In re Horizon

• Decision Date: 24 February 2014
• Docket Number: No. 12–30012.,12–30012.
• Citation: 745 F.3d 157
• Parties: In re DEEPWATER HORIZON.
• Court: U.S. Court of Appeals — Fifth Circuit

745 F.3d 157

In re DEEPWATER HORIZON.

No. 12–30012.

United States Court of Appeals, Fifth Circuit.

Feb. 24, 2014.

Stephen B. Murray, Jr., Murray Law Firm, Fred L. Herman, Esq., Law Offices of Fred L. Herman, Peter J. Butler, Jr., Esq., Richard G. Passler, Breazeale, Sachse & Wilson, L.L.P., Barrett Robert Stephens, Esq., Edward J. Womac, Jr. & Associates, L.L.C., Walter J. Leger, Jr., Christine Elizabeth Sevin, Attorney, Leger & Shaw, New Orleans, LA, Philip Francis Cossich, Jr., David Allen Parsiola, Esq., Cossich, Sumich, Parsiola & Taylor, L.L.C., Belle Chasse, LA, John Francis Rowley, District Attorney's Office, Chalmette, LA, Camille A. Morvant, II, Thibodaux, LA, Franklin G. Shaw, Leger & Shaw, Covington, LA, C. Berwick Duval, II, Stanwood Robert Duval, Duval, Funderburk, Sundbery, Lovell & Watkins, Joseph Lee Waitz, Jr., District Attorney's Office, Houma, LA, Victor L. Marcello, Esq., Talbot, Carmouche & Marcello, Baton Rouge, LA, Tommy W. Thornhill, Thornhill Law Firm, Slidell, LA, Wanda Jean Edwards, Attorney, Calvin Clifford Fayard, Jr., Esq., Senior Trial Attorney, David Blayne Honeycutt, Esq., Fayard & Honeycutt, A.P.C., Denham Springs, LA, John Phillip Haney, District Attorney's Office, New Iberia, LA, Paul D. Connick, Jr., District Attorney's Office, Gretna, LA, Walter P. Reed, District Attorney's Office, Covington, LA, for Plaintiff–Appellant.

Richard Cartier Godfrey, Esq., James Andrew Langan, Esq., Elizabeth A. Larsen, Kirkland & Ellis, L.L.P., Chicago, IL, Jeffrey Bossert Clark, Sr., Esq., Kirkland & Ellis, L.L.P., David Bruce Salmons, Esq., Attorney, Bryan Michael Killian, Esq., Ky E. Kirby, Bingham McCutchen, L.L.P., Washington, DC, Carmelite M. Bertaut, Stone Pigman Walther Wittmann, L.L.C., Deborah D. Kuchler, Kuchler, Polk, Schell, Weiner & Richeson, L.L.C., Don Keller Haycraft, Liskow & Lewis, P.L.C., Edward F. Kohnke, IV, Esq., Preis & Roy, A.P.L.C., Evans Martin Mcleod, Esq., Phelps Dunbar, L.L.P., Kerry J. Miller, Joseph Nicholas Mole, Esq., Campbell E. Wallace, Esq., Frilot, L.L.C., Glenn G. Goodier, William Cothbert Baldwin, Lance Michael Sannino, Jones Walker LLP, New Orleans, LA, Michael G. Lemoine, Jones Walker LLP, Edwin G. Preis, Jr., Esq., Preis & Roy, A.P.L.C., Paul Matthew Jones, Esq., Trial Attorney, Liskow & Lewis, Lafayette, LA, Donald Everett Godwin, Esq., Managing Senior Counsel, Godwin Lewis, P.C., Allyson Newton Ho, Morgan, Lewis & Bockius, L.L.P., Dallas, TX, Denise U. Scofield, Attorney, Hugh Earl Tanner, Morgan, Lewis & Bockius, L.L.P., Russell S. Post, David J. Beck, Esq., Robert David Daniel, Beck Redden, L.L.P., Robert Alan York, Godwin Lewis, P.C., Steven Lynn Roberts, Attorney, Rachel Giesber Clingman, Attorney, Sutherland Asbill & Brennan, L.L.P., John Michael Elsley, Esq., Attorney, Royston, Rayzor, Vickery & Williams, L.L.P., Houston, TX, Brad D. Brian, Esq., Daniel Benjamin Levin, Munger, Tolles & Olson, L.L.P., James Joseph Dragna, Bingham McCutchen, L.L.P., Los Angeles, CA, Sean Daniel Jordan Kent C. Sullivan, Sutherland, Asbill & Brennan, L.L.P., Austin, TX, Derek E. Leon, Morgan, Lewis & Bockius, L.L.P., Miami, FL, John F. Pritchard, Frederick A. Brodie, Edward Flanders, Pillsbury Winthrop Shaw Pittman, L.L.P., New York, NY, Christopher McNevin, Pillsbury Winthrop Shaw Pittman, L.L.P., Los Angeles, CA, Jack McKay, Pillsbury Winthrop Shaw Pittman, L.L.P., Washington, DC, for Defendants–Appellees.

Mary Jo Woods, Office of the Attorney General for the State of Mississippi, Jackson, MS, Corey L. Maze, Esq., Special Attorney to the Attorney General, Office of the Attorney General for the State of Alabama, Montgomery, AL, Allan L. Kanner, Esq., Kanner & Whiteley, L.L.C., New Orleans, LA, Henry Tutt Dart, Esq., Attorney, Covington, LA, Bradley Marten, Marten Law, P.L.L.C., Seattle, WA, Edmond Wade Shows, Shows, Cali & Walsh, L.L.P., Baton Rouge, LA, Thomas Allen Usry, Esq., Usry, Weeks & Matthews, A.P.L.C., New Orleans, LA, for Amici Curiae.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before JONES, BARKSDALE and SOUTHWICK, Circuit Judges.

EDITH H. JONES, Circuit Judge:

Eleven Louisiana coastal parishes (the “Parishes”) filed suits against BP and other defendants (“Appellees”) ¹ involved in the DEEPWATER HORIZON oil spill to recover penalties under The Louisiana Wildlife Protection Statute (“Wildlife Statute”) for the pollution-related loss of aquatic life and wildlife. La. R.S. 56:40.1.² Suits filed originally in state court were removed to federal court, which denied the Parishes' motions to remand and then dismissed all of the Parishes' claims as preempted by federal law. Both decisions are challenged in the Parishes' appeal. We concur with the district court that the state law claims were removable pursuant to the jurisdictional provision of the Outer Continental Shelf Lands Act (“OCSLA”). We also affirm their dismissal as preempted by federal law.

BACKGROUND

The Macondo well, which was being drilled by the mobile offshore drilling rig DEEPWATER HORIZON, experienced a catastrophic blowout and explosion in April 2010 and caused hydrocarbon, mineral, and other contaminant pollution all along the shores and estuaries of the Gulf Coast states, inflicting billions of dollars in property and environmental damage and spawning a litigation frenzy. Among the thousands of cases transferred for consolidated management by the Judicial Panel on Multidistrict Litigation to the Eastern District of Louisiana were the Parishes' lawsuits, some of which had been removed from state court. The district court handledcases filed by government entities, like the Parishes, in various groups according to their common issues. Considering first the remand motions filed by three of these Parishes, the court upheld its removal jurisdiction notwithstanding that the cases alleged only penalties accruing under state law for pollution damage that occurred in state waters or along the coastline.³ The court predicated federal court jurisdiction on 43 U.S.C. § 1349(b)(1)(A). See In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mex., on April 20, 2010 (In re: Oil Spill), 747 F.Supp.2d 704, 708–09 (E.D.La.2010). Next, considering various defendants' Motions to Dismiss the “B1” pleading bundle cases, filed for private or “non-governmental economic loss and property damages,” the district court held that admiralty jurisdiction was present because the alleged tort occurred upon navigable waters and disrupted maritime commerce, and the operations of the DEEPWATER HORIZON, the vessel, bore a substantial relationship to maritime activity. In re: Oil Spill, 808 F.Supp.2d 943, 951 (E.D.La.2011). The district court also held that state law was preempted by maritime law. Id. at 953–55. In a subsequent order concerning the “C” pleading bundle cases, brought by the states of Alabama and Louisiana, the court drew from its decision concerning the “B1” pleading bundle to hold that the states' wildlife actions are preempted by federal law. See In re: Oil Spill, MDL No. 2179, 2011 WL 5520295, at *3, 8 (E.D.La. Nov. 14, 2011). Finally, when considering the Local Government Entity Master Complaint and certain other cases within pleading bundle “C,” the district court held, inter alia, that because the Parishes only asserted state law claims, which the district court already deemed preempted, the cases failed to state claims upon which relief could be granted and must be dismissed. In re: Oil Spill, 835 F.Supp.2d 175, 179–80 (E.D.La.2011).

STANDARD OF REVIEW

“The district court's denial of the motion to remand, the propriety of removal under the various governing statutes, and the existence of subject-matter jurisdiction here are all interrelated questions of law subject to de novo review.” Oviedo v. Hallbauer, 655 F.3d 419, 422 (5th Cir.2011) (emphasis added). Further, “[w]e review the district court's grant of summary judgment on preemption grounds de novo.” O'Hara v. Gen. Motors Corp., 508 F.3d 753, 757 (5th Cir.2007).

DISCUSSION

I. Removal Jurisdiction

The Appellees principally rely on OCSLA's broad jurisdictional grant in petitioning for federal court removal jurisdiction.⁴ Defendants may generally remove a case from state court if the federal court would have had original jurisdiction over it. 28 U.S.C. § 1441(a). The defendants bear the burden of establishing the basis for removal, and operative facts and pleadings are evaluated at the time of removal. City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 163, 118 S.Ct. 523, 529, 139 L.Ed.2d 525 (1997). The pertinent provision, OCSLA § 23(b)(1), states:

... the district courts of the United States shall have jurisdiction of cases and controversies arising out of, or in connection with ... any operation conducted on the outer Continental Shelf which involves exploration, development, or production of the minerals, of the subsoil and seabed of the outer Continental Shelf, or which involves rights to such minerals....

The Fifth Circuit has interpreted this language as straightforward and broad. See Tenn. Gas Pipeline v. Hous. Cas. Ins. Co., 87 F.3d 150, 154 (5th Cir.1996); EP Operating Ltd. P'ship v. Placid Oil Co., 26 F.3d 563, 569 (5th Cir.1994) (“[A] broad reading of the jurisdictional grant of section 1349 is supported by the expansive substantive reach of the OCSLA.”). Moreover, because jurisdiction is invested in the district courts by this statute, “[a] plaintiff does not need to expressly invoke OCSLA in order for it to apply.” Barker v. Hercules Offshore, Inc., 713 F.3d 208, 213 (5th Cir.2013). Courts typically assess jurisdiction under this provision in terms of whether (1) the activities that caused the injury constituted an “operation” “conducted on the outer Continental Shelf” that involved the exploration and production of minerals, and (2) the case “arises out of, or in connection with” the operation. See, e.g., EP Operating Ltd. P'ship, 26 F.3d at 568–69. As the...