Bd. of Comm'rs of the Se. La. Flood Prot. Auth.—E. v. Tenn. Gas Pipeline Co., Civil Action No. 13–5410.

88 F.Supp.3d 615

BOARD OF COMMISSIONERS OF the SOUTHEAST LOUISIANA FLOOD PROTECTION AUTHORITY—EAST et al.

v.TENNESSEE GAS PIPELINE COMPANY, LLC et al.

Civil Action No. 13–5410.

United States District Court, E.D. Louisiana.

Signed Feb. 13, 2015.

Gladstone N. Jones, III, Andrew K. Jacoby, Eberhard D. Garrison, Emma E. Daschbach, Harvey Sylvanous Bartlett, III, Kevin Earl Huddell, Rose A. Murray, Jones, Swanson, Huddell & Garrison, LLC, Benjamin D. Reichard, Brent Bennett Barriere, James Richard Swanson, Fishman Haygood, New Orleans, LA, Bernard E. Boudreaux, Jr., Jones, Swanson, Huddell & Garrison, LLC, Baton Rouge, LA, Alonzo P. Wilson, Ashley E. Philen, J. Rock Palermo, III, J. Michael Veron, Turner Duvall Brumby, Veron, Bice, Palermo & Wilson, Lake Charles, LA, for Board of Commissioners of the Southeast Louisiana Flood Protection Authority—East et al.

Ewell E. Eagan, Jr., James D. Rhorer, Terrence Kent Knister, Gordon, Arata, McCollam, Duplantis & Eagan, New Orleans, LA, Alexander G. Junge, J. Curtis Moffatt, Lawrence G. Acker, Michael M. Diamond, Patrick O. Daugherty, Van Ness Feldman, Washington, DC, for Tennessee Gas Pipeline Company, LLC et al.

ORDER

NANNETTE JOLIVETTE BROWN, District Judge.

Before the Court is Defendants' “Joint Motion to Dismiss for Failure to State a Claim Under Rule 12(b)(6).”¹ Having considered the motion, the memoranda in support, the memoranda in opposition, the statements at oral argument, the Petition, and the applicable law, the Court will grant the motion with respect to each of Plaintiff's claims.

I. Background

A. Factual Background

Plaintiff in this matter is the Board of Commissioners of the Southeast Louisiana Flood Protection Authority—East, individually and as the board governing the Orleans Levee District, the Lake Borgne Basin Levee District, and the East Jefferson Levee District.² The Southeast Louisiana Flood Protection Authority (the “Authority”) was created by statute in 2006 to further “regional coordination of flood protection.”³ According to Plaintiff, the Authority's “mission is to ensure the physical and operational integrity of the regional flood risk management system, and to work with local, regional, state and federal partners to plan, design and construct projects that will reduce the probability and risk of flooding of the residents within the Authority's jurisdiction.”⁴

Defendants are eighty-eight oil and gas companies operating in what Plaintiff refers to as the “Buffer Zone.”⁵ The Buffer Zone “extends from East of the Mississippi River through the Breton Sound Basin, the Biloxi Marsh, and the coastal wetlands of eastern New Orleans and up to Lake St. Catherine.”⁶

Plaintiff alleges that Defendants' oil and gas operations have led to coastal erosion in the Buffer Zone, making south Louisiana more vulnerable to severe weather and flooding. According to Plaintiff, “[c]oastal lands have for centuries provided a crucial buffer zone between south Louisiana's communities and the violent wave action and storm surge that tropical storms and hurricanes transmit from the Gulf of Mexico.”⁷ However, “[h]undreds of thousands of acres of coastal lands that once protected south Louisiana are now gone as a result of oil and gas activities.”⁸ Specifically, Plaintiff asserts that Defendants have “dredged a network of canals to access oil and gas wells and to transport the many products and by-products of oil and gas production.”⁹ This canal network, in conjunction with “the altered hydrology associated with oil and gas activities,” has caused vegetation die-off, sedimentation inhibition, erosion, and submergence—all leading to coastal land loss.¹⁰ In addition to the initial dredging, Plaintiff maintains that Defendants “exacerbate direct land loss by failing to maintain the canal network and banks of the canals that Defendants have dredged, used, or otherwise overseen.”¹¹ This failure has “caused both the erosion of the canal banks and expansion beyond their originally permitted widths and depths of the canals comprising that network.”¹² Looking beyond the alleged effects of the canal network, Plaintiff identifies ten other oil and gas activities that, it claims, “drastically inhibit the natural hydrological patterns and processes of the coastal lands”—road dumps, ring levees, drilling activities, fluid withdrawal, seismic surveys, marsh buggies, spoil disposal/dispersal, watercraft navigation, impoundments, and propwashing/maintenance dredging.¹³

B. Procedural Background

On July 24, 2013, Plaintiff filed suit in Civil District Court for the Parish of Orleans, State of Louisiana.¹⁴ In its petition, Plaintiff asserts six causes of action: (1) negligence,¹⁵ (2) strict liability,¹⁶ (3) natural servitude of drain,¹⁷ (4) public nuisance,¹⁸ (5) private nuisance,¹⁹ and (6) breach of contract—third party beneficiary.²⁰ Plaintiff requests both damages and injunctive relief

... in the form of abatement and restoration of the coastal land loss at issue, including, but not limited to, the backfilling and revegetating of each and every canal Defendants dredged, used, and/or for which they bear responsibility, as well as all manner of abatement and restoration activities determined to be appropriate, including, but not limited to, wetlands creation, reef creation, land bridge construction, hydrologic restoration, shoreline protection, structural protection, bank stabilization, and ridge restoration.²¹

While Plaintiff's six causes of action are all ostensibly state-law claims, Plaintiff contends that “Defendants' dredging and maintenance activities at issue in this action are governed by a longstanding and extensive regulatory framework under both federal and state law specifically aimed at protecting against the deleterious effects of dredging activities.”²² According to Plaintiff, “the relevant components of this regulatory framework ... buttress the Authority's claims.”²³ Specifically, Plaintiff points to the Rivers and Harbors Act of 1899, which “grants to the [Army Corps of Engineers] exclusive authority to permit modification of navigable waters of the United States and prohibits the unauthorized alteration of or injury to levee systems and other flood control measures built by the United States.”²⁴ Plaintiff also cites the Clean Water Act of 1972 and accompanying regulations, which require Defendants to “[m]aintain canals and other physical alterations as originally proposed; [r]estore dredged or otherwise modified areas to their natural state upon completion of their use or their abandonment; and [m]ake all reasonable efforts to minimize the environmental impact of the Defendants' activities.”²⁵ Further, Plaintiff references the Coastal Zone Management Act of 1972 and related Louisiana coastal zone regulations that “impose ... a litany of duties and obligations expressly designed to minimize the adverse ecological, hydrological, topographical, and other environmental effects” associated with oil and gas activities.²⁶ Finally, Plaintiff cites “[r]egulations and rights-of-way granted across state-owned lands and water bottoms administered by the Louisiana Office of State Lands.”²⁷ According to Plaintiff, “[t]his regulatory framework establishes a standard of care under Louisiana law that Defendants owed and knowingly undertook when they engaged in oil and gas activities.”²⁸ Additionally, Plaintiff avers that these “permitting schemes created numerous individual obligations under Louisiana law between Defendants and governmental bodies of which Plaintiff is the third-party beneficiary.”²⁹

On August 13, 2013, Defendant Chevron U.S.A. Inc. (“Chevron”) removed the case to federal court.³⁰ On September 10, 2013, Plaintiff filed a “Motion to Remand.”³¹ All Defendants filed a “Joint Response in Opposition to the Motion to Remand,”³² and Defendant Tennessee Gas Pipeline Company, LLC, Gulf South Pipeline Co. LP, Southern Natural Gas Company, and Boardwalk Pipeline Partners, LP filed an additional “Response in Opposition to Motion to Remand”³³ addressing jurisdictional issues specific to certain natural gas producers. The Court also received supplemental briefs from HKN, Inc.,³⁴ White Oak Operating, LLC,³⁵ Liberty Oil and Gas Corporation,³⁶ Manti Operating Company,³⁷ Mosbacher Energy Company,³⁸ Coastal Exploration & Production, LLC,³⁹ and Flash Gas & Oil Northeast, Inc.⁴⁰ On November 13, 2013, Plaintiff filed an “Omnibus Reply Memorandum in Support of Its Motion to Remand.”⁴¹

The Court denied Plaintiff's Motion to Remand on June 27, 2014.⁴² In its Order, the Court explained that federal question jurisdiction exists in this case under an exception to the “well-pleaded complaint” rule providing that federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.⁴³

Applying this test, the Court determined that Plaintiff's claims for negligence under Louisiana Civil Code Article 2315, public nuisance under Louisiana Civil Code Article 667, and breach of contract as a third-party beneficiary necessarily raise a federal issue.⁴⁴ First, the Court found that Plaintiff's claim “necessarily raises” what duties the Rivers and Harbors Act, the Clean Water Act, and the Coastal Zone Management Act impose upon Defendants. The Court determined that these three federal statutes do not merely present “one of multiple theories” that could support Plaintiff's negligence claim; rather, they are the only specific sources of the duty Plaintiff must establish in order to prevail. Next, the Court determined that Plaintiff's claim for public nuisance necessarily involves the application of federal law because, as with the negligence claim, Plaintiff “necessarily raises” what conduct constitutes “unreasonable interference” under the three federal statutes listed above. Finally, with respect to Plaintiff's claim as a third-party...