Fifth Circuit: Some Degree of Propinquity Is Required To Maintain Claims

In Board of Commissioners of the Southeast Louisiana Flood Protection Authority – East, et al., v. Tennessee Gas Pipeline Company, L.L.C., et al., the U.S. Court of Appeals for the Fifth Circuit issued a unanimous ruling affirming the District Court’s decision to: (a) reject the Board of Commissioners of the Southeast Louisiana Flood Protection Authority–East’s (Board) motion to remand this cost recovery and injunctive action to the state courts of Louisiana; and (b) dismiss the complaint alleging claims against 97 oil and gas companies in connection with their oil and gas operations and activities off the Gulf Coast for any years for failure to state a claim.

The Board’s complaint alleged that these operations have caused ecological and infrastructure damages to the coastal lands overseen by the Board, and increased the risk of flooding. The causes of action were claims for negligence, public and private nuisance and breach of contract adversely affecting third party beneficiaries. Both the lower court and the Fifth Circuit noted that the regulatory framework in which these defendants operate is that of federal law—namely the Clean Water Act, the River and Harbors Act and the Coastal Zone Management Act of 1972. These claims therefore ”necessarily raise a federal issue: issues: the negligence claim, which purportedly draws its requisite standard of care from three federal statutes; the nuisance claims, which rely on that same standard of care; and the third-party breach of contract claim, which purportedly is based on permits issued pursuant to federal law.” However, “[n]one of the individual claims relies on a cause of action created under federal law, and the negligence, strict liability, and natural servitude claims explicitly rely on state law causes of action.”

Because of the predominance of federal issues, the lower court was warranted in taking and keeping jurisdiction over this lawsuit, and reviewing the claims to determine whether a motion to dismiss should be granted. Ultimately, the Fifth Circuit affirmed the District Court’s dismissal of the Board’s claims.