Withrow v. Chevron is another Louisiana legacy lawsuit, this one claiming that defendants Chevron and Vernon E. Faulconer, Inc., and their predecessors, improperly disposed of toxic and hazardous oilfield wastes in unlined earthen pits causing leaks, spills and other surface and subsurface damages and contaminating the soil and groundwater.

Defendants’ filed a Rule 12(b)(6) motion to dismiss the whole shebang for failure to state a claim. To defeat the motion the plaintiff had to plead specific facts, not mere conclusory allegations or legal conclusions masquerading as factual conclusions. On the other hand, a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.

This the court did not offer much in the way of reasoning for its rulings; there will be plenty of time for that. The order is helpful as a laundry list of claims often asserted by legacy plaintiffs.

The court considered the following claims:
Continue Reading Louisiana Legacy Lawsuit Survives Motion to Dismiss

Co-author Jamie Mills*

Is it worth spending extra dollars, days, and windshield time to discover what mischief your oil and gas operator might be making on your property? The landowner-plaintiffs in Mustafa v. Americo Energy would certainly say so.

The “discovery rule” offered them no help in their suit against their lessee for negligence when visible soil contamination occurred over two years before suit and was filed and the landowners had not visited the property in over six years. The two-year statute of limitations barred the landowners’ claim.
Continue Reading Landowners Vanquished by the Discovery Rule

In Lexington Land Development LLC v. Chevron Pipeline Company et al, a Louisiana landowner’s suit for damages to land alleged to have been caused by oil and gas operations failed to survive exceptions of prescription and the subsequent purchaser rule.

The facts

In 1959 the Hoffman heirs granted a mineral gas lease on 343 acres in East Baton Rouge Parish to Chevron’s predecessor. Shell Pipeline owns and operates a pipeline across the property. Hoffman also granted surface leases to Chevron. In 1962 the surface leases expired and in 1963 Chevron relinquished its rights in the mineral lease except for three production units. The lease was assigned to Stone Petroleum and, in 1991, to Zinn Petroleum. Lexington purchased the property in 2005 from the Hoffman heirs for development of a subdivision.

Lexington sued Chevron, its successors, and Shell in 2007 after being notified of a rupture in the Shell pipeline. After adverse rulings, Lexington obtained assignments of rights from the Hoffman heirs and amended its petition.

Liberative Prescription
Continue Reading Louisiana Land Damage Claim Can’t Survive Prescription and Subsequent Purchaser Rule

Regency Field Services LLC v. Swift Energy Operating LLC, draws one’s attention to the difficult analyses that should be made before bringing a subsurface trespass claim.

A mineral estate lessee (Swift) alleged that H2S (“brimstone” if you follow the Old Testament) injected into the Wilcox formation by an injection well (owned by Regency) migrated and injured its interests in the minerals underlying nearby properties. The issue for the court was when the lessee’s claims accrued. We will ignore parts of the decision discussing pleadings and summary judgment evidence (trial lawyers, pay attention!).
Continue Reading Texas Supreme Court Reverses Subsurface Trespass Judgment

Co-author Niloufar  “Nikki” Hafizi

The 2012 Macondo Well blowout and Deepwater Horizon rig explosion gave rise to a slew of lawsuits. Our subject today is one of them. In Houston Casualty Company v. Anadarko Petroleum Corp. the Beaumont court of appeals construed an insurance policy’s excess liability coverage provision. At stake was whether Underwriters had to indemnify Anadarko for over $100 million in defense costs. In an opinion much-decried by energy companies, the court thought not.

The Texas Supreme Court will review the decision, so let’s look at what the court of appeals said. 
Continue Reading Texas Supreme Court to Consider Macondo Blowout Insurance Dispute