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The Parish of Jefferson originally filed suit against nine oil and gas companies for alleged violations of the State     and     Local     Coastal     Resources Management Act of 1978, alleging damage to land and water bodies located in the Coastal Zone. In August, Judge Stephen Enright, Jr. rejected the suit as premature for failure to exhaust administrative remedies. Judge Enright, however, has changed his mind.

On November 10, 2016, Judge Enright ruled that Jefferson Parish’s lawsuit may continue. The reversal is based on Enright’s perception that the Louisiana Department of Natural Resources does not have sufficient staff or capabilities to conduct the thousands of administrative enforcement actions required to address the violations alleged in the suit. Such conclusions mirror the sentiments of Governor John Edwards, but are not shared by the oil and gas industry.

The Louisiana Oil and Gas Association as well as the Louisiana Mid-Continent Oil and Gas Association responded strongly:

“Governor Edwards’ and DNR’s claim that they are incapable of addressing the alleged violations through the state’s well established administrative enforcement process is absurd. DNR manages an annual budget of $69 million and employs hundreds of scientists and inspectors. DNR’s primary duty and obligation under state law is to do the work that the Edwards Administration is now calling on our judicial system to do.”

 

The New Orleans Times-Picayune Article can be found HERE.

The joint LOGA and LMOGA Press Release can be found HERE.

 

Below is our write up of Judge Enright’s original decision, which will be included in our “Louisiana Update 2016” to be published in the Winter Section Report of the Oil, Gas and Energy Resources Law Section of the State Bar of Texas.

Parish of Jefferson v. Atlantic Richfield Company, No. 732-768 24th Jud. Dist. Ct. Jefferson Parish (8/1/2016).

Failure to exhaust administrative remedies precluded judicial relief.

This is the first of numerous Coastal Zone suits to come to judgment. The Parish of Jefferson filed suit against nine oil and gas companies for alleged violations of the State and Local Coastal Resources Management Act of 1978[1] (the “SLCRMA”), alleging damage to land and water bodies located in the Coastal Zone.

Defendants filed several exceptions including Dilatory Exceptions of Prematurity for Failure to Exhaust Administrative Remedies. The State of Louisiana ex rel. Jeff Landry, Attorney General, filed a Petition for Intervention and a First Amended, Supplemental and Wholly Restated Petition for Intervention. The Department of Natural Resources, Office of Coastal Management, also filed a Petition for Intervention (the “Interventions”).

The Interventions sought damages from all parties found liable and the payment of restoration costs or actual restoration of the coastal area, as well as any other relief provided by the SLCRMA. Defendants responded to the Interventions with exceptions that adopted their original exceptions, including the Dilatory Exception of Prematurity for Failure to Exhaust Administrative Remedies.

The court noted it is well settled Louisiana law that failure to pursue and exhaust administrative remedies precludes judicial relief and pointed out that the doctrine of exhaustion of administrative remedies has previously been applied to the administrative coastal use permitting process at issue.

The court further noted that the SLCRMA includes a thorough administrative procedure for addressing permit violations. Such procedure includes field surveillance programs, the authority to issue cease and desist orders, and authority to suspend, revoke, or modify coastal use permits,[2] while the Louisiana Administrative code sets forth the procedure.[3]

After defendants met their burden of proving the existence of an administrative remedy, plaintiffs were required to demonstrate their case was an exceptional situation where any administrative remedy was irreparably inadequate, thus entitling them to judicial relief. The court rejected plaintiff’s argument that the administrative process does not provide for an award of civil damages as it was unknown whether civil damages existed in the absence of exhaustion of administrative remedies. The court concluded by ruling that the suit was premature for failure to exhaust administrative remedies.

[1] LA RS 49:214.21, et seq.

[2] LA RS 49:214.36; LA RS 49:214.36(C)

[3] LA Admin. Code Title 43, Pt. I Sec. 723(D)(I-4)

CategoryCivil law, Louisiana
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