Summary
finding that Section 136 is limited to "certain enumerated claims" and denying defendants' motions to dismiss for failure to make amicable demand
Summary of this case from Brownell Land Company v. Apache Corp.Opinion
Civil Action No. 04-2467 Section "M" (2).
December 15, 2004
ORDER AND REASONS; REPORT AND RECOMMENDATION
This is a lawsuit alleging environmental contamination by defendants' oil and gas exploration activities on land in which plaintiffs assert ownership or other proprietary interests. Four motions are pending before me in this case, either by automatic referral under the court's local rules or by special referral from the presiding district judge. They are: (1) Motion of defendant, IMC Global, Inc., for More Definite Statement, to Sever, to Dismiss and, Alternatively, to Stay, Record Doc. No. 8; (2) Motion of defendant, Jolen Operating Company, for More Definite Statement, to Dismiss and, Alternatively, to Stay, Record Doc. No. 11; (3) Motion of defendant, Hydro-Environmental Technology, Inc. to Dismiss and/or for More Definite Statement, Record Doc. No. 12; (4) Motion of defendant, Cecil Perry Improvements, Ltd., to Dismiss and, Alternatively, for More Definite Statement, Record Doc. No. 22.
The district judge directed that I defer ruling on these motions until his ruling on plaintiffs' motion to remand. Record Doc. No. 23. The motion to remand has now been denied. Record Doc. No. 28. Although each of the pending motions asserts arguments that may be addressed on orders by a magistrate judge, all of them also seek dismissal. Accordingly, it is necessary that I issue orders as to parts of the motions, but that I issue a report and recommendation as to the parts of each motion seeking dismissal. 28 U.S.C. § 636(b)(1). Plaintiffs were required to submit written memoranda or opposition as to these motions no later than November 2, 2004. Record Doc. No. 21; Local Rule 7.5E. No opposition memorandum has been filed. However, although it appears that the motions are unopposed, it also appears that they are largely without merit.
Having considered the record, the submissions of the parties and the applicable law, IT IS ORDERED that defendants' motions are DENIED insofar as they seek a more definite statement or a stay of further proceedings or a severance of certain claims, although denial of the motion to sever is without prejudice to reurging it when more information about the claims and claimants is available.
Insofar as defendants' motions seek dismissal of this case, IT IS RECOMMENDED pursuant to 28 U.S.C. § 636(b) that the motions of defendants Hydro-Environmental Technology, Inc. and Cecil Perry Improvements, Ltd. be GRANTED and that the motions of defendants Jolen Operating Co. and IMC Global Inc. be DENIED.
ORDER AND REASONS
I. Motions for More Definite Statement
Rule 12(e) permits the court to order plaintiffs to file a more definite statement of their claims if the complaint "is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading." The nine-page, 32-paragraph state court petition in this case, which has already been supplemented and/or amended at least once, is not such a pleading.
Notice pleading, not fact pleading as in the state court, is all that is required under the Federal Rules of Civil Procedure in this court. Fed.R.Civ.P. 8 does not require the kind of specific fact pleading defendants seek. The court's discovery devices are available to defendants to obtain the more detailed information they seek. After discovery yields evidence, defendants may reassert some of their arguments in favor of dismissal, supported by evidence, in new dispositive motions. At this time, however, the petition is not so vague or ambiguous that defendants cannot be expected to frame responsive pleadings.
Accordingly, IT IS ORDERED that the motions are DENIED insofar as they seek a more definite statement. Defendants can reasonably be required to prepare an answer or other appropriate response to the complaint, and those not dismissed must do so no later than ten (10) days from entry of the district judge's action on my recommendation contained herein concerning the defendants' motions to dismiss.
II. Motions to Stay
Apparently as an alternative to their motions to dismiss, defendants IMC Global Inc. and Jolen Operating Co., have also requested that this proceeding be stayed pending proceedings before Louisiana state agencies, including the Louisiana Department of Natural Resources, Office of Conservation ("LOC") and/or the Louisiana Department of Environmental Quality ("DEQ").
A request for a stay of proceedings is a non-dispositive matter, not excepted from determination by a magistrate judge under Section 636(b), which I may apparently address without report and recommendation. For the following reasons, defendants' motions to stay are DENIED.
Defendants' argument relies principally upon the doctrine of "primary jurisdiction," which they argue "requires that the court defer to the administrative agency by staying the judicial proceedings in order to allow the parties reasonable opportunity to seek an administrative ruling." Record Doc. No. 8 (IMC's Memorandum in Support of Motion at p. 9) (emphasis added). There is no such requirement under applicable Louisiana substantive law. "Private landowners in Louisiana have no duty to seek relief from an administrative agency before filing suit against an oil company." Corbello v. Iowa Production, 850 So.2d 686, 701 (La. 2003). Thus, in Corbello, the Louisiana Supreme Court specifically sanctioned prosecution to conclusion in a trial court of an oilfield contamination claim, even in the absence of the conclusion of state administrative proceedings.
Substantive Louisiana law, applicable in this case, is clear that under Louisiana's doctrine of primary jurisdiction, a stay of these proceedings in deference to matters within the state agencies' presumed area of expertise "is a matter within the sound discretion of the trial court." Mills v. Davis Oil Co., 11 F.3d 1298, 1304 (5th Cir. 1994) (citing Magnolia Coal Terminal v. Phillips Oil Co., 576 So.2d 475, 487 (La. 1991)).
In the instant case, this court should exercise its discretion to decline to stay the instant lawsuit for the following reasons. The relief sought by plaintiffs in this case is primarily in the form of damages, although injunctive relief in the form of an order requiring defendants to restore and/or remediate plaintiffs' property to its precontamination condition is also sought. As in Magnolia Coal, the damages, if any, recoverable by plaintiffs as a result of the alleged pollution "are within the conventional knowledge and expertise of a trier of fact . . ." 576 So.2d at 484. There is no reason to conclude that the litigants in this case, assisted as they invariably will be by expert witnesses, will not be able adequately to educate the fact finder at trial sufficiently for a reliable verdict to be reached. The same evidence should permit the court to render a fully informed verdict as to the injunctive relief sought by plaintiffs.
Significantly, there is no evidence or even suggestion in the current record that the state agencies identified in defendants' motion papers have taken any action whatsoever or instituted any proceedings at all to address plaintiffs' contamination claims. In weighing the public policy concerns inherent in a decision to commit claims like this one to administrative proceedings rather than court processes, the Louisiana Supreme Court by the result reached in Corbello approved private litigation as an adjunct to state agency action as a means of redressing private rights in property damaged by alleged pollution. While the state agencies undoubtedly have expertise, they have also been characterized by their own state supreme court in Corbello as "understaffed and underfunded." 850 So.2d at 701. In addition, there is no reason to conclude on this record that the expertise possessed by the agencies is either exclusive or superior to the expertise that private litigants can muster in litigation like the instant case. This is principally an action for damages. The state LOC and/or DEQ do not award damages. On this record, there is no reason to conclude that resolution of plaintiffs' claims will be any faster or more efficiently or expertly concluded than by trial in this court, particularly where there is no indication that administrative proceedings are under way.
Finally, to whatever extent, if any, that defendants may seek a stay under the general discretionary power of federal district courts, Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 544-45 (5th Cir. 1983), the motions must also be denied. The proposed stay in this case would be immoderate or of an indefinite duration, given the lack of evidence on the current record as to the status, or even the existence, of any state agency action. Plaintiffs would be prejudiced in their ability to obtain speedy and efficient resolution of their damages claims if made to await the conclusion of currently nonexistent state agency proceedings that could not result in the recovery of the damages they seek. The Corbello decision dispels any notion of legal prejudice or inequity to defendants in being required to go forward in this court as opposed to administrative proceedings. For all of the foregoing reasons, the motions to stay are denied.
III. Motion to Sever
Defendant IMC is the only one of the four moving defendants seeking severance of certain claims asserted in this case. Specifically, IMC argues that the petition improperly cumulates causes of actions against multiple defendants in a single suit, in that the claims do not arise out of the same transaction, occurrence or series of transactions or occurrences. Rules 20(a) and 21 of the Federal Rules of Civil Procedure govern IMC's motion to sever.
Rule 20(a) provides for permissive joinder of plaintiffs: "All persons may join in one action as plaintiffs if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action." Fed.R.Civ.P. 20(a). "Rule 20 requires that all of the plaintiffs' claims arise out of the same transaction or occurrence and that there is a common issue of fact or law."Applewhite v. Reichhold Chems., Inc., 67 F.3d 571, 574 n. 11 (5th Cir. 1995) (citations omitted).
Thus, permissive joinder is proper when (1) [the] right to relief arose out of the same transaction, occurrence, or series of transactions or occurrences, and (2) . . . there is a question of law or fact common to all of the plaintiffs that will arise in the action. Both of these requirements must be satisfied in order to sustain party joinder under Rule 20(a). Thus, to determine whether the two prong test of Rule 20 is satisfied, the Courts should consider such things as whether there is a logical relationship between the claims, and whether there is any overlapping proof or legal question.Weber v. Lockheed Martin Corp., No. 00-2876, 2001 WL 274518, at *1 (E.D. La. Mar. 20, 2001) (Duval, J.) (quotations omitted) (citing Alexander v. Fulton County, 207 F.3d 1303, 1322-23 (11th Cir. 2000); Porter v. Milliken Michaels, Inc., No. 99-0199, 2000 WL 1059849, at *1 (E.D. La. Aug. 1, 2000) (Vance, J.); Little v. Bellsouth Telecomm., No. 95-1646, 1995 WL 468256, at *1 (E.D. La. Aug. 7, 1995) (Mentz, J.); C.A. Wright, A. Miller M.K. Kane, Federal Practice Procedure § 1653 (1986)).
The test for Rule 20 permissive joinder is (1) whether there is a logical relationship between the claims and (2) whether there is any overlapping proof or legal question. Weber, 2001 WL 274518, at *1; Porter, 2000 WL 1059849, at *1.
In determining what constitutes a single transaction or occurrence under the first prong, a number of courts have looked to the interpretation of "transaction" under Rule 13(a) — compulsory counterclaims. Transaction, for the purposes of Rule 13(a), is a word of flexible meaning. It may comprehend a series of many occurrences, depending not so much upon the immediateness of their connection as upon their logical relationship.Id. (quotations omitted) (citing Alexander, 207 F.3d at 1323;Mosley v. General Motors Corp., 497 F.2d 1330, 1333 (8th Cir. 1974)); accord Lott v. Eastman Kodak Co., 1999 WL 242688, at *3 (N.D. Tex. Apr. 16, 1999). "Absolute identity of all events is unnecessary." Id. (citing Mosley, 497 F.2d at 1333).
"The second prong [of Rule 20(a)] does not require all questions of law and fact raised by the dispute to be common. Rather, only 'some question of law or fact must be common to all parties.'" Porter, 2000 WL 1059849, at *2 (citing Alexander, 207 F.3d at 1324; Mosley, 497 F.2d at 1334; Guedry v. Marino, 164 F.R.D. 181, 184 (E.D. La. 1995) (Jones, J.)). Parties to a lawsuit are misjoined and may be severed under Rule 21 if they fail to satisfy either of the prerequisites for permissive joinder in Rule 20(a). Bailey v. Northern Trust Co., 196 F.R.D. 513, 515 (N.D. Ill. 2000) (Alesia, J.).
On the current record, it cannot be concluded that joinder was improper or that the case would be more efficiently or justly tried or prepared by the severance of claims. It appears from the face of the petition that plaintiffs' claims have both a logical relationship among themselves and overlapping proof and legal questions. The petition alleges that all plaintiffs have interests in the same identifiable oil and gas property known as the Napoleonville Field. It also alleges that defendants conducted common oil and gas activities in that field that produced the same kinds of contaminating substances. It asserts common legal theories of recovery on behalf of all plaintiffs.
At this time, IMC's arguments for severance are mere conclusory boilerplate. Further case preparation and discovery may unearth concrete reasons in support of later severance, and denial of this motion is expressly without prejudice to defendants' later reassertion of this motion when it may be more specifically supported. At this early juncture, however, severance is unwarranted.
REPORT AND RECOMMENDATION
I. Motions to Dismiss
As noted above, all four motions seek dismissal of all claims against the four moving defendants.
Fed.R.Civ.P. 12(b)(6) permits dismissal of a lawsuit for failure to state a claim upon which relief can be granted. In his ruling denying plaintiffs' motion to remand this matter to the state court, the presiding district judge made the following pertinent findings: "[T]hree non-diverse defendants, Cecil Perry Improvements, Ltd., Hydro-Environmental Technology, Inc. and International Well Testers, Inc., . . . [a]s a matter of undisputed fact, . . . never conducted, directed, controlled or participated in oil and gas exploration and production activities on the subject properties. They were not mineral lessees, operators, working interest owners or joint-venturers in any of the exploration and production activities. No privity of contract exists between the non-diverse defendants and plaintiffs. Thus,these non-diverse defendants are not legally responsible for the closure of pits on plaintiff's property as a matter of Louisiana law." Record Doc. No. 28 at pp. 1-2.
These findings are binding upon me in this case. Given these findings, I cannot conceive how a claim upon which relief can be granted could be stated as to these non-diverse defendants. Plaintiffs have submitted no opposition memorandum explaining how any claim they have asserted against the non-diverse defendants might proceed, given these findings. Two of the non-diverse defendants as to whom these findings apply, including Cecil Perry Improvements, Ltd. and Hydro-Environmental Technology, Inc., have filed motions to dismiss that have been referred to me.
Accordingly, for the reasons stated in the presiding district judge's order denying plaintiffs' motion to remand, IT IS RECOMMENDED that the motions to dismiss of Cecil Perry Improvements, Ltd. and Hydro-Environmental Technology, Inc. be GRANTED.
As to the other two defendants who have filed motions to dismiss, including IMC Global Inc. and Jolen Operating Co., no such findings have been made. Thus, when considering these defendants' motions to dismiss under Fed.R.Civ.P. 12(b)(6), the court must take the well-pleaded factual allegations of the complaint as true. "All questions of fact and any ambiguities in the current controlling substantive law must be resolved in the plaintiff's favor." Lewis v. Fresne, 252 F.3d 352, 357 (5th Cir. 2001); accord Lovick v. Ritemoney Ltd., 378 F.3d 433, 437 (5th Cir. 2004).
"Given the Federal Rules' simplified standard for pleading, [a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (quotation omitted); see also United States ex rel. Bain v. Georgia Gulf Corp., 2004 WL 2152360, at *2 (5th Cir. Sept. 27, 2004) (complaint should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief") (quotation and citation omitted).
Motions to dismiss for failure to state a claim are viewed with disfavor and are rarely granted. Southern Christian Leadership Conference v. Supreme Court, 252 F.3d 781, 786 (5th Cir. 2001). "However, conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Id. (quotation omitted); accord Lovick, 378 F.3d at 437.
Both motions argue perfunctorily, citing La.Rev.Stat. § 31:136, for dismissal on grounds that absent amicable demand, plaintiffs have no cause of action or right of action for breach of any mineral lease. Record Doc. No. 11 (Jolen's Motion at ¶ 14) and Record Doc. No. 8 (IMC's Motion at ¶ 17). By its terms, Section 31:136 is limited to certain enumerated kinds of claims in which a "mineral lessor seeks relief from his lessee." Only one paragraph of plaintiffs' petition, ¶ 20, asserts a claim for breach of a mineral lease or other standard of conduct under the Louisiana Mineral Code. It is unknown on this record whether plaintiffs made amicable demand. However, plaintiffs' petition asserts numerous other legal causes of action, including negligence (¶ 17), strict liability (¶ 18), nuisance (¶ 19), breach of contract (¶ 21), ultrahazardous activity (¶ 23), and trespass (¶ 25). These are causes of action which are not based on breach of any mineral lease or obligation imposed by the Mineral Code. I know of no "amicable demand" requirement for these non-Mineral Code causes of action and have been cited to none. Plaintiffs are alleged to be owners of contaminated property, not just mineral lessors. In addition, they allege that defendants actively concealed their activities from plaintiffs' knowledge and other circumstances that may vitiate any amicable demand requirement. See Williams v. Humble Oil Refining Co., 432 F. 2d 165 (5th Cir. 1970), cert. denied, 91 S. Ct. 1526 (1971).
Given the allegations in the petition, I cannot conclude on the basis of this record that plaintiffs could prove no set of facts that would entitle them to relief against these defendants, and the motion to dismiss should be denied.
Although the motions are not entirely clear, they may also seek dismissal (although they clearly seek a stay of proceedings) on grounds that the LOC or DEQ have primary jurisdiction over this kind of dispute. This argument does not support dismissal on grounds of lack of jurisdiction in this court. The presiding district judge has found in his order denying plaintiffs' motion to remand that federal jurisdiction is established in this case. Accordingly, there is no reason to dismiss this case on jurisdictional grounds.
CONCLUSION
For the reasons stated above, IT IS ORDERED that the motions for more definite statement, to stay these proceedings and to sever certain claims and/or parties are DENIED.
IT IS RECOMMENDED that the motions to dismiss of defendants Hydro-Environmental Technology, Inc. and Cecil Perry Improvements, Ltd. be GRANTED and that the motions to dismiss of defendants Jolen Operating Co. and IMC Global Inc. be DENIED.
A party's failure to file written objections to the proposed findings, conclusions, and recommendations in a magistrate judge's report and recommendation within ten (10) days after being served with a copy shall bar that party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the district court, provided that the party has been served with notice that such consequences will result from a failure to object. Douglass v. United Servs. Auto Ass'n, 79 F.3d 1415, 1430 (5th Cir. 1996) (en banc).