Locke Lord QuickStudy: No Duty to Protect the Levee Districts’ Interest in the “Buffer Zone”

According to the Authority, the Buffer Zone “extends from East of the Mississippi River through the Breton Sound Basin, the Biloxi Marsh, and the coastal wetlands of eastern New Orleans and up to Lake St. Catherine.” Opinion at p. 2.  The Authority, which also serves as the board governing three south Louisiana Levee Districts, sued the defendants claiming that the defendants’ oil and gas activities in the area have led to coastal erosion, making south Louisiana more vulnerable to severe weather and flooding. Id. Specifically, the Authority alleged that the dredging of canals by defendants to provide access to their oil and gas properties caused “vegetation die-off, sedimentation inhibition, erosion and submergence – all leading to coastal land loss,” which in turn allows storm surges further inland. Id.  The Authority’s causes of action included negligence, strict liability, natural servitude of drain, public and private nuisance, and breach of contract – third party beneficiary.

Noting as a starting point that under Louisiana law “oil and gas companies do not have a duty … to protect members of the public ‘from the results of coastal erosion allegedly caused by [pipeline] operators that were physically and proximately remote from plaintiffs of their property’” (Opinion at p. 23), Judge Brown considered the Authority’s argument that the Rivers and Harbors Act, the Clean Water Act, and the Coastal Management Act imposed a duty on defendants to protect the Authority from the alleged harm.  With regard to each Act, the Court found that while the Authority may benefit from the law, it was not an intended beneficiary, and therefore could not show that the laws imposed a specific duty on any of the defendants for the benefit of the Authority.  Therefore, the Authority could not state a viable claim for negligence.  Opinion at p. 32.

Addressing the strict liability claim, the Court found that Louisiana has abolished strict liability by requiring the defendant to have knowledge of the alleged defect. Opinion at p. 35.  Since the strict liability claim was really just a recast negligence claim, this claim was dismissed as well.

The parties disagreed as to whether the natural servitude of drain claim required that the properties be adjacent to each other, and whether the Authority’s land needed to be higher to be able to state a claim.  Judge Brown found that while the properties at issue need not be adjacent but, instead, must be located “as to allow one to derive some benefit from the charge on the other,” (Opinion at p. 36), Louisiana law could not be extended to include this case where only indirect economic harm from coastal storm surge was alleged.

Judge Brown then turned to the public and private nuisance claims.  She noted that in 1996, Louisiana changed its nuisance law to require a showing of negligence (except for circumstances not at issue in case before her). Since the Authority could not show negligence, it also could not recover on the nuisance claims accruing after 1996. Opinion at p. 44.  The pre-1996 nuisance claims failed because the Authority did not allege or show physical proximity of the servient and dominant estates. Opinion at p. 46.

Finally, Judge Brown found that the various United States Army Corps of Engineers permits issued to the defendants over time were not contracts, and even if they were, the Authority was not an intended beneficiary of those permits, and therefore could not claim third-party beneficiary status. Opinion at p. 47-48.

This case is significant in that the Authority was seeking to impose significant liability on a vast number of defendants for actions that have occurred over decades and that may or may not have caused the erosion about which the Authority complained.  By finding no duty and no liability under the remaining causes of actions pled by the Authority, the Court did not address the significant causation issues raised by defendants.  Nor did the Court address the Louisiana Legislature’s efforts in 2014 to block the Authority’s ability to maintain this suit.  The Authority has already filed an appeal with the Fifth Circuit, and after a contentious board vote to consider whether to stop the appeal, that appeal will continue.  In the meantime, however, oil and gas operators working in and around the “Buffer Zone” are breathing a little easier today.

For more information on the matters discussed in this Locke Lord QuickStudy, please contact the authors.