Frank C. Minvielle LLC v. Atlantic Refining Co. , 337 F. App'x 429 ( 2009 )


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  •            IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    July 24, 2009
    No. 08-30399                    Charles R. Fulbruge III
    Clerk
    FRANK C MINVIELLE LLC
    Plaintiff-Appellant
    v.
    ATLANTIC REFINING CO, formerly known as Atlantic Richfield Co; OXY
    USA INC, formerly known as Cities Service Oil Co; PACIFIC ENTERPRISES
    OIL CO (USA), formerly known as Sabine Production Co Inc; MOSAIC
    GLOBAL OPERATIONS INC, formerly known as IMC Global Operations Inc
    Defendants-Appellees
    Appeal from the United States District Court
    for the Western District of Louisiana
    USDC No. 6:05-cv-1312
    Before JOLLY, PRADO, and SOUTHWICK, Circuit Judges.
    PER CURIAM:*
    Plaintiff-Appellant Frank C. Minvielle, LLC (“Minvielle”) appeals the
    district court’s order awarding summary judgment to Defendants-Appellees
    Atlantic Refining Co. (“Atlantic Refining”), OXY USA, Inc. (“Oxy”), Pacific
    Enterprises Oil Co. (“Pacific Oil”), and Mosaic Global Operations, Inc. (“Mosaic”)
    *
    Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
    R. 47.5.4.
    No. 08-30399
    (collectively “Appellees”) on the ground of res judicata.      For the following
    reasons, we AFFIRM.
    I. FACTUAL AND PROCEDURAL BACKGROUND
    A.    Factual Background
    This appeal arises from the second of two lawsuits in which Minvielle has
    asserted materially identical claims for alleged environmental damage stemming
    from a nearly fifty-year-old oil lease.
    In September 1961, Juliet Bourgeois Delcambre (“Delcambre”) entered into
    an oil, gas, and mineral lease (the “1961 lease”) with Atlantic Refining to explore
    and drill for oil on land that she owned in Iberia Parish, Louisiana (“the
    property”). Pursuant to the lease, a well was drilled on the property, and various
    companies operated the well according to the terms of an Operating Agreement
    between Atlantic Refining and the other companies. Appellees in this case are
    former parties to or the assignees and/or successors-in-interest of the parties to
    this agreement.
    In 1974, Petro-Lewis Funds, Inc. (“Petro-Lewis”) purchased an interest in
    the property and became the operator of the well. In December 1977, it plugged
    and abandoned the well and the lease expired. When Delcambre died over a
    decade later, her daughter and grandchildren (“the Cowans”) inherited the
    property. In 1998, the Cowans sold the property to Minvielle & Segura, LLC by
    an Act of Cash Sale, retaining a one-half mineral interest. In November 2001,
    Frank C. Minvielle acquired full ownership of Minvielle & Segura, LLC and
    changed its name to Frank C. Minvielle, LLC.
    B.    Minvielle I
    In August 2003, Minvielle sued, among others, IMC Global Operations,
    Inc. (“IMC”)—Petro-Lewis’s successor and Mosaic’s predecessor—in Louisiana
    state court, bringing both contract and tort claims for alleged contamination of
    the property. The defendants removed to the Western District of Louisiana on
    2
    No. 08-30399
    the basis of diversity, see Frank C. Minvielle, L.L.C. v. IMC Global Operations,
    Inc. (Minvielle I), 
    380 F. Supp. 2d 755
    (W.D. La. 2004), after which all remaining
    defendants except IMC were dismissed. IMC filed various motions to dismiss,
    including one under Federal Rule of Civil Procedure 12(b)(6) for failure to state
    a claim, which the district court converted to a motion for summary judgment.
    The court granted the motion. As to the contract claims, the court explained
    that under Louisiana law the right to sue for the property damage is a personal
    right, and it found both that Minvielle did not receive an assignment of the right
    to sue for prior damages from the Cowans at the time of the sale and that the
    1961 lease did not create a stipulation pour autrie in Minvielle’s favor. 
    Id. at 766,
    770. It therefore held that Minvielle lacked standing to bring the contract
    claims against IMC. 
    Id. at 770.
    As to the tort claims, the court noted that under
    Louisiana law, “the owner of land at the time of the alleged damages is the
    person with the real and actual interest to assert the claim for damages to the
    land,” 
    id. at 770,
    and that Minvielle sought damages arising from operations
    that occurred prior to its purchase of the property, 
    id. at 772.
    Accordingly, it
    found that Minvielle lacked standing to bring the tort claims against IMC.1 
    Id. Minvielle moved
    for reconsideration, arguing that at the time of the 1998
    Act of Cash Sale, the Cowans intended to convey all rights to Minvielle &
    Segura, including the right to sue for past damages to the property. In support,
    Minvielle asserted that it had procured an amendment to the Act of Cash Sale
    reflecting this purported agreement, and it informed the court that it would file
    the document with the court. Minvielle, however, never filed the purported
    amendment. On January 12, 2005, the district court denied Minvielle’s motion
    1
    On the same day that the court granted IMC’s motion for summary judgment, IMC
    filed a third-party complaint against Atlantic Refining, Oxy, and Pacific Oil, among others,
    asserting claims for contribution on the ground that each was a former party to or successor-
    in-interest of a party to the Operating Agreement. Because of the court’s decision in its favor,
    however, IMC never served this complaint.
    3
    No. 08-30399
    for reconsideration, reiterating its previous ruling and noting that Minvielle had
    neither amended the Act of Cash Sale nor demonstrated that a Louisiana court
    would allow such an amendment. Minvielle did not appeal the judgment, and
    it became final.
    C.    Minvielle II
    In June 2005, Minvielle again filed suit in Louisiana state court, alleging
    claims identical to those in Minvielle I, against, among others, Atlantic
    Refining—an original party to the 1961 lease—and IMC, Oxy, and Pacific Oil,
    each of which it concedes is a successor-in-interest by sublease or assignment of
    the 1961 lease. Mosaic was substituted for IMC, and it removed the case to the
    Western District of Louisiana on the basis of diversity. See Frank C. Minvielle,
    LLC v. Atl. Ref. Co. (Minvielle II), Civil Action No. 05-1312, 
    2007 WL 2668715
    (W.D. La. Sept. 6, 2007). Minvielle expressly stated in its complaint that the
    claims in this suit were identical to those in Minvielle I and further agreed with
    the district court that “there’s nobody who sits at the table in [Minvielle II] that
    didn’t sit [at] the table [in Minvielle I].” However, Minvielle argued that it now
    had standing to assert its claims because, after the final judgment in Minvielle I,
    it executed an amendment to the Act of Cash Sale—the same purported
    amendment discussed in Minvielle I—which provided that the parties to that
    agreement intended to assign to Minvielle the right to sue for previous damage
    to the property. Notably, the alleged amendment, by its very terms, did not
    amend the Act of Cash Sale or confer any new rights upon Minvielle; rather, as
    Minvielle acknowledged, it purported only to clarify the original intentions of the
    4
    No. 08-30399
    parties to the agreement.2 Minvielle nonetheless argued that the amendment
    gave it standing to sue.
    Appellees moved to dismiss on the ground of res judicata, arguing that
    Minvielle could not relitigate the question of its standing to assert contract and
    tort claims against them, as this was the exact same issue the court decided in
    Minvielle I. The district court converted the motion into one for summary
    judgment and granted it. In so doing, the district court explained that “[t]he
    claims asserted are identical to those asserted in Minvielle I, there is
    commonality of parties, and the court’s jurisdictional ruling in Minvielle I is a
    final and valid judgment.” 
    Id. at *7.3
    It further noted that the amendment to
    the Act of Cash Sale—which by its terms did not convey new rights and which
    even Minvielle’s counsel acknowledged was merely an “act of correction” and
    “clarification”—did not cure the res judicata effect of the Minvielle I judgment.
    See 
    id. at *6.
                  II. JURISDICTION AND STANDARD OF REVIEW
    At oral argument, Minvielle challenged, for the first time, the subject-
    matter jurisdiction of the district court in Minvielle I and II and of this court in
    2
    Under Louisiana law, an actual amendment attempting to change the original
    agreement would have been ineffective. See Lejuene Bros. v. Goodrich Petroleum Co., 
    981 So. 2d
    23, 31 (La. Ct. App. 2007) (noting “Louisiana’s longstanding rule that the right to damages
    conferred by a lease is a personal right that must be specifically assigned at the time of sale”).
    3
    Although the district court’s opinion in Minvielle II analyzes only the question of
    Minvielle I’s res judicata effect on Minvielle II, the court appears to have ruled for Appellees
    on two grounds:
    Accordingly, defendants’ motions for summary judgment based on res judicata
    are GRANTED. Because the Minvielle I finding that plaintiff did not have
    standing has res judicata effect, the court in the instant case does not have
    subject matter jurisdiction.
    Minvielle II, 
    2007 WL 2668715
    , at *7. Given that the district court addressed the entirety of
    its opinion to the question of res judicata and expressly granted Appellees’ motion on that
    ground, we agree with Appellees that the court’s single mention of jurisdiction in its
    concluding statement can be disregarded as erroneous and unnecessary dicta.
    5
    No. 08-30399
    this appeal, and we ordered supplemental briefing.         Having reviewed the
    briefing, we find Minvielle’s contentions to lack merit.
    As a preliminary matter, although the district court in Minvielle I
    certainly had jurisdiction to determine its own jurisdiction, see United States v.
    Ruiz, 
    536 U.S. 622
    , 628 (2002); Habetz ex rel. Habetz v. La. High Sch. Athletic
    Ass’n, 
    915 F.2d 164
    , 167 (5th Cir. 1990), Minvielle challenges the propriety of
    removal in Minvielle I, arguing that the case should have been remanded to
    state court. The Supreme Court has explained, however, that “[a] party that has
    had an opportunity to litigate the question of subject-matter jurisdiction may not
    . . . reopen that question in a collateral attack upon an adverse judgment. It has
    long been the rule that principles of res judicata apply to jurisdictional
    determinations—both subject matter and personal.”           Ins. Corp. of Ir. v.
    Compagnie des Bauxites de Guinee, 
    456 U.S. 694
    , 702 n.9 (1982); cf. Royal Ins.
    Co. of Am. v. Quinn-L Capital Corp., 
    960 F.2d 1286
    , 1293 (5th Cir. 1992) (“If the
    parties against whom judgment was rendered did not appeal, the judgment
    becomes final and the court’s subject matter jurisdiction is insulated from
    collateral attack.”) This is true even if the earlier judgment was incorrect. See
    Federated Dep’t Stores, Inc. v. Moitie, 
    452 U.S. 394
    , 398 (1981) (“Nor are the res
    judicata consequences of a final, unappealed judgment on the merits altered by
    the fact that the judgment may have been wrong or rested on a legal principle
    subsequently overruled in another case.”). If the Minvielle I court should have
    remanded rather than granted summary judgment, its judgment could have
    been reversed on appeal, but Minvielle chose not to appeal. Accordingly, the
    judgment became final and is now insulated from Minvielle’s collateral attack.
    See Des Moines Navigation & R.R. Co. v. Iowa Homestead Co., 
    123 U.S. 552
    , 559
    (1887).
    The district court also had jurisdiction in Minvielle II.      As we have
    explained,
    6
    No. 08-30399
    It is well settled that a federal district court can exercise ancillary
    jurisdiction over a second action in order to secure or preserve the
    fruits and advantages of a judgment or decree rendered by that
    court in a prior action. Such jurisdiction is appropriate where the
    effect of an action filed in state court would effectively nullify the
    judgment of a prior federal action. This is true even where the
    federal district court would not have jurisdiction over the second
    action if it had been brought as an original suit.
    Royal Ins. Co. of 
    Am., 960 F.2d at 1292
    (citations, alteration, and internal
    quotation marks omitted). This is precisely the case here. Notwithstanding
    Minvielle’s attempt to frame the issue below as a question of standing, the issue
    was simply one of res judicata—whether the court’s Minvielle I decision
    precluded Minvielle from arguing that it has standing to sue for the alleged
    environmental damages in Minvielle II. The question of standing is precisely the
    question that Minvielle I addressed, and there have been no changed
    circumstances that would warrant bypassing the bar of res judicata. Minvielle’s
    second suit, if successful, would nullify the district court’s judgment in Minvielle
    I. Thus, the Minvielle II court properly had ancillary jurisdiction to preserve the
    effect of its Minvielle I judgment.
    We have jurisdiction over the district court’s final order granting Appellees
    summary judgment under 28 U.S.C. § 1291.4 “We review the district court’s
    grant of summary judgment de novo, applying the same legal standards as the
    district court.” Aubris Res. LP v. St. Paul Fire & Marine Ins. Co., 
    566 F.3d 483
    ,
    486 (5th Cir. 2009). “The res judicata effect of a prior judgment is a question of
    law that we review de novo.” Davis v. Dallas Area Rapid Transit, 
    383 F.3d 309
    ,
    313 (5th Cir. 2004).
    4
    In its supplemental briefing, Minvielle argues for the first time that this court should
    abstain from exercising its jurisdiction under Burford v. Sun Oil Co., 
    319 U.S. 315
    (1943). As
    the issue on appeal is simply the res judicata effect of a prior judgment, however, Burford
    abstention is inapplicable. To the extent that Minvielle seeks to collaterally attack the final,
    unappealed judgment in Minvielle I on this ground, we reject its argument as untimely.
    7
    No. 08-30399
    III. DISCUSSION
    A.     Choice of Law
    Although each appellee moved to dismiss Minvielle II on the basis of res
    judicata, the parties do not appear to agree on whether Louisiana or federal res
    judicata law applies.5 Under our pre-2001 precedent, federal res judicata law
    would clearly apply. See Mowbray v. Cameron County, 
    274 F.3d 269
    , 281 (5th
    Cir. 2001) (“We apply federal law to determine the preclusive effect of a federal
    judgment, even if that judgment was based on state law.”) However, in Semtek
    International Inc. v. Lockheed Martin Corp., 
    531 U.S. 497
    (2001), the Supreme
    Court suggested that state res judicata law, incorporated as federal common law,
    should apply. There, the Court held that “federal common law governs the
    claim-preclusive effect of a dismissal by a federal court sitting in diversity,” but
    it adopted “as the federally prescribed rule of decision, the law that would be
    applied by state courts in the State in which the federal diversity court sits.” 
    Id. at 508.
    As we have explained, the Semtek Court held “that while federal law
    ultimately determines whether a federal judgment precludes a subsequent
    action or argument, when the basis of the original court’s jurisdiction is diversity
    of citizenship, federal courts should apply the law of the forum state unless the
    state law is incompatible with federal interests.” Am. Home Assurance Co. v.
    Chevron, USA, Inc., 
    400 F.3d 265
    , 271 n.20 (5th Cir. 2005) (citing 
    Semtek, 531 U.S. at 508
    ). But see Harper Macleod Solicitors v. Keaty & Keaty, 
    260 F.3d 389
    ,
    396 n.7 (5th Cir. 2001) (“Semtek did not address the role of state law in
    determining the preclusive effect of jurisdictional findings made by a federal
    court sitting in diversity.”).
    5
    Atlantic Refining does not differentiate between federal and Louisiana res judicata
    law, Mosaic argues that Louisiana law applies, Oxy and Pacific argue that Louisiana law
    applies but, alternatively, that federal res judicata law should apply, and Minvielle argues
    that the court should look to Louisiana law. The district court, without much discussion,
    applied Louisiana res judicata law.
    8
    No. 08-30399
    In this case, however, we need not weigh the effect of Semtek, as Louisiana
    courts “‘have repeatedly confirmed that federal law is applicable to consideration
    of whether a federal court judgment has res judicata effect.’” Jones ex rel. Jones
    v. GEO Group, Inc., 
    6 So. 3d 1021
    , 1025 (La. Ct. App. 2009) (quoting Green v.
    Iberia Par. Sch. Bd., 
    945 So. 2d 940
    , 943 (La. Ct. App. 2006)). Thus, whether we
    look to Louisiana law or federal law to provide the rule of decision, the result is
    the same: federal res judicata law applies.
    B.    Res Judicata
    Under federal law, the test for res judicata contains four elements:
    (1) the parties are identical or in privity; (2) the judgment in the
    prior action was rendered by a court of competent jurisdiction;
    (3) the prior action was concluded by a final judgment on the merits;
    and (4) the same claim or cause of action was involved in both
    actions.
    Test Masters Educ. Servs., Inc. v. Singh, 
    428 F.3d 559
    , 571 (5th Cir. 2005) (citing
    Petro-Hunt, L.L.C. v. United States, 
    365 F.3d 385
    , 395 (5th Cir. 2004)). Here,
    the second and fourth elements are not in dispute. Both Minvielle I and II arise
    out of the same alleged breaches of contract and tortious conduct, Minvielle
    expressly admits that its claims in Minvielle I and II are identical, and, as
    explained above, Minvielle cannot now challenge the jurisdiction of the district
    court in Minvielle I, which certainly had jurisdiction to determine its own
    jurisdiction. See 
    Ruiz, 536 U.S. at 628
    ; 
    Habetz, 915 F.2d at 167
    . The only
    elements that Minvielle challenges are the first and third elements: whether the
    judgment in Minvielle I, which was final and unappealed, was a judgment on the
    merits, and whether the parties to each case are identical or in privity. Both
    challenges lack merit.
    1.    Judgment on the Merits
    Minvielle first asserts that the Minvielle I decision was not a judgment on
    the merits. Although it is technically correct, this does not preclude application
    9
    No. 08-30399
    of res judicata in this case. In Minvielle I, the district court granted IMC
    summary judgment based upon Minvielle’s lack of standing, a jurisdictional
    issue. Cobb v. Cent. States, 
    461 F.3d 632
    , 635 (5th Cir. 2006) (“[T]he issue of
    standing is one of subject matter jurisdiction . . . .”). Although a jurisdictional
    ruling is technically not an adjudication on the merits, “[i]t has long been the
    rule that principles of res judicata apply to jurisdictional determinations—both
    subject matter and personal.” Ins. Corp. of 
    Ireland, 456 U.S. at 702
    n.9; accord
    Beiser v. Weyler, 
    284 F.3d 665
    , 673 (5th Cir. 2002). As we have explained,
    Although the dismissal of a complaint for lack of jurisdiction does
    not adjudicate the merit so as to make the case res judicata on the
    substance of the asserted claim, it does adjudicate the court’s
    jurisdiction, and a second complaint cannot command a second
    consideration of the same jurisdictional claims.
    Boone v. Kurtz, 
    617 F.2d 435
    , 436 (5th Cir. 1980) (per curiam). Thus, because
    the unappealed Minvielle I judgment—which adjudicated the question of
    Minvielle’s standing to bring the claims it now asserts—is unquestionably final,
    it satisfies this res judicata requirement.
    2.       Identity of the Parties
    Notwithstanding its previous agreement that “there’s nobody who sits at
    the table in [Minvielle II] that didn’t sit [at] the table in [Minvielle I],” Minvielle
    argues on appeal that res judicata cannot apply to Atlantic Refining, Oxy, and
    Pacific Oil, because they were not parties to Minvielle I.6 Res judicata applies
    only when the parties in the second suit are identical to or in privity with the
    parties in the first suit.      Test Masters Educ. Servs., 
    Inc., 428 F.3d at 571
    .
    Notably, as the Supreme Court recently reaffirmed in Taylor v. Sturgell, 128 S.
    Ct. 2161 (2008), the parties need not actually be identical: “nonparty preclusion
    may be justified based on a variety of pre-existing ‘substantive legal
    6
    Minvielle concedes that IMC, now Mosaic, was a party in both Minvielle I and II.
    10
    No. 08-30399
    relationship[s]’ between the person to be bound and a party to the judgment.
    Qualifying relationships include, but are not limited to, preceding and
    succeeding owners of property . . . and assignee and assignor.” 
    Id. at 2172
    (alteration in original, citations omitted).
    Here, Minvielle expressly concedes in its brief that “IMC (Mosaic), Oxy,
    and Pacific are successors-in-interest by sub-lease or assignment of the original
    1961 mineral lease between Delcambre and [Atlantic Refining].” It thus admits
    that Oxy and Pacific Oil are succeeding owners of property and/or assignees, and
    that Atlantic Refining is a preceding owner of property and/or assignor.
    Therefore, although Oxy, Pacific Oil, and Atlantic Refining were not parties to
    Minvielle I, the identity-of-the-parties requirement of res judicata is met.
    Accordingly, all four elements required for res judicata to apply are
    satisfied, and the district court properly held the judgment in Minvielle I to be
    res judicata on this second suit.
    IV. CONCLUSION
    For the reasons stated above, we hold that the district court properly
    granted Appellees’ motion for summary judgment on the basis of res judicata.
    We therefore AFFIRM the judgment of the district court.
    AFFIRMED.
    11
    No. 08-30399
    E. GRADY JOLLY, Circuit Judge, specially concurring:
    I am happy to concur. The standing issue in these cases has always
    referred to the lack of statutory standing under Louisiana law because of the
    failure of the plaintiff to demonstrate a cognizable interest in the res at issue.
    The standing issue never constituted a challenge to the personal or subject-
    matter jurisdiction of the federal court. Consequently, it is quite correct to say
    that Minvielle I was a decision on the merits of the plaintiff’s claim, that the case
    now before us is identical in all relevant respects to Minvielle I, and that res
    judicata is a bar to this case.
    12
    

Document Info

Docket Number: 08-30399

Citation Numbers: 337 F. App'x 429

Judges: Jolly, Per Curiam, Prado, Southwick

Filed Date: 7/27/2009

Precedential Status: Non-Precedential

Modified Date: 8/2/2023

Authorities (20)

Beiser v. Weyler , 284 F.3d 665 ( 2002 )

Mowbray v. Cameron County, TX , 274 F.3d 269 ( 2001 )

Royal Insurance Company of America and Royal Lloyds of ... , 960 F.2d 1286 ( 1992 )

Harper MacLeod Solicitors v. Keaty & Keaty, Doing Business ... , 260 F.3d 389 ( 2001 )

Joe Boone and Mary Alice Boone v. Jerome Kurtz, ... , 617 F.2d 435 ( 1980 )

Davis v. Dallas Area Rapid Transit , 383 F.3d 309 ( 2004 )

Green v. Iberia Parish School Board , 945 So. 2d 940 ( 2006 )

AUBRIS RESOURCES v. St. Paul Fire and Marine Ins. , 566 F.3d 483 ( 2009 )

Cobb v. Central States, Southwest & Southeast Areas Pension ... , 461 F.3d 632 ( 2006 )

American Home Assurance Co. v. Chevron, USA, Inc. , 400 F.3d 265 ( 2005 )

Jones Ex Rel. Jones v. GEO Group, Inc. , 6 So. 3d 1021 ( 2009 )

alyson-a-habetz-by-her-next-friends-leonard-j-habetz-and-deanna-h , 915 F.2d 164 ( 1990 )

test-masters-educational-services-inc-vivek-israni-v-robin-singh-doing , 428 F.3d 559 ( 2005 )

Frank C. Minvielle, L.L.C. v. IMC Global Operations, Inc. , 380 F. Supp. 2d 755 ( 2004 )

United States v. Ruiz , 122 S. Ct. 2450 ( 2002 )

Burford v. Sun Oil Co. , 63 S. Ct. 1098 ( 1943 )

Des Moines Navigation & Railroad v. Iowa Homestead Co. , 8 S. Ct. 217 ( 1887 )

Federated Department Stores, Inc. v. Moitie , 101 S. Ct. 2424 ( 1981 )

Insurance Corp. of Ireland v. Compagnie Des Bauxites De ... , 102 S. Ct. 2099 ( 1982 )

Semtek International Inc. v. Lockheed Martin Corp. , 121 S. Ct. 1021 ( 2001 )

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