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Federal appeals court prevents oil companies from moving Louisiana coastal wetlands lawsuits to federal court
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Federal appeals court prevents oil companies from moving Louisiana coastal wetlands lawsuits to federal court

A three-judge panel from the US Court of Appeals for the Fifth Circuit upheld a decision Monday to keep oil companies from moving lawsuits that blame them for coastal wetlands loss in Louisiana to federal court.

In 1972 Congress enacted the Coastal Zone Management Act, which led Louisiana to enact the Louisiana State and Local Coastal Resources Management Act of 1978 (SLCRMA). SLCRMA established a permitting program for anyone starting an activity that had a direct and significant impact on coastal waters in Louisiana’s coastal zone. Any activity not in accordance with the terms of a coastal use permit could result in civil liability, damages and an order for environmental restoration measures. The SLCRMA legacy clause allowed activities legally started before the effective date of the permit program to continue without a permit.

Starting in the 1940s, the oil companies drilled from barges and dredged and maintained canal networks to access wells. Louisiana parishes sued the companies, alleging that the companies’ continued use of the wells and canals violates SLCRMA because they either lack a permit or their use violates a permit. They claimed that the legacy clause does not apply because any operations prior to 1980 were not “lawfully commenced or established” before the implementation of SLCRMA.

The oil companies tried to move the suits to federal court early in litigation, but they were remanded to state court due to lack of a federal question. After the parishes filed an expert report in one of the cases, the companies moved again for the removal of the cases to federal court. Both the Eastern and Western District of Louisiana granted the motions and remanded the cases back to state court.

The court on Monday found that the remand was appropriate because the companies filed their removal notices too late. The defendants’ second notice of removal was untimely unless it was not evident on the face of the complaints that the case included claims from World War II. While the defendants argued they did not know the claims were based upon activities dating back to World War II until the plaintiffs submitted their expert testimony, the court found that the report simply repeated information that had been filed with the court before the companies first tried to remove the cases from court.

Because of this, the court affirmed the decision to remand the case to state court.