matter jurisdiction may not... reopen that question
in a collateral attack upon an adverse judgment. It
has long been the rule that principles of res judicata
apply to jurisdictional determinations — both subject
matter and personal.” Ins. Corp. of Ir. v. Compagnie
des Bauxites de Guinee, 456 U.S. 694, 702 n.9 (1982);
cf. Royal Ins. Co. of Am. v. Quinn-L Capital Corp.,
960 F.2u 1286, 1293 (5th Cir. 1992) (“If the parties
against whom judgment was rendered did not appeal,
the judgment becomes final and the court’s subject
matter jurisdiction is insulated from collateral
attack.”) This is true even if the earlier judgment was
incorrect. See Federated Dep't Stores, Inc. v. Moitie,
452 U.S. 394, 398 (1981) (“Nor are the res judicata
consequences of a final, unappealed judgment on the
merits altered by the fact that the judgment may
have been wrong or rested on a legal principle
subsequently overruled in another case.”). If the
Minvielle I court should have remanded rather than
granted summary judgment, its judgment could have
been reversed on appeal, but Minvielle chose not to
appeal. Accordingly, the judgment became final and is
now insulated from Minvielle’s collateral attack. See
Des Moines Navigation & R.R. Co. v. lowa Homestead
Co., 123 U.S. 552, 559 (1887).
App. 9
The district court also had jurisdiction in
Minvielle II. As we have explained,
It is well settled that a federal district court
can exercise ancillary jurisdiction over a
second action in order to secure or preserve
the fruits and advantages of a judgment or
decree rendered by that court in a prior
action. Such jurisdiction is appropriate
where the effect of an action filed in state
court would effectively nullify the judgment
of a prior federal action. This is true even
where the federal district court would not
have jurisdiction over the second action if it
had been brought as an original suit.
Royal Ins. Co. of Am., 960 F.2d at 1292 (citations,
alteration, and internal quotation marks omitted).
This is precisely the case here. Notwithstanding
Minvielle’s attempt to frame the issue below as a
question of standing, the issue was simply one of res
judicata — whether the court’s Minvielle J decision
precluded Minvielle from arguing that it has standing
to sue for the alleged environmental damages in
Minvielle ll. The question of standing is precisely the
question that Minvielle 1 addressed, and there have
been no changed circumstances that would warrant
bypassing the bar of res judicata. Minvielle’s second
suit, if successful, would nullify the district court’s
judgment in Minvielle J. Thus, the Minvielle I] court
properly had ancillary jurisdiction to preserve the
effect of its Minvielle J judgment.
App. 10
We have jurisdiction over the district court’s final
order granting Appellees summary judgment under
28 U.S.C. § 1291." “We review the district court’s
grant of summary judgment de novo, applying the
same legal standards as the district court.” Aubris
Res. LP v. St. Paul Fire & Marine Ins. Co., 566 F.3d
483, 486 (5th Cir. 2009). “The res judicata effect of a
prior judgment is a question of law that we review de
novo.” Davis v. Dallas Area Rapid Transit, 383 F.3d
309, 313 (5th Cir. 2004)
Lil. DISCUSSION
A. Choice of Law
Although each appellee moved to dismiss
Minvielle I on the basis of res judicata, the parties do
not appear to agree on whether Louisiana or federal
res judicata law applies Under our pre-2001
In its supplemental briefing, Minvielle argues for the first
time that this court should abstain from exercising its
jurisdiction under Burford v. Sun Oil Co., 319 U.S. 315 (1943)
As the issue on appeal is simply the res judicata effect of a prior
judgment, however, Burford abstention is inapplicable. To the
extent that Minvielle secks to collaterally attack the final,
unappealed judgment in Minvielle / on this ground, we reject its
argument as untimely
Atlantic Refining does not differentiate between federal!
and Louisiana res judicata law, Mosaic argues that Louisiana
law applies, Oxy and Pacific argue that Louisiana law applie
but, alternatively, that federal res judicata law shovwld apply, and
Minvielle argues that the court should look to Louisiana law
The district court, without much discussion, applied Louisiana
res judicata law
App. 11
precedent, federal res judicata law would clearly
apply. See Mowbray v. Cameron County, 274 F.3d 269,
281 (5th Cir. 2001) (“We apply federai law to
determine the preclusive effect of a federal judgment,
even if that judgment was based on state law.”) How-
ever, in Semtek International Inc. v. Lockheed Martin
Corp., 531 U.S. 497 (2001), the Supreme Court sug-
gested that state res judicata law, incorporated as
federal common law, should apply. There, the Court
held that “federal common law governs the claim-
preclusive effect of a dismissal by a federal court
sitting in diversity,” but it adopted “as the federally
prescribed rule of decision, the law that would be
applied by state courts in the State in which the
federal diversity court sits.” /d. at 508. As we have
explained, the Semtek Court held “that while federal
law ultimately determines whether a _ federal
judgment precludes a subsequent action or argument,
when the basis of the original court’s jurisdiction is
diversity of citizenship, federal courts should apply
the law of the forum state unless the state law is
incompatible with federal interests.” Am. Home As-
surance Co. v. Chevron, USA, Inc., 400 F.3d 265, 271
n.20 (5th Cir. 2005) (citing Semtek, 531 U.S. at 508).
But see Harper Macleod Solicitors v. Keaty & Keaty,
260 F.3d 389, 396 n.7 (5th Cir. 2001) (“Sermtek did not
address the role of state law in determining the pre-
clusive effect of jurisdictional findings made by a
federal court sitting in diversity.”).
App. 12
In this case, however, we need not weigh the
effect of Semtek, as Louisiana courts “‘have repeat-
edly confirmed that federal law is applicable to con-
sideration of whether a federal court judgment has
res judicata effect.” Jones ex rel. Jones v. GEO
Group, Inc., 6 So. 3d 1021, 1025 (La. Ct. App. 2009)
(quoting Green v. Iberia Par. Sch. Bd., 945 So. 2d 940,
943 (La. Ct. App. 2006)). Thus, whether we look to
Louisiana law or federal law to provide the rule of
decision, the result is the same: federal res judicata
law applies.
B. Res Judicata
Under federal law, the test for res judicata
contains four elements:
(1) the parties are identical or in privity;
(2) the judgment in the prior action was
rendered by a court of competent juris-
diction; (3) the prior action was concluded by
a final judgment on the merits; and (4) the
same claim or cause of action was involved in
both actions.
Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559,
571 (5th Cir. 2005) (citing Petro-Hunt, L.L.C. v.
United States, 365 F.3d 385, 395 (Sth Cir. 2004)).
Here, the second and fourth elements are not in dis-
pute. Both Minuvielle I and II] arise out of the same
alleged breaches of contract and tortious conduct,
Minvielle expressly admits that its claims in Min-
vielle I and JI are identical, and, as explained above,
App. 13
Minvielle cannot now challenge the jurisdiction of the
district court in Minvielle I, which certainly had
jurisdiction to determine its own jurisdiction. See
Ruiz, 536 U.S. at 628: Habetz, 915 F.2d at 167. The
only elements that Minvielle challenges are the first
and third elements: whether the judgment in Min-
vielle I, which was final and unappealed, was a judg-
ment on the merits, and whether the parties to each
case are identical or in privity. Both challenges lack
merit.
1. Judgment on the Merits
Minvielle first asserts that the Minvielle I deci-
sion was not a judgment on the merits. Although it is
technically correct, this does not preclude application
of res judicata in this case. In Minvielle I, the district
court granted IMC summary judgment based upon
Minvielle’s lack of standing, a jurisdictional issue.
Cobb v. Cent. States, 461 F.3d 632, 635 (5th Cir. 2006)
(“(T\lhe issue of standing is one of subject matter
jurisdiction. ...”). Although a jurisdictional ruling is
technically not an adjudication on the merits, “[{i]t has
long been the rule that principles of res judicata
apply to jursdictional determinations — both subject
matter and personal.” /ns. Corp. of Ireland, 456 U.S.
at 702 n.9; accord Beiser v. Weyler, 284 F.3d 665, 673
(5th Cir. 2002). As we have explained,
Although the dismissal of a complaint for
lack of jurisdiction does not adjudicate the
merit sc as to make the case res judicata on
the substance of the asserted claim, it does
App. 14
adjudicate the court’s jurisdiction, and a
second complaint cannot command a second
consideration of the same _ jurisdictional
claims.
Boone v. Kurtz, 617 F.2d 435, 436 (5th Cir. 1980) (per
curiam). Thus, because the unappealed Minvielle J
judgment — which adjudicated the question of Min-
vielle’s standing to bring the claims it now asserts — is
unquestionably final, it satisfies this res judicata
requirement.
2. Identity of the Parties
Notwithstanding its previous agreement that
“there’s nobody who sits at the table in [Minvtelle IT]
that didn’t sit [at] the table in [Minvielle [],” Min-
vielle argues on appeal! that res judicata cannot apply
to Atlantic Refining, Oxy, and Pacific Oil, because
they were not parties to Minvielle J." Res judicata
applies only when the parties in the second suit are
identical to or in privity with the parties in the first
suit. Jest Masters Educ. Servs., Inc., 428 F.3d at 571.
Notably, as the Supreme Court recently reaffirmed in
Taylor v. Sturgell, 128 S. Ct. 2161 (2008), the parties
need not actually be identical: “nonparty preclusion
may be justified based on a variety of pre-existing
‘substantive legal relationship[s}’ between the person
to be bound and a party to the judgment. Qualifying
* Minvielle concedes that IMC, now Mosaic, was a party in
both Minvielle I and IT
App. 15
relationships include, but are not limited to, preced-
ing and succeeding owners of property . .. and assignee
and assignor.” Id. at 2172 (alteration in original, cita-
tions omitted).
Here, Minvielle expressly concedes in its brief
that “IMC (Mosaic), Oxy, and Pacific are successors-
in-interest by sub-lease or assignment of the original
1961 mineral lease between Delcambre and [Atlantic
Refining].” It thus admits that Oxy and Pacific Oil
are succeeding owners of property and/or assignees,
and that Atlantic Refining is a preceding owner of
property and/or assignor. Therefore, although Oxy,
Pacific Oil, and Atlantic Refining were not parties to
Minvielle I, the identity-of-the-parties requirement of
res judicata is met.
Accordingly, all four elements required for res
judicata to apply are satisfied, and the district court
properly held the judgment in Minvielle I to be res
judicata on this second suit.
IV. CONCLUSION
For the reasons stated above, we hold that the
district court properly granted Appellees’ motion for
summary judgment on the basis of res judicata. We
therefore AFFIRM the judgment of the district court.
AFFIRMED.
App. 16
E. GRADY JOLLY, Circuit Judge, specially con-
curring:
I am happy to concur. The standing issue in these
cases has always referred to the lack of statutory
standing under Louisiana law because of the failure
of the plaintiff to demonstrate a cognizable interest in
the res at issue. The standing issue never constituted
a challenge to the personal or subject-matter juris-
diction of the federal court. Consequently, it is quite
correct to say that Minvielle I] was a decision on the
merits of the plaintiff’s claim, that the case now
before us is identical in all relevant respects to
Minvielle I, and that res judicata is a bar to this case.
App. 17
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 08-30399
D.C. Docket No. 6:05-CV-1312
FRANK C MINVIELLE LLC
Plaintiff-Appellant
V.
ATLANTIC REFINING CO, formerly known as
Atlantic Richfield Co; OXY USA INC, formerly known
as Cities Service Oil Co; PACIFIC ENTERPRISES
OIL CO (USA), formerly known as Sabine Production
Co Inc; MOSAIC GLOBAL OPERATIONS INC,
formerly known as IMC Global Operations Inc
Defendants-Appellees
Appeal from the United States District Court for the
Western District of Louisiana, Lafayette
Before JOLLY, PRADO, and SOUTHWICK, Circuit
Judges.
JUDGMENT
(Filed Jul. 24, 2009)
This cause was considered on the record on
appeal and was argued by counsel.
It is ordered and adjudged that the judgment of
the District Court 1s affirmed.
App. 18
IT IS FURTHER ORDERED that plaintiff-
appellant pay to defendants-appellees the costs on
appeal to be taxed by the Clerk of this Court.
E. GRADY JOLLY, Circuit Judge, specially con-
curring:
ISSUED AS MANDATE: SEP 15 2009
App. 19
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE-OPELOUSAS DIVISION
FRANK C. MINVIELLE, LLC CIVIL ACTION
VS. NO. 05-1312
ATLANTIC REFINING CO. SEat eens
OXY USA, INC.
PACIFIC ENTERPRISES Si al
OIL CO. MOSAIC GLOBAL
OPERATIONS, INC.
MEMORANDUM RULING ON MOTIONS
FOR SUMMARY JUDGMENT
(Rec. Docs. 29, 35, 41, and 51)
(Filed Sep. 6, 2007)
Before the court are four motions for summary
judgment filed by defendants Atlantic Refining Com-
pany (“ARCO”), Oxy USA, Inc. (“Oxy”), Pacific Oil
Company (“Pacific”) and Mosaic Global Operations,
Inc. (“Mosaic”) (collectively referred to as “movers”).’
Plaintiff, Frank C. Minvielle, LLC filed an opposition
and movers filed replies.”
' Rec. Docs. 29, 35, 41 51
~ Rec Docs. 456, 63, 65
App. 20
Factual Background
The underlying facts of the case involve an Oil,
Gas and Mineral Lease (hereinafter referred to as the
“1961 lease”) entered into on September 28, 1961, by
ARCO and Juliet Bourgeois Delcambre, a previous
owner of the land at issue, located in Iberia Parish.
ARCO subsequently subleased the mineral rights to
Callery Properties, Inc., which in turn conveyed its
interest in the land to another company. The con-
veyances and subleasing continued, leaving a long list
of oilfield companies having had some connection to
the land at issue. During this time, movers also
operated oil and gas exploration and/or production
activities on the property.
In 1998, plaintiff’s predecessor, Minvielle &
Segura, L.L.C. purchased the land by Act of Cash
Sale (“1998 Act of Cash Sale”). On November 30,
2001, Frank C. Minvielle acquired all ownership of
Minvielle & Segura, L.L.C., and shortly thereafter
changed its name to Frank C. Minvielle, L.L.C.,
plaintiff in this action.
Previous Litigation — Minvielle I
On August 27, 2003, plaintiff filed suit in the
16th Judicial District Court alleging that the land in
question was contaminated or otherwise damaged by
App. 21
oil and gas exploration and production activities.’
Plaintiff named as defendants IMC Global Opera-
tions, Inc. (“IMC”), Encana Midstream, Inc., Estis
Well Service, L.L.C., and Transok, Inc. The case,
hereinafter referred to as “Minvielle I,” was removed
to this court on October 15, 2003 pursuant to di-
versity jurisdiction under 28 U.S.C. § 1332.
The only defendant remaining in the case is
IMC.* IMC filed a third-party complaint against
ARCO, Oxy, Pacific, Edwin Cox, and William Dick,
alleging that the third-party defendants were former
parties to, or successors-in-interest to the original
parties to the 1961 Lease.
IMC filed several motions to dismiss, including
one seeking dismissal based on plaintiff’s lack of
standing to assert contractual claims arising from the
1961 lease and tort claims arising prior to plaintiff’s
purchase of the land. Plaintiff responded that it had
standing because it was a third party beneficiary the
contract (a stipulation pour autrui) and because tort
damages can be brought regardless of the timing of
the damages.
’ See Minvielle v. IMC et al, 03CV1908, Rec. Doc. 1,
Paragraphs 1 and 3.
* Estis Well Wervice, L.L.C. was dismissed on February 2,
2002, on a finding of fraudulent joinder. Transok, Inc. was dis-
missed on February 20, 2004, for plaintiff's failure to prosecute,
and Encana was dismissed with prejudice on plaintiff's own
motion. See Minvielle 1, O3CV1908, Ree Docs. 55, 9A
App. 22
On October 19, 2004, this court dismissed
plaintiff’s claims for lack of standing.” The ruling was
based on a finding that the 1998 cash sale did not
confer on plaintiff a specific assignment of rights to
recover damages from third parties, nor did the 1961
lease create a stipulation pour autrui in favor of
plaintiff. The court concluded that plaintiff lacked
standing to bring contractual claims arising from the
1961 lease. As to the tort claims, the court also con-
cluded that plaintiff lacked standing because plaintiff
was seeking damages arising from operations which
occurred prior to plaintiff’s acquisition of the land.
Plaintiff filed a motion for reconsideration,
arguing that to the extent the 1998 cash sale was
deficient, it would be amended to include the transfer
of property rights to plaintiff. On January 12, 2005,
the court denied plaintiff’s motion, noting that plain-
tiff had not yet amended the 1998 Act of Cash Sale,
nor had plaintiff established that such an amendment
would properly convey standing.” Accordingly, plain-
tiff’s case was dismissed and plaintiff did not appeal
the judgment.
Instant Suit —- Minvielle Il
On June 20, 2005, plaintiff filed suit in the 16th
Judicial District Court for the Parish of Iberia,
alleging the same claims arising from the 1961 lease
* See Minvielle I, 083CV1908, Rec. Does. 104, 105
* See Minvielle I, O8CV1908, Rec. Doc. 113
App. 23
as Minvielle |. Plaintiff named as defendants IMC,
ARCO, Oxy, Pacific, Pioneer Production Corporation,
Edwin L. Cox, and William J. Dick. Defendants
Pioneer, Cox, and Dick were dismissed for plaintiff’s
failure to prosecute. Defendant Mosaic has been
substituted for IMC, as its successor in interest.
The petition addresses the previous ruling by
this court regarding standing, and the subsequent
Amendment to Act of Cash Sale executed by the
Cowans and plaintiff:
15.
In 2003, plaintiff filed suit against IMC
Global Operations, Inc., making claims iden-
tical to those brought herewith. That suit,
captioned Frank C. Minvielle, L.L.C. v. IMC
Global Operations, Inc., et al was removed to
the United States District Court for the
Western District of Louisiana (Civil Action
No. 03-1908). In that suit, Magistrate Judge
Mildred E. Methvin dismissed plaintiff’s
suit. She found that the 1998 act of sale from
the Cowans to plaintiff did not include a
specific assignment of rights to recover from
third parties for damage done to the property
prior to plaintiff's acquisition, and therefore
plaintiff lacked standing to bring a resto-
ration claim in contract or in tort. /d., Judg-
ment and Memorandum Opinion ~ Ruling on
Motions (October 19, 2004).
App. 24
16.
By Amendment to Act of Cash Sale the
Cowans and plaintiff specified:
Sellers and each of them declared further
that they did by virtue of the Act of Cash
Sale, dated August 27, 1998, et seq., accepted
by Purchaser September 18, 1998, .. . assign,
convey, sell, transfer and deliver, less the
undivided one-half ('2) of the oil, gas and
other minerals, including sulphur, reserved
and retained, all of their right, title, claim,
interest, demand, surface and subsurface,
real, personal and mixed, movable, immov-
able, corporeal and incorporeal, including
claims for damages suffered by the afore
described tracts of land prior to September
18, 1998.
The suit filed in the 16th JDC was removed to
this court on July 22, 2005. Subsequently movers
filed the following motions:
l Rule 12(b1) Motion Requesting Defer-
ence to the Primary Concurrent Juris
diction of the Louisiana Office of Con
servation (“LOC”) and the Louisiana
Department of Environmental Quality
(“DEQ”);
Rex Dur ]
Rec. Docs. 41. 35. 51
App. 25
2. Rule 12(b)(1) and/or 12(b)(6) motion to
dismiss premature claims;
3. Rule 12(e) motion for more definite
statement:””
4. Motion for compliance with Rule 20 and
21 regarding improper joinder;’
5. Rule 12(b)(7) motion dismiss for failure
to join indispensable parties;
6. Rule 12(b)(6) motion to dismiss for fail-
ure to state a claim for lack of standing,
nonrecoverable damages, unjust enrich-
ment, and prescription;
Rule 12(b)(6) motion to dismiss claims as
barred under res judicata.”
~]
The 12(b)(6) motions (Paragraphs 6 and 7 above)
were converted to motions for summary judgment
since their disposition required reference to docu-
ments outside of the complaint.
Motion for Summary Judgment
The Federal Rules of Civil Procedure provide for
summary judgment where no genuine issue as to any
Rec. Docs. 41, 35
Rec. Docs. 41, 35, 51
Rec. Does. 35, 51
Rec. Docs. 35, 51
Rec. Docs. 41, 35, 51
* Rec. Does. 29, 41, 35, 51
?
App. 26
material fact exists. Fed.R.Civ.P. 56(c). The threshold
inquiry is whether there are any genuine factual
issues that properly can be resolved only by a finder
of fact because they may reasonably be resolved in
favor of either party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d
202 (1986). Of course, the substantive law will iden-
tify which facts are material. 7d. All of the evidence
must be reviewed in the light most favorable to the
motion’s opponent. Jd. However, the Fifth Circuit has
emphasized that summary judgment should be
granted and will be affirmed when the nonmoving
party fails to meet its burden to come forward with
facts and law demonstrating a basis for recovery that
would support a jury verdict. Little v. Liquid Air
Corp., 37 F.3d 1069, 1071 (5th Cir. 1994).
Analysis
Although a litany of motions have been filed, the
initial inquiry must be whether res judicata applies
to this court’s previous ruling that plaintiff lacks
standing.
Res Judicata
Movers argue that the ruling in Minvielle I that
plaintiff lacked standing to bring the claims was a
finding that the court did not have subject matter
jurisdiction, and is res judicata.
App. 27
“Federal common law governs the _ claim-
preclusive effect of a dismissal by a federal court
sitting in diversity.” Semtek Intl Inc. v. Lockheed
Martin Corp., 531 U.S. 497, 121 S.Ct. 1021, 1028, 149
L.Ed.2d 32 (2001). Accordingly, federal courts apply
the law of the forum state, unless the state’s law is
incompatible with federal interests, when the basis of
the court’s jurisdiction was diversity of citizenship.
American Home Assurance Co. v. Chevron, USA, Inc.,
400 F.3d 265, 271 n. 20 (5th Cir.2005). “The purpose
of both federal and state law on res judicata is
essentially the same; to promote judicial efficiency
and final resolution of disputes by preventing need-
less re-litigation.” Terrebonne Fuel & Lube, Inc. v.
Placid Ref. Co., 95-654, p. 11 (La.1/16/96), 666 So.2d
624, 631.
In the case at bar, the Court, as a court sitting in
diversity, applies Louisiana law to determine the pre-
clusive effect of its prior judgments. Under Louisiana
law, the phrase “res judicata” includes both claim pre-
clusion (traditional res judicata) and issue preclusion
(collateral estoppel). Hudson v. City of Bossier, 33,620,
p. 7 (La.App.2d Cir.8/25/00), 766 So.2d 738, 743, writ
denied, 00-2687 (La.11/27/00), 775 So.2d 450. Claim
preclusion precludes the parties from relitigating.,
matters that were or could have been raised in that
action. Issue preclusion or collateral estoppel, how-
ever, precludes relitigation of an issue that has al-
ready been decided by the court in a previous action.
“Thus, res judicata used in the broad sense has two
different aspects: (1) foreclosure of relitigating matters
App. 28
that have never been litigated, but should have been
advanced in the earlier suit; and (2) foreclosure of
relitigating matters that have been previously liti-
gated and decided.” /d.
Louisiana Revised Statute § 13:4231 provides:
Except as otherwise provided by law, a valid
and final judgment is conclusive between the
same parties, except on appeal or other di-
rect review, to the following extent: ...
(2) If the judgment is in favor of the de-
fendant. all causes of action existing at the
time of final judgment arising out of the
transaction or occurrence that is the subject
matter of the litigation are extinguished and
the judgment bars a subsequent action on
those causes of action.
(3) Ajudgment in favor of either the plain-
tiff or the defendant is conclusive, in any
subsequent action between them, with re-
spect to any issue actually litigated and de-
termined if its determination was essential
to that judgment.
Thus, “a second action is precluded when al] of
the following are satisfied: (1) the judgment is valid;
(2) the judgment is final; (3) the parties are the same;
(4) the cause or causes of action asserted in the
second suit existed at the time of final judgment in
the first htigation; and (5) the cause or causes of
action asserted in the second suit arose out of the
transaction or occurrence that was the subject matter
App. 29
of the first litigation.” Burguieres v. Pollingue, 843
So.2d 1049, 1053, 2002-1385 (La.. 2003).
Valid and final judgment
Plaintiff asserts that the judgment in Minvielle I
cannot form the basis for a res judicata ruling in this
case because the judgment was not a final judgment
on the merits of the case, but rather was a ruling
limited to whether there was a deficiency of parties.
The judgment dismissing Minvielle I specifically
granted defendants’ motions for summary judgment
“for [plaintiff’s] failure to state contractual! and tort
claims due to lack of standing.””
It is well settled that unless a plaintiff has
standing, a federal district court lacks subject matter
jurisdiction to address the merits of the case. In the
absence of standing, there is no “case or controversy”
between the plaintiff and defendant which serves as
the basis for the exercise of judicial power under
Article III of the constitution. Warth v. Seldin, 422
U.S. 490, 498-499, 95 S.Ct. 2197, 2206 (1975). “In es-
sence the question of standing is whether the litigant
is entitled to have the court decide the merits of the
dispute or of particular issues.” Warth v. Seldin, 422
U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 348 (1975).
Thus, standing must be inquired inte as part of the
court’s determination of whether it has subject matter
Rec. Doc. 105
App. 30
jurisdiction. Golding v. Bartholow, 166 F.3d 710 (5th
Cir. 1999). If the court finds that it lacks subject mat-
ter jurisdiction, it has a duty to dismiss the case.
Fed.R.Civ.P. 12(h)(3). Standing, therefore, determines
the courts’ “fundamental power even to hear the suit.”
Grant ex rel. Family Eldercare v. Gilbert, 324 F.3d
383, 386 (5th Cir. 2003) citing Ford v. Nylcare Health
Plans, Inc., 301 F.3d 329, 333 (5th Cir.2002).
Thus, under the applicable law, the determina-
tien in Minvielle I that plaintiff did not have standing
was equivalent to a finding that the court lacked
subject matter jurisdiction.
Although a dismissal for lack of jurisdiction is
not a ruling on the merits of the claim, both Louisi-
ana and federal law hold that the “principles of res
judicata apply to jurisdictional determinations.” J/n-
surance Corp. of Ireland, Ltd. v. Compagnie des
Bauxites de Guinee, 456 U.S. 694, 702 n. 9, 102 S.Ct.
2099, 72 L.Ed.2d 492 (1982): see also Boone v. Kurtz,
617 F.2d 435, 436 (5th Cir.1980) (“Although the dis-
missal of a complaint for lack of jurisdiction does not
adjudicate the merit[s] so as to make the case res
judicata on the substance of the asserted claim, it
does adjudicate the court’s jurisdiction, and a second
complaint cannot command a second consideration of
the same jurisdictional claims.”); Royal Insurance Co.
of America v. Quinn-L Capital Corp., 960 F.2d 1286
(5th Cir. 1992); Hawthorne v. Couch, 946 So.2d 288,
41,603 (La.App.2d Cir. 2006) (previous ruling of lack
of subject matter jurisdiction given res judicata
effect).
App. 31
In LoCicero v. Jefferson Parish Dept. of Fleet
Management, 722 So.2d 1205, 1209 (La.App. 5th
Cir.1998), the court explained that a court’s finding of
lack of subject matter jurisdiction can be the basis for
res judicata:
(The] question here is whether a final judg-
ment sustaining an exception of lack of
subject matter jurisdiction can form the ba-
sis of an exception of res judicata in a second
suit subsequently brought in the same court
and based on the same transaction or occur-
rence...
The purpose of the concept of res judicata is
to put an end to disputes between the same
parties which arise from the same trans-
action or occurrence, see La. R.S. 13:4231,
Comments-1990(a). While we recognize that
a judgment rendered on the merits by a court
without subject matter jurisdiction is gen-
erally a nullity, that rule cannot be applied to
a judgment like the present one where the
decision initially made was simply whether
the court could proceed further with the case.
Pursuant to La.Code Civ. Pro., Art. 925(A)(6),
relating to the declinatory exception of lack
of jurisdiction over the subject matter of the
action, district courts are required to exercise
their threshold jurisdiction in deciding this
issue. [It would be anomalous indeed were it
to be held that a judgment sustaining this
exception would be a nullity for res judicata
purposes in a subsequent suit in the same
court. Such a ruling would permit endless
App. 32
re-litigation of that issue in direct contra-
vention of the policy underlying the concept
of res judicata.
Id. at 1209-1210.
Thus, this court’s jurisdictional ruling in Min-
vielle 1 is a final and valid judgment to which res
judicata applies
Parties
In order for res judicata to apply, there must be a
commonality of parties. Identity of parties does not
mean the parties must be the same physical parties.
When one party’s interests were adequately repre-
sented by another party to an earlier action who may
be considered their virtual representative because
their interests are closely aligned, their presence in a
later litigation does not disrupt the res judicata
analysis. Forum for Equality, PAC v. McKeithen, 893
So.2d 738, 745 (La. 2005) (addition in second suit
of three new plaintiffs’ whose interests were closely
aligned to original plaintiffs did not preclude res
judicata application).
In Minvielle I plaintiff sued IMC. In Minvielle II,
plaintiff sued IMC’s successor Mosaic, and ARCO,
Oxy, and Pacific. Although ARCO, Oxy, and Pacific
were not named as defendants by plaintiff in Min-
vielle I, they were the subject of a third-party com-
plaint filed by IMC. Although the case was dismissed
prior to ARCO, Oxy, and Pacific having made an
App. 33
appearance, they were nonetheless named parties to
the litigation.
Furthermore, ARCO, Oxy, and Pacific are former
parties to, or successors-in-interest to the original
parties to the 1961 Lease. The complaint in Minvielle
II states that the defendants are joint tortfeasors and
because “the negligence, acts and/or omissions of de-
fendants have collectively contributed to plaintiff’s
pollution-related property damages, all defendants
are solidarily liable for all damages sought in this
litigation.”
It is clear that, as joint tortfeasors, the defen-
dants were closely aligned and their interests were
adequately represented by IMC/Mosaic in Minvielle I.
Accordingly, the requirement for identity of parties is
met.
Existence of Causes of Action and Same
Transaction or Occurrence
The central inquiry in applying the doctrine of
res judicata is whether the cause of action in the
second case arises out the same transaction or occur-
rence that was the subject of the first case. Blanchard
v. ABC Ins. Co., 38,005 p. 5 (La. App 2d Cir. 3/3/04),
867 So.2d 901. It is clear that the alleged causes of
action asserted in Minvielle II existed at the time of
Minvielle I and that the causes of actions arise from
the same transaction or occurrence. In fact, the
App. 34
Minvielle II complaint specifically states that claims
in both suits are “identical.”
Although plaintiff argues that res judicata should
not apply because the Amendment to Act of Cash Sale
did not exist at the time of the first judgment, the
existence of the amendment is irrelevant. The Act
of Cash Sale between plaintiff and the Cowans does
not form the basis for the allegations of negligence
against defendants, but rather, the causes of action
arise from defendants’ alleged wrongdoings. The alle-
gations as to defendants’ alleged torts and contractual)
violations arising from the 1961 lease are the same in
both Minvielle I and II.
Moreover, plaintiff offers no persuasive authority
for the proposition that the Amendment to Act of
Cash Sale cures the res judicata effect of the prior
judgment. Plaintiff cites Perry v. Globe Auto Recycl-
ing, Inc., 227 F.3d 950, 953 (7th Cir. 2000) for the
proposition that an assignee who lost on his own
claims was not precluded from bringing a new action
on a claim acquired from another person. Perry, how-
ever, is distinguishable from the instant case. Perry
did not involve a standing issue, nor does it address
the effect of res judicata.’ The facts of the case at
bar are peculiar in that plaintiff lacked standing in
* Rec. Doc. 1.
' Furthermore, this case is not authoritative because as
discussed above, the law applicable to this determination is
Louisiana law. Moreover, the case is not a 5th Circuit decision.
App. 35
Minvielle I and is now attempting to cure the court’s
previous finding of lack of jurisdiction by filing an
amended cash sale purporting to confer standing on
plaintiff. Plaintiff has not cited any cases establishing
that a dismissal for lack of standing/jurisdiction can
be cured by a post-judgment attempt to confer stand-
ing to the same party who was previously adjudged to
be without standing.
The claims asserted are identical to those as-
serted in Minvielle I, there is commonality of parties,
and the court’s jurisdictional ruling in Minvielle I is a
final and valid judgment. Accordingly, all require-
ments for application res judicata are met.
Conclusion
The underlying facts and causes of action in
Minvielle II are precisely the same as in Minvielle I,
and the parties are virtually the same. Likewise, be-
cause the Minvielle I judgment regarding lack of
subject matter jurisdiction is res judicata in this case,
both cases have the same fatal flaw — lack of subject
matter jurisdiction. Plaintiff’s after-the-fact creation
of a document purporting to create standing does not
affect the preclusive effect of res judicata. To allow
any other ruling in this case would thwart the fun-
damental principal of res judicata, 1.e., that matters
litigated and finally adjudged are presumed correct
and not subject to collateral attack in a subsequent
suit involving the same transaction or occurrence.
App. 36
Accordingly, defendants’ motions for summary
judgment based on res judicata are GRANTED. Be
cause the Minvielle | finding that plaintiff did not
have standing has res judicata effect, the court in the
instant case does not have subject matter jurisdiction.
Since dismissal is proper for lack of subject matter
jurisdiction, it is not necessary to address the re-
maining motions. Ruhrgas AG v. Marathon Oil, 526
U.S. 574 (1999); Alpine View Co. Ltd. v. Atlas Copco
AB, 205 F.3d 208 (5th Cir. 2000)
Signed at Lafayette, Louisiana, on September 6,
Z00 |
Mildred E. Methvin
Mildred E. Methvin
United States Magistrate Judge
800 Lafayette St., Suite 3500
Lafayette, Louisiana 70501
337) 593-5140 (phone
193-5155 (fax)
App. 37
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE-OPELOUSAS DIVISION
FRANK C. MINVIELLE, LLC CIVIL ACTION
VS. NO. 05-1312
ATLANTIC REFINING CO. potter al +
OXY USA, INC.
PACIFIC ENTERPRISES mi Sg en Tia
OIL CO. MOSAIC GLOBAL s
OPERATIONS, INC.
JUDGMENT
(Filed Sep. 6, 2007)
For the reasons set forth in the Memorandum
Opinion filed this date,
IT IS ORDERED that defendants’ motions for
summary judgment based on res judicata are
GRANTED, and this case is dismissed for lack of
subject matter jurisdiction.
App. 33
Signed at Lafayette, Louisiana, on September 6,
2007
Mildred FE. Methvin
Mildred E. Methvin
United States Magistrate Judge
800 Lafayette St., Suite 3500
Lafayette, Louisiana 70501
(337) 593-5140 (phone)
593-5155 (fax)
App. 39
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE-OPELOUSAS DIVISION
FRANK C. MINVIELLE, LLC CIVIL ACTION
VS. NO. 05-1312
ATLANTIC REFINING CO. a arn ‘
OXY USA, INC.
PACIFIC ENTERPRISES a.
OIL CO. MOSAIC GLOBAL
OPERATIONS, INC.
MEMORANDUM RULING ON MOTION FOR
NEW TRIAL AND/OR TO AMEND JUDGMENT
(Rec. Docs. 89 and 91)
(Filed Mar. 24, 2008)
On September 6, 2007, the undersigned issued a
Memorandum Ruling dismissing this case for lack of
subject matter jurisdiction.’ Judgment was entered
the same day.” On September 20, 2007, plaintiff filed
the instant motion under Rule 59 for new trial and/or
* Rec. Doc. &7
~ Rec. Doc. 88
App. 40
to amend or alter judgment.’ Defendants oppose the
motion.°
Legal Analysis
The factual background is fully set forth in the
memorandum ruling of September 6, 2007, and will
not be repeated here. The ruling concluded that the
Minvielle I judgment regarding lack of subject matter
jurisdiction is res judicata in this case. Plaintiff
contends that the judgment should be vacated and
plaintiff should be allowed a new trial because res
judicata is inapplicable and plaintiff has standing to
sue ARCO.
* Rec. Docs. 89 and 91. Although plaintiff filed two separate
motions, the motions rely on the same memorandum in support.
Oxy incorrectly asserts that the motion was filed untimely.
A motion filed under Rule 59 must be filed within 10 days of
judgment. According to Rule 6(a) the day of the act (entry of
judgment) is not included in the time period. Moreover, “|wJhen
the period of time prescribed or allowed is less than 11 days,
intermediate Saturdays, Sundays, and legal holidays shall be
excluded in the computation.” Here, the judgment was entered
on September 6, 2007. Using the furegoing formula, the deadline
for filing a motion under Rule 59 was September 20, 2007, which
is the date that plaintiff filed the motion. Accordingly, the
motion was filed timely.
* Rec. Docs. 95-98.
App. 41
The court has considerable discretion to grant or
deny a motion under Rule 59.° Whitehead v. Food
* Rule 59 provides as follows:
Rule 59. New Trial; Altering or Amending a
Judgment
(a) In General.
(1) Grounds for New Trial. The
court may, on motion, grant a new
trial on all or some of the issues — and
to any party — as follows:
(A) after a jury trial, for any reason
for which a new trial has heretofore
been granted in an action at law in
federal court; or
(B) after a nonjury trial, for any rea-
son for which a rehearing has hereto-
fore been granted in a suit in equity in
federal court.
(2) Further Action After a Nonjury
Trial. After a nonjury trial, the court may,
on motion for a new trial, open the judg-
ment if one has been entered, take addi-
tional testimony, amend findings of fact
and conclusions of law or make new ones,
and direct the entry of a new judgment.
(b) Time to File a Motion for a New Trial.
A motion for a new trial must be filed no later
than 10 days after the entry of judgment.
(c) Time to Serve Affidavits. When a motion
for a new trial is based on affidavits, they must
be filed with the motion. The opposing party has
10 days after being served to file opposing
affidavits; but that pemod may be extended for
up to 20 days, either by the court for good cause
or by the parties’ stipulation. The court may per-
mit reply affidavits
Continued on following page)
App. 42
Max of Mississippi, Inc., 163 F.3d 265 (5th Cir. 1998);
Edward H. Bohlin Co., Inc. v. Banning Co., Inc., 6
F.3d 350, 355 (5th Cir.1993); Lavespere, 910 F.2d at
174. The court must “strike the proper balance between
the need for finality and the need to render a just
decision on the basis of all the facts.” Bohlin, 6 F.3d at
355. It is wel] established that a party may not use
Rule 59(e) to relitigate old matters, or to raise argu-
ments or present evidence that could have been raised
prior to the court order. See Templet v. HydroChem Inc.,
367 F.3d 473, 479 (5th Cir. 2004); Simon v. United
States, 891 F.2d 1154, 1159 (5th Cir.1990).
Res judicata: As set forth in the September 6th
ruling, “[t]he purpose of both federal and state law on
res judicata is essentially the same; to promote
judicial efficiency and final resolution of disputes by
preventing needless re-litigation.” Terrebonne Fuel &
Lube, Inc. v. Placid Ref. Co., 95-654, p. 11 (La.1/16/96),
666 So.2d 624, 631.
(d) New Trial on the Court’s Initiative or
for Reasons Not in the Motion. No fater than
10 days after the entry of judgment, the court, on
its own, may order a new trial for any reason
that would justify granting one on a party’s mo-
tion. After giving the parties notice and an op-
portunity to ve heard, the court may grant a
timely motion for a new trial for a reason not
stated in the motion. In either event, the court
must specify the reasons in its order.
(e) Motion to Alter or Amend a Judgment. A
motion to alter or amend a judgment must be filed no
later than 10 days after the entry of the judgment
App. 43
In this diversity case, the court must apply Loui-
siana law to determine the preclusive effect of its
prior judgments.” Louisiana Revised Statute § 13:4231
provides:
Except as otherwise provided by law, a valid
and final judgment is conclusive between the
same parties, except on appeal or other di-
rect review, to the following extent: ...
(2) If the judgment is in favor of the de-
fendant, all causes of action existing at the
time of final judgment arising out of the
transaction or occurrence that is the subject
matter of the litigation are extinguished and
the judgment bars a subsequent action on
those causes of action.
(3) A judgment in favor of either the
plaintiff or the defendant is conclusive, in
any subsequent action between them, with
respect to any issue actually litigated and
determined if its determination was essential
to that judgment.
Mosaic incorrectly asserts that federal law should be ap-
plied to the res judicata issue in this case. The case relied upon
by Mosaic, however, pre-dates the Supreme Courts’ ruling in
Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 121
S.Ct. 1021, 1028, 149 L.Ed.2d 32 (2001) (“Federal common law
governs the claim-preclusive effect of a dismissal by a federal
court sitting in diversity.”) Federal courts, therefore, apply the
law of the forum state, unless the state’s law is incompatible
with federal interests, when the basis of the court’s jurisdiction
was diversity of citizenship. American Home Assurance Co. v
Chevron, USA, Inc., 400 F.3d 265, 271 n. 20 (5th Cir.2005)
App. 44
Thus, “a second action is precluded when all of
the following are satisfied: (1) the judgment is valid;
(2) the judgment is final; (3) the parties are the same;
(4) the cause or causes of action asserted in the sec-
ond suit existed at the time of final judgment in the
first litigation; and (5) the cause or causes of action
asserted in the second suit arose out of the trans-
action or occurrence that was the subject matter of
the first litigation.” Burguieres v. Pollingue, 843 So.2d
1049, 1053, 2002-1385 (La. 2003).
Plaintiff does not dispute that: the resolution of
Minvielle I was a valid and final judgment; that the
causes of action asserted in Minvielle II existed at the
time of final judgment in Minvielle I; and that the
causes of action in the two cases arose out of the same
transaction or occurrence. Plaintiff’s sole contention
is that because the parties to the two suits were not
identical, res judicata should not apply.
Identity of parties does not mean that the parties
must be identical. Identity exists when the same par-
ties, their successors, or others appear so long as they
share the same ‘quality as parties. Sun Finance Co.,
Inc. v. Jackson, 525 So.2d 532 (1.a.1988): Welch uv.
Crown Zellerbach Corp., 359 So.2d 154 (La.1978).
When one party’s interests were adequately repre-
sented previously by a party whose interests are
closely aligned, the presence of the first party in later
litigation does not affect the res judicata analysis.
Forum for Equality, PAC v. McKeithen, 2004-2551
(La. 1/19/05), 893 So.2d 738 (noting that parties are
deemed “privies” when: (1) the nonparty is the
App. 45
successor in interest of a party; (2) the nonparty con-
trolled the prior litigation; or (3) the nonparty’s in-
terests were adequately represented by a party to the
action who may be considered the “virtual represen-
tative” of the nonparty because the interests of the
party and the nonparty are so closely aligned.”).
The memorandum ruling addressed the identity
of parties as follows:
In order for res judicata to apply, there must
be a commonality of parties. Identity of par-
ties does not mean the parties must be the
same physical parties. When one party’s in-
terests were adequately represented by an-
other party to an earlier action who may be
considered their virtual representative be-
cause their interests are closely aligned,
their presence in a later litigation does not
disrupt the res judicata analysis. Forum for
Equality, PAC v. McKeithen, 893 So.2d 738,
745 (La. 2005) (addition in second suit of
three new plaintiffs whose interests were
closely aligned to original plaintiffs did not
preclude res judicata application).
In Minvielle I plaintiff sued IMC. In Minvieile
[I1, plaintiff sued LMC’s successor Mosaic, and
ARCO, Oxy, and Pacific. Although ARCO, Oxy,
and Pacific were not named as defendants by
plaintiff in Minvielle I, they were the subject
of a third-party complaint filed by IMC.
Although the case was dismissed prior to
ARCO, Oxy, and Pacific having made an ap-
pearance, thev were nonetheless named par-
ties to the litigation
App. 46
Furthermore, ARCO, Oxy, and Pacific are
former parties to, or successors-in-interest to
the original parties to the 1961 Lease. The
complaint in Minvielle II states that the
defendants are joint tortfeasors and because
“the negligence, acts and/or omissions of de-
fendants have collectively contributed to plain-
tiff’s pollution-related property damages, al]
defendants are solidarily liable for all dam-
ages sought in this litigation.”
It is clear that, as joint tortfeasors, the de-
fendants were closely aligned and their in-
terests were adequately represented by IMC/
Mosaic in Minvielle I. Accordingly, the re-
quirement for identity of parties is met.’
Plaintiff contends that the court should not have
considered the third party claims filed against ARCO,
Oxy, and Pacific in Minvielle I, because they were not
served and made no appearance. Plaintiff also argues
that the fact that ARCO, Oxy, and Pacific were al-
leged to be solidarily liable with IMC does not show
that the defendants were closely aligned.
Plaintiff relies on Breaux v. Avondale Industries,
Inc., 2002-1713 (La. App. 4 Cir. 3/12/03), 842 So.2d
1115, for the proposition that “mere solidarity” does
not operate tio create “virtual representation and close
alignment.” Breaux is distinguishable, however. In
Breaux, the defendants had adverse interests, and
were not considered solidarily liable. The judgment in
Rec. Doc. 87 at pps. 10-11
App. 47
question “exonerated the only party before the court,
thus making it impossible to declare that party to
have been solidarily liable with anyone”. Jd. at 1119.
In Minvielle I, IMC/Mosaic joined as_ third-party
defendants ARCO, Oxy, and Pacific due to the joint
interests of all defendants.
Furthermore, the identity of parties in the in-
stant case is not based solely on solidarity. The defen-
dants in the two actions are all former parties or
successors-in-interest to the 1961 lease. Plaintiff’s
claims against all defendants are identical and arise
from the obligations allegedly created by the lease.
Additionally, plaintiff was aware at least by the
time of Minvielle I that ARCO, Oxy, and Pacific had
conducted operations on the land in question, and
were potentially liable for the resulting contamina-
tion. Plaintiff could have asserted claims against
these defendants at that time, but chose not to do so.
Finally, it is clear that IMC/Mosaic adequately
represented the aligned interests of all defendants as
it related to plaintiff’s lack of standing under the
1961 Lease.
Considering the foregoing, the September 6, 2007
ruling finding that the there was an identity of
parties in Minvielle I and II was not erroneous. The
Minvielle I judgment finding that the court lacks
subject matter jurisdiction is res judicata in this case.
Claim of standing Plaintiff argues that it has
standing to sue ARCO. This does not ameliorate the
App. 48
fact that there is no subject matter jurisdiction in
this case. Plaintiff’s standing was fully litigated in
Minvielle [. The doctrine of res judicata precludes
plaintiff’s attempt to re-litigate the issue as to any
party to the previous litigation, as well as parties who
were closely aligned with the party in the previous
litigation, such as ARCO. Because the Minvielle I
judgment regarding lack of subject matter jurisdic-
tion is res judicata, the court lacks subject matter jur-
isdiction in this case. Since dismissal is proper for
lack of subject matter jurisdiction, it is not necessary
to fully address plaintiff's standing argument. RuArgas
AG v. Marathon Oil, 526 U.S. 574 (1999); Alpine View
Co. Ltd. v. Atlas Copco AB, 205 F.3d 208 (5th Cir.
2000).°
Conclusion
Considering the foregoing, the Court’s finding that
res judicata applies to this case will not be altered.
Accordingly,
IT IS ORDERED that plaintiff’s motion is
DENIED.
* The undersigned also notes that this attempt by plaintiff
to address this specific standing issue is improper under Rule
59, which “may not use Rule 59/(e) to relitigate old matters, or to
raise arguments or present evidence that could have been raised
prior to the court order.” See Templet v. HydroChem Inc., 367
F.3d 473, 479 (5th Cir. 2004) Stmon v. United States, 891 F.2d
1154, 1159 (Sth Cir.1990)
App. 49
Signed at Lafayette, Louisiana, on March 24,
2008.
/s/ Mildred E. Methvin
Mildred E. Methvin
United States Magistrate Judge
800 Lafayette St., Suite 3500
Lafayette, Louisiana 70501
(337) 593-5140 (phone)
593-5155 (fax)
App. 50
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE - OPELOUSAS DIVISION
FRANK C. MINVIELLE, L.L.C. CIVIL ACTION
VS. NO. 03-1908
IMC GLOBAL MAGISTRATE
OPERATIONS. INC JUDGE METHVIN
; , BY CONSENT OF
THE PARTIES
MEMORANDUM OPINION ~-
RULING ON MOTION
(Rec. Doc. 108)
(Filed Jan. 12, 2005)
Before the court is plaintiff's Memorandum in
Support of the Motion for Reconsideration and/or
for New Trial seeking reconsideration of the under-
signed’s October 19, 2004 ruling dismissing plaintiff's
claims based on lack of standing. On November 4,
2004, the Motion for Reconsideration was granted
and additional! briefing was ordered. Plaintiff filed a
supplemental memorandum in support and defen-
dant filed an opposition.’
Issues Presented
Plaintiff seeks an order vacating the Court’s
judgment dismissing plaintiff’s claims for lack of
Rec. Doc. 111 and 112
App. 51
standing to bring contractual and tort claims arising
from defendant’s alleged contamination of property.
Plaintiff alleges it has standing to bring the claims
because actions for restoration of property once bur-
dened by a mineral lease are real rights which attach
to the property, and that to the extent that the Act of
Cash Sale was deficient, it is being amended to in-
clude the transfer of property rights to plaintiff.
Background’
On October 19, 2004, defendant’s motions to dis-
miss and for summary judgment were granted and
judgment was entered dismissing plaintiff’s claims
against defendant. As it relates to plaintiff ’s lack of
standing to bring contractual and tort claims, the
Memorandum Opinion states:
Plaintiff seeks damages based on IMC’s
breach of the 1961 lease and for IMC’s tor-
tious conduct. IMC argues that since plaintiff
was not a party to the contract and the
previous owners’ rights under the 1961 lease
were not specifically assigned to plaintiff,
plaintiff lacks standing to bring the breach
of contract claims. Moreover, IMC maintains
that since the tortious conduct occurred prior
to plaintiff owning the property, it cannot
assert tort claims for damages. Plaintiff
For a detailed review of the procedural and factual back
ground, see Rec. Doc. 105
Rec. Doc. 105
App. 52
maintains that it has standing because it is a
third party beneficiary of the contract and
because tort damages can be brought regard-
less of the timing of the damages.
¥ + ‘
There is no dispute that plaintiff has no
direct privity of contract with IMC, nor does
plaintiff allege that it obtained any assign-
ment of rights in the the Act of Sale from the
previous owners, other than warranty of
title.
After an exhaustive review of the law regarding
stipulations pour autri and standing to bring tort
claims arising from damage to property, the Court
found that plaintiff did not have standing to bring
contractual or tort claims.
Legal Analysis
The Federal Rules of Civil Procedure do not rec-
ognize a motion to reconsider in haec verba. See
Lavespere v. Niagara Mach. & Tool Works. Inc., 910
F.2d 167, 173 (5th Cir.1990), abrogated on other
grounds by Little v. Liquid Atr Corp., 37 F.3d 1069,
1075 n. 14 (5th Cir.1994). The Fifth Circuit has held
that a motion to recunsitter a dispositive pretrial
motion may be classified under either Rule 59 or Rule
60, depending upon the time of filing. /d. If the mo-
tion is filed within ten days of the court's judgment, a
motion for reconsideration is treated as a Rule 59(e)
motion “to alter or amend” the judgment. /d. If filed
App. 53
more than ten days after the judgment, a motion for
reconsideration falls under Rule 60(b) as a motion for
“relief from judgment.” Here, plaintiff filed the mo-
tion for reconsideration less than ten days after this
Court entered its judgment.’ (Accordingly, the Court
analyzes plaintiff ’s motion under Rule 59(e).
The district court has considerable discretion to
erant or deny a motion under Rule 59(e). Edward H.
Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 355
(5th Cir.1993); Lavespere, 910 F.2d at 174. The court
must “strike the proper balance between the need for
finality and the need to render a just decision on the
basis of all the facts.” Bohlin, 6 F.3d at 355. It is well
established that a party may not use Rule 59(e) to re-
litigate old matters, or to raise arguments or present
evidence that could have been raised prior to the
court order. See Simon v. United States, 891 F.2d
1154, 1159 (5th Cir.1990); Louis Dreyfous Corp. v.
McShares, Inc., 1990 WL 3916, at *1 (E.D.La. Jan.
17, 1990) (“Relitigation of previously decided issues is
not favored, particularly when no newly discovered
evidence or other compelling reason exists.”).
* Judgment was entered October 19, 2004 (Rec. Doc. 105).
According to Fed R. Civ. Proc. Rule 6, the day of the judgment
and weekends are not included in computing time delays that
are less than ten days. Accordingly, the motion filed on Novem-
ber Z, 2004 was filed within ten days of judgment
App. 54
Standing to enforce restoration obligation
Plaintiff asserts that defendant had an obligation
under the Mineral Code, La. RS. 31:1 et seq, to
restore the property, and that plaintiff has standing
to enforce that obligation. In the original ruling, the
court found that since plaintiff was not assigned the
right to enforce the obligations of the mineral lease,
plaintiff did not have standing to bring the claims.
Plaintiff maintains that since mineral leases are
classified as real rights, they attach to the land and
there was no need for a particular assignment of
rights to plaintiff in order for plaintiff to have stand-
ing to bring suit.
Plaintiff is correct that the Mineral Code imposes
an obligation on a mineral lessee to restore the leased
property. The Louisiana Supreme Court and the
Third Circuit Court of Appeals of Louisiana have
recognized the contractual duty of a mineral lessee to
restore the surface upon completion of operations. See
Caskey v. Kelly Oil Company, 737 So.2d 1257 (La.1999)
and Trinidad Petroleum Corporation v. Pioneer Natu-
ral Gas Company, 416 So.2d 290 (3rd Cir.1982). In
Trinidad, the court held that an implied obligation of
a mineral lessee to restore the surface when opera-
tions are completed is read into every mineral lease.
This, however, is not dispositive of the issue be-
fore this court. Regardless of whether or not an ob-
ligation existed, plaintiff must have standing to bring
the action to enforce the obligation. Plaintiff main-
tains that since a mineral lease is a real right, the
App. 55
obligations attach to the land, and therefore, the own-
er of the land has standing to bring action against the
mineral lessee, despite the lack of privity of contract
between plaintiff and defendant.’
The original ruling characterized plaintiff’s ac-
tion in the case at bar as a personal right, which did
not attach to the property. Although, Louisiana R.S.
31:16 provides that a mineral lease, as a mineral
right, is a real right, a review of the Mineral Code
and the jurisprudence shows that it is not purely a
real right that automatically attaches to the property,
and therefore, the result of the original ruling was
correct. In Sketoe v. Exxon Co., 188 F.3d 596, 600-601
(5th Cir.1999), the court noted the dual nature of
mineral leases, concluding that the mineral lease
gives rise to a limited personal servitude, which is a
real right:
The Louisiana mineral lease includes fea-
tures that are characteristic of both contracts
and rights in property. See id. § 31:16 cmt.
(noting that the mineral lease is “a hybrid
institution”); see generally 1A W.L. SUM-
MERS, THE LAW OF OIL AND GAS § 167
(2d ed. 1954 & Supp.1999); Martin & Yeates,
supra, at 823-26. For instance, we inter-
pret the terms of the lease agreement as we
5
Real rights and obligations transfer from the seller to the
buyer without any special provision. La.Civ.Code art. 1763. Per-
sonal rights, however, do not transfer tn the absence of a special
assignment of rights to the buyer. La.Civ.Code art. 1764
App. 56
would any other lease. See La.Rev.Stat. Ann.
§ 31:2; Massie v. Inexco Oil Co., 798 F.2d 777,
779 (5th Cir.1986). Indeed, the lease itself is
a “contract.” La.Rev.Stat. Ann. § 31:114. As
such, it does not create an unlimited mineral
servitude, and Louisiana’s liberative pre-
scription for ten years nonuse therefore does
not apply. See Reagan v. Murphy, 235 La.
529, 105 So.2d 210, 215 (La.1958). On the
other hand, as an “incorporeal immovable”
*601 a mineral lease carries “real rights” and
is “subject to the laws of registry.” See
La.Rev.Stat. Ann. §§ 31:16,:18; St. Charles
Land Trust v. St. Amant, 253 La. 243, 217
So.2d 385, 390 (La.1968) (“Under Louisiana
law, the mineral leases and servitudes held
by the trustees are immovable property.”).
Strictly speaking, the mineral lease creates a
kind of servitude called a “limited personal
servitude.” See 3 a.N. Yiannopoulis, Louisi-
ana Civil Law Treatise: Personal Servitudes
§ 223, at 450 (3d ed.1989). “Limited personal
servitudes are real rights that confer on a
person limited advantages of use or enjoy-
ment over an immovable[, v.e., realty,] be-
longing to another person.” Jd. at 448-49.
Thus, it is in the nature of a limited personal ser-
vitude that the mineral lease is a real right. The lim-
ited personal servitude is explained in the Comments
to La. C.C. Art. 639 as constituting “an intermediary
category between personal and predial servitudes.
Like usufruct and habitation, they are charges on
things in favor of a person rather than an estate, like
predial servitudes, they are necessarily charges on an
App. 57
immovable belonging to another person and are con-
fined to certain advantages of use or enjoyment.” Al-
though a right of use, i.e., a personal servitude, is a
real right, it is one granted in favor of a person rather
than an estate, and therefore it does not pass with
the property upon sale of the property. Sustainable
Forests, L.L.C. v. Harrison, 846 So.2d 123, 1284
(La.App. 2 Cir. 5/22/03). A predial servitude, however,
is created to benefit an estate, and therefore, is
inseparable from the estate and passes with it upon
sale. La. C.C. Art. 650.
In the case of a mineral lease, the Mineral Code
designates the right as a real one in order to protect
the mineral lessee from losing his rights if the land is
sold during the existence of the lease. This conclusion
is apparent in the reasoning behind La.R.S. 31:16,
which are illustrated in the Comments stating:
All things considered, the lease has the ma-
jor characteristics of a real right: the mineral
lessee may follow the land, regardless of
transfers of ownership; the mineral lessee
may assert his rights against the world just
as the proprietor of any other real right; he
may enjoy directly and draw from the land a
part of its economic advantages by appro-
priating a wasting asset; he has certain
rights of preference; and he holds a right
that is in reality susceptible of a type of
possession through exercise.
App. 58
The fact that the real right created is the right
held by the lessee, is specifically noted in the Com-
ments to La.R.S. 31:154, “The mineral lease, though
it creates a real right in the hands of the lessee is still
an elaborate contractual relationship.” Accordingly,
the mineral lease gives real rights to the lessee, but
the Mineral Code is void of any indication that it
creates real rights in favor of the lessor. This is ac-
counted for in the Comments to La.R.S. 31:16, which
note:
It is true that there are certain distinctions
from the normal rea] right which give the
mineral lease markings of kinship to per-
sonal rights. Not all obligations created by
the lease are binding on a subsequent owner
of the land. However, these distinguishing
marks are susceptible of recognition and are
dealt with appropriately in the articles of
this code governing mineral leases. The basic
purpose of this article is to recognize that
insofar as the mineral lease transfers both
operating rights and rights to production it is
a real right and not a mere personal con-
tract.
Further, the jurisprudence does not indicate that
a subsequent landowner has standing to sue a former
mineral lessee based on the status of the mineral
lease as a mineral right.’ Moreover, the cases which
* The lone case cited by plaintiff is factually distinguishable
in that in Magnolia Coal Terminal v. Phillips Oil Co., 576 So. 2d
475 (La. 1991) the landowner purchased the land while the
(Continued on following page)
App. 59
do involve the issue presented herein, i.e., whether a
subsequent landowner has standing to bring suit
based on the expired mineral lease, require the subse-
quent landowner to some form of privity of contract,
assignment of rights, or be the beneficiary of a stipu-
lation pour autri. Hazelwood Farm, Inc. v. Liberty Oil
and Gas Corp., 790 So.2d 93, 100-101 (La.App. 3rd
Cir. 2001) (subsequent landowner had standing to
bring claims as a beneficiary of a stipulation pour
autri); Hargroder v. Columbia Gulf Transmission Co.,
290 So.2d 874, 876 (La. 1974) (stipulation pour autri).
As stated in the origina] ruling, “There is no dispute
that plaintiff has no direct privity of contract with
IMC, nor does plaintiff allege that it obtained any
assignment of rights in the Act of Sale from the previ-
ous owners, other than warranty of title.”’ Plaintiff
now, after the Court’s ruling, claims that the parties
to the Act of Sale intended to assign rights to plain-
tiff, and therefore, the Act of Sale will be amended to
so state. Plaintiff has not provided a copy of the
Amended Act of Sale, nor is there any indication that
such an amendment will be allowed by the state
court.
Considering the foregoing, the Court’s finding
that plaintiff does not have standing to bring contrac-
tual or tort claims will not be altered. Accordingly,
mineral lease was still in existence. Here, on the other hand, the
lease had expired and was no longer in effect when plaintif!
purchased the land. .
~ Ree. Doc. 105 at p. 17
App. 60
IT IS ORDERED plaintiff ’s request to vacate
the October 19, 2004 ruling in favor of defendant is
DENIED.
Signed at Lafayette, Louisiana on January 12,
2005.
/s/ Mildred FE. Methvin
Mildred E. Methvin
United States Magistrate Judge
800 Lafayette St., Suite 3500
Lafayette, LA 70501
(337) 593-5140 FAX 593-5155
App. 61
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE-OPELOUSAS DIVISION
FRANK C. MINVIELLE, L.L.C. CIVIL ACTION
VS. NO. 03-1908
IMC GLOBAL OPERATIONS, MAGISTRATE
JUDGE METHVIN
INC. TRANSOK INC. whine bin
ENCANA MIDSTREAM, INC. 7s DARTS
ESTIS WELL SERVICE, L.L.C.
MEMORANDUM OPINION -
RULING ON MOTIONS
(Rec. Docs. 19 and 89)
(Filed Oct. 19, 2004)
Before the court are a number of motions to
dismiss filed by defendant IMC Global Operations,
Inc. (*IMC”).'’ Plaintiff, Frank C. Minvielle, L.L.C.
filed an opposition and IMC filed a reply.’ Plaintiff
submitted additional affidavits and defendant filed a
The motion is styled as if mover were McMoRan
Exploration Company rather than defendant IMC. As the court
observed in its ruling on the motion to remand, McMoRan has
undertaken the defense of IMC in this suit, and its motion will
be deemed on behalf of IMC. Encana also filed a motion to
dismiss (Rec. Doc. 16), however, at oral argument held July 22,
2004, plaintiff's counsel advised that plaintiff was going to
voluntarily dismiss Encana with prejudice, rendering Encana’s
motion moot. An order dismissing FE ncanca was issued August
16, 2004. Rec. Doc. 94.
“ Rec. Doc. 69. 72, and 73
App. 62
motion to strike a portion of the affidavits.’ Oral
argument was held on July 22, 2004.*
Procedural Background
Plaintiff, a limited liability company, filed suit on
August 27, 2003, in the 16th Judicial District Court
alleging that it owns real property and oil and gas
leases in Iberia Parish, Louisiana, which have been
“contaminated or otherwise damaged by defendants’
oil and gas exploration and production activities.”
Plaintiff named as defendants IMC, Encana Mid-
stream, Inc., Estis Well Service, L.L.C., and Transok,
Inc. The case was removed to federal on October 15,
2003 pursuant to diversity jurisdiction under 28
U.S.C. § 13832. Only one defendant remains in the
case at this juncture: IMC.°
> Rec. Doc. 89.
4
At oral argument, the court deferred ruling on the motion
for summary judgment based on prescription; and on the Rule
12(b\7) motion to dismiss for failure to join parties who retained
a '/2% mineral interest in the property; for lack of standing, and
for failure to state a claim for attorney’s fees
* See Petition for Damages, Rec. Doc. 1, Paragraphs 1 and 3
* On February 2, 2002, Estis Well Service, L.L.C. was dis-
missed based on fraudulent joinder (Rec. Doc. 55). Defendant
Transok, Ine., was dismissed on February 20, 2004 for plaintiff's
failure to prosecute (Rec. Doc. 65). Finally, Encana was dis-
missed with prejudice on plaintiff's motion (Rec. Doc. 94).
App. 63
Factual Background
The record shows as follows: On September 28,
1961, Juliet Bourgeois Delcambre, a previous owner
of the land at issue, entered into an Oil, Gas and
Mineral Lease (hereinafter referred to as the “1961
lease”) with The Atlantic Refining Company
(“ARCO”) for the purposes of exploring and possibly
drilling for oil on the property. ARCO subleased the
mineral rights to Callery Properties, Inc. on
November 26, 1962." Callery Properties, Inc., in turn,
conveyed its interest in the lease to Petro-Lewis
Funds, Inc. on November 26, 1974.’ Petro-Lewis
conducted operations on the property and on
December 24, 1977 filed a “Plug and Abandon Report”
related to the Delcambre #1 Well (well serial no.
105992).”° Plaintiff alleges that Petro-Lewis breached
the contract and contaminated the property during
its operations. IMC is the successor of Petro-Lewis.
Plaintiff’s predecessor, Minvielle & Segura,
L.L.C. purchased the land in 1998 by Act of Cash
Sale.'’ On November 30, 2001, Frank C. Minvielle
' Attachment to Rec. Doc. 69. On January 10, 1963, Juliet
Delcambre Cowan, daughter of Juliet Bourgeois Delcambre,
ratified the 196] lease. See “Act of Ratification,” attachment to
Rec. Doc. 69.
* “Sublease of Oil, Gas, and Minera! Leases.” attachment to
Rec. Doc. 69.
* “Conveyance,” attachment to Rec. Doc. 69.
° “Plug and Abandon Report,” attachment to Rec. Doc. 41.
Exhibit 8 to Rec. Duc. 41.
App. 64
acquired all ownership of Minvielle & Segura, L.L.C.,
and shortly thereafter changed its name to Frank C.
Minvielle, L.L.C., plaintiff in this action.”
Motions Presented
IMC filed the following motions:
(A) Rule 12(b)(1) Motion Requesting Defer-
ence to the Primary Concurrent Juris-
diction of the Louisiana Office of Con-
servation (“LOC”) and the Louisiana
Department of Environmental Quality
(“DEQ”);
(B) Rule 12(b)\1) and/or 12(b)(6) motion to
dismiss premature claims;
(C) Rule 12(e) motion for more definite
statement;
(D) Rule 12(b\3) motion to dismiss for
improper venue;
(E) Motion for compliance with Rule 20 and
21 regarding improper joinder;
(KF) Rule 12(b)(7) motion dismiss for failure
to join indispensable parties;
(G) Rule 12(b\6) motion to dismiss for
faiture to state a claim for lack of
Rec. Doc. 77
App. 65
standing, nonrecoverable damages, and
prescription.”
On June 2, 2004, the 12(b)(6) motions (Paragraph
(G) above) were converted to motions for summary
judgment since their disposition required reference to
documents outside of the complaint. The parties were
allowed ten days to submit additional information to
be considered in connection with the motion for
summary judgment.” On June 14, 2004, plaintiff
submitted the affidavit of Frank Minvielle, owner of
plaintiff Frank C. Minvielle, L.L.C. Plaintiff sub-
sequently filed the affidavits of Juliet and Finis
Cowan, regarding the previous owners’ knowledge of
the condition of the land at issue.'” Defendant filed a
motion to strike the affidavits, maintaining that
portions of the affidavits were not based on the
personal knowledge of the aftfiants."” Plaintiff filed an
opposition to the motion to strike and the parties filed
supplemental briefs regarding prescription and
indispensable parties."
Rec. Doc. 19.
On June 14, 2004, plaintiff submitted the affidavit of
Frank Minvielle, owner of plaintiff Frank C. Minvielle, L.L.C.
Plaintiff subsequently filed the affidavits of Juliet and Finis
Cowan, regarding the previous owners’ knowledge of the
condition of the land at issue. The parties filed supplemental
briefs regarding prescription
' Rec. Doc. &6
Rec. Doc. 89
Rec. Docs. 90, 92, 93, 96
4
App. 66
Analysis
The district court, sitting in diversity juris-
diction, must apply the substantive law of Louisiana,
while employing Federal procedural rules. Erie R. Co.
v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188
(1938). In the absence of a valid Federal Civil Rule
addressing the point, the court must determine
whether a particular rule is procedural or substantive
by considering the “twin aims of the Erie rule:
discouragement of forum-shopping and avoidance of
inequitable administration of the laws.” Hanna v.
Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8
(1965).
(A) Rule 12(b)(1) motion for deference to the
primary concurrent jurisdiction
Plaintiff seeks damages for IMC’s disposal,
discharge, and storage of highly toxic chemicals into
plaintiff’s property. Plaintiff also seeks funds to
conduct a scientific analysis of the extent and nature
of the contamination, the costs to restore the prop-
erty, punitive damages, and attorneys’ fees. IMC
argues that all of the claims are subject to the
primary concurrent jurisdiction of the Louisiana
OMce of Conservation (“LOC”) and the Louisiana
Department of Environmental Quality (“DEQ”), and
that this court should allow those agencies to address
the environmental remediation issues prior to judicial
consideration of liability and damage issues.
App. 67
Louisiana Revised Statute 30:1(D) provides that
the LOC has jurisdiction over claims regarding: “the
disposal of any waste product into the subsurface by
means of a disposal well and the regulation of all
surface and storage waste facilities incidental to oil
and gas exploration and production, shall be within
the jurisdiction of the department.” The LOC also has
jurisdiction over issues regarding surface and storage
waste facilities incidental to oil and gas exploration
and production and abandoned oil and gas wells. La.
R.S. 30:4(C). The DEQ has jurisdiction over remedial
action plans and has set forth a process by which
remediation plans are approved and enforceable.
La.R.S. 30:2286.1.
Under Louisiana law, the deference to the com-
missioner for an initial decision on matters within the
expertise of the LOC, which is contemplated by the
doctrine of primary jurisdiction, is a matter within
the sound discretion of the trial court. Magnolia Coal
Terminal v. Phillips Oil Co., 576 So.2d 475, 489 (La.
1991). The two major considerations underlying the
doctrine are the need for uniformity 1n various areas
of regulated industry, and the special administrative
expertise attributable to agencies due to their
intimate working associations with industries they
regulate. South-West Utilities v. S. Cent. Bell Tel., 339
So.2d 425 (La.1976). Louisiana’s doctrine of primary
jurisdiction is substantive and it requires the federal
courts to exercise discretion as if it were a Louisiana
state court. Mills v. Davis Oil Co., 11 F.3d 1298, 1304-
1304 (5th Cir. 1994).
App. 68
Landowners in Louisiana have no duty to seek
relief from an administrative agency before filing suit
against an oil company. Corbelio v. Iowa Production,
850 So.2d 686 (La. 2003). Plaintiff’s action for
damage to its property is a matter of private law.
Magnolia Coal Terminal v. Phillips Oil Co., 576 So.2d
475, 483 (La. 1991). In Magnolia Coal, the Louisiana
Supreme Court upheld a trial court’s decision, in
deciding a remediation issue, refusing to defer to the
Commissioner of Conservation as a matter of primary
jurisdiction. The court stated that “damages from soil
pollution are within the conventional knowledge and
expertise of a trier of fact and the court of appeal
erred in deciding that the plaintiff’s damages cannot
be fixed until the commissioner of conservation holds
a new hearing.” Magnolia Coal, 576 So.2d at 484.
Considering the applicable law, and the fact that
plaintiff opposes it, the court concludes that pre-
liminary submission of the claims to the LOC and
DEQ is not necessary. Accordingly, the Rule 12(b)(1)
motion for deference to the primary concurrent
jurisdiction of the LOC and DEQ is DENIED.
(B) and (C): Motion to dismiss premature claims,
or for more definite statement
1. Prematurity involving LOC and DEQ
IMC argues that plaintiff’s claims are premature
because plaintiff has not sought review with the LOC
or DEQ, and therefore has failed to exhaust the ad-
ministrative remedies. As discussed above, exhaustion
App. 69
of administrative remedies is not necessary. As dis-
cussed in Corbello, supra, landowners have no duty to
seek relief from an administrative agency before
filing suit against an oil company.
IMC asserts that claims under the Conservation
- Act for contamination of “usable ground water” must
be made with the LOC and DEQ, pursuant to La. R.S.
30:1 and 30:2015.1 (requiring notification of DEQ
in certain cases). Those statutes are inapplicable.
Plaintiff has specifically stated that it does not seek
redress for public issues, but instead has limited its
claims to private causes of action. Louisiana Revised
Statute 30:1 requires exhaustion prior to judicial
review for claims by “a person aggrieved” by a law,
rule, regulation or order made by the assistant
secretary of the office of conservation. Plaintiff has
not asserted that it has been aggrieved by an order of
the LOC or DEQ, and is therefore not limited to a
claim under La. R.S. 30:1."
Nor is La.R.S. 30:14 applicable. The latter stat-
ute authorizes the Commissioner of Conservation to
" La R.S. 30:1 provides:
A person who is aggrieved by any law of this state
with respect to conservation of oil or gas, or both, or
by a provision of this Chapter, or by a rule, regulation,
or order made by the assistant secretary of the office
of conservation hereunder, or by an act done or
threatened hereunder, and who has exhausted his
administrative remedy, may obtain court review by a
sult for injunction or judicial review against the
assistant secretary as defendant
or;
ca
App. 70
enjoin conduct in violation of state laws when
“ongoing or threatened” actions violate conservation
laws of the state. Plaintiff’s claims are for purely
private matters relating solely to the actions of the
defendant oil companies. Plaintiff has specifically
excluded any claims for contamination of usable
ground water and has otherwise avoided claims that
trigger involvement by the Commissioner of
Conservation. Accordingly, IMC’s attempt to require
administrative review by this landowner is without
merit, and the motion to dismiss for prematurity is
DENIED.”
2. Prematurity under leases
IMC contends that plaintiff was required to give
defendants written notice of the alleged breach of
contract and request that defendants correct the
breach prior to filing this suit. IMC asserts that
plaintiff’s complaint is vague and omits specific facts
identifying which leases have been allegedly breached
” To the extent that plaintiff's complaint does mention in
paragraphs 13, 16, 25, and 26 that defendant’s activities have
resulted in contamination of ground water, the court deems
these references merely factual allegations. Since plaintiff
specifically, in paragraph 31, asserts that it is not seeking
damages for contamination or remediation costs for usable
ground water, no such damages are recoverable due to the
exclusion thereof by the complaint. In the event that plaintiff
were to claim damages for contamination or remediation costs of
usable ground water, La. R.S. 30:2015.1, requiring notification of
DEQ, must be followed prior to assertion of any such claims
App. 71
by which defendant, the terms of the leases, the
parties thereto, and the subject lands. IMC reasons
that some of the leases at issue may not have been
terminated yet, and therefore the present claims are
premature.
A review of Exhibit “C” to plaintiff’s opposi-
tion memorandum shows that IMC’s predecessor,
Petro-Lewis Funds, Inc. was involved with a lease
that resulted in work done on plaintiff’s land.
Although plaintiff failed to specify, in its pleadings,
the subject tract of land and whether the lease had
expired, plaintiff’s counsel addressed the issue at
oral argument. The Petro-Lewis lease involved the
Delcambre Well No. 1, which was plugged and
abandoned in 1977. By its own terms, the lease
expired 90 days after production ceased. IMC
conceded that the lease expired in 1977. Thus, the
motion to dismiss for prematurity under the lease is
DENIED.
(D) Rule _ 12(b)(3) motion to dismiss for _ im-
proper venue
IMC maintains that:
To the extent that the plaintiff’s claims must
be brought against the LOC pursuant to La.
R.S. 30:12(A)(2) as discussed in the motion to
dismiss for prematurity raised above, the
19th Judicial District Court (and therefore
the U.S. Dnistrmect Court for the Middle
District of Loutsiana) is the court of proper
e a i a we _*
App. 72
venue for the claims raised by plaintiff’s
Petition.
As discussed above, IMC’s motion to dismiss for
prematurity regarding the necessity to file suit
against the Commissioner of Conservation is without
merit. Accordingly, the motion to dismiss for lack of
venue based on the same arguments is DENIED.
(E) Motion for compliance with Rule 20 and
21 regarding improper joinder
IMC maintains that plaintiff improperly joined
the defendants in this action. Since all other
defendants have now been dismissed, this motion is
DENIED as moot.
(F) Rule 12(b)(7) motion dismiss for failure to
join indispensable parties
IMC argues that there may be other parties
which need to he added, either as defendants or
plaintiffs. Plaintiff argues that there are no other
parties which need to be joined.
At oral argument, the court noted that the sellers
retained a '/2 percent mineral interest in the land sold
to plaintiff. The Act of Cash Sale states:
Sellers reserve and retain unto themselves,
their heirs, successors and assigns, an
undivided ‘2 [percent| of all oil, gas, and
other minerals, including sulphur, in, on and
under the aforedescribed property with the
App. 73
right and authority to exercise all necessary
means for the’ prospecting, exploiting,
producing and development of the minerals,
including all rights of access to and use of
the surface of the land as may be necessary
or incident to this reservation.”
Rule 19(a) F-R.Civ. P. states that parties are
necessary to an action if: “(1) in the person’s absence
complete relief cannot be accorded among those
already parties, or (2) the person claims an interest
relating to the subject of the action and is so situated
that the disposition of the action in the person’s
absence may (i) as a practical matter impair or
impede the person's ability to protect that interest or
(ii) leave any of the persons already parties subject to
a substantial risk of incurring double, multiple, or
otherwise inconsistent obligations by reason of the
claimed interest.”
The Cowans do not own the land in question. The
record indicates they are aware of this action and
have not attempted to state an interest, nor have
any other indispensable parties been identified. The
motion to dismiss for failure to join necessary parties
is therefore DENIED.
’ Exhibit 8 to Rec. Doc. 41
App. 74
(G) Rule _12(b)(6) Motion to Dismiss - Con-
verted to Motion for Summary Judgment
IMC filed a motion to dismiss for failure to state
a claim. Since the parties filed matters outside of the
pleadings which must be considered in order to
determine the motion, the court notified the parties
that the motion would be considered a motion for
summary judgment under Rule 56. F. R. C.P. 12(b).
Summary judgment “shall be rendered forthwith if
the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
judgment as a matter of law.” Fed.R.Civ.P.56. An
issue is material if its resolution could affect the
outcome of the action. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202
(1986). In deciding whether a fact issue has been
created, the court must view the facts and the
inferences in the lhght most favorable to the
nonmoving party. Olabisiomotosho v. City of Houston,
185 F.3d 521, 525 (5th Cir.1999).
1. Prescription
a. Contra Non Valeniium
Plaintiff concedes that the complaint was filed
over twenty years after the alleged breach of contract
and tortious conduct by defendants. Considering that
tort claims prescribe one year after the date of the
alleged tortious conduct, and that contractual claims
App. 75
prescribe ten years after the alleged breach, the
claims arising from defendants’ actions on plaintiff’s
property were prescribed on the face of the petition.
Accordingly, the burden to establish an exception to
the rule of prescription lies with plaintiff. Terrebonne
Parish School Bd. v. Mobil Oil Corp., 310 F.3d 870,
885-886 (5th Cir. 2002). The plaintiff is required to
adduce evidence sufficient to raise a genuine issue of
material fact regarding its claim of an exception from
prescription. Mere allegation or innuendo is insuffi-
cient.
Plaintiff relies on the theory of contra non
valentum to avoid prescription barring the claims in
this case. According to this theory, prescription does
not begin to run until “a plaintiff either knew or
should have known of a cause of action, even if that
knowledge does not occur until long after the
wrongful conduct at issue has occurred.” Simmons uv.
Templeton, 723 So.2d 1009, 1012 (La.App. 4 Cir.
11/10/98). Prescription runs from the time that the
plaintiff has actual or constructive knowledge of the
act, which has been defined as “the time at which the
plaintiff has information sufficient to excite attention
and prompt further inquiry.” National Council on
Compensation Ins. v. Quixx Temporary Serv., Inc., 665
So.2d 120, 124 (La.App. 4 Cir. 11/16/95). Thus,
prescription does not begin to run at the first
indication that the plaintiff may have suffered harm,
but rather it begins to run “when plaintiff has
reasonable basis to pursue claim against specific
defendant.” Jordan v. Employee Transfer Corp., 509
App. 76
So.2d 420, 424 (La.1987). The heart of the inquiry
into constructive knowledge is the reasonableness of
plaintiff’s inaction. /d.
Plaintiff submitted the affidavit of Frank
Minvielle, owner of plaintiff Frank C. Minvielle,
L.L.C., which states that he did not have knowledge
of a claim or reason to suspect that a claim existed
until August 2003, when a geologist issued a report
discussing possible contamination of plaintiff’s
property.
IMC does not contest that plaintiff did not have
knowledge regarding the alleged contamination until
just prior to the filing of suit. Plaintiff did not
purchase the land until 1998, well after the alleged
tortious conduct occurred. However, the claims may
be prescribed if the previous owners of the land knew
or should have known of the possible claims. If they
did not, then under the doctrine of contra non
valentum, prescription only began to run when
plaintiff learned of the potential claims.
In response to the order setting oral argument,
plaintiff submitted the affidavits of Finis E. Cowan,
Jr. and Juliet D. Cowan. The Cowans are married
and Mrs. Cowan’s mother, Mrs. Juliet Delcambre,
owned the land at issue until her death in 1988, at
which time the land passed to Mrs. Cowan and her
children.”’ Mr. Cowan explained that in 1982,
App. 77
PanCanadian Petroleum, Encana’s predecessor, paid
Mrs. Delcambre $21,000.00 for possible contami-
nation from its operations.” With regard to IMC’s
predecessor Petro-Lewis’s oilfield operations, Mr.
Cowan states, “I have never had any information that
would lead me to know or believe that there was any
contamination problems at the Petro Lewis site.”
Mrs. Cowan states, “I have reviewed the above
affidavit and discussed it with my husband. To the
best of my knowledge the statements contained in his
affidavit are true and correct.””
IMC argues that the affidavits of the Cowans are
insufficient to defeat the motion for summary judg-
ment.” IMC maintains that the Cowans’ affidavits
were not based on personal knowledge regarding
what the pre-1988 owners knew. Mrs. Cowan inher-
ited the land from her mother in 1988. Additionally,
IMC argues that since the Cowans’ affidavits contain
language evidencing that they did not know where
the Petro Lewis well was located, they could not
provide information based upon personal knowledge
regarding possible contamination at the site.
The court concludes that the affidavits of the
Cowens establish that prior to selling the property to
plaintiff, they did not know of any contamination, nor
was there any indication that the property may have
Rec. Doc. 86
Rec. Doc. 86
“ Rec. Doc. 89
App. 78
been contaminated by Petro-Lewis. IMC’s argument
that the Cowans did not have personal knowledge
regarding the facts relating to the Petro-Lewis well is
unpersuasive. The Cowans attest that they had no
information regarding possible contamination or
claims against Petro-Lewis, and no reason to believe
that there was any contamination or other problems
with the land prior to it being sold to plaintiff. Their
lack of knowledge is explained by their further
assertions that they were far removed from the
operations and did not even know the exact location
of the well. The Cowans state that they relied upon
the oilfield companies to perform their work
according to the leases. Thus, absent some affir-
mative communication from a company, such as
PanCanadian’s statement to the landowners that it
had contaminated the site, there was no reason to
believe that the companies operating on the land
were doing so in a deficient manner. Moreover, since
the owner of the land prior to 1988, Mrs. Delcambre,
is deceased, it would be virtually impossible for
plaintiff to establish Mrs. Delcambre’s knowledge
regarding the land without relying upon the
affidavits of the Cowans, from whom Mrs. Delcambre
sought advice on issues concerning the land. It is
clear that the Cowans did not know cf contamination,
nor do they have reason to believe that Mrs.
Delcambre had any such knowledge. IMC concedes
that the Cowans are testifying truthfully in their
affidavits.
App. 79
Considering the foregoing, the court concludes
that no one had reason to believe that there was a
problem with the land prior to the 2003 geologist’s
report indicating possible contamination. The doc-
trine of contra non valentum therefore suspended the
running of prescription until plaintiff had knowledge
of the claims shortly before filing suit. IMC’s motion
for summary judgment is’ therefore DENIED
Additionally, IMC’s motion to strike the affidavits of
the Cowans is DENIED.
b. Continuing tort
The doctrine of continuing tort presents an
exception to the one-year prescriptive period. “A
continuing tort 1s occasioned by |the continual]
unlawful acts, not the continuation of the ill effects of
an original, wrongful act.” Crump v. Sabine River
Authority, 737 So.2d 720, 728 (La.6/29/99).°
Addressing the requirement that there be continuous
conduct by the defendant, the Louisiana Supreme
Court stated that “[tjJhe continuous conduct contem-
plated in a continuing tort must be tortious and must
be the operating cause of the injury.” Jd. at 729 n. 7.
In Crump, the Louisiana Supreme Court rejected the
Although the decision regarding contra non valentum
defeats the motion for summary judgment on prescription at
this time, the argument concerning the continuing tort doctrine
will be addressed since there is a possibility that a fact finder
will find that the doctrine of contra non valentum is inapplicable
to the case
App. 80
contention that a continuing breach of duty could
consist of a defendant’s failure to remedy the harm
caused by the initial tortious conduct, stating that
“the breach of the duty to right the wrong and make
the plaintiff whole simply cannot be a continuing
wrong which suspends the running of prescription, as
that is the purpose of any lawsuit and the obligation
of every tortfeasor.” Jd. at 729.
The Louisiana Supreme Court summarized the
doctrine of continuing tort as it applies in Louisiana
property law cases as follows:
When a defendant’s damage-causing act 1s
completed, the existence of continuing dam-
ages to the plaintiff, even progressively
worsening damages, does not present succes-
sive causes of action accruing because of a
continuing tort. Derbofen v. TL. James &
Co., 355 So.2d 963 (La.App. 4th Cir.1977),
writs denied, 357 So.2d 1156, 1168(1.a.), cert.
denied, *886 439 U.S. 911, 99 S.Ct. 280, 58
L.Ed.2d 257 (1978).
In re Moses, 788 So.2d 11738, 1188 (La. 2001). The
practical rule adopted by Louisiana courts in property
damage cases is that prescription begins to run when
the continuous tortious conduct is ahated
The case law distinguishes between ongoing
causes and tortious conduct that has ceased. In cases
such as Patout, where landfill waste was deposited
onto plaintiff's property via trespass, and South
Central Bell, where gas tanks continued to leak, the
ongoing cause was the failure of the defendants to
App. 81
remove the damage causing structure. Estate of Patout
vu. City of New Iberia, 708 So.2d 526 (La. App. 3 Cir.
3/6/98); South Central Bell Telephone Co. v. Texaco,
Inc., 418 So. 2d 531 (La. 1982). In South Central Bell,
leaking underground storage tanks caused contin-
uous damages to plaintiff’s underground telephone
wires. Because both the conduct — the leaking — and
the damages continued, the tort was held to be a
continuous.
In Mouton v. State of Louisiana, 525 So.2d 1136
(La.App. 1st Cir.1988), however, disposal of waste in
the ground was not a continuing tort. The court held
that the tortious conduct was the dumping of waste
onto plaintiff’s property and, since it occurred beyond
the one year prescriptive period, the action had
prescribed. Similarly, in Badalamenti v. Chevron
Chemical Co., 1995 WL 386868, *2 (E.D.La.), the
court found that the tortious conduct at issue was the
disposal of waste onto plaintiff's property. The
operating cause of plaintiff’s injury did not continue
beyond the placement of the waste in the ground, and
therefore, dcfendant’s alleged conduct did _ not
constitute a continuing tort because there was no
ongoing cause. Likewise in Terrebonne Parish School
Bd. v. Mobil Oil Corp., 310 F.3d 870, 885-886 (5th Cir.
2002), the Fifth Circuit upheld the distnct court’s
finding that the continuing tort doctrine was
inapplicable. In Jerrebonne v. Mobil, pursuant to a
mineral lease, the defendant dredged a canal during
its oil operations. After completion of the operations,
the defendant left the canal intact. Plaintiff sued, 40
App. 82
years later, arguing that the existence of the canal
contributed to erosion of its land and the demise of
the marshland habitat. The Fifth Circuit found that
the unlawful conduct was not continuing because the
completed well was abandoned with the canal left
intact in 1959. Thus, even though the damage, i.e. the
erosion, may have been continuing, the continuing
tort doctrine was inapplicable because there was no
continuing cause.
Here, like Mouton, the tortious conduct was the
disposal of waste into plaintiff’s property. The
operating cause of plaintiff’s injury was the actual
disposal or storage of the oilfield waste in plaintiff’s
property. The conduct abated when the defendant’s
ceased operations, which was in excess of 20 years
ago. Simply because the damages brought about by
such conduct may have continued, that is insufficient
to support application of the continuing tort doctrine.
Accordingly, the continuing tort doctrine is
inapplicable to the case at bar.
2. Lack of standing
Plaintiff seeks damages based on JMC’s breach of
the 1961 lease and for IMC’s tortious conduct. IMC
argues that since plaintiff was not a party to the
contract and the previous owners’ rights under the
1961 lease were not specifically assigned to plaintiff,
plaintiff lacks standing to bring the breach of contract
claims. Moreover, IMC maintains that since the
tortious conduct occurred prior to plaintiff owning the
App. 83
property, it cannot assert tort claims for damages.
Plaintiff maintains that it has standing because it is
a third party beneficiary of the contract and because
tort damages can be brought regardless of the timing
of the damages.
a. Contractual claims
Actions arising from a breach of contract or lease
of property are classified as involving personal mghts
rather than real rights. Prados v. South Central Bell
Tel. Co., 329 So.2d 744, 749 (La. 1976), citing Leonard
v. Lavigne, 245 La. 1004, 162 So.2d 341 (1964);
Harwood Oil and Mining Co. v. Black, 240 La. 641,
124 So.2d 764 (1960) overruled on other grounds by
Salvex, Inc. v. Lewis, 546 So.2d 1309 (La.App. 3d
Cir.1989); 2 A. YIANNOPOULOS, LOUISIANA CIviIL Law
TREATISE — PROPERTY, s 95, pp. 275-278 (1st Ed. 1967).
Real rights and obligations transfer from the seller to
the buyer without any special provision. La.Civ.Code
art. 1763. Personal rights, however, do not transfer in
the absence of a special assignment of rights to the
buyer. La.Civ.Code art. 1764. Official Comment (d) of
article 1764 states that, “a particular successor does
not acquire, without stipulation to that effect, any
personal rights that his author has with respect to
the thing.”
There is no dispute that plaintiff has no direct
privity of contract with IMC, nor does plaintiff allege
that it obtained any assignment of rights in the the
App. 84
Act of Sale from the previous owners, other than
warranty of title. The Act of Sale provides:
... Sellers, who, for the price and on the
terms and conditions hereafter expressed
hereby sell, assign, transfer and deliver with
all legal warranties and with full sub-
stitution and subrogation in and to al] the
rights and actions of warranty which Sellers
have or may have against all preceding
owners and vendors unto... Purchaser.”
Such a subrogation clause applies only to warranty of
title and does not assign personal rights for damages
arising from previous leases involving the property
Prados, supra, 329 So.2d 744, 749 (La. 1976).
Plaintiff argues, rather, that it is a third-party
beneficiary of a “stipulation pour autri” contained in
the the contract between the earlier landowners and
IMC’s predecessor. LA.CIv.CODE ANN. art 1978 pro-
vides as follows:
Art. 1978. Stipulation for a third party
A contracting party may stipulate a benefit
for a third person called a third party
beneficiary.
Once the third party has manifested his
intention to avail himself of the benefit, the
parties may not dissolve the contract by
" Exhibit 8 to Rec. Doc. 41
App. 85
mutual consent without the beneficiary’s
agreement.
Comment (b) to ART. 1978 states that “the
beneficiary's intention to accept the benefit may be
made known in any manner, even implied.” Thus, by
simply filing suit, plaintiff has made known its
intention to accept the benefit, if it exists.
The specific language of the contract in question
determines whether a stipulation pour autrui has
been created. The Fifth Circuit has observed the
necessity of clarity in any contractual provision
intended to contain a stipulation pour autrut..
... [SJuch a promise, or a stipulation pour
autrui, “is never presumed. Rather, the
intent of the contracting parties to stipulate
a benefit in favor of a third party must be
made manifestly clear.” Homer Natl Bank v.
Tri-District Dev. Corp., 534 So.2d 154, 156
(La.App. 3d Cir.1988), writ dented, 536 So.2d
1236 (La.1989). As we stated in New Orleans
Public Service, Inc. v. United Gas Pipe Line
Co., 7382 F2d 452 (5th Cir.) (en bance), cert.
denied sub nom. Morial v. United Gas Pipe
Line Co., 469 U.S. 1019, 105 S.Ct. 434, 83
L.Ed.2d 360 (1984):
Louisiana law ts settled that for
there to be a stipulation pour autrui
there must be not only a third-party
advantage, but the benefit derived
from the contract by the third party
may not merely be incidental to the
contract. Rather, the third-party
App. 86
benefit must form the condition or
consideration of the contract in
order for it to be a stipulation pour
autrut. Moreover, a stipulation pour
autrui will be found only when the
contract clearly contemplates the
benefit to the third person as its
condition or consideration.
732 F.2d at 467 (internal quotations and
citations omitted).
Chevron U.S.A., Inc. v. Traillour Oil Co., 987 F.2d
1138, 1147 (5th Cir.1993).
Plaintiff relies on Hazelwood Farm, Inc. uv.
Liberty Oil & Gas Corp., 790 So.2d 93 (La.App. 3rd
Cir.2001), writ denied, 01-2115 (La.7/26/01), 794
So.2d 834, writ denied, 01-2303 (La./10/01), 794 So.2d
836. In Hazelwood, the defendant had conducted oil
and gas exploration and production activities pur-
suant to a contract with a previous landowner. After
purchasing the property, Hazelwood filed suit al-
leging that the defendants’ activities resulted in con-
tamination of the property. Defendant Gulf/Chevron
asserted that Hazelwood was not a party to the lease
and therefore could not bring an action for the breach
of the lease. The court found, however, that Hazel-
wood was the beneficiary of a stipulation pour autrut.
Id. at 100, citing La.Civ.Code art. 1978. The court
noted that several factors are considered in deter-
mining whether a contract provides for a stipulation
App. 87
pour autrut. Id. citing Andrepont v. Acadia Drilling
Co., 231 So.2d 347, 351, 255 La. 347 (1969).*’ The
court looked to the language in the lease, which
provided that “Grantee shall be responsible for all
damages caused by his operations.” The court found
that this language was similar to the relevant phrase
in the Andrepont lease: “The Lessee shall be respon-
sible for all damages caused by Lessee’s operations.”
The latter lease had been found to create a stipu-
lation pour autrui, and accordingly, the Hazelwood
court concluded that the language in the lease must
be interpreted as providing a stipulation pour autrui
in favor of Hazelwood.
In Andrepont supra, the landowner allowed
Andrepont to farm soybeans on a 35-acre tract in
return for twenty percent of his crop. Later, the land
and mineral owners of the tract executed an oil and
gas lease allowing the lessee to enter the land to
explore and produce oil, gas, and other minerals. The
* The factors are: “(1) The existence of a legal relationship
between the promisee and the third person involving an obliga-
tion owed by the promisee to the beneficiary which performance
of the promise will discharge; (2) the existence of a factual
relationship between the promisee and the third person, where
(a) there is a possibility of future liability either personal or real
on the part of the promisee to the beneficiary against which
performance of the promisee (sic) will protect the former; (b)
securing an advantage for the third person may beneficially
affect the promisee in a material way; (c) there are ties of
kinship or other circumstances indicating that a benefit by way
of gratuity was intended.” Andrepont, 231 So.2d at 351.
App. 88
oil company’s operations on the tract were detri-
mental to Andrepont’s soybean crop:
** * (Djuring July, the oil and gas lessee
entered upon the land, built a board road
across Andrepont’s field, dug waste pits and
proceeded to drill a well in search of
minerals. Construction of the road, the drill
site and pits destroyed part of the crop and
impaired drainage in the remainder of the
soybean field. The lack of adequate drainage
left water standing in the field and made it
impracticable to work the crop. As a result,
the remainder of Andrepont’s crop was
damaged by ‘scalding’ and excessive weeds.
Andrepont, 231 So.2d 347, 353-355. The Louisiana
Supreme Court examined the lease form, which
initially read, “The Lessee shall be responsible for all
damages to timber and growing crops of the Lessor
caused by Lessee’s operations.” /d. at 351. The phrase
“to timber and growing crops of Lessor” was then
deleted so that the lease read, “The Lessee shall be
responsible for all damages caused by Lessee’s
operations.” Jd. The Court found that this language
created a stipulation pour autrut. The court wrote:
|Andrepont] is seeking to enforce a benefit
stipulated in his favor by the landowner
lessor as a condition of a commutative con-
tract between the landowner lessor and the
oil and gas lessee. Defendants, as assignees
of the oil and gas lessee, are, therefore,
parties to the contract in which the stipu-
lation 1s a condition... .”
App. 89
Id. at 356. The court reasoned that Andrepont had a
direct right of action against the lessee to recover his
damages as beneficiary of the stipulation.
In Hargroder v. Columbia Gulf Transmission Co.,
290 So.2d 874, 876 (La. 1974), the court found that a
stipulation pour autruit was created by language in
a servitude agreement providing that defendant
“agrees to pay such damages which may arise to
growing crops, timber, or fences from the construction
of the [pipeline].”
An examination of the lease in question shows
that the language contained therein is materially
distinguishable from that presented in Hazelwood
and Andrepont, and Hargroder. Unlike the open-
ended provisions in Hazelwood and Andrepont — “the
lessee shall be responsible for all damages” — the
lease here contemplates damages only “to Lessor and
Lessor’s tenants.” The relevant provision of the 1961
lease sub judice reads as follows:
Lessee shall promptly pay Lessor and
Lessor’s tenants a reasonable sum for any
damage resulting to said premises or the
crops or improvements thereon which may be
caused by or result from the operations of
Lessee hereunder. Within ninety (90) days
after the cessation of drilling operations on
any well located on the leased premises,
Lessee, or its successors and assigns, shall
fill and level all slush pits and shall remove
the drilling equipment and materia] used in
connection therewith from the drill site and
App. 90
shall restore said drill site to substantially
its prior condition, so far as can reasonably
be done, as concerns any material] change in
the surface of such premises caused by or
resulting from operations of Lessee here-
under.
Although the second sentence requiring restora-
tion of the property seems to impose a general
obligation of restoration, the provision must be read
as a whole. The only provision which discusses a right
to damages is limited to damages payable to “Lessor
and Lessor’s tenants.” Under Louisiana case law,
such language does not create a stipulation pour
autrui in favor of plaintiff. In Broussard v. Northcott
Exploration Co., Inc., 481 So.2d 125, 127 (La. 1986),
the court found that no stipulation pour autri was
created by a clause stating, “The Lessee shall be
responsible for all surface damages of the Lessor
caused by the Lessee’s operations” because the lan-
guage was restricted to damages suffered by the
lessor. The court held that the intent of the parties
was key in determining whether a stipulation pour
autrui is created. /d., 481 So. 2d at 127. A later court
cited Broussard in concluding that no stipulation
pour autrui arises in the absence of a clear intention
a Oe oR ene
Lo penetit iuture suriace owners:
Even viewing the clause as a possible stip-
ulation pour autrut (stipulation for benefit of
a third party), the result would be the same.
Broussard v. Northcott Exploration Company,
Inc., 481 So.2d 125 (La.1986); Hargroder v
Columbia Gulf Transmission Co., 290 So.2d
App. 91
874 (La.1974); Andrepont v. Acadia Drilling
Co., Inc., 255 La. 347, 231 So.2d 347 (1969).
The test annunciated in Broussard states
that “[iJn order to determine if a stipulation
{pour autrui] exists, we must look to the
intention of the parties at the time the min-
eral lease was negotiated.” Since the fore-
going analysis indicates no such intention to
benefit future surface owners, there was no
stipulation pour autrui in favor of plaintiffs
in this case.
Ashby v. IMC Exploration Co., 506 So.2d 1193, 1196
fn.7 (La. 1987).
In Prados, supra, 329 So.2d at 751, a land owner
granted a lease to South Central Bell Telephone
Company, allowing it to erect buildings and other
structures on the land. The lease required the com-
pany to remove the structures at the completion of
the lease. Upon termination of the lease, South
Central Bell did not remove the structures, nor did
the owner require removal. Several months later, the
property was sold to Prados. After acquiring the
property, Prados demanded that South Central Bell
remove the structures. The company refused and
Prados filed suit for damages representing the cost of
clearing the property. South Central Bell challenged
Prados’s standing to bring suit based upon a breach of
a former lessee’s obligation to restore the property at
the termination of the lease. Noting that predial
App. 92
leases” involve personal rights, the Louisiana
Supreme Court found that the right to damages was
a personal! right that accrued to the lessor prior to the
sale of the property to Prados. Thus, the court looked
to the act of sale to determine whether the right to
damages was specifically assigned by the pre
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