Emerald Land Corp v. Trimont Energy (BL) L L C et al

Filing 369

MEMORANDUM RULING re 239 MOTION for Partial Summary Judgment to Dismiss Private Claims for Removal of Buried Flowlines filed by Chevron U S A Inc. Signed by Judge Robert R Summerhays on 8/4/2021. (crt,Thomas, T)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION

EMERALD LAND CORP CASE NO. 6:17-CV-01655

VERSUS JUDGE ROBERT R. SUMMERHAYS
TRIMONT ENERGY (BL) LLC ET AL MAGISTRATE JUDGE PEREZMONTES
MEMORANDUM RULING
Presently before the Court is Chevron U.SA. Inc. ?s Motion for Partial Summary Judgment

to Dismiss Private Claims for Removal of Buried Flowlines [ECF No. 239]. The motion is opposed
by Plaintiff, Emerald Land Corporation ("Emerald"). For the reasons explained below, the motion

is GRANTED in part and DENIED in part.
I.

FACTUAL BACKGROUND
Emerald is a Louisiana corporation based in St. Mary Parish, Louisiana, where it owns
approximately 8,000 acres of land located along the Atchafalaya River immediately west of
Morgan City. The tract includes over 6,000 acres of natural marsh land below the Intracoastal
Waterway in the Atchafalaya Basin ("the Property").1 The Property is within the Bateman Lake
Field.2

1 ECF Doc. 177, Ex. A at pp. 51:4-12; 53:7-16 (30(b)(6) Deposition of Emerald Land Corporation); Ex. B,
Declaration of M. Taylor Darden at ^ 3.
2 ECF Doc. 177, Ex. B, Declaration of M. Taylor Darden at ^ 5.

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The Property has been the subject of three Mineral Leases ("the Mineral Leases") entered
into by predecessors to Emerald and Defendants.3 The Mineral Leases provided Defendants and
Chevron's predecessor, Texaco, with the exclusive right to construct lines, tanks, storage facilities,
buildings, stations and other structures necessary "to produce, save, take, care of treat and
transport" oil and gas products on over 6,000 acres of Emerald's Property.4 All three Mineral
Leases contain an identical damages provision, requiring the lessees to pay for any damage to the
Property: "Lessee shall pay all damages caused by its operations hereunder to the land, buildings
and improvements presently existing, and crops now or hereafter planted."5
Chevron ultimately assigned its interest in the Mineral Leases and related contracts to
EnerVest.6 The interests in the Mineral Leases and related contracts changed hands multiple times
thereafter.7 Ultimately on May 5, 2020, Trimont Energy BL, the last remaining assignee of lessee
interests under the Mineral Leases, "agreed that the Mineral Leases have terminated" and therefore
released "all... right, title and interest in and to the Mineral Leases."8
In the present motion. Chevron seeks partial summary judgment to dismiss the private
claims asserted by Emerald for the removal of flowlines buried beneath the surface and canal
bottoms of the Property.

3Mat1f6.
4 Chevron and Texaco are referred to collectively as "Chevron." ECF Doc. 177, Ex. A at exhibits 3, 4, and 5, ^ 1,

attached thereto. (30(b)(6) Deposition of Emerald Land Corporation)
5 ECF Doc. 177, Ex. A at pp. 85-88, referring to If 13 of exhibits 3, 4, and 5 attached thereto. (30(b)(6) Deposition of
Emerald Land Corporation)
6 See Ex. B-2 to ECF No. 177, Act of Assignment from Texaco to EnerVest at p. 6; Ex. A at p. 116 (30(b)(6) Deposition
of Emerald Land Corporation)
7 See Ex. A to ECF No. 177, at pp. 94-95. (30(b)(6) Deposition of Emerald Land Corporation)
8 Id. at p.95, Exhibit 10 thereto (30(b)(6) Deposition of Emerald Land Corporation and Release of Mineral Leases)

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II.
THE SUMMARY JUDGMENT STANDARD
"A party may move for summary judgment, identifying each claim or defense-or the part
of each claim or defense-on which summary judgment is sought."9 "The court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law."10 "A genuine issue of material fact exists when
the evidence is such that a reasonable jury could return a verdict for the non-moving party.9911 As

summarized by the Fifth Circuit:
When seeking summary judgment, the movant bears the initial responsibility of
demonstrating the absence of an issue of material fact with respect to those issues
on which the movant bears the burden of proof at trial. However, where the
nonmovant bears the burden of proof at trial, the movant may merely point to an
absence of evidence, thus shifting to the non-movant the burden of demonstrating
by competent summary judgment proof that there is an issue of material fact
warranting trial.12
When reviewing evidence in connection with a motion for summary judgment, "the court
must disregard all evidence favorable to the moving party that the jury is not required to believe,
and should give credence to the evidence favoring the nonmoving party as well as that evidence
supporting the moving party that is uncontradicted and unimpeached."13 "Credibility
determinations are not part of the summary judgment analysis."14 Rule 56 "mandates the entry of
summary judgment . . . against a party who fails to make a showing sufficient to establish the

9 Fed. R. Civ. P. 56(a).
10 Id.

11 Quality Infusion Care, Inc. v. Health Care Service Corp., 628 F.3d 725, 728 (5th Cir. 2010).
12 Lindsey v. Sears Roebuck and Co., 16 F.3d 616, 618 (5th Cir.1994) (intemal citations omitted).
13 Roberts v. Cardinal Servs., 266 F.3d 368, 373 (5th Cir.2001); see also Feist v. Louisiana, Dept. of Justice, Office of
the Atty. Gen., 730 F.3d 450, 452 (5th Cir. 2013) (court must view all facts and evidence m the light most favorable
to the non-moving party).
14 Quorum Health Resources, L.L.C. v. Maverick County Hosp. Dist., 308 F.3d 451, 458 (5fh Cir. 2002).

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existence of an element essential to that party's case, and on which that party will bear the burden
of proof."15

m.
DISCUSSION
A. The Scope of the Summary Judgment Motion.
Chevron seeks dismissal of Emerald Land's private claims pertaining to the removal of
buried "flowlines" on the leased property. Emerald Land's complaint seeks specific performance
and money damages with respect to the removal offlowlines. Relying on the terms of the Mineral
Leases and the Louisiana Supreme Court's decision in Terrebonne Parish School Boar d v. Castex
Energy, Inc.,16 Chevron contends that it has no obligation to restore the leased land by removing
all of the flowlines buried on the property. Specifically, the Mineral Leases include granting
language that Chevron contends expressly grants it (or its predecessors) the right to install buried
flowlines on the leased land in connection with its oil and gas exploration and production activities.
Chevron also points out that the Mineral Leases contain no provision that expressly requires it to
restore the land by removing buried flowlines or paying the cost for removing those flowlines.
Chevron further argues that there is no evidence in the summary judgment record showing that the
buried flowlines (as opposed to surface flowlines) have caused any damage to the leased land.
Emerald Land, on the other hand, distinguishes Castex and argues that, unlike the canals
dredged on the leased property in Castex, the flowlines here are foreign equipment attached and
buried on the property.17 Accordingly, Emerald Land argues that Chevron has an obligation to
remove the flowlines as part of its obligation to restore the land to its original condition minus the

15 Patrick v. Ridge, 394 F.3d 311, 315 (5fh Cir. 2004) (alterations in original) (quoting Celotex v. Catrett, 477 U.S.

317,322(1986)).
16 893 So. 2d 789 (2005).
17 ECF No. 264 at 3.

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"wear and tear" attributable to "ordinary, customary, and necessary acts which must be done by a
drilling company in order to put down a well."18 Emerald Land also points to evidence in the
summary judgment record showing flowlines exposed at the surface of the property, and
presumably, creating hazards in the use of the property.19 Emerald Land also points to evidence
of leaks and other contamination from flowlines on the property.20
The record reflects at least two broad categories offlowlines at issue: flowlines buried at
least "plow depth" below the surface ("buried flowlines"), and flowlines located on the surface of
the property or less than plow depth ("surface flowlines"). For purposes of its motion. Chevron
defines "plow depth" as at least three (3) feet below the surface. Chevron thus limits its Motion
for Partial Summary Judgment to the private claims involving the removal of "buried flowlines"—
flowlines at least three feet below the surface. Emerald Land's Opposition does not always
distinguish between these types of flowlines and often refers to the buried flowlines and surface
flowlines interchangeably. The Court, however, will analyze Chevron's motion as limited to buried
flowlines.
C. Buried FIowlines
Under the Louisiana Civil Code, a lessee is bound to "return the thing at the end of the
lease in a condition that is the same as it was when the thing was delivered to him, except for
normal wear and tear."21 A lessee also has a duty to avoid unreasonable or excessive use of the
property during the term of the lease.22 In Castex, however, the Louisiana Supreme Court held that
"in the absence of an expressed lease provision, [the Mineral Code] does not impose or imply duty

18 Castex, 893 So. 2d at 799 (quoting 6W?^ v. Austral Oil Ca, 104 So. 2d 253 (La. App. 3 Cir. 1958)).
19 ECF No. 264 at 7-8.
20 Id. at 9.
21 La. C.C. Art. 2683 (3).

21Alfordv. Chevron U.S.A. Inc., 13 F. Supp. 3d 581, 600 (E.D. La 2014).

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to restore the surface to it's original, pre-lease condition absent proof that the lessee has exercised
his rights under the lease unreasonably or excessively."23 According to the Court, a lessor in the
context of an oil and gas lease "maybe considered to have a given his assent to the 'wear and tear9
normally involved in rights granted" in a mineral lease.24 There, the Court held that the plaintiff
had no claim based on the canals that were dredged on the leased property because the right to
dredge canals was explicitly granted in the lease and, therefore, was merely "wear and tear.5 In
Marin v. Exxon Mobile Corp.26 the Court clarified its ruling in Castex, According to Marin, a
lessee has a duty to remediate oilfield contamination under the Louisiana Mineral Code's "pmdent
operator standard."27 According to the Marin court, oilfield contamination does not constitute
"wear and tear" because such contamination is not a matter that the lessors consented to in the
lease.28 The Court also noted that the oilfield contamination at issue in that case arose from the
"unreasonabl[e] or excessive[]" use of the leased property29
Here, Chevron argues that Emerald Land has no private claim requiring it to remove or pay
to remove the buried flowlines because, like the canals in Castex, the Mineral Leases expressly
grant Chevron and its predecessors the right to install flowlines buried under the surface.
Considering the language of the Mineral Leases and the relevant case law, the Court agrees. The
Mineral Leases expressly grant Chevron's predecessors the right to lay "pipelines" as well as tanks,
stations, telephone lines, and "other structures thereon necessary to produce, save, take care of,

23 893 So.2d.at 801.
24 Id. at 800.
25 Id. at 800-01.

26 48 So. 3d. 234 (2010).
27 Mat 259.
28 Id. at 260.
29 Id.

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treat, and transport said products. .. ."30 Although the leases do not explicitly refer to flowlines, the
term "pipelines" encompasses flowlines.31 The Mineral Leases also expressly provide for the
flowlines to be buried: "when required by lessor, lessee shall bury all pipelines below ordinary
plow depths..."32 Therefore, like Castex, Emerald Land (or its predecessors) consented to the
installation of buried flowlines on the leased property.
Emerald Land first argues that Castex is distinguishable from the present case because, in
Castex, the lessee had "altered the land itself by digging canals and ditches... ."33 In contrast, here,
the buried flowlines are "foreign equipment to Emerald's Property" and "[t]he intrusion of this
equipment onto the Property is not a 'modification9 of the land."34Emerald Land's attempt to
distinguish Castex is not persuasive for at least two reasons. First, installing buried flowlines
underground is arguably a "modification" to the land because it changes or alters the land when
the flowlines are installed even if they are buried.35 Second, and more importantly, the Castex
court's holding was not based on the nature of the modification—ie. dredged canals versus buried
flowlines. Instead, the court's holding was based on the meaning of "wear and tear" in the context
of the Civil Code mle requiring a lessor to return leased property in its original condition minus
"wear and tear."36 The court constmed wear and tear in terms of the "specific rights granted in the
lease." According to the court: "The lessor may be considered to have given his assent to the "wear

30 Exhibits 3, 4, and 5 to the Deposition of Emerald Land Corporation through M. Taylor Darden, Exhibit A to
Chevron's Motion for Partial Summary Judgment [ECF No. 239-4].
31 Larry W. Lake, Ed., SPE PETROLEUM ENGINEERING HANDBOOK, Ch. 9, at 317 (2006) (defming "flowlmes" as
"piping and pipeline systems typically associated with producing wells ....") (emphasis added).
32Id.

33ECFNo.264at4.
34 Id.

35 See, e.g., WEBSTERS THIRD NEW INTERNATIONAL DICTIONARY (1981) (defining "modification" as "the act or action
of changing something without fundamentally altering it.")
36 893 So. 2d. at 800.

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and tear5 normally involved in exercising the rights granted."37 The Mineral Leases here expressly
grant Chevron (or its predecessors) the right to lay flowlines and, at the request of Emerald (or its
predecessors), requires Chevron to bury the flowlines at ordinary plow depth. Thus, Castex's
holding applies here.
Emerald Land next appears to argue that Chevron is taking inconsistent positions with
respect to buried and surface flowlines. Specifically, the granting language in the Mineral Lease
applies generally to flowlines without distinguishing between buried and surface flowlines. Yet,
Chevron has agreed that the surface flowlines must be removed. In other words, according to
Emerald Land, Chevron's position on surface flowlines is inconsistent with its argument that
removal of the buried flowlines is not required under Castex: "[N]or [are buried flowlines] more
'necessary and incidental' to oil and gas operations than the surface equipment such as well heads
and storage tanks Chevron agrees it must remove."38 The Court disagrees. Castex is grounded on
the lessee's consent to the "'wear and tear normally involved in exercising the rights granted."39
Based on Emerald Land's summary judgment filings, it is reasonable to infer that surface flowlines
pose hazards and limit the use of the surface of the leased land in ways that flowlines buried at
least three feet below the surface do not. For example, Emerald Land's Opposition describes
damage to the leased land caused by flowlines and includes images of flowline debris, but this
evidence appears to be damage and debris from surface flowlines.40 Emerald Land does not point
to any damage that can be specifically traced to buried flowlines. In sum. Chevron's concession
on removing surface flowlines is not inconsistent with its position that, under Castex, it is not

37 Id.

38ECFNo.264at4.
39 893 So. 2d. at 800.
40 ECF No. 264 at 7-8.

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required to remove flowlines buried at least three feet below the surface pursuant to the Mineral
Leases.

Emerald Land next argues that if Chevron removes any equipment from the leased land
(such as surface flowlines) it must remove all equipment from the land, including buried flowlines.
Emerald Land bases its argument on a provision in the Mineral Leases that states:
Lessee shall have the right at any time during or after the expiration of this lease to remove

all property and fixtures placed by lessee on said land, including the right to draw and
remove all casing.

Emerald Land argues that the term "all9'means that Chevron cannot pick and choose which
equipment to remove but must remove all equipment. The Court disagrees. This language grants
Chevron the right to remove its equipment and fixtures from the leased land. In this context, the
plain and ordinary meaning of the term "all" is that Chevron's removal right is not limited to
certain equipment or fixtures but encompasses "all" of the equipment and fixtures on the leased
land. Emerald Land, however, reads this term as creating a limitation on Chevron's right to
remove—that Chevron can remove all but only all of the equipment and fixtures from the leased
property. Accordingly, Emerald Land is essentially reading an additional requirement into the
lease provision granting Chevron the right to remove property. The plain meaning of this granting
language simply does not limit Chevron's right to remove equipment and fixtures in the way
Emerald Land argues.
Finally, Emerald Land argues that it is entitled to recover the cost of removing all flowlines
(including buried flowlines) based on the damages provision in the Mineral Leases. Specifically,
these leases provide that:

41 ECF Doc. 177, Ex. A at pp. 85-88, referring to ^ 13 of exhibits 3, 4, and 5 attached thereto. (30(b)(6) Deposition of
Emerald Land Corporation)

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Lessee shall pay all damages caused by its operations hereunder to the land, buildings and
improvements presently existing, and crops now or hereafter planted.42
Emerald Land contends that the flowlines on the leased property have damaged the land by
(

creating navigation hazards,43 that leaks from flowlines are contaminating the property,44 and that
flowlines protruding from the surface are limiting Emerald Land's ability to enter into leases or
otherwise use the land.45 Under Castex, Emerald Land does not have a private claim (whether as
damages or specific performance) for the removal of buried flowlines. As with the dredged canals
in Castex, Emerald Land (or its predecessor) consented to the installation of buried flowlines in
the Mineral Lease and (like the canals in Castex) the mere presence of these buried flowlines does
not amount to "damages" in the sense of triggering the damages provision of the Mineral Lease or
a claim under the Mineral Code. On the other hand, even under Castex, Emerald Land could assert
private claims under the Mineral Leases and the Mineral Code with respect to buried flowlines if,
for example, those flowlines leaked fluids that contaminated the leased property.46

42 Id. (emphasis added).
43 ECF No. 264, Ex. 6, Rule 30(b)(6) Depo. of Emerald, pp. 84: 5 - 12, 214: 5-8.
44 ECF No. 264, Ex. 7, Depo. ofRudy Sparks, at 71:10 -18.
45 Id. at 175: 18 - 176:5;177:18 - 24.
46 Marin, 48 So. 3d. at 259-60. According to the court in Marm:

In our view, the duty to remediate oilfield contamination exists under the prudent operator standard of the
Mineral Code by virtue of our holding in Castex, and it certainly exists under the Civil Code. The holding in
Castex merely recognized that in absence of unreasonableness or excessiveness, the lessee has the duty to
restore the surface minus normal wear and tear. Where the lessee has operated unreasonably or excessively,

as in this case, the lessee has additional obligations, e.g., the obligation to correct the damage due to the
unreasonable or excessive operations However, that does not necessarily mean that the lessee has a duty to

restore the land to its pre-lease condition, particularly where, unlike dredged canals, subsurface
contamination is not overt and cannot be considered "wear and tear."

The damage caused by Exxon's unreasonable operations was the contamination of the soil, and it is clear
plaintiffs did not consent to this contamination. Therefore, Exxon's additional restoration duty is the duty to
correct the contamination.

Id. (citations omitted).

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Chevron contends that, even if Emerald Land retains a private claim for damages caused
by buried flowlines, it has come forward with no evidence to support a damage claim with respect
to buried flowlines. The Court agrees. The evidence cited by Emerald Land appears to reflect
damage caused largely by surface flowlines, which are not the subject of the present motion. In
three instances, Emerald Land refers to "buried" flow lines:
• "Michael Fogarty, former President of Emerald, testified that 'there were a couple
of times when there was some gas bubbling up, you know, out of a flowline9 that
was buried under the Property's surface."47

• "Mr. Cantrell took photographs of 'flowlines sticking up that you got to watch for, 9
and explained that the buried flowlines presented navigational hazards to boaters,
hunters and other recreational users."48

• "[B]uried flowlines often do not actually remain buried—they migrate to the
surface and cause serious navigational hazards."49
But these three statements do not create a triable issue with respect to buried flowlines. The
statement attributed to Fogarty is not supported by his deposition testimony. In his deposition,
Fogarty does refer to "gas bubbling up, you know, out of a flowline," but he never identifies
whether the flowline was a surface flowline (on or less than three feet below the surface) or a
buried flowline—he merely refers to a "flowline." Moreover, the statement attributed to Cantrell
appears to refer to surface flowlines causing navigational hazards. Finally, with respect to the
"migration" of buried flowlines. Emerald Land points to no evidence showing that flowlines buried
at least three below the surface have (or are likely to) "migrate" to the surface. At most the evidence
presented by Emerald Land is speculative and conclusory, and is not sufficient to create a triable
issue on a damages claim with respect to buried flowlines.

47 ECF No. 264 at 9.
48 Id.
49 Id. at 6.

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In sum. Chevron's Motion for Partial Summary Judgment is GRANTED and Emerald
Land's private claims against Chevron are DISMISSED to the extent that they are based on the
removal of buried flowlines—flowlines buried at least three feet under the surface of the leased
land.50 In all other respects, the motion is DENIED.

THUS DONE in Chambers on this.

ROBERT R. SUMMER^AYS
UNITED STATES DISTRICf JUDGI

50 Chevron's Motion for Partial Summary Judgment as well as this Court's ruling on that motion does not address any
claim that Emerald Land may have with respect to decommissioning the buried flowlines as opposed to physically
removing the flowlines. For example, Chevron points out that, as part of the plugging and abandonment process that
certain actions would be taken to flush and otherwise decommission the buried flowlines to prevent any oilfield
contamination. The Court's ruling takes no position on any claims that may arise from the failure to undertake this
decommissioning process.