Significant Louisiana Environmental Damages Lawsuit Against Major Energy Companies Remanded to State Court

On December 1, 2014, the U. S. District Court for the Eastern District of Louisiana (Judge Zainey presiding) issued a ruling in the case of The Parish of Plaquemines v. Total Petrochemical & Refining USA, Inc., et. al. The court granted the motion of the Parish to remand to state court a lawsuit filed by the Parish against several major oil companies who the Parish alleges have caused substantial environmental damages to the land and water bodies located within the Louisiana Coastal Zone boundaries of Plaquemines Parish. These companies, over the course of many years, have conducted their operations pursuant to more than 1000 state coastal zone permits, which they are alleged to have violated. The case was filed in state court, but the defendants attempted to remove it to federal court. They argued that removal was justified on the basis of diversity, the Outer Continental Shelf Lands Act (OCSLA), general maritime law, and federal enclave jurisdiction (some of the areas are also located in federal nature preserves). The District Court rejected all of these arguments in a careful and a lengthy opinion.

The ability of the Parish to pursue this litigation was challenged, but the District Court determined that the relevant Louisiana statutes authorized the Parish to bring this lawsuit, which pertains to activities conducted within the jurisdictional boundaries of the Parish. There is a suggestion that the Louisiana Attorney General does not concur with this legal action, but very little discussion is provided on this matter. The defendants also argued that a recent decision of the Fifth Circuit in In re Deepwater Horizon, 745 F.3d 157 (5th Cir. 2014), clarified the reach of federal jurisdiction embodied in the OCSLA, but the District Court pointed out that that case involved natural resource damage claims emanating from oil spills on the Outer Continental Shelf — and that is not the case here. Finally, the maritime and federal enclave arguments were unsuccessful. The matter will be returned to the state courts — unless there is an appeal to the Fifth Circuit. By state law, the Parish must expend any damages recovered to enhance coastal protection and recovery issues.