Daigle v. Cimarex Energy Co.

333 F.Supp.3d 604

David R. DAIGLE, et al.

v.CIMAREX ENERGY CO., et al.

CIV. ACTION NO. 2:17-01523

United States District Court, W.D. Louisiana, Lake Charles Division.

Signed June 28, 2018

Andrew Karl Jacoby, Varadi Hair & Checki, New Orleans, LA, for David R. Daigle, et al.

MEMORANDUM RULING

JAMES T. TRIMBLE, JR., UNITED STATES DISTRICT JUDGE

Before the court is a "Motion of Cimarex Energy Co. to Dismiss Complaint" which the court converted¹ to a Motion for Summary Judgment (R. # 13) wherein Defendant, Cimarex Energy Co. ("Cimarex") moved to dismiss Plaintiffs' suit against it for lack of subject matter jurisdiction because Cimarex is not presently "in violation" of the Clean Water Act ("CWA").² In that motion, Cimarex also seeks to dismiss the instant suit because Plaintiffs have failed to state a claim upon which relief can be granted under the CWA, the Louisiana Environmental Quality Act ("LEQA"), the Louisiana Tree Piracy Statutes and other state-law based claims sought in the Complaint.

FACTUAL STATEMENT

Plaintiffs, David R. Daigle and Mary Ann Daigle, own the surface of approximately 115 acres of property in Allen Parish.³ Defendants, Cimarex and Drive Energy, Inc. have conducted, directed, and participated in oil and gas exploration and production activities as lessees, and assignees in the Bunch Creek Oil and Gas Field on the Daigles' property.⁴ The Defendants' activities include the construction and operation of oil and gas facilities, including but not limited to, wells, pits, sumps, pipelines, flowlines, tank batteries, heater treaters, wellheads and measuring facilities.⁵

The land that is involved in this lawsuit is a 40-acre tract previously owned by Tyrrell L. Garth.⁶ On October 5, 2000, mineral lessor, Tyrrell L. Garth, entered into a 115-acre mineral lease (the "Garth Lease") with lessee Kash Oil & Gas, Inc. ("Kash") which included the above-mentioned 40-acre tract.⁷ On December 18, 2000, Mr. Garth sold and conveyed all rights to the 40 acres at issue to Plaintiffs, however, he retained all of the mineral and royalty interests.⁸ The T.L. Garth # 1 Well (the "Garth Well") was previously operated by Cimarex' predecessor-by-merger, Helmerich & Payne ("H & P") and by Cimarex at all times from March 23, 2001 through the sale by Cimarex of all of its interest in the Garth Well effective as of May 1, 2010.⁹

On December 22, 2000, Kash assigned a 50% interest in the 2000 Oil and Gas lease to H & P.¹⁰ On February 1, 2001, H & P entered into a Joint Operating agreement ("2001 Joint Operating Agreement").¹¹ The Daigles still own and use the 40-acre tract, plus an additional 90 acres of longleaf pine savannah ecosystem restoration property.¹²

In 2001, H & P built a road and an earthen fluid pit on the property.¹³ On February 23, 2001, H & P, as operator, obtained a permit to drill the Garth Well on the Garth Lease,¹⁴ and in March H & P drilled the Garth Well. The Garth Well "reserve pit" was constructed by Davies Construction¹⁵ but the pit was not lined with an impervious synthetic liner to prevent horizontal and vertical subsurface migration and seepage and to protect groundwater as required by the Louisiana Department of Natural Resources regulations.¹⁶ The purpose of the reserve pit was to treat and store liquid wastes associated with the Garth Well.¹⁷

At the time the Garth Well was drilled, H & P was aware that the usable groundwater aquifer in that region was 60' below the surface and could be threatened by the use of the unlined reserve pits, spills and/or failure to timely and completely restore the spill area.¹⁸ H & P applied for a permit to dispose of the Garth Well Drilling wastes into the annulus of the well, but it was denied because the well had insufficient surface casing to isolate the underground source drinking water there.¹⁹

On May 10, 2001, after the Garth Well was drilled, H & P hired a contractor to back fill the reserve pit and clean up the Garth Well location;²⁰ Plaintiffs allege this procedure was in violation of Louisiana Department of Natural Resources regulations.²¹

On January 7, 2002, U.S. Fish and Wildlife Service confirmed via a letter to H & P environmental consultant, Tim Morton, that the Daigles' property and surrounding areas are a suitable habitat for the endangered red cockaded woodpecker.²²

Subsequent to the closure of the earthen reserve pit at the Garth Well, no other pits were used in connection with Cimarex' operations at the Garth Well. Recompletion/workover operations at the Garth Well in July 2002, April 2003, December 2003, and July 2004 used the tanks of workover rigs; the July 2004 recompletion work utilized above-ground steel containers for produced water and completion fluids.²³

On July 12, 2002, H & P entered a "Contract of Release" ("2002 Release") with the Daigles.²⁴ The 2002 Release provides, in part, that "[w]hen the well is plugged and abandoned, lease road and gravel pad will be restored, within 6 months, as near as possible to original condition. Upon closure, soil parameters will meet L.D.N.R. 29-B criteria and/or criteria provided by governmental bodies having jurisdiction over the covered lands or operations."²⁵

On November 13, 2002, effective October 21, 2002, Cimarex succeeded H & P as operator of the Garth Well.²⁶

On July 29, 2004, the Garth Well was recompleted; on that same day Plaintiffs allege that an oilfield work truck overturned about 100 yards from the Garth Well and created a spill which allegedly caused a 1.8 acre dead tree area on the Daigles' property (hereinafter referred to as the "Dead Tree Area"). Plaintiffs allege that the truck was an agent of H & P; during this recompletion, 211 bbls of 9.6 ppg saltwater was "swabbed", i.e. circulated out from the Garth Well which had to be hauled off location.²⁷ Plaintiffs assert that this is the likely source of contamination found at the Dead Tree Area; Plaintiffs also assert that they were unaware of the damage to the trees until sometime after January 1, 2006.

Sometime after July 1, 2005, Mr. Daigle observed an area on the 40-acre tract which caused him to investigate further.²⁸ Mr. Daigle hired Austin Arabie, an environmental consultant, to inspect and collect soil samples.²⁹ Shortly thereafter, Mr. Daigle learned from his neighbor, Jesse Ardoin, of an overturned vacuum truck at the 1.8 acre Dead Tree Area.³⁰ On August 5, 2005, Mr. Arabie inspected the property and collected soil samples for lab analysis with follow-up sampling performed on October 7, 2005. The results from Mr. Arabie's inspection and lab results revealed a high concentration of calcium ; the December 22, 2005, report indicated that the "contaminant of concern inhibiting the vegetative growth contains calcium and chloride."³¹ Mr. Arabie concluded that "it is evident that a spill of material containing calcium and chloride and possibly other contaminants has occurred on the property."³² The report also noted that "[m]ost" longleaf pines in the impacted area are dead, and the remaining ones appear severely stressed or dying."³³

Mr. Daigle met with Cimarex representative/Production Manager, Rick White, on April 19, 2006, to inspect the spill site area. Mr. Daigle showed Mr. White the ruts where the truck had left the road on the west side as well as the ruts on the east side where the recovery truck made ruts removing the ditched truck.³⁴ On May 5, 2006, Mr. White wrote Mr.Daigle that "Cimarex will pay to remediate the damaged area, including timber, damage, if such damage is reasonably determined to have been caused by our operations with respect to the wells or ‘ponding’ from our lease road." Cimarex proposed to conduct additional soil sampling at its expense, but did not admit knowledge of, or responsibility for, the completion fluid spill.³⁵

On May 8, 2006, Cimarex hired Coastal Chemical to analyze the produced water from the Garth Well and nearby Kingery Estates Well. The analyses showed the presence of barium, sodium, calcium and chlorides which had also been reported in the soil and groundwater samples taken at the Garth Well and other locations on the Daigles' property.³⁶ On July 19, 2006, Cimarex environmental consultant CK Associates performed sampling at the Dead Tree Area and confirmed levels of calcium magnesium, and chlorides in excess of background.³⁷

Plaintiffs' expert, Mr. Arabie, performed certain tests in April 2008 at a location believed to be a former reserve pit site at the Garth Well. In September 25, 2008, Arabie Environmental Solutions issued a second report evaluating all test results performed to date; the report identified environmental damage to soil from LDR Statewide Order 29-B SAR and EC parameter soil exceedances in the area of the former and now closed Garth Well reserve pit.³⁸ The Report further identified environmental damage to groundwater at three sample locations and at the 1.8 acre Dead Tree spill site, 100 yards north of the Garth Well and 100 yards south of the Garth Well.³⁹

The Oil, Gas and Mineral Lease covering Cimarex' oil and gas operations at the Garth Well (the "Garth Lease") expired in February 2009.⁴⁰ Effective May 1, 2010, Cimarex sold all of its right, title and interest in the Garth Well to Kash and Tenexco.⁴¹

On January 9, 2015, Mr. Garth assigned to Plaintiffs any environmental damage related litigation rights he may have not earlier conveyed (hereinafter referred to as the 2015 Assignments of Rights").⁴² On May 1, 2015, Drive Energy, Inc. began to operate and continues to operate the Garth Well and related facilities.⁴³

The State court lawsuit

On June 1, 2006, Plaintiffs sued in state court to force a cleanup of the property; Plaintiffs sued Cimarex, H & P, and Kash, as present and/or former operators of the Garth Well and Moncla Well Services, Inc., the drilling contractor on Cimarex' July 2004 recompletion of the Garth Well.⁴⁴ Plaintiffs alleged that Moncla "spilled completion chemicals" on the Daigles' property during the recompletion which resulted in dead or dying...