Bd Cmsnr SE LA Flood Protc v. Tennessee Gas , 850 F.3d 714 ( 2017 )


Menu:
  •      Case: 15-30162   Document: 00513895847    Page: 1   Date Filed: 03/03/2017
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT      United States Court of Appeals
    Fifth Circuit
    FILED
    March 3, 2017
    No. 15-30162
    Lyle W. Cayce
    Clerk
    BOARD OF COMMISSIONERS OF THE SOUTHEAST LOUISIANA
    FLOOD PROTECTION AUTHORITY – EAST; ORLEANS LEVEE
    DISTRICT; LAKE BORGNE BASIN LEVEE DISTRICT; EAST JEFFERSON
    LEVEE DISTRICT,
    Plaintiffs–Appellants,
    v.
    TENNESSEE GAS PIPELINE COMPANY, L.L.C.; ALTA MESA SERVICES,
    L.P.; ANADARKO E&P ONSHORE, L.L.C.; APACHE CORPORATION;
    ATLANTIC RICHFIELD COMPANY; BEPCO, L.P.; BOARDWALK
    PIPELINE PARTNERS, L.P.; BOPCO, L.P.; BP AMERICA PRODUCTION
    COMPANY; BP OIL PIPELINE COMPANY; CALLON OFFSHORE
    PRODUCTION, INCORPORATED; CALLON PETROLEUM COMPANY;
    CASKIDS OPERATING COMPANY; CENTERPOINT ENERGY
    RESOURCES CORPORATION; CHEVRON PIPELINE COMPANY;
    CHEVRON USA, INCORPORATED; CLAYTON WILLIAMS ENERGY,
    INCORPORATED; CLOVELLY OIL COMPANY, L.L.C.; COASTAL
    EXPLORATION AND PRODUCTION, L.L.C.; COLLINS PIPELINE
    COMPANY; CONOCOPHILLIPS COMPANY; CONTINENTAL OIL
    COMPANY; COX OPERATING, L.L.C.; CRAWFORD HUGHES
    OPERATING COMPANY; DALLAS EXPLORATION, INCORPORATED;
    DAVIS OIL COMPANY; DEVON ENERGY PRODUCTION COMPANY, L.P.;
    ENERGEN RESOURCES CORPORATION; ENTERPRISE INTRASTATE,
    L.L.C.; EOG RESOURCES, INCORPORATED; EP ENERGY
    MANAGEMENT, L.L.C.; EXXON MOBIL CORPORATION; EXXON MOBIL
    PIPELINE COMPANY; FLASH GAS & OIL NORTHEAST,
    INCORPORATED; GRAHAM ROYALTY, LIMITED; GREKA AM,
    INCORPORATED; GULF PRODUCTION COMPANY, INCORPORATED;
    GULF SOUTH PIPELINE COMPANY, L.P.; HELIS ENERGY, L.L.C.;
    HELIS OIL & GAS COMPANY, L.L.C.; HESS CORPORATION, A Delaware
    Corporation; HILLIARD OIL & GAS, INCORPORATED; HKN,
    INCORPORATED; INTEGRATED EXPLORATION & PRODUCTION,
    L.L.C.; J.C. TRAHAN DRILLING CONTRACTOR, INCORPORATED; J.M.
    Case: 15-30162    Document: 00513895847     Page: 2   Date Filed: 03/03/2017
    No. 15-30162
    HUBER CORPORATION; KENMORE OIL COMPANY, INCORPORATED;
    KEWANEE INDUSTRIES, INCORPORATED; KOCH EXPLORATION
    COMPANY, L.L.C.; KOCH INDUSTRIES, INCORPORATED; LIBERTY OIL
    ; GAS CORPORATION; LLOG EXPLORATION COMPANY; MANTI
    OPERATING COMPANY; MARATHON OIL COMPANY; MOEM
    PIPELINE, L.L.C.; MOSBACHER ENERGY COMPANY; NATURAL
    RESOURCES CORPORATION OF TEXAS; NEWFIELD EXPLORATION
    GULF COAST, L.L.C.; NOBLE ENERGY, INCORPORATED; O'MEARA,
    L.L.C.; P. R. RUTHERFORD; PLACID OIL COMPANY; PLAINS PIPELINE,
    L.P.; REPUBLIC MINERAL CORPORATION; RIPCO, L.L.C.; ROZEL
    OPERATING COMPANY; MURPHY EXPLORATION & PRODUCTION
    COMPANY, USA; SHELL OIL COMPANY; SOUTHERN NATURAL GAS
    COMPANY, L.L.C.; SUN OIL COMPANY; SUNDOWN ENERGY, L.P.;
    UNION OIL COMPANY OF CALIFORNIA; WHITING OIL & GAS
    CORPORATION; WILLIAMS EXPLORATION COMPANY; YUMA
    EXPLORATION AND PRODUCTION COMPANY, INCORPORATED;
    MERIDIAN RESOURCE & EXPLORATION, L.L.C.; PICKENS COMPANY,
    INCORPORATED; ESTATE OF WILLIAM G. HELIS; LOUISIANA LAND
    AND EXPLORATION COMPANY, L.L.C. MARYLAND; KAISER-FRANCIS
    OIL COMPANY; BP PIPELINES NORTH AMERICA, INCORPORATED;
    VINTAGE PETROLEUM, L.L.C., Delaware; ENLINK LIG, L.L.C.,
    Defendants–Appellees.
    Appeal from the United States District Court
    for the Eastern District of Louisiana
    Before STEWART, Chief Judge, and OWEN and COSTA, Circuit Judges.
    PRISCILLA R. OWEN, Circuit Judge:
    The Board of Commissioners of the Southeast Louisiana Flood
    Protection Authority–East filed a lawsuit in Louisiana state court against
    various companies involved in the exploration for and production of oil reserves
    off the southern coast of the United States. The Board alleged that Defendants’
    exploration activities caused infrastructural and ecological damage to coastal
    2
    Case: 15-30162         Document: 00513895847       Page: 3   Date Filed: 03/03/2017
    No. 15-30162
    lands overseen by the Board that increased the risk of flooding due to storm
    surges and necessitated costly flood protection measures. Defendants removed
    the case to federal court, and the district court denied the Board’s motion to
    remand, on the ground that the Board’s claims necessarily raise a federal issue.
    Defendants also moved to dismiss the case for failure to state a claim on which
    relief can be granted, and the district court granted the motion. We affirm.
    I
    In July 2013, the Board of Commissioners of the Southeast Louisiana
    Flood Protection Authority–East (the Board) filed a lawsuit in Louisiana state
    court against ninety-seven entities (the Defendants) involved in the
    exploration for and production of oil reserves off the southern coast of the
    United States. The Board, whose purpose is “regional coordination of flood
    protection,” 1 alleges that since the 1930s, coastal landscapes that serve as a
    “first line of defense” against flooding (the Buffer Zone) have been suffering
    from rapid land loss. The Board alleges that replacement of land in the Buffer
    Zone with water threatens the existing levee system and imperils coastal
    communities.        It further asserts that Defendants’ oil and gas activities—
    primarily the dredging of an extensive network of canals to facilitate access to
    oil and gas wells—has caused “direct land loss and increased erosion and
    submergence in the Buffer Zone, resulting in increased storm surge risk.”
    Attached to the complaint was a list of Defendants’ names, agents, and
    addresses; a map depicting the levee districts under the Board’s purview; a list
    of the names and location information of wells operated by Defendants; a list
    of the locations in the relevant levee districts subject to dredging permits and
    the permittees benefitting thereunder; and a list of the locations and grantees
    of rights of way in the relevant levee districts.
    1   LA. STAT. ANN. § 38:330.1(F)(2)(a).
    3
    Case: 15-30162      Document: 00513895847       Page: 4   Date Filed: 03/03/2017
    No. 15-30162
    The Board’s asserted bases for recovery from Defendants include
    negligence, strict liability, natural servitude of drain, public nuisance, private
    nuisance, and breach of contract as to third-party beneficiaries. The Board
    describes the “highly costly but necessary remedial measures” that it has
    undertaken or will undertake to protect against the increased storm surge risk.
    These measures include “abatement and restoration of the coastal land loss at
    issue,” including backfilling and revegetating each canal dredged by
    Defendants; the joint state-federal Hurricane and Storm Damage Risk
    Reduction System, some of the cost of which has been borne by the Board;
    investigation and remediation of defects in the local levee systems to comply
    with relevant certification standards; and “additional flood protection
    expenses,” including the construction of “safe houses” for use by employees
    during dangerous flooding conditions.
    The complaint describes “a longstanding and extensive regulatory
    framework under both federal and state law” that protects against the effects
    of dredging activities and establishes the legal duties by which Defendants
    purportedly are bound.            It enumerates four main components of this
    framework, including the Rivers and Harbors Act of 1899 (RHA); 2 the Clean
    Water Act of 1972 (CWA); 3 “[r]egulations related to rights-of-way granted
    across state-owned lands and water bottoms administered by the Louisiana
    Office of State Lands”; and the Coastal Zone Management Act of 1972 (CZMA) 4
    “and related Louisiana coastal zone regulations bearing directly on oil and gas
    activities.” None 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.
    2 
    33 U.S.C. §§ 401-467
    .
    3 
    33 U.S.C. §§ 1251-1388
    .
    4 
    16 U.S.C. §§ 1451-1466
    .
    4
    Case: 15-30162       Document: 00513895847         Page: 5     Date Filed: 03/03/2017
    No. 15-30162
    The Board seeks “[a]ll damages as are just and reasonable under the
    circumstances,” as well as injunctive relief requiring the backfilling and
    revegetating of canals, “wetlands creation, reef creation, land bridge
    construction,     hydrologic     restoration,      shoreline      protection,   structural
    protection, bank stabilization, and ridge restoration.”
    Defendants removed the case to federal court, asserting five separate
    grounds for federal jurisdiction. The Board moved to remand, and the district
    court denied the motion, concluding that the Board’s state law claims
    “necessarily raise a federal issue, actually disputed and substantial, which a
    federal forum may entertain without disturbing the congressionally approved
    balance of federal and state judicial responsibilities.” Defendants moved to
    dismiss the case pursuant to Federal Rule of Civil Procedure 12(b)(6) as
    preempted by federal law and barred under state law. The district court
    granted the motion with respect to all of the Board’s claims, concluding that
    none of the Board’s stated grounds for relief constituted a claim upon which
    relief could be granted under state law. The Board appealed.
    II
    We review an order denying remand to state court de novo. 5 A federal
    court may exercise federal question jurisdiction over any civil action that
    “arises under the federal constitution, statutes, or treaties.” 6                A federal
    question exists only where “a well-pleaded complaint establishes either that
    federal law creates the cause of action or that the plaintiff’s right to relief
    necessarily depends on resolution of a substantial question of federal law.” 7
    However, “[t]he fact that a substantial federal question is necessary to the
    5See Davoodi v. Austin Indep. Sch. Dist., 
    755 F.3d 307
    , 309 (5th Cir. 2014).
    6Energy Mgmt. Servs., LLC v. City of Alexandria, 
    739 F.3d 255
    , 258-59 (5th Cir. 2014).
    7 Singh v. Duane Morris LLP, 
    538 F.3d 334
    , 337-38 (5th Cir. 2008) (quoting Franchise
    Tax Bd. v. Constr. Laborers Vacation Tr., 
    463 U.S. 1
    , 27-28 (1983)).
    5
    Case: 15-30162      Document: 00513895847        Page: 6    Date Filed: 03/03/2017
    No. 15-30162
    resolution of a state-law claim is not sufficient to permit federal jurisdiction.” 8
    Only in a “‘special and small category’ of cases” will federal jurisdiction exist
    when state law creates the cause of action. 9 That limited category of federal
    jurisdiction only exists where “(1) resolving a federal issue is necessary to
    resolution of the state-law claim; (2) the federal issue is actually disputed; (3)
    the federal issue is substantial; and (4) federal jurisdiction will not disturb the
    balance of federal and state judicial responsibilities.” 10 “[I]f a plaintiff files suit
    in state court alleging both federal and state claims arising out of the same
    controversy, the entire action may be removed to federal court.” 11
    The district court concluded that three of the Board’s claims necessarily
    raise federal 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.
    A
    The Board argues that the district court was incorrect to conclude that
    the nuisance and negligence claims necessarily raise a federal issue, because
    although the state law claims “could turn to federal law for support, federal
    law is not necessary for their resolution.” It points to this court’s holding in
    MSOF Corp. v. Exxon Corp. that an allegation that a facility was maintained
    “in violation of federal regulations as well as in violation of state and local
    regulations” was not enough for the action to arise under federal law. 12
    8 Id. at 338.
    9  Gunn v. Minton, 
    133 S. Ct. 1059
    , 1064 (2013) (quoting Empire Healthchoice
    Assurance, Inc. v. McVeigh, 
    547 U.S. 677
    , 699 (2006)).
    10 Singh, 
    538 F.3d at 338
    .
    11 Halmekangas v. State Farm Fire & Cas. Co., 
    603 F.3d 290
    , 293 (5th Cir. 2010).
    12 
    295 F.3d 485
    , 490 (5th Cir. 2002).
    6
    Case: 15-30162    Document: 00513895847     Page: 7   Date Filed: 03/03/2017
    No. 15-30162
    Defendants dispute the Board’s contention that the negligence or
    nuisance claims could be resolved solely as a matter of state law; they note that
    although the negligence claim draws its cause of action from a Louisiana
    statute, the “sole basis” for any standard of care is found in the federal
    regulatory scheme. Unlike in MSOF, the Board is seeking a remedy—the
    backfilling of canals—that could not be required under any state law-based
    conception of negligence, and accordingly the claim of necessity has a “federal
    substance.” Similarly, Defendants argue that the nuisance claims posit an
    obligation not to make “unauthorized” changes or alterations to levee
    systems—an imperative that they argue could only exist under federal law.
    The Board’s negligence claim in fact requests relief for multiple distinct
    injuries and refers to multiple sources of law that might establish a duty of
    care, and it is not the case that just because some of these sources are drawn
    from state law and some from federal law that the two sources are redundant
    and therefore “alternative.” The claims for negligence and strict liability in
    MSOF arose out of the alleged contamination of plaintiffs’ land with toxic
    chemicals, which undisputedly gave rise to a cause of action under state law. 13
    Here, however, Defendants correctly point out that the Board’s complaint
    draws on federal law as the exclusive basis for holding Defendants liable for
    some of their actions, including for the “unauthorized alteration” of federal
    levee systems and for dredging and modifying lands away from their “natural
    state.” Unless Louisiana state law requires persons engaged in oil and gas
    activities to restore dredged or modified areas to their “natural state” to the
    identical extent that the CWA purportedly does, then a court would not be able
    to establish the magnitude of any potential liability without construing that
    Act. The same is true of the alleged obligation not to alter levee systems built
    13   
    Id.
    7
    Case: 15-30162       Document: 00513895847          Page: 8     Date Filed: 03/03/2017
    No. 15-30162
    by the United States, which the complaint draws from the RHA. The Board
    points out that Louisiana law sets forth apparently similar requirements, such
    as the provision stating that “[m]ineral exploration and production sites shall
    be cleared, revegetated, detoxified, and otherwise restored as near as
    practicable to their original condition upon termination of operations to the
    maximum extent practicable.” 14 But the “maximum extent practicable” in turn
    is defined as a regulatory determination that entails “a systematic
    consideration of all pertinent information regarding the use, the site and the
    impacts of the use . . . and a balancing of their relative significance.” 15 No
    Louisiana court has used this or any related provision as the basis for the tort
    liability that the Board would need to establish, and the Louisiana Supreme
    Court has explicitly rejected the prospect that a statutory obligation of
    “reasonably prudent conduct” could require oil and gas lessees to restore the
    surface of dredged land. 16
    The absence of any state law grounding for the duty that the Board
    would need to establish for the Defendants to be liable means that that duty
    would have to be drawn from federal law. Supreme Court precedent is clear
    that a case arises under federal law where “the vindication of a right under
    state law necessarily turn[s] on some construction of federal law,” 17 and the
    Board’s negligence and nuisance claims thus cannot be resolved without a
    determination whether multiple federal statutes create a duty of care that does
    not otherwise exist under state law.
    14 LA. ADMIN. CODE tit. 43, § 719(M).
    15 Id. § 701(H)(1).
    16 See Terrebonne Parish Sch. Bd. v. Castex Energy, Inc., 
    893 So. 2d 789
    , 801 (La. 2005)
    (“[W]e hold that, in the absence of an express lease provision, Mineral Code article 122 does
    not impose an implied duty to restore the surface to its original, pre-lease condition absent
    proof that the lessee has exercised his rights under the lease unreasonably or excessively.”).
    17 Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 
    463 U.S. 1
    , 9 (1983).
    8
    Case: 15-30162       Document: 00513895847         Page: 9     Date Filed: 03/03/2017
    No. 15-30162
    B
    The Board argues that even if its claims necessarily raise federal issues,
    those issues are not “actually disputed.” But its argument draws entirely on
    district court cases in which the parties did not disagree with respect to the
    proper interpretation of federal statutes unrelated to those raised in the
    Board’s complaint. 18 Defendants refute this argument by pointing out that
    they do not concede, for example, that the RHA establishes liability for
    otherwise permitted activity that might have the effect of altering United
    States-built levee systems; that the CWA requires them to restore dredged
    canals to their “natural state”; or that they are required to backfill canals that
    they have dredged pursuant to federal permits. These are legal, not factual,
    questions, and the parties dispute them.
    C
    For a federal issue to give rise to federal jurisdiction, “it is not enough
    that the federal issue be significant to the particular parties in the immediate
    suit . . . . The substantiality inquiry under Grable looks instead to the
    importance of the issue to the federal system as a whole.” 19 The Supreme Court
    has suggested that an issue can be important for many reasons: because state
    adjudication would “undermine ‘the development of a uniform body of [federal]
    law’”; 20 because the case presents “a nearly pure issue of law” that would have
    18 See, e.g., Cooper v. Int’l Paper Co., 
    912 F. Supp. 2d 1307
    , 1316-17 (S.D. Ala. 2012)
    (“The plaintiffs’ complaint . . . does not place in dispute the meaning of any provisions of
    federal law, and [the defendant] has not shown that a state court will be called upon to do
    more than apply a settled federal framework to the facts of this case.” (citation omitted)).
    19 Gunn v. Minton, 
    133 S. Ct. 1059
    , 1066 (2013); see also Smith v. Kan. City Title &
    Tr. Co., 
    255 U.S. 180
    , 198-202 (1921) (holding substantial the question in a state-law
    shareholder lawsuit whether the statute pursuant to which certain federal bonds were issued
    was constitutionally valid).
    20 Gunn, 
    133 S. Ct. at 1067
     (quoting Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,
    
    489 U.S. 141
    , 162 (1989)).
    9
    Case: 15-30162        Document: 00513895847          Page: 10      Date Filed: 03/03/2017
    No. 15-30162
    applications to other federal cases; 21 or because resolution of the issue has
    “broad[] significance” for the federal government. 22                 “The absence of any
    federal cause of action . . . [is] worth some consideration in the assessment of
    substantiality.” 23
    The district court concluded that the substantiality requirement was met
    in this case, both because the relevant federal statutes plainly regulate “issues
    of national concern” and because the case affects “an entire industry” rather
    than a few parties. Moreover, it called the lawsuit “a collateral attack on an
    entire regulatory scheme . . . premised on the notion that [the scheme]
    provides inadequate protection.” The Board disagrees and argues that it raises
    that regulatory scheme “to support the obligations created under state law.”
    The Board is correct that the federal regulatory scheme is only relevant
    to its claims insofar as the scheme provides the underlying legal basis for
    causes of action created by state law.              But of course Defendants dispute
    whether the federal scheme provides such basis at all. The dispute between
    the parties does not just concern whether Defendants breached duties created
    by federal law; it concerns whether federal law creates such duties.                         As
    Defendants point out, the validity of the Board’s claims would require that
    conduct subject to an extensive federal permitting scheme is in fact subject to
    implicit restraints that are created by state law. 24 The implications for the
    21  Empire Healthchoice Assurance, Inc. v. McVeigh, 
    547 U.S. 677
    , 700 (2006) (internal
    quotation marks omitted); cf. Gunn, 
    133 S. Ct. at 1066-67
     (holding insubstantial the federal
    question whether patent lawyers being sued for malpractice could have succeeded in a prior
    federal patent suit by timely raising a particular argument, because “[n]o matter how the
    state courts resolve that hypothetical ‘case within a case,’ it w[ould] not change the real-world
    result of the prior federal patent litigation. [Plaintiff’s] patent w[ould] remain invalid.”).
    22 Gunn, 
    133 S. Ct. at 1066
    .
    23 Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 
    545 U.S. 308
    , 318 (2005).
    24 See 
    33 U.S.C. § 404
     (allowing the Secretary of the Army to grant permits “to make
    deposits in any tidal harbor or river of the United States beyond any harbor lines established
    under authority of the United States”); 
    33 U.S.C. § 403
     (requiring federal permission to
    10
    Case: 15-30162      Document: 00513895847        Page: 11     Date Filed: 03/03/2017
    No. 15-30162
    federal regulatory scheme of the sort of holding that the Board seeks would be
    significant, and thus the issues are substantial.
    D
    In Singh, we considered whether the area of law relevant to the
    plaintiff’s claims “has traditionally been the domain of state law,” and in that
    case we concluded that “federal law rarely interferes with the power of state
    authorities to regulate” that area of law. 25 The Supreme Court has held that
    the balance of federal and state judicial responsibilities would be disturbed by
    the exercise of federal jurisdiction where such exercise would “herald[] a
    potentially enormous shift of traditionally state cases into federal courts.” 26
    Here, the district court held that no such shift would arise, noting that the
    Board relies on federal law to establish liability and that resolution of its
    claims could affect coastal land management in multiple states as well as the
    national oil and gas market.
    The Board points out that each of the three federal statutes that forms
    the basis of its claims contains a savings clause, which it argues supports an
    inference that exercising federal jurisdiction would disrupt the balance struck
    by Congress. 27 But as Defendants point out, these savings clauses act to
    preserve existing state law claims; they do not confine consideration of lawsuits
    based on federal law to state courts. They also argue that the relief sought by
    the Board would require federal approval to be implemented, and thus it
    cannot be that the lawsuit is a matter only of state concern. 28
    “excavate or fill, or in any manner to alter or modify the course, location, condition, or
    capacity of, any . . . canal”).
    25 Singh v. Duane Morris LLP, 
    538 F.3d 334
    , 339 (5th Cir. 2008).
    26 Grable, 
    545 U.S. at 319
    .
    27 See 
    33 U.S.C. §§ 1365
    (e), 1416(g); 
    16 U.S.C. § 1456
    (e).
    28 See 
    33 U.S.C. § 403
    ; 
    33 C.F.R. § 322.3
    (a).
    11
    Case: 15-30162       Document: 00513895847          Page: 12     Date Filed: 03/03/2017
    No. 15-30162
    In Grable & Sons Metal Products, Inc. v. Darue Engineering &
    Manufacturing, the Supreme Court explicitly rejected “[a] general rule of
    exercising federal jurisdiction over state claims resting on federal . . . statutory
    violations,” and it also rejected the proposition that “any . . . federal standard
    without a federal cause of action” is enough to support federal jurisdiction over
    a lawsuit. 29 However, the Court nonetheless held that federal jurisdiction was
    proper in the state quiet title action before it, because “it is the rare state quiet
    title action that involves contested issues of federal law,” and thus “jurisdiction
    over actions like Grable’s would not materially affect, or threaten to affect, the
    normal currents of litigation.” 30
    The Grable Court was persuaded that “the absence of threatening
    structural consequences” was relevant to its inquiry, and the same logic
    militates in favor of federal jurisdiction here. 31 If the federal statutes at issue
    in this case do create duties and obligations under the laws of various states,
    then it might be inappropriate for federal question jurisdiction to obtain every
    time a state-law claim is made on that basis. But where, as here, one of the
    primary subjects of dispute between the parties is whether the federal laws in
    question may properly be interpreted to do that at all, the implications for the
    federal docket are less severe. 32 Relatedly, the scope and limitations of a
    complex federal regulatory framework are at stake in this case, and disposition
    of the question whether that framework may give rise to state law claims as
    29  
    545 U.S. at 318-19
    .
    30  
    Id. at 319
    .
    31 
    Id.
    32 See 
    id. at 318-19
     (noting that even though “[t]he violation of federal statutes and
    regulations is commonly given negligence per se effect in state tort proceedings,” federal
    jurisdiction is not always proper in such proceedings (quoting RESTATEMENT (THIRD) OF
    TORTS § 14, Reporter’s Note, cmt. a (AM. LAW INST., Tentative Draft No. 1, 2001))).
    12
    Case: 15-30162       Document: 00513895847          Page: 13     Date Filed: 03/03/2017
    No. 15-30162
    an initial matter will ultimately have implications for the federal docket one
    way or the other.
    E
    Because we conclude that the Board’s negligence and nuisance claims
    necessarily raise federal issues sufficient to justify federal jurisdiction, we do
    not reach the question whether the third-party breach of contract claim also
    does so. We also do not reach the question whether maritime jurisdiction
    provides an independent basis for federal jurisdiction in this case.
    III
    “To survive a motion to dismiss, a complaint must contain sufficient
    factual matter, accepted as true, to ‘state a claim to relief that is plausible on
    its face.’” 33 “[T]he tenet that a court must accept as true all of the allegations
    contained in a complaint is inapplicable to legal conclusions. Threadbare
    recitals of the elements of a cause of action, supported by mere conclusory
    statements, do not suffice.” 34
    A
    To state a claim for negligence under Louisiana law, the Board must
    establish, inter alia, that Defendants “had a duty to conform [their] conduct to
    a specific standard.” 35 The extent of a duty is “a question of policy as to
    whether [a] particular risk falls within the scope of the duty.” 36 A court must
    determine “whether the enunciated rule or principle of law extends to or is
    intended to protect this plaintiff from this type of harm arising in this
    33 Ashcroft v. Iqbal, 
    556 U.S. 662
    , 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 
    550 U.S. 544
    , 570 (2007)).
    34 
    Id.
    35 Audler v. CBC Innovis Inc., 
    519 F.3d 239
    , 249 (5th Cir. 2008) (quoting Lemann v.
    Essen Lane Daiquiris, Inc., 
    923 So. 2d 627
    , 633 (La. 2006)).
    36 Roberts v. Benoit, 
    605 So. 2d 1032
    , 1044 (La. 1991).
    13
    Case: 15-30162       Document: 00513895847          Page: 14   Date Filed: 03/03/2017
    No. 15-30162
    manner.” 37 Louisiana courts consider various factors to ascertain the scope of
    this protection, including “whether the imposition of a duty would result in an
    unmanageable flow of litigation; ease of association between the plaintiff’s
    harm and a defendant’s conduct; economic, social, and moral implications on
    similarly situated parties; the nature of defendant’s activity; the direction in
    which society and its institutions are evolving; and precedent.” 38
    The district court held that the requirements imposed by the RHA, the
    CWA, and the CZMA “do not extend to the protection of [the Board].” It stated
    that (1) the primary purpose of the RHA is to ensure that waterways remain
    navigable, and the provision therein that makes it illegal for any person to
    damage a levee did not impose a duty to protect the Board; (2) the CWA is
    meant to restore and maintain the integrity of the United States water supply,
    and the issuance of permits for the discharge of dredged or fill materials under
    it does not establish private duties; and (3) the issuance of permits licensing
    oil and gas exploration activities under the CZMA does not impose private
    duties to prevent environmental damage. The district court also denied that
    Louisiana state law creates a duty of care by which the Board is bound, because
    in the Fifth Circuit case that arguably suggested as much, Terrebonne Parish
    School Board v. Columbia Gulf Transmission Co., 39 at issue was whether “a
    direct loss of acreage . . . due to erosion” breached “[t]he duty of two specific
    pipeline companies to maintain canals on specific property vis a vis a specific
    lessor.”
    The Board argues that because the three federal statutes “set forth clear
    standards of care relevant to the defendants’ conduct,” and because the
    complaint points to the content of those statutes, the Board has stated a claim.
    37 
    Id. at 1044-45
     (citation omitted).
    38 Cormier v. T.H.E. Ins. Co., 
    745 So. 2d 1
    , 7 (La. 1999).
    39 
    290 F.3d 303
     (5th Cir. 2002).
    14
    Case: 15-30162       Document: 00513895847          Page: 15     Date Filed: 03/03/2017
    No. 15-30162
    It also points to Louisiana statutes that require coastal uses “to avoid to the
    maximum extent practicable” detrimental changes to sediment transport
    processes and coastal erosion, as well as “increases in the potential for flood,
    hurricane and other storm damage, or increases in the likelihood that damage
    will occur from such hazards.” 40
    Defendants note both that the Board has not explained how the federal
    statutes it enumerates serve to create a duty of care under state law and that
    the Board does not appear to allege that Defendants have caused any actual
    loss, because the Board states only that Defendants’ dredging activities have
    weakened coastal lands such that “flood protection costs” have increased. They
    also point to Terrebonne Parish School Board v. Castex Energy, Inc., in which
    the Louisiana Supreme Court found no implied duty for a mineral right lessee
    to restore coastline, even where the lessee was obligated by statute to “develop
    and operate the property leased as a reasonably prudent operator for the
    mutual benefit of himself and his lessor.” 41 Finally, they argue that the line of
    Louisiana Supreme Court cases suggesting that imposing liability for any
    indirect economic harm caused by a wrongful act “could create liability ‘in an
    indeterminate amount for an indeterminate time to an indeterminate class’” 42
    means that here, where the damaged party has incurred only additional costs
    40  LA. ADMIN. CODE tit. 43, § 701(G).
    41  
    893 So. 2d 789
    , 796-97 (La. 2005); see also Barasich v. Columbia Gulf Transmission
    Co., 
    467 F. Supp. 2d 676
    , 692 (E.D. La. 2006) (“If the Louisiana Supreme Court refused to
    read an implied duty to restore the surface on the facts of Terrebonne Parish, it would almost
    certainly decline to do so when remote parties seek to impose a general duty that has no basis
    in their relationship or controlling law.”).
    42 PPG Indus., Inc. v. Bean Dredging, 
    447 So. 2d 1058
    , 1061 (La. 1984) (quoting
    Ultramares Corp. v. Touche, 
    174 N.E. 441
    , 444 (N.Y. 1931)); see MAW Enters., LLC v. City of
    Marksville, 
    149 So. 3d 210
    , 220 (La. 2014) (limiting damages owed by city to lessor whose
    lessee was denied a retail alcoholic beverage permit); Bean Dredging, 
    447 So. 2d at 1061-62
    (“Because the list of possible victims and the extent of economic damages might be expanded
    indefinitely, the court necessarily makes a policy decision on the limitation of recovery of
    damages.”).
    15
    Case: 15-30162        Document: 00513895847          Page: 16      Date Filed: 03/03/2017
    No. 15-30162
    and has not suffered any loss to property it owns, Defendants could not have
    been bound to protect the Board from the losses it sustained.
    The district court was correct that neither federal law nor Louisiana law
    creates a duty that binds Defendants to protect the Board from increased flood
    protection costs that arise out of the coastal erosion allegedly caused by
    Defendants’ dredging activities. Although it is true that this court “has often
    held that violation of a Federal law or regulation can be evidence of
    negligence,” 43 it has declined to do so where the “principal purpose” of the
    relevant statutes was not to protect the plaintiff. 44 The Supreme Court’s
    determination that the RHA “was obviously intended to prevent obstructions
    in the Nation’s waterways” and that “a principal beneficiary of the Act, if not
    the principal beneficiary, is the Government itself” 45 indicates that the Board’s
    asserted ground for relief on the basis of the RHA—that the Act makes it
    unlawful to impair in any manner, inter alia, a levee built by the United
    States—may not properly be brought to bear on private parties by a municipal
    authority.
    Similar logic applies in the context of the CWA. That the CWA, its
    attendant regulations, and permits issued thereunder might require
    Defendants to maintain canals and to mitigate the environmental impact of
    their dredging activities might bear some relation to the general purpose of the
    Act, which is “to restore and maintain the chemical, physical, and biological
    integrity of the Nation’s waters.” 46 But with respect to the permits issued
    43 Lowe v. Gen. Motors Corp., 
    624 F.2d 1373
    , 1379 (5th Cir. 1980).
    44 Audler v. CBC Innovis Inc., 
    519 F.3d 239
    , 252 (5th Cir. 2008) (quoting Till v. Unifirst
    Fed. Sav. & Loan Ass’n, 
    653 F.2d 152
    , 159 (5th Cir. 1981)).
    45 Wyandotte Transp. Co. v. United States, 
    389 U.S. 191
    , 201 (1967) (holding that the
    United States may maintain a civil action against the owner of an allegedly negligently
    sunken vessel to recover government expenses incurred in removing the vessel).
    46 
    33 U.S.C. § 1251
    (a).
    16
    Case: 15-30162      Document: 00513895847         Page: 17    Date Filed: 03/03/2017
    No. 15-30162
    pursuant to the CWA that purportedly impose various maintenance
    requirements on Defendants, the few federal regulatory provisions that the
    Board cites as evidence of the contents of such permits do nothing to extend
    the reach of any implied duty to the protection of local government entities.
    The Board’s claims with respect to the CZMA are more non-specific, and
    even if the Board is correct to state in its complaint that the Act imposes “a
    litany of duties and obligations expressly designed to minimize the
    adverse . . . environmental effects associated with” Defendants’ activities,
    those duties do not protect the Board, in light of the Supreme Court’s
    acknowledgment that the Act “has as its main purpose the encouragement and
    assistance of States in preparing and implementing management programs to
    preserve, protect, develop and whenever possible restore the resources of the
    coastal zone of the United States.” 47 The Act also states that one of its policies
    is to provide for “the management of coastal development to minimize the loss
    of life and property caused by improper development” in vulnerable areas. 48
    But the Board has not pointed to any wrong committed by Defendants that
    even arguably serves as a basis for liability.
    The complaint is equally vague in its references to applicable state
    regulations, and although the Board now notes that certain state statutes have
    the declared policy of serving ends similar to those supported by the above
    federal statutes, there is little evidence that any of the cited provisions create
    private liability. The best source of law for the proposition is Terrebonne
    Parish, in which the Fifth Circuit denied summary judgment to defendants
    who allegedly had breached a private duty to protect canals against breaches
    47 Cal. Coastal Comm’n v. Granite Rock Co., 
    480 U.S. 572
    , 592 (1987) (quoting S. REP.
    NO. 92-753, at 1 (1972)).
    48 
    16 U.S.C. § 1452
    (2)(B).
    17
    Case: 15-30162         Document: 00513895847           Page: 18      Date Filed: 03/03/2017
    No. 15-30162
    and widening. 49 But that case was heavily dependent on the relationship
    between the litigants as parties to a servitude agreement. 50 That case did not
    involve a negligence claim and certainly did not purport to extract a general
    duty of care from state or federal regulatory law. Additionally, as Defendants
    point out, Terrebonne Parish addressed whether a company that had dredged
    a canal was liable to the owners of adjacent land for the erosion caused by the
    widening of the canal; 51 it did not address the indirect effects that the canal
    had on other land in the region by virtue of its effects on the ecosystem. The
    Board thus has failed to establish that Defendants breached a duty of care to
    it under the facts alleged, and accordingly the district court properly dismissed
    the negligence claim.
    B
    Under Louisiana law, a claim for strict liability requires that a duty of
    care was breached, just as a negligence claim does. 52 There is essentially no
    difference between the two types of claim under Louisiana law, 53 and to the
    extent any difference existed during the time period relevant to this lawsuit,
    that difference was only that recovery on a theory of strict liability before 1996
    49  Terrebonne Parish Sch. Bd. v. Columbia Gulf Transmission Co., 
    290 F.3d 303
    , 325
    (5th Cir. 2002); see also Barasich v. Columbia Gulf Transmission Co., 
    467 F. Supp. 2d 676
    ,
    692 (E.D. La. 2006) (holding that oil and gas companies owed no duty, in the absence of a
    contractual relationship, to protect landowners from “hurricane damage from storm surge
    allegedly magnified by coastal erosion caused by” dredging).
    50 Terrebonne Parish, 
    290 F.3d at 313-19
    .
    51 
    Id. at 308-09
    .
    52 See Oster v. Dep’t of Transp. & Dev., 
    582 So. 2d 1285
    , 1288 (La. 1991) (“In essence,
    the only difference between the negligence theory of recovery and the strict liability theory
    of recovery is that the plaintiff need not prove the defendant was aware of the existence of
    the ‘defect’ under a strict liability theory.”).
    53 Burmaster v. Plaquemines Parish Gov’t, 
    982 So. 2d 795
    , 799 n.1 (La. 2008) (“[T]he
    Legislature [has] effectively eliminated strict liability . . . turning it into a negligence claim.”
    (quoting Lasyone v. Kan. City S. R.R., 
    786 So. 2d 682
    , 689 n.9 (La. 2001))).
    18
    Case: 15-30162       Document: 00513895847          Page: 19     Date Filed: 03/03/2017
    No. 15-30162
    did not require that the defendant had knowledge of its breach of duty. 54
    Because the Board has not stated a claim that Defendants owed it a duty of
    care, its strict liability claim fails along with its negligence claim.
    C
    The complaint alleges that the lands dredged by Defendants constitute
    “dominant estates” under the Louisiana Civil Code that carry a natural
    servitude of drain over the “servient estates” owned by the Board, because
    “water naturally flows” from Defendants’ property to the Board’s property. 55
    It further alleges that “Defendants have rendered the natural servitude of
    drain more burdensome in violation of Louisiana Civil Code article 656.” 56 The
    district court dismissed the claim on the ground that there is no basis in law
    for “finding that a natural servitude of drain may exist between non-adjacent
    estates with respect to coastal storm surge.”
    The Board argues that this conclusion was incorrect, noting that
    Louisiana Civil Code article 648 provides that “[n]either contiguity nor
    proximity of the two estates is necessary for the existence of a . . . servitude. It
    suffices that the two estates be so located as to allow one to derive some benefit
    from the charge on the other.” The Board points to the allegations in its
    complaint that state that Defendants’ actions have “directly altered and
    continue to alter the natural course, flow, and volume of water” from
    Defendants’ lands to coastal lands.            Defendants respond that the Board’s
    54  LA. CIV. CODE art. 2317.1 (noting that a strict liability claim requires “a showing
    that [defendant] knew or, in the exercise of reasonable care, should have known of the ruin,
    vice, or defect which caused the damage, that the damage could have been prevented by the
    exercise of reasonable care, and that he failed to exercise such reasonable care.”).
    55 See 
    id.
     art. 655 (“An estate situated below is bound to receive the surface waters
    that flow naturally from an estate situated above unless an act of man has created the flow.”).
    56 See 
    id.
     art. 656 (“The owner of the servient estate may not do anything to prevent
    the flow of the water. The owner of the dominant estate may not do anything to render the
    servitude more burdensome.”).
    19
    Case: 15-30162    Document: 00513895847      Page: 20   Date Filed: 03/03/2017
    No. 15-30162
    allegations do not amount to a claim that Defendants’ property is “situated
    above” the Board’s property, as would be required for the existence of a
    servitude of drain under Louisiana Civil Code Article 655. Moreover, even
    though the complaint need not allege that the properties are adjacent or near
    to each other, Defendants point out that there need at least be some allegation
    that the properties are “close enough that surface water naturally flows from
    one to another.” Even more problematic, Defendants note, is the fact that
    “storm surge is not surface water,” and thus the fact that the Board is most
    concerned with damage caused by storms and hurricane-related flooding belies
    its claim that damage is being caused by the flow of water onto its property
    from some other particular property.
    The explanation of the natural servitude claim contained in the
    complaint does little more than recite the legal requirements of such a claim.
    It does not name or describe the location of any of the relevant properties, and
    it does not explain the properties’ relation to each other, other than by way of
    reciting the circumstances of any natural servitude claim. It does not specify
    which properties constitute the servient and dominant estates, and it therefore
    cannot allege that any particular property receives naturally flowing surface
    waters from any other. The Board says that Exhibits B through G to its claim
    exhibit a “wealth of specificity” on these questions, but the exhibits merely
    comprise a map indicating the location of the levee districts of the Southeast
    Louisiana Flood Protection Authority; the names and serial numbers of wells
    operated by Defendants; descriptions of the locations of wells subject to
    Defendants’ dredging permits; and descriptions of the locations subject to
    Defendants’ right-of-way permits. Because the Board does not argue that
    every single one of the hundreds of listed locations constitutes a dominant
    estate, it must intend only to allege that some of those locations are dominant
    estates. However, it has not made such an allegation. Another possibility is
    20
    Case: 15-30162     Document: 00513895847       Page: 21    Date Filed: 03/03/2017
    No. 15-30162
    that its argument is that Defendants’ actions have altered the flow of water
    into certain bodies of water, which in turn poses a storm surge risk to the lands
    the Board oversees. But this would hardly constitute “[a]n estate situated
    below . . . receiv[ing] the surface waters that flow naturally from an estate
    situated above,” 57 and thus the district court properly dismissed the servitude
    of drain claim.
    D
    Below and here, the parties analyzed both the public and private
    nuisance claims as arising under Louisiana Civil Code article 667, which
    provides that “[a]lthough a proprietor may do with his estate whatever he
    pleases, still he cannot make any work on it, which may deprive his neighbor
    of the liberty of enjoying his own, or which may be the cause of any damage to
    him.” 58 For actions accruing after 1996, such proprietor “is answerable for
    damages only upon a showing that he knew or, in the exercise of reasonable
    care, should have known that his works would cause damage, that the damage
    could have been prevented by the exercise of reasonable care, and that he failed
    to exercise such reasonable care.” 59 The district court held that the Board’s
    claims brought under this statute fail because the Board did not sufficiently
    allege in its complaint that it is a “neighbor” of any of Defendants’ property.
    The Fifth Circuit has noted that to bring an action under Article 667, “[a]
    plaintiff must have some interest in an immovable near the defendant-
    proprietor’s immovable.” 60
    The lack of specificity that plagues the Board’s servitude claim also
    makes its nuisance claim little more than a restatement of Louisiana law. The
    57 
    Id.
     art. 655 (emphasis added).
    58 
    Id.
     art. 667.
    59 
    Id.
    60 Roberts v. Cardinal Servs., Inc., 
    266 F.3d 368
    , 386 (5th Cir. 2001) (emphasis
    removed).
    21
    Case: 15-30162         Document: 00513895847            Page: 22     Date Filed: 03/03/2017
    No. 15-30162
    complaint states generally that Defendants have “dredged a network of canals
    to access oil and gas wells,” and that this and other oil and gas activity have
    damaged Louisiana’s coast. Although the Board is correct to point out that
    “there is no rule of law compelling ‘neighbor’ to be interpreted as requiring a
    certain physical adjacency or proximity,” 61 the Fifth Circuit has established
    that a complaint nonetheless must establish some degree of propinquity, so as
    to substantiate the allegation that activity on one property has caused damage
    on another. 62 The Board is thus incorrect to interpret the relevant law to
    require nothing more than a “causal nexus” between the offending property
    and the damage done, and in the absence of allegations that the relevant
    properties were near to each other, the Board has not stated a claim for
    nuisance.
    *       *      *
    For the foregoing reasons, the district court’s dismissal of the Board’s
    claims is AFFIRMED.
    See 
    id. at 385
     (“To be a ‘neighbor’ one need not be an adjoining landowner . . . ‘it
    suffices that they [the lands] be sufficiently near, for one to derive benefit from the servitude
    on the other.’” (quoting Ferdinand Fairfax Stone, Tort Doctrine in Louisiana: The Obligations
    of Neighborhood, 40 TUL. L. REV. 701, 711 (1966))).
    62 
    Id. at 387
     (“To show that he is a ‘neighbor,’ and thus legally entitled . . . to maintain
    [a nuisance] action, a plaintiff must show some type of ownership interest in immovable
    property near that of the proprietor.” (emphasis added)); see also TS & C Invs., LLC v. Beusa
    Energy, Inc., 
    637 F. Supp. 2d 370
    , 383 (W.D. La. 2009) (dismissing class action nuisance claim
    because “plaintiffs have not demonstrated whose property is physically adjacent, closely
    adjacent or remote from the well site”); In re Katrina Canal Breaches Consol. Litig., 
    647 F. Supp. 2d 644
    , 734 (E.D. La. 2009), rev’d on other grounds, 
    696 F.3d 436
     (5th Cir. 2012)
    (“Although there is a paucity of guidance in the law as to the proximity required so as to be
    a ‘neighbor’ for purposes of [a nuisance claim], the Court finds that [three miles] is too
    attenuated for these plaintiffs to be so considered.”).
    22
    

Document Info

Docket Number: 15-30162

Citation Numbers: 850 F.3d 714

Filed Date: 3/3/2017

Precedential Status: Precedential

Modified Date: 1/12/2023

Authorities (27)

Singh v. Duane Morris LLP , 538 F.3d 334 ( 2008 )

MSOF Corp v. Exxon Corporation , 295 F.3d 485 ( 2002 )

Terrebonne Parish School Board v. Columbia Gulf ... , 290 F.3d 303 ( 2002 )

Audler v. CBC Innovis Inc. , 519 F.3d 239 ( 2008 )

roy-ronald-lowe-as-administrator-of-the-estate-of-lou-ann-lowe-deceased , 624 F.2d 1373 ( 1980 )

Roberts v. Cardinal Services, Inc. , 266 F.3d 368 ( 2001 )

TERREBONNE SCHOOL BD. v. Castex Energy , 893 So. 2d 789 ( 2005 )

Cormier v. THE Ins. Co. , 745 So. 2d 1 ( 1999 )

Halmekangas v. State Farm Fire & Casualty Co. , 603 F.3d 290 ( 2010 )

Oster v. Dept. of Transp. & Development , 582 So. 2d 1285 ( 1991 )

Lasyone v. Kansas City Southern RR , 786 So. 2d 682 ( 2001 )

Lemann v. Essen Lane Daiquiris, Inc. , 923 So. 2d 627 ( 2006 )

PPG Industries, Inc. v. Bean Dredging , 447 So. 2d 1058 ( 1984 )

Burmaster v. Plaquemines Parish Government , 982 So. 2d 795 ( 2008 )

Smith v. Kansas City Title & Trust Co. , 41 S. Ct. 243 ( 1921 )

Wyandotte Transportation Co. v. United States , 88 S. Ct. 379 ( 1967 )

California Coastal Commission v. Granite Rock Co. , 107 S. Ct. 1419 ( 1987 )

In Re Katrina Canal Breaches Consolidated Litigation , 647 F. Supp. 2d 644 ( 2009 )

TS & C Investments, L.L.C. v. Beusa Energy, Inc. , 637 F. Supp. 2d 370 ( 2009 )

Barasich v. Columbia Gulf Transmission Co. , 467 F. Supp. 2d 676 ( 2006 )

View All Authorities »