Louisiana’s Act 312 & Legacy Landowner Litigation

Louisiana’s Act 312 & Legacy Landowner Litigation

By: Sarah C. Thompson

A “legacy” lawsuit is instituted by a landowner who claims that oil and gas operations caused his property to become contaminated.  These suits often name every operator who ever worked at the site as defendants, usually going back decades.  Below is a snapshot graphic of legacy litigation in Louisiana:

Clarifying Minimum Contacts: Personal Jurisdiction over Corporations

Clarifying Minimum Contacts: Personal Jurisdiction over Corporations

By: Etheldreda C. Smith

 

In 2014, following the United States Supreme Court’s decisions in Daimler AG v. Bauman,[1] we provided an update on the shift in policy away from the landmark International Shoe[2] decision regarding states’ exercise of general personal jurisdiction over corporations.  Notably, International Shoe’s “minimum contacts” test for general personal jurisdiction was murky and resulted in judicial expansion of personal jurisdiction as globalization evolved over the last seventy years. Since Daimler, the Court has continued its shift away from International Shoe in the general jurisdiction analysis and also taken aim at exercises of specific jurisdiction that could undermine Daimler. The cases discussed here illustrate the Supreme Court’s desire to realign the states’ exercise of personal jurisdiction over corporations with the constitutional guarantees of due process and the burden placed on the defendant.

The Daimler decision provided clarity to corporations regarding the jurisdictions in which they might be subject to suit under a general jurisdiction analysis. Following Daimler, corporations could be subject to suit only in jurisdictions in which their “affiliations with the State are so continuous and systematic as to render it essentially at home in the forum State.”  Simply put, general personal jurisdiction over corporations can properly be exercised in their state of incorporation or where their principal place of business or corporate headquarters are located. In a footnote, the Supreme Court left open the possibility that in an “exceptional case” a defendant could be subject to general jurisdiction in another state, but did little to elaborate on what factors would create such an “exceptional case;” and subsequent cases have yet to find one.

Walden v. Fiore[3] was decided that same year.  In Walden, the Supreme Court provided further insight into personal jurisdiction—this time focusing on specific personal jurisdiction over foreign defendants.   The Court underscored that the focus of the inquiry is “the relationship among the defendant, the forum, and the litigation” rather than the defendant’s relationship with persons who reside in the forum.  Rather than focusing on the situs of the injury as was done in many prior decisions examining the existence of specific personal jurisdiction, Walden held that the defendant’s suit-related conduct must connect him to the forum state in a meaningful way. Injury might be relevant to that inquiry, but it would no longer be controlling.

Last year, the Supreme Court again granted certiorari for two cases presenting issues of personal jurisdiction: BNSF Railway Co. v. Tyrrell, et al. and Bristol-Myers Squibb Company v. Superior Court of California, et al.

In BNSF, railroad employees filed suit under the Federal Employers’ Liability Act, which makes railroads financially liable for job related injuries sustained by their employees.  In two consolidated cases, the Montana Supreme Court held that Montana could properly exercise general personal jurisdiction[4] over the railroad because it “did business” within the state under Section 65 of FELA and was “found within” the State under Montana Rule of Civil Procedure 4(b)(1).  The Montana Supreme Court further stated that the due process limits articulated in the Daimler decision did not apply to FELA claims or railroad defendants. Writing for eight of the nine members of the Court and reversing the Montana Supreme Court’s holding, Justice Ginsburg explained that the constraints of Daimler apply to “all state-court assertions of general jurisdiction over nonresident defendants; the constraint does not vary with the type of claim asserted or business enterprise sued.”[5]

Bristol-Myers Squibb and BNSF were argued the same day. There, the California Court of Appeal applied Daimler to determine that California lacked general personal jurisdiction over the Plavix manufacturer, but affirmed the lower court’s decision that it had specific jurisdiction over claims asserted by out-of-state plaintiffs by applying a “sliding scale” approach to specific jurisdiction.  Bristol-Meyers Squibb involved claims by both non-resident and domestic plaintiffs, and specific jurisdiction over the non-residents’ claims were at issue.  A divided California Supreme Court found that Bristol-Myers’ “extensive” contacts with California permitted the exercise of a modified version of specific personal jurisdiction over claims by the non-resident plaintiffs; and that the requisite connection between the forum state and the suit-related conduct was “relaxed” where the foreign defendant has wide ranging general contacts with the forum state unrelated to the underlying controversy.  Specific jurisdiction attached to the non-residents’ claims, the court held, in part because the non-residents’ claims were similar in many ways to the California residents’ claims.  Fairness and judicial economy permitted joinder of the residents’ claims (to which specific jurisdiction inarguably applied) and the non-residents’ claims (which had no direct nexus with California).

The Supreme Court reversed and remanded.  Relying on Walden, the same eight justices as in BNSF[6] rejected California’s exercise of specific personal jurisdiction over the non-residents’ claims because there was no nexus between their claims and California. All of the non-residents’ alleged harm in Bristol-Myers was suffered outside of the forum state.  The fact that the California plaintiffs were prescribed, obtained, and ingested the drug in California and sustained the same injuries as the non-residents was insufficient to exercise specific jurisdiction over the non-residents’ claims. According to the Court, specific jurisdiction requires a connection between the forum and the specific claims at issue. The Court further explained that Bristol-Myers’ contractual relationship with a resident co-defendant for distribution of Plavix was insufficient, standing alone,[7] to confer specific personal jurisdiction over the company.

Despite repeated references to the “settled” nature of the law, the Court explicitly left open the question of whether the Fifth Amendment imposes the same due process requirements on federal courts’ exercise of personal jurisdiction as the Fourteenth Amendment does on the states’.[8]  The implication being that these cases signal a marked shift in the jurisprudence dealing with personal jurisdiction over defendant corporations in state courts.

With these cases in mind, new state court matters should be evaluated with a close eye to determine whether the forum’s exercise of general or specific personal jurisdiction over your corporate client is proper.

[1] 134 S.Ct. 746 (2014).

[2] International Shoe Co. v. Washington, 326 U.S. 310 (1945).

[3] 134 S.Ct. 1115 (2014).

[4] Because the workers were not injured in the forum state, an evaluation of specific jurisdiction was not at issue in BNSF.

[5] Justice Sotomayor wrote a partial dissent.  While she concurred with majority’s conclusion that the nature of the claim has no bearing on the personal jurisdictional analysis, she expressed her disapproval of “the path the Court struck in Daimler AG v. Bauman,” and urged for a return to the International Shoe standard.

[6] Justice Sotomayor again dissented.

[7] There were no allegations that the contractual relationship was related to the alleged harm in this case, therefore, the contractual relationship alone would not create specific personal jurisdiction over Bristol-Myers Squibb.

[8] Since Bristol-Meyers Squibb concerned the exercise of personal jurisdiction by a state court, the Court’s analysis focused on due process as applied to the states under the Fourteenth Amendment.  In contrast, the Fifth Amendment provides due process restrictions on federal courts’ exercise of personal jurisdiction; and the Court expressly reserved for another day whether the Fifth Amendment analysis is different.

KPW Sponsors DirectWomen’s 2017 Sandra Day O’Connor Board Excellence Award Luncheon

The firm was a proud sponsor of DirectWomen’s 2017 Sandra Day O’Connor Board Excellence Award Luncheon in New York City on October 20, 2017.  Partners, Sarah Iiams and Michele DeShazo, attended on behalf of the firm and were happy to meet such accomplished ladies.  The mission of DirectWomen is to increase the representation of women on corporate boards through identifying leading women lawyers around the country who will improve corporate governance and increase shareholder value.

We are very pleased that ConocoPhillips Company’s Senior Vice President, Legal, General Counsel and Corporate Secretary, Janet Langford Carrig, was selected as a 2017 DirectWomen Board Institute participant for the October 19-20, 2017 program.  Each year, DirectWomen uses rigorous criteria to identify only the most talented women for the Board Institute training program.  Our firm has been fortunate to view Janet’s extraordinary talents firsthand through our work for ConocoPhillips.  Congratulations, Janet, on this well-deserved honor!

 

Darleene Peters & Katherine Wells attend legal seminar, “Not Just a Pretty Face: Developing Powerful Women of Substance for Success”

Darleene Peters & Katherine Wells attended an empowering legal seminar entitled “Not Just a Pretty Face:  Developing Powerful Women of Substance for Success.” The event was sponsored by The Greater New Orleans Louis A. Martinet Legal Society, Inc. and The Association of Women Attorneys.

Panelists included Dawn Barrios– a local  attorney, Nandi Campbell– local Attorney, Loyola and Tulane Law Professor, and Eboni Williams– attorney, book author, and Fox News Host.  Darleene and Katherine are pictured here with Eboni Williams.

KPW joins ConocoPhillips in supporting United Way of Greater Houston

KPW partnered with ConocoPhillip’s Legal Department for the Department’s United Way fundraiser.  ConocoPhillips has supported the United Way of Houston for almost three decades.  The United Way has an integral role in providing support to people in the Greater Houston Area affected by Hurricane Harvey.

Deb Kuchler, Sarah Iiams, Robert Guidry, Phil Wood and Nick Wise enjoyed fellowship, good Cajun food and music with our COP friends in Houston– all while supporting this worthy cause.

Kuchler Polk Weiner, LLC congratulates Freightliner on 75 years of innovation.

Kuchler Polk Weiner, LLC congratulates Freightliner on 75 years of innovation.

 

Janika Polk, Lee Ziffer and Deb Kuchler recently ran into Dale Earnhardt, Jr. at Hendrick Motorsports where Freightliner is prominent. We’re reminded of how important it is as outside counsel to learn the client’s business.

What’s important to each client?

What keeps a client awake at night?

How does the business run?

That’s why, on our own time and on our own nickel, we:

  • Visit the client’s operation;

  • Climb on and drive a tractor;

  • Pick up a power tool and disassemble a brake drum;

  • Swing on a personnel basket onto an oil rig;

  • Don a Tyvek suit, hard hat, goggles, ear protectors and steel-toed boots for an inspection of a chemical plant or refinery;

  • Dive into the science underlying a product liability case;

  • Learn the lingo of deepwater drilling;

  • Know how to get to the port side from starboard on a client’s vessel; and

  • Understand the sensitivities involved in the client’s environmental stewardship issues.

We are 100% in it with our clients.  When they have skin in the game, so do we.

Darleene Peters and Skylar Rudin Represent KPW at 2017 NAMWOLF Annual Meeting and Law Firm Expo

Darleene Peters and Skylar Rudin attended the National Association of Minority & Women Owned Law Firms (NAMWOLF) Annual Meeting and Law Firm Expo, held in New York City, September 17-20, 2017.

The NAMWOLF meeting didn’t disappoint! Darleene and Skylar were able to participate in informal networking activities, such as a scavenger hunt throughout the City that Skylar helped organize.  The event was hosted by the Emerging Leaders Initiative (ELI), on which our very own Skylar serves as a member of the ELI Board and as the Co-Chair of the Networking/Business Development Committee.  She also received recognition for her efforts during the General Session of the Annual Meeting.

Darleene was a first-time attendee at the meeting and participated in the First Time Attendee Orientation where she learned more about NAMWOLF, met the NAMWOLF Team, and other colleagues.  She also attended the Law Firm Cross Marketing Session on Trust and Relationship-Building and engaged in interactive exercises with other attendees to learn the importance of connections and trust in building your professional network.

All of the sessions and receptions provided opportunities to enlighten, network, and engage all attendees.  Another highlight of the meeting was the Law Firm Expo, which allowed attorneys from various practice settings and locations the opportunity to further network with in-house counsel, various legal association members, and other attorneys in private practice, in an effort to assist with building their professional networks and practices.

KPW is proud to be a NAMWOLF Member with legal expertise in several practice areas, and is one of three Louisiana Law Firm NAMWOLF Members.

 

Cleaning Up the Clean Water Act

Cleaning Up the Clean Water Act

By: Kristyn L. Lambert

On July 27, 2017, the Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (the Corps) proposed the first of two rules designed to replace the controversial 2015 “Clean Water Rule” (the 2015 Rule),[1] which some argue broadened federal jurisdiction under the Clean Water Act (CWA).  This regulation is particularly important because it determines which areas are subject to the Corps’ permitting authority under the CWA.  This news comes after Louisiana state administrators asked the Trump administration to grant funding and ease the federal permitting requirements related to Louisiana’s coastal lands.

The Corps’ Clean Water Rule of 2015 purportedly sought to clarify the question of which wetlands fall under the jurisdiction of the CWA, and interpreted “waters of the United States” to include “all waters that require protection in order to restore and maintain the chemical, physical, or biological integrity of traditional navigable waters,” without requiring a continuous surface connection.[2]  After its adoption, critics of the 2015 Rule argued that this construction significantly expanded federal jurisdiction.

Pursuant to its terms, the CWA applies to “navigable” waters, defined by Section 1362(7) of the Act as “waters of the United States.”[3]  This definition caused confusion regarding which areas are subject to the CWA regulations.  Wetlands have been particularly difficult to classify under the CWA because the boundaries between navigable waterbodies and adjacent wetlands are often unclear.[4]  Enforcing agencies and the courts have struggled to determine where the navigable waters – and the jurisdiction of the CWA – ends, and where terra firma land begins.

The Corps, responsible for enforcing certain of the CWA’s permitting requirements, interpreted “waters of the United States” expansively.  This resulted in a number of legal challenges from multiple parties and states, including Louisiana.

For instance, in U.S. v. Riverside Bayview Homes, Inc., the United States Supreme Court upheld the Corps’ authority to interpret the CWA as applicable to wetlands adjacent to other covered water bodies, even though the Corps had historically construed the CWA to cover only waters navigable in fact.[5]

In Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, (SWANCC), the U.S. Supreme Court held that the Corps exceeded its authority under the CWA when it adopted a rule extending the definition of “navigable waters” to include intrastate waters used as habitat by migratory birds.[6]  That case did not involve wetlands specifically, but it discussed that the deciding factor in Riverside, supra, was the “significant nexus” between the wetlands and navigable waters at issue.[7]  While the opinion did not precisely address what constitutes a significant nexus, it did indicate that physical proximity and location are important considerations.[8]

More recently in Rapanos v. United States, the Supreme Court agreed that the “significant nexus test” should be applied to determine which wetlands fall within the CWA’s jurisdiction, but failed to reach a majority holding regarding how the test is applied.  According to the plurality opinion authored by late Justice Scalia, a significant nexus requires that the wetlands be adjacent to “a relatively permanent body of water connected to traditional interstate navigable waters; and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the water ends and the wetland begins.”[9]  According to the opinion, the scope of the definition of “waters of the United States” was determined by a wetland’s physical proximity to covered waters, “not ecological relationship thereto.”[10]  According to Justice Kennedy’s concurring opinion, the significant nexus is established if the wetlands “affect the chemical, physical, and biological integrity of other covered waters.”[11]  In Justice Kennedy’s view – if the wetlands have a substantial ecological impact on navigable waters, the significant nexus test is satisfied regardless of the wetlands’ physical proximity to the navigable waters.

In October 2015, the U. S. Court of Appeals for the Sixth Circuit stayed the Rule on the grounds that the 2015 Rule was “at odds with the Supreme Court’s ruling in Rapanos” and because the rulemaking process by which the 2015 Rule was adopted was “facially suspect.”[12]

In February 2017, President Trump issued an Executive Order instructing the EPA and Corps to issue new regulations that reflect Judge Scalia’s majority opinion in Rapanos to narrow CWA jurisdiction and reduce the area subject to federal permitting.  The rule proposed on July 27, 2017 essentially seeks to repeal the 2015 Rule and “re-codify” the prior regulations temporarily.  This will essentially maintain the status quo, as the prior regulations have been applied since the Sixth Circuit enjoined the 2015 Rule.  In a “second step,” the agencies intend to “conduct a substantive re-evaluation of the definition” to draft replacement regulations.

[1] Corps of Engineers’ regulatory definition of waters of the United States 33 C.F.R. § 328.3.

[2] Clean Water Rule: Definition of “Waters of the United States,” 80 FR 37054-01 (2015).

[3] 33 U.S.C.A. § 1362(7) (2014).

[4] See U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985); and Rapanos v. United States, 547 U.S. 715 (2006).

[5] U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121, 123 (1985).

[6] Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001).

[7] Id. at 167.

[8] Id. at 168.

[9] Rapanos v. United States, 547 U.S. 715, 742 (2006)(internal quotations omitted).

[10] Id. at 747.

[11] Id. at 780.

[12] In Re E.P.A., 803 F.3d 804, 807 (6th Cir. 2015).

The Enemy of Efficiency: Diminishing Marginal Returns

The Enemy of Efficiency: Diminishing Marginal Returns

By: Mark E. Best, Esq.

Clients want, expect, and are entitled to efficient handling of their cases.  The block-billing model of the past, which allowed for full-day time entries on “research” or “document review,” gave way to standard tenth-of-an-hour billing increments with verbose time entries designed to help clients determine whether they were getting their money’s worth.  And even this model is now showing its age, having to compete with fixed and alternative fee agreements designed to give more certainty to future litigation costs.  No matter the billing method, when the client is writing out that check, she wants to know she isn’t paying for unnecessary work.

Most defense firms create efficiencies using common methods like new technology (e.g., paperless work flow; video conferencing; electronic document review software), appropriately tiered staffing (e.g., delegation of simple tasks to clerks, paralegals and secretaries), and assessment of cases for early resolution through motion practice or settlement.  At Kuchler Polk Weiner, LLC, we take efficiency efforts one step further—out of the physical office and into our collective mindset.  One way we do this is by focusing on the archenemy of efficiency—the law of diminishing marginal returns (“DMR”).

This economic principle states that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.[1]  Put more simply, you can continually add more of a given resource to creation of a product but, at some point, it will become inefficient to do so.  The practice of law is not immune from the law of DMR.  There comes a point in every project or case when spending additional hours working on it yields an ever-decreasing return for the client—potentially even a negative return, which occurs when additional work input results only in increased costs to the client, without any benefit whatsoever.  So what does this look like in the real world?

In the first three hours an attorney spends constructing a brief, she may formulate an outline, read the latest case-on-point, and identify the key supporting exhibits.  That work is very productive and highly valuable to the client.  In the last hour of brief preparation, however, he may read and re-read the draft, ultimately deciding only to change the word “Firstly” to “First.”  Some would (rightly) argue that the last hour was quality-control work necessary to ensure top quality.  From an economic perspective, however, the last hour created “diminished” value for the client relative to the first three hours.  And yet, the client is charged for the last hour at full price.

We cannot fight the law of diminishing marginal returns, but we can maintain a higher level of efficiency by being mindful of it.  An efficient attorney should consider the following questions at each stage of work-product preparation:

 

  1. What is absolutely essential to this work product, and what is not?
  2. Have any essential parts of the work product already been created, such that I need not reinvent the wheel?
  3. Have I reached the point in the creative process where I am merely fine-tuning?
  4. Is the fine-tuning still creating good value for the client?

The goal of this mindfulness exercise is to create an automatic internal alarm system, pinpointing the moment when the return on investment of time begins to diminish.  Once the alarm bells go off, there should be a shift in mindset to “wrapping things up” and moving on to other, more productive tasks.  The benefit to the client’s bottom line does not go unnoticed and (bonus!) we tend to avoid those headaches that come from staring at the same words on the computer screen for hour after hour.

[1] https://www.britannica.com/topic/diminishing-returns

 

Skylar Rudin Selected as YLS Bar Ambassador for the New Orleans Bar Association

KPW Associate Skylar Rudin has been selected as a YLS Bar Ambassador for the New Orleans Bar Association (NOBA). The YLS Bar Ambassadors are described as a group of young lawyers recognized as leaders and charged with actively representing the NOBA. Skylar was featured in this month’s NOBA magazine along with the select group of other YLS Bar Ambassadors.