Vintage Assets, Inc. v. Tennessee Gas Pipeline Company, LLC et al
Filing
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ORDER AND REASONS denying 8 Motion to Dismiss for Failure to State a Claim. Signed by Judge Jane Triche Milazzo. (ecm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
VINTAGE ASSETS, INC.
CIVIL ACTION
VERSUS
NO: 16-713
TENNESSEE GAS PIPELINE
COMPANY, L.L.C. ET AL.
SECTION: “H”
ORDER AND REASONS
Before the Court is Defendant’s Motion to Dismiss (Doc. 9). For the
following reasons, the Motion is DENIED.
BACKGROUND
Plaintiff Vintage Assets, Inc. claims that its property, located in
Plaquemines Parish, has been damaged by the widening of canals used by the
Defendants, Tennessee Gas Pipeline Company, L.L.C. and Southern Natural
Gas Company, L.L.C.
received
Between 1953 and 1970, Defendants’ predecessors
multiple right-of-way servitudes on Plaintiff’s property, which
authorized the construction and operation of pipelines and dredge canals.
Defendants have dredged canals and laid pipelines pursuant to these
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agreements. Plaintiff alleges that its property has suffered damage because of
Defendants’ failure to maintain the pipeline canals and banks.
Plaintiff
alleges that this failure has caused ecological damages and loss of acreage due
to erosion.
In this diversity action, Plaintiff brings state law claims for breach of
contract, negligence, and trespass, and seeks injunctive relief in the form of
abatement and restoration of the land loss. Plaintiff also seeks injunctive relief
for the maintenance and repair of the canal banks. Defendants have filed a
Motion to Dismiss seeking dismissal on the following grounds: (1) the Federal
Energy Regulatory Commission (“FERC”) represents the appropriate forum for
adjudication of this claim, (2) FERC is in a superior position to issue injunctive
relief, and (3) Plaintiff has failed to state a claim based on Louisiana Civil Code
article 697.
LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead
enough facts “to state a claim for relief that is plausible on its face.” 1 A claim
is “plausible on its face” when the pleaded facts allow the court to “draw
reasonable inference that the defendant is liable for the misconduct alleged.” 2
A court must accept the complaint’s factual allegations as true and must “draw
all reasonable inferences in the plaintiff’s favor.” 3 The court need not, however,
accept as true legal conclusions couched as factual allegations. 4 To be legally
sufficient, a complaint must establish more than a “sheer possibility” that the
Ashcroft v. Iqbal, 566 U.S. 662 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
547 (2007)).
2 Id.
3 Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009).
4 Iqbal, 556 U.S. at 678.
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plaintiff’s claims are true. 5 If it is apparent from the face of the complaint that
an insurmountable bar to relief exists and the plaintiff is not entitled to relief,
the court must dismiss the claim. 6
The court’s review “is limited to the
complaint, and any documents attached to the motion to dismiss that are
central to the claim and referenced by the complaint.” 7
LAW & ANALYSIS
Defendants’ Motion asks this Court to refer this case to FERC and stay
these proceedings pending guidance from FERC.
dismissal of some of Plaintiff’s claims.
In addition, it requests
This Court will address each of
Defendants’ arguments in turn.
I. Referral to FERC
Defendants allege that all of the pipelines at issue are interstate
pipelines certified by FERC. According to Defendants, FERC has “the most
technical knowledge and streamline[d] procedures” for issues relating to
interstate pipelines and must approve all actions, including operations and
maintenance, involving those pipelines. Defendants argue, therefore, that
FERC is in the best position to adjudicate Plaintiff’s claims and oversee any
injunctive relief granted. In their Motion, Defendants ask this Court to “invoke
the primary jurisdiction doctrine by referring questions to FERC and
administratively closing the case as to them while FERC considers the
outstanding issues.” 8 However, in their reply they seem to retreat from this
request, stating instead that they are not asserting that FERC has primary
jurisdiction over this suit and are only asking that “the Court refer the suit to
Id.
Lormand, 565 F.3d at 255-257.
7 Jones v. Bock, 549 U.S. 199, 215 (2007).
8 Doc. 8, p. 4.
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FERC now in order to get FERC’s inevitable input at the beginning of this
litigation.” 9
Defendants argue that FERC’s input is inevitable due to the nature of
the relief sought by the Plaintiff and as such, it would be expedient to garner
FERC’s input at the beginning of this litigation. Defendants cite a number of
advantages in referring this suit to FERC including: (1) FERC’s relief could be
implemented immediately, while relief provided by this Court would still
require FERC approval, (2) FERC has a superior process for addressing suits
like this one, and (3) FERC’s team of experts could assess the most feasible
method of implementing its plan, while the Court would necessarily have to
rely on experts introduced by the parties to select a plan, which would still
require FERC approval.
Perceived benefits of referral aside, Defendants have not provided this
Court with any theory of law or case supporting such a referral. In Bernstein
v. Atlantic Ritchfield Co., another court in this District addressed a similar
issue. 10
The plaintiff in Bernstein sought “all manner of abatement and
restoration” for the FERC-certified pipelines at issue. 11 The defendants argued
that because the pipelines were FERC certified pursuant to the Natural Gas
Act (NGA), the petition raised federal issues and should therefore not be
remanded to state court. 12 The defendants argued that the plaintiff’s request
for injunctive relief implicated FERC’s exclusive authority regarding the
abandonment and relocation of pipelines. 13 The court rejected this argument,
pointing out that the petition made no mention of the NGA or any other federal
Doc. 19, p. 5.
Bernstein v. Atl. Richfield Co., No. 15-630, 2015 WL 3454740, at *1 (E.D. La. May 29,
2015).
11 Id.
12 Id.
13 Id.
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law and that the petition did not seek abandonment or relocation. 14 The court
noted that “the state court is fully capable of using its discretion to determine
whether injunctive relief is available, or whether monetary damages would
adequately remedy Plaintiff’s injuries.” 15
This Court finds that the logic applied in Bernstein should likewise apply
here. In this matter, Plaintiff’s claims resound entirely in state law, and it has
not requested the abandonment or relocation of the pipelines at issue. The
Louisiana Supreme Court has stated that nothing in the NGA prevents a court
from making “a determination that the defendant’s continued use of the
pipeline at issue is a violation of Louisiana’s property, tort, and contract
laws”—as Plaintiff has requested here. 16 Referral of this case to FERC would
require FERC to make these state law determinations. “[S]urely Congress
could not have intended to give the FERC jurisdiction over property, tort, and
contract disputes in all fifty states.” 17 This Court can determine no reason why
Plaintiff’s claims should not be adjudicated in this forum, and Defendants
arguments touting FERC’s benefits are not sufficient legal grounds for their
request. Accordingly, Defendants request for referral is denied.
II. Failure to State a Claim for Breach of Contract
Next, Defendants allege that Plaintiff cannot rely on the implied
obligations in Louisiana Civil Code article 697 to establish a claim for breach
of contract. Article 697 states that predial servitudes, like the one at issue
here, are “regulated by the title by which they are created, and, in the absence
of such regulation, by” the rules provided for in the Civil Code. Under these
rules, “the dominant estate owner must not aggravate the condition of the
Id.
Id.
16 Terrebonne Par. Sch. Bd. v. Koch Gateway Pipeline Co., 769 So. 2d 1178, 1179 (La. 2000).
17 Id.
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servient estate.” 18
Plaintiff argues that Defendants have violated this
obligation by allowing the canals to widen and erode the Plaintiff’s land.
Defendants argue that because the servitudes at issue were established
by right-of-way agreements, no “absence of regulations” exists for implied
obligations to apply. In addition, Defendants argue that Plaintiff has not plead
the existence of a gap in express provisions in order to rely on suppletive law.
In Terrebonne Parish School Board v. Columbia Gulf Transmission Co.,
the Fifth Circuit held that because a servitude agreement did not determine
whether or not the dominant estate owner had a continuing duty to maintain
the pipeline canal at issue and prevent erosion of the canal banks, the
suppletive rules of the Louisiana Civil Code applied. 19 The court stated that
the Civil Code rules “come into play when issues are not explicitly disposed of
in the writings of the parties.” 20 Accordingly, the existence of a servitude
agreement does not preclude Plaintiff from relying on suppletive law in
bringing its claims. To the extent that the servitude agreements do not address
Defendants’ obligations of maintenance, the rules of the Civil Code will apply.
In addition, Defendants cite no law for their proposition that Plaintiff
must have pleaded the agreements’ silence on these matters in order to rely on
suppletive law. It is well-settled that a complaint need not “articulate a perfect
statement of the legal theory supporting the claim asserted.” 21 Plaintiff’s
Complaint makes clear that it alleges that Defendants breached their
obligations under both the express terms of the agreements and the implied
obligations of suppletive law.
Such an allegation is sufficient to put
Terrebonne Par. Sch. Bd. v. Columbia Gulf Transmission Co., 290 F.3d 303, 316 (5th Cir. 2002).
Id.
20 Id.
21 Smith v. Bank of Am., N.A., 615 F. App'x 830, 833 (5th Cir. 2015).
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Defendants on notice of Plaintiff’s claims. Accordingly, Defendants’ motion to
dismiss is denied.
CONCLUSION
For the foregoing reasons the Motion to Dismiss (Doc. 8) is DENIED.
New Orleans, Louisiana this 26th day of July, 2016.
__________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
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