Lafargue v. U.S., Civil Action No. 97-2393.

• Decision Date: 27 May 1998
• Docket Number: Civil Action No. 97-2393.
• Parties: Jeron J. LAFARGUE, et al., on behalf of themselves and all others similarly situated v. The UNITED STATES of America and Louisiana Intrastate Gas Company.
• Court: U.S. District Court — Eastern District of Louisiana

4 F.Supp.2d 593

Jeron J. LAFARGUE, et al., on behalf of themselves and all others similarly situated v. The UNITED STATES of America and Louisiana Intrastate Gas Company.

Civil Action No. 97-2393.

United States District Court, E.D. Louisiana.

May 27, 1998.

Peter Stephen Title, Andrew A. Braun, Camilo Kossy Salas, III, Sessions & Fishman, New Orleans, LA, Gregg Lindsey Spyridon, Robert Joshua Koch, Jr., Edmund S. LaTour, Spyridon, Koch, Wallace & Palermo, L.L.C., Metairie, LA, for Plaintiffs.

David F. Shuey, U.S. Department of Justice, Washington, DC, Glenn Kenneth Schreiber, U.S. Attorney's Office, New Orleans, Paul T. Michael, U.S. Department of Energy, Economic Regulatory Administration, Washington, DC, James P. Dore, George William Jarman, J. Carter Wilkinson, Troy J. Charpentier, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman LLP, Baton Rouge, Julie Parelman Silbert, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, LLP, New Orleans, LA, for Defendants.

ORDER AND REASONS GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

VANCE, District Judge.

This matter comes before the Court on cross-motions for summary judgment filed by the plaintiffs and defendants United States of America (the "Government") and Louisiana Intrastate Gas Company, L.L.C. ("LIG"). For the reasons set forth below, plaintiffs' motion is DENIED, and defendants' motions are GRANTED.

I. BACKGROUND

As summarized by the Court in its Order and Reasons denying defendants' motions to dismiss, see LaFargue v. United States, 4 F.Supp.2d 580 (E.D.La.1998), this case revolves around the ownership of a pipeline and underlying servitudes located in the Louisiana Parishes of Iberia, St. Mary, St. Martin, St. James, and Assumption. The servitudes were acquired and the pipeline was constructed by the government as part of its Strategic Petroleum Reserve Plan ("SPRP"), a program that was established under the Energy Policy and Conservation Act ("EPCA"), 42 U.S.C. § 6201, et seq. The SPRP was intended to serve as a reserve to reduce the impact of energy supply interruptions or reductions in imports of crude oil and refined petroleum products. Under the EPCA, and to the extent necessary or appropriate to implement the SPRP, the government is authorized to "acquire by purchase, condemnation or otherwise, land or interests in land for the location of storage and related facilities." 42 U.S.C. § 6239(f)(1)(B). The government may also "construct, purchase, lease or otherwise acquire storage and related facilities," and "use, lease, maintain, sell, or otherwise dispose of storage and related facilities acquired pursuant to this part." Id. § 6239(f)(1)(C), (D). Further, the government is authorized to "execute any contracts necessary to carry out the provisions" of the SPRP. Id. § 6239(f)(1)(G).

In furtherance of the SPRP, the government sought to construct a 36-inch diameter pipeline to extend approximately 67 miles from the St. James Terminal to the Weeks Island Facility. In order to lay the Pipeline, and pursuant to statutory authority, the Government secured rights-of-way from landowners by means of direct purchase, condemnation, or donation. The named plaintiffs in this proposed class action are parties to a certain Donation of Servitude and Easement dated August 10, 1979 (hereinafter "the Donation").¹ The Donation states:

The above named parties declare that we, by this act, do donate, convey, transfer, set over and deliver, without any warranty, liability, or recourse, but with full substitution and subrogation in and to all rights and action of warranty which said grantors have or may have against all preceding owners and vendors, unto the United States of America, and its assigns, including its officers, agents, servants, and contractors, a perpetual and assignable easement and right-of-way in, on, over and across the land for the location, construction, operation, maintenance, alteration, repair, and patrol of a single pipeline in the establishment, management, and maintenance of the Strategic Petroleum Reserve

....

Donation at 2. The Donation includes a provision on the causes and procedures for the termination of the easements:

This donation is made and accepted for and in consideration of Grantors' desire to aid their country in the establishment of a Strategic Petroleum Reserve and in further consideration of Grantee's agreement to construct and operate said pipeline in accordance with the following specific requirements:

1. The rights herein donated to Grantee shall expire, terminate, and cease and this act shall be rendered null, void and unenforceable on December 31, 1981 if by such date Grantee shall have not commenced construction of the Strategic Petroleum Reserve pipeline.

2. The causes for termination of this easement shall include, but not be limited to, the following: (a) abandonment, (b) removal of the pipeline, (c) ten years non-use, or (d) execution of an affidavit by an authorized representative of the United States of America stating that the pipeline has been abandoned. Upon termination for any reason the United States of America shall have the election at its sole discretion of abandoning the pipeline and related improvements in place or removing it at its own expense. Such removal, if so elected, shall be completed within one year after termination. If abandonment in place is elected, Grantee shall have no claim against Grantors for compensation or damages, and the pipeline and related improvements shall become the property of the Grantors without any payment to the Grantee.

Donation at 5.

The construction of the Pipeline was completed in 1979, and it was in continuous service as part of the SPRP from October 1980 to March 1997. During this time, the Pipeline was used to transport crude oil between the St. James Terminal and the Weeks Island Facility. In recent years, due in part to a geotechnical problem related to the underground storage facility at Weeks Island, the Government removed the oil from that location and in March 1997, decommissioned the Pipeline. The Government no longer uses the Pipeline to transport oil between the two locations.

After the decision to decommission the Pipeline was made, the Government solicited bids from interested parties for the sale of the Pipeline and the perpetual easements. After this suit was filed, the Government sold and conveyed to LIG, "as is" and "where is" under a quitclaim deed executed August 22, 1997 all title, right, and interest the Government had in the Pipeline and the perpetual easements for a total sum of $22,000,000. LIG intends to integrate the Pipeline into its existing pipeline system, which is used for the transportation of natural gas.

Prior to the August 22, 1997 sale, LIG— "out of an abundance of caution"—attempted to enter into new conventional right-of-way and servitude agreements with the landowners along the length of the pipeline (hereinafter the "LIG Agreement"). The LIG Agreement states that the new servitude will be subject to the Donation and that the Donation will terminate when LIG begins operations of the existing Pipeline as a natural gas pipeline or when the Government transfers all of its rights in the Donation, whichever comes first. See Compl., Exh. B. LIG contends that 95% of the landowners along the length of the Pipeline have entered into such agreements. LIG's Answer ¶ 1A.

Plaintiffs initiated this class action on July 31, 1997 and filed a first amended complaint on October 24, 1997. Plaintiffs' proposed class is defined as all those persons and entities who granted servitudes and easements in favor of the Government for the location, construction, operation, maintenance, alteration, repair, and patrol of the Pipeline. Compl. ¶ 8. The plaintiffs also propose two subclasses: (1) All those persons and entities who fall into the proposed class and who executed the LIG Agreement, or similar documents; (2) All those persons and entities who fall into the proposed class and who did not execute the LIG Agreement, or similar documents. Compl. ¶ 9.

In its Order and Reasons denying defendants' motions to dismiss, this Court concluded that plaintiffs' case was exclusively brought under the Quiet Title Act, 28 U.S.C. § 2409a ("QTA"). Consequently, the Court dismissed Counts II, III, IV, and V of plaintiffs' complaint because they sought relief that is not available under the QTA. The Court also declined to exercise supplemental jurisdiction over Count IV of plaintiffs' complaint, a claim requesting this Court to determine whether the Pipeline constitutes a corporeal immovable under Louisiana law and whether certain plaintiffs' agreements with LIG should be rescinded for lesion beyond moiety. The Court further refused supplemental jurisdiction over LIG's counterclaim for expropriation of plaintiffs' property.

The lawsuit in this Court is therefore whittled down to a single issue: Whether the servitudes granted to the Government by the plaintiffs have been terminated, extinguished, and/or abandoned as a result of the alleged non-use of the Pipeline and the alleged decommissioning of the Weeks Island Facility. Plaintiffs allege that the servitudes have expired and/or terminated for the following reasons:

(a) the Government, through its own actions, has permanently discontinued the use of the Servitudes for the purpose for which they were granted, i.e., in connection with the Strategic Petroleum Reserve, and has transferred, or is in the process of transferring its right under the Servitudes and to the Pipeline to a transferee engaged in the business of transporting natural gas, rendering it impossible for the Government to use the Servitudes for the purposes required thereby;

(b) the Servitudes were granted subject to the express or implied resolutory condition that the Pipeline be used solely in connection with the Strategic Petroleum Reserve Program and the resolutory condition has been fulfilled;

(c) the Government has...