Mayhall Fondren Blaize

Companies get preliminary dismissal of oil & gas law case

One regular area of oil and gas industry litigation deals with asserted violations of the Coastal Zone Management Act. The Act is an important provision of Louisiana oil & gas law that requires companies to repair damage caused by dredging and other operations and to remove improper waste residues from wetlands. Generally, under normal procedure when a company gets a permit, the conditions for wetlands preservation will be specified.

Violations of the permit raise issues of compliance that often lead to litigation. There are currently numerous pending lawsuits against oil and gas companies in several parishes pursuant to the Coastal Zone Management Act. Recently, the defendant companies achieved a preliminary victory of sorts when a Louisiana District Court judge dismissed a lawsuit filed by Jefferson Parish demanding repairs and compensation. The court held that the parish had not exhausted its administrative remedies and therefore dismissed the case without prejudice.

The Aug. 9 decision is a temporary respite that requires the parish to follow state laws that set forth a procedure for remedying the damages claimed. Despite being at most a temporary interval, the oil and gas industry associations praised the decision. The industry spokespersons called this lawsuit and others "premature and inappropriate" for the reason that there is already a rigorous governmental administrative process that assures compliance with each permit. The association asserted that the administrative process is quite sufficient to assure compliance without expensive litigation.

Under Louisiana oil & gas law, the parish was required to first seek "cease and desist" orders against the companies, according to the judge's decision. The decision pointed out that the parish and state government did not present evidence to the contrary, proving that the lawsuit was premature. This is not a new or novel legal concept. When an available administrative remedy is not followed, it is a basic rule of administrative law that there has been an illegal failure to exhaust all administrative remedies. Premature litigation is superseded and dismissed, at least until the prevailing administrative procedure is completed.  

Source: nola.com, "Jefferson judge shoots down a parish oil suit ... for now", Mark Schleifstein, Aug. 9, 2016

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