Medco Energi U.S., L.L.C. v. Sea Robin Pipeline Co.
| Decision Date | 14 June 2012 |
| Docket Number | Civil Action No. 09–0971. |
| Citation | 895 F.Supp.2d 794 |
| Parties | MEDCO ENERGI U.S., L.L.C. v. SEA ROBIN PIPELINE CO., L.L.C. |
| Court | U.S. District Court — Western District of Louisiana |
OPINION TEXT STARTS HERE
Paul M. Jones, Brian Wesley Capell, Liskow & Lewis, Lafayette, LA, for Medco Energi U.S., L.L.C.
Scott Hervey Mason, James Keith Ordeneaux, G. Bruce Parkerson, Andrew L. Plauche, Jr., Plauche Maselli Parkerson, New Orleans, LA, for Sea Robin Pipeline Co., L.L.C.
MEMORANDUM RULING
Pending before this Court are two motions filed by defendant Sea Robin Pipeline Co., L.L.C. (“Sea Robin”), as follows: (1) Motion for Summary Judgment on State Law Grounds [Doc. 80], and (2) Motion for Summary Judgment on Federal Preemption [Doc. 81]. Both motions are opposed by plaintiff Medco Energi US, L.L.C. (“Medco”) [Docs. 84 & 85], and Sea Robin has filed Motions for Leave to File Reply briefs in connection with both motions for summary judgment [Docs. 86 & 87], which are hereby GRANTED.
In its motion for summary judgment on preemption grounds, Sea Robin argues Medco's state law claims for negligence, negligent misrepresentation, detrimental reliance, fraud, and violations of the Louisiana Unfair Trade Practices Act are preempted by the Supremacy Clause of the United States Constitution under the doctrine of field preemption and the filed rate doctrine, and, specifically with respect to Medco's negligence claims, preemption by FERC proceedings.
Because this Court agrees Medco's claims are barred by one or all of the foregoing preemption doctrines, this Court need not consider Sea Robin's motion for summary judgment on state law grounds. Accordingly, Sea Robin's motion for summary judgment on federal preemption is GRANTED, and Medco's claims against Sea Robin are DENIED AND DISMISSED WITH PREJUDICE as preempted by federal law. Sea Robin's motion for summary judgment on state law grounds is DENIED as moot.
I. Factual and Procedural History
The following facts are undisputed: 1
1. Sea Robin is a natural gas company engaged in the transportation of natural gas, which is subject to FERC jurisdiction.
2. Sea Robin's Second Revised Volume No. I Gas Tariff was issued on November 22, 2004, approved by the Federal Energy Regulatory Commission (“FERC”), and became effective on December 31, 2004.
3. From time to time between the original effective date of the Second Revised Volume No. 1 Tariff and later versions, individual Tariff sheets were revised by Sea Robin, then filed with and approved by FERC, becoming effective on the dates reflected by the individual Tariff sheets.
4. Sea Robin's Gas Tariff provides as follows:
2.1 The transportation services provided under this Rate Schedule ITS shall be performed under Subparts B and G of Part 284 of the Federal Energy Regulatory Commission's Regulations. This Rate Schedule ITS shall apply to all gas transported by Sea Robin for Shipper pursuant to an executed ITS Agreement.
2.2 Service hereunder shall be provided on an interruptible basis.
2.5 To the extent that Sea Robin complies with the provisions of its General Terms and Conditions and its Rate Schedule ITS, it shall have no liability to any shipper receiving service under Rate Schedule ITS arising from or related to service thereunder except as provided in such General Terms and Conditions and Rate Schedule ITS.
(a) Sea Robin makes no representation, assurance or warranty that capacity will be available on Sea Robin's Pipeline System at any time.
4.0 The provisions of the General Terms and Conditions of this Tariff, as such provisions may be amended from tune to time, are hereby incorporated by reference and made a part of this Rate Schedule ITS, and shall apply to service rendered hereunder, as though stated herein.2
3.9 Sea Robin shall not be required to perform service unless all facilities necessary to render the requested service exist and are in good operating condition.
16.2 As between Shipper and Sea Robin, Shipper shall be deemed to be in control and possession of the gas and responsible for and shall hold Sea Robin harmless of and from any damage or injury caused thereby until it shall have been delivered to Sea Robin at the Sea Robin Point(s) of Receipt, and while such gas is in facilities other than facilities owned or controlled by Sea Robin after which Sea Robin shall be deemed to be in control and possession of such gas only while such gas is in facilities owned or controlled by Sea Robin, and until its delivery to Shipper, or for Shipper's account, at Sea Robin's Point(s) of Delivery. While in such possession Sea Robin shall be responsible for and hold Shipper harmless of and from any damage or injury caused thereby, except for gas tendered by Shipper which fails to meet the provisions of Section 12 hereof, which gas shall be deemed, for purposes hereof, to remain in the possession and control of Shipper. Sea Robin shall have no responsibility with respect to any gas to be transported until it is received by Sea Robin, or on account of anything which may be done, happen or arise with respect to said gas before such receipt. Except as provided in the second preceding sentence and except for Shipper arrangements for separation, treating, dehydration, and/or processing, Shipper shall have no responsibility with respect to said gas after its receipt by Sea Robin, or on account of anything which may be done, happen or arise with respect to said gas after such receipt until its delivery to Shipper, or for Shipper's account, at Sea Robin's Point(s) of Delivery. The foregoing provisions of this paragraph shall not relieve either party from responsibility for acts of gross negligence of such party, its agents or employees.3
5. Firm service at the time of Hurricane Ike cost shippers approximately 30 times more than interruptible service according to Sea Robin's Tariff.
6. FERC is currently conducting proceedings to establish a Hurricane Surcharge to offset the cost of restoring the pipeline to service following Hurricane Ike.
7. Sea Robin initiated the FERC proceedings to recover the costs associated with restoring its line to service. Those costs have now exceeded $118,000,000.
8. Sea Robin sought to recover these extraordinary costs in the form of a surcharge to be incorporated into its Tariff.
9. Medco appeared in the proceeding, and filed a Motion to Intervene and Protest.
10. After filing the Motion to Intervene and Protest, Medco failed to file any further briefs in the proceeding.
11. Other shippers claimed in the proceeding that “there are questions regarding whether Sea Robin did act expeditiously and efficiently to restore system operations.”
12. Other parties complained in the proceeding that it took Sea Robin “15 months to restore a major supply leg of its system.”
13. FERC's Initial Decision allows Sea Robin to impose the surcharge, at a rate that allows 21.4 years to recover the restoration costs incurred.
14. Among the reasons for its holding, FERC stated “current shippers were primarily benefitted by Sea Robin's quick return to service.”
15. FERC also found that Sea Robin's repairs allowed it to “resume full service as quickly as possible following a catastrophic event.”
16. According to FERC, “Sea Robin's repairs to the system provided an important service to the public by allowing the continued access to natural gas reserves at a competitive price.”
In its motion for summary judgment, Sea Robin argues it transports natural gas produced by companies such as Medco via Sea Robin's pipeline from points on the outer continental shelf to transportation facilities onshore. The gas is then transported throughout the United States. Sea Robin argues it sustained losses in excess of $118,000,000.00 as a result of damage to its facilities during Hurricane Ike, which crossed the Gulf of Mexico in mid-September 2008. Facilities owned by Sea Robin in the “West Leg” are the focus of the instant litigation. Sea Robin acknowledges all producers on the West Leg, includingMedco, were shut in while Sea Robin repaired its pipeline damage.
On May 19, 2009, Medco filed suit against Sea Robin in the Fifteenth Judicial District Court for the Parish of Lafayette, Louisiana. In its petition, Medco asserts claims against Sea Robin for negligence, detrimental reliance, negligent misrepresentation, fraud, and violations of Louisiana's Unfair Trade Practices Act (“LUTPA”), La.Rev.Stat. § 51:1401, et seq. The gist of Medco's claims against Sea Robin is that Sea Robin misrepresented when Sea Robin would be ready to resume transportation to its pipeline. Therefore, Medco's alleged damages arise from reliance on that representation and thus the alleged resultant delayed access to pipelines operated by Sea Robin following Hurricane Ike in September 2008. Medco argues Sea Robin had a regulatory duty to provide “open and nondiscriminatory access to its pipelines;” “a duty to ensure that its representations concerning repairs to the pipeline system were accurate;” and “a duty to repair its pipelines in a reasonable manner once it had undertaken a duty to do so and committed to that duty with its public and private representations.” Medco alleges Sea Robin's repairs to its pipelines were grossly inadequate; its representations concerning those repairs either negligently or intentionally inaccurate; and its return to service so delayed as to cause great economic harm to Medco. Medco avers it would not have sustained the economic damages it did had Sea Robin accurately represented its inspection and repair efforts, including the date the lines could reasonably have been returned to service as Medco argues but for the misrepresentation, it would have undertaken substantial expense to tie into a competitor's line much earlier than the date Sea Robin finally returned to service.4
Despite pleading several different theories of liability, Medco seeks damages under each theory which are virtually identical, i.e., for damages...
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...(citing Patel , 904 F.3d at 1320, 1326 (Florida law) ); Defs.' Mem. at 27 n.8 (citing Medco Energi, U.S., L.L.C. v. Sea Robin Pipeline Co. , 895 F.Supp.2d 794, 816 (W.D. La. 2012) ), aff'd , 729 F.3d 394 ( (Louisiana law) ). The plaintiff appears to concede a conflict with Louisiana law, wh......