Parish of Plaquemines v. Chevron USA, Inc.

• Decision Date: 05 August 2021
• Docket Number: consolidated with No. 19-30829,No. 19-30492,19-30492
• Citation: 7 F.4th 362
• Parties: The PARISH OF PLAQUEMINES, Plaintiff—Appellee, The State of Louisiana, ex rel, Jeffrey Martin Landry, Attorney General; The State of Louisiana, through the Louisiana Department of Natural Resources Office of Coastal Management and its Secretary, Thomas F. Harris, Intervenors—Appellees, v. CHEVRON USA, INCORPORATED, As Successor in Interest to Chevron Oil Company and The California Company ; Exxon Mobil Corporation, As Successor in Interest to Exxon Corporation and Humble Oil and Refining Company ; ConocoPhillips Company, As Successor in Interest to General American Oil Company of Texas, Defendants—Appellants, Parish of Cameron, Plaintiff—Appellee, State of Louisiana, ex rel, Jeff Landry; State of Louisiana, on behalf of Louisiana Department of Natural Resources, on behalf of Office of Coastal Management, on behalf of Thomas F. Harris, Intervenors—Appellees, v. BP America Production Company ; Chevron Pipe Line Company ; Chevron USA Holdings, Incorporated; Chevron USA, Incorporated; Exxon Mobil Corporation; Kerr-McGee Oil; Gas Onshore, L.P.; Shell Offshore, Incorporated; Shell Oil Company ; Swepi, L.P.; Texas Company, Defendants—Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

7 F.4th 362

The PARISH OF PLAQUEMINES, Plaintiff—Appellee,

The State of Louisiana, ex rel, Jeffrey Martin Landry, Attorney General; The State of Louisiana, through the Louisiana Department of Natural Resources Office of Coastal Management and its Secretary, Thomas F. Harris, Intervenors—Appellees,

v.CHEVRON USA, INCORPORATED, As Successor in Interest to Chevron Oil Company and The California Company ; Exxon Mobil Corporation, As Successor in Interest to Exxon Corporation and Humble Oil and Refining Company ; ConocoPhillips Company, As Successor in Interest to General American Oil Company of Texas, Defendants—Appellants,Parish of Cameron, Plaintiff—Appellee,State of Louisiana, ex rel, Jeff Landry; State of Louisiana, on behalf of Louisiana Department of Natural Resources, on behalf of Office of Coastal Management, on behalf of Thomas F. Harris, Intervenors—Appellees,

v.BP America Production Company ; Chevron Pipe Line Company ; Chevron USA Holdings, Incorporated; Chevron USA, Incorporated; Exxon Mobil Corporation; Kerr-McGee Oil; Gas Onshore, L.P.; Shell Offshore, Incorporated; Shell Oil Company ; Swepi, L.P.; Texas Company, Defendants—Appellants.

No. 19-30492

consolidated with No. 19-30829

United States Court of Appeals, Fifth Circuit.

Filed August 5, 2021

Victor L. Marcello, Esq., Donald T. Carmouche, Talbot, Carmouche & Marcello, Baton Rouge, LA, William Peter Connick, Sr., Connick & Connick, L.L.C., Andre' Collins Gaudin, Esq., Burglass & Tankersley, L.L.C., Metairie, LA, Brandon J. Taylor, Esq., Cossich, Sumich, Parsiola & Taylor, L.L.C., Belle Chasse, LA, for Plaintiff - Appellee.

Ryan Michael Seidemann, Esq., Louisiana Department of Justice, Baton Rouge, LA, for Intervenor - Appellee Jeffrey Martin Landry, Esq.

Donald Wayne Price, Special Counsel, Department of Natural Resources for the State of Louisiana, Megan Kathleen Terrell, Esq., Assistant Attorney General, Plauche & Carr, L.L.P., Baton Rouge, LA, for Intervenor - Appellee State of Louisiana, through the Louisiana Department of Natural Resources Office of Coastal Management and its Secretary, Thomas F. Harris.

Peter D. Keisler, Esq., Jennifer Jo Clark, Ryan C. Morris, Sidley Austin, L.L.P., Washington, DC, Eric Julian Mayer, Alexandra Giselle White, Susman Godfrey, L.L.P., Houston, TX, for Defendant - Appellant Chevron USA, Incorporated, As Successor in Interest to Chevron Oil Company and The California Company.

Martin A. Stern, Jeffrey Edward Richardson, Adams & Reese, L.L.P., Robert Beattie McNeal, Esq., Liskow & Lewis, P.L.C., New Orleans, LA, for Defendant - Appellant Exxon Mobil Corporation, As Successor in Interest to Exxon Corporation and Humble Oil and Refining Company.

Deborah DeRoche Kuchler, Michele Hale DeShazo, Kuchler Polk Weiner, L.L.C., New Orleans, LA, for Defendant - Appellant ConocoPhillips Company, As Successor in Interest to General American Oil Company of Texas.

Thomas Allen Lorenzen, Crowell & Moring, L.L.P., Washington, DC, for Amici Curiae Chamber of Commerce of the United States of America, National Association of Manufacturers.

George Scott Christian, Austin, TX, for Amicus Curiae Texas Civil Justice League, Incorporated.

Thomas More Flanagan, Anders F. Holmgren, Flanagan Partners, L.L.P., New Orleans, LA, for Amici Curiae Louisiana Association of Business and Industry, Louisiana Oil & Gas Association, Louisiana Mid-Continent Oil and Gas Association, Louisiana Chemical Association.

William Christopher Pooser, Stoel Rives, L.L.P., Boise, ID, for Amicus Curiae American Petroleum Institute.

Alexander Dubose & Jefferson, L.L.P., William Joseph Boyce, Houston, TX, Colleen Garcia, Austin, TX, for Amicus Curiae Texas Oil and Gas Association.

Before HO, ENGELHARDT, and OLDHAM, Circuit Judges.

ON PETITION FOR REHEARING

James C. Ho, Circuit Judge:

The petition for rehearing is granted, the prior opinion in this case is withdrawn, and the following is substituted in its place, in light of new information provided to the court in response to our request for supplemental briefing and our further consideration of the issues presented in this appeal. The petition for en banc rehearing is denied, as no judge in active service requested that the court be polled.

* * *

Six Louisiana parishes, joined by the Louisiana Attorney General and the Louisiana Secretary of Natural Resources, brought forty-two suits challenging decades of drilling activities by various oil companies. In this consolidated appeal, we do not reach the merits of these suits. Instead, we conclude that because an expert report filed by the parishes revealed a new theory of liability for the first time, the companies’ removal based on federal-officer jurisdiction was timely. Rather than deciding whether federal-officer jurisdiction exists, however, we remand for the district courts to address this question with the benefit of our recent en banc decision in Latiolais v. Huntington Ingalls, Inc. , 951 F.3d 286, 290 (5th Cir. 2020). In addition, we agree with both district courts that there is no federal-question jurisdiction in this case. Accordingly, we affirm in part, reverse in part, and remand.

I.

Congress enacted the Coastal Zone Management Act of 1972 to encourage states to manage their coasts in an environmentally sound manner through federally approved programs. See 86 Stat. 1280 (codified as amended at 16 U.S.C. §§ 1451 – 65 ); 16 U.S.C. § 1452(2). Following that invitation, Louisiana enacted the Louisiana State and Local Coastal Resources Management Act of 1978 (SLCRMA). La. Stat. Ann. §§ 49:214.21 –:214.42.

SLCRMA establishes a permitting program for anyone wishing to "use" coastal resources within Louisiana's coastal zone. Id. § 49:214.30(A)(1). The Act defines "use" as any activity with "a direct and significant impact on coastal waters." Id. § 49:214.23(13). It authorizes Louisiana courts to impose civil liability and damages and order environmental restoration measures for "uses conducted within the coastal zone without a coastal use permit ... or which are not in accordance with the terms and conditions of a coastal use permit." Id. § 49:214.36(E). The Act also contains a grandfather clause allowing "uses legally commenced or established prior to the effective date of the coastal use permit program" to continue without requiring "a coastal use permit." Id. § 49:214.34(C)(2). Much of this dispute concerns drilling activities that first took place before the Act's effective date, and whether those activities were "legally commenced or established."

The parishes sued various oil companies engaged in oil and gas exploration, production, and transportation along Louisiana's coast since the 1940s. The parishes’ petitions, which are materially identical in each case, allege that the companies violated SLCRMA by failing to obtain necessary coastal use permits or by violating the terms of the permits they did obtain. Regarding the companies’ activities before SLCRMA went into effect in 1980, the parishes allege that the grandfather clause does not apply because those activities were not "lawfully commenced or established" before 1980. See id. § 49:214.34(C)(2). Specifically, the petitions allege:

Plaintiffs allege that most, if not all, of Defendants’ operations or activities complained of herein were not "lawfully commenced or established" prior to the implementation of the coastal zone management program. See [La. Admin. Code tit. 43, § ]723(B)(8). The complained-of operations and activities were prohibited prior to 1978 by various provisions of Louisiana Statewide Orders 29, 29-A, and 29-B, various field wide orders, as well as various orders of the Louisiana Stream Control Commission.

Louisiana Statewide Orders 29, 29-A, and 29-B were first issued in the early 1940s by the Louisiana Office of Conservation. They regulate numerous aspects of oil and gas production, such as the type of sign that must be posted before drilling is commenced, the records that companies must keep, the number of sacks of cement that should be used for the surface casing, the measures that must be taken to minimize fire hazards, and the production and disposal of salt water. See LA. DEP'T OF CONSERVATION, ORDER NO. 29-B, STATE-WIDE ORDER GOVERNING THE DRILLING FOR AND PRODUCING OF OIL AND GAS IN THE STATE OF LOUISIANA §§ II(D), IV, VII(B), VIII, XV (July 19, 1943). The content of these orders changed frequently before 1978. Between 1951 and 1974, for example, Order 29-B was amended twenty-four times. See LA. DEP'T OF CONSERVATION, ORDER NO. 29-B, STATE-WIDE ORDER GOVERNING THE DRILLING FOR AND PRODUCING OF OIL AND GAS IN THE STATE OF LOUISIANA (Aug. 26, 1974). Nothing in the petitions identifies which of the many orders of the Louisiana Stream Control Commission or the "various field wide orders" the companies allegedly violated before 1978.

Also attached to the petitions were maps of the areas where the parishes alleged that the companies’ violations occurred as well as a list of 760 well serial numbers located within those areas. Some of the wells were drilled during World War II.

The parishes disclaim any "cause of action arising under federal law or federal regulations." So when the companies first tried to remove these cases, the district courts remanded based on the absence of a federal question. See , e.g. , Parish of Cameron v. Auster Oil & Gas, Inc. , 2018 WL 2144281, at *3 (W.D. La. May 9, 2018) ; Stutes v. Gulfport Energy Corp. , 2017 WL 4286846, at *15 (W.D. La. June 30, 2017), report and recommendation adopted , 2017 WL 4274353 (W.D. La. Sept. 26, 2017) ; Plaquemines Parish v. Rozel Operating Co. , 2015 WL 403791, at *5 (E.D. La. Jan. 29, 2015).

In response to a Louisiana court's order that the parishes provide specific details of the companies’ alleged violations of SLCRMA, Plaquemines Parish served an expert report on April 30, 2018. That report ("the Rozel report") certified that it represented the position of the Louisiana Department of Natural Resources in all forty-two cases. It argued that to...