Sher Garner defends rights of holder of pipeline servitude
Sher Garner obtained a successful ruling from the Louisiana Supreme Court and defended the rights of the holder of a pipeline servitude to replace a deteriorating pipeline. On January 29, 2020, the Louisiana Supreme Court brought finality to litigation between the holder of the pipeline servitude, Texas Brine Company, L.L.C. (“Texas Brine”), and one of the property owners, W&T Offshore, L.L.C. (“W&T”). The Louisiana Supreme Court found that Texas Brine had the right to replace a 30-year old deteriorated underground pipeline with a new, slightly larger pipeline.
Under a contract that did not specify the size or location of the pipeline, and pursuant to the rights provided the Louisiana Civil Code and the Mineral Code, Texas Brine constructed a replacement underground pipeline with a slightly larger diameter and installed the replacement pipeline approximately eight feet away from the original location. All of this took place within the original servitude boundaries, which is an area of land designated as wetlands. W&T argued that Texas Brine had to pull up the old pipeline –idling the plant that Texas Brine supplied brine to for months–and place a new pipeline of the same size and in the same location as the previous pipeline. W&T sought millions in damages from Texas Brine, including all profits from the operating of the pipeline.
After a trial on the merits, the district court issued a judgment that ruled in favor of Texas Brine. Based on the evidence in the record, article 642 of the Louisiana Civil Code, and the Mineral Code, the District Court found that Texas Brine had the right to its replacement pipeline.
On appeal at the Louisiana Court of Appeal for the First Circuit, the court of appeal reversed in part the district court’s decision. W & T Offshore, L.L.C. v. Texas Brine Corp., 2017-0574 (La. App. 1 Cir. 5/10/18), 250 So.3d 970. The court of appeal found that Texas Brine had the right to relocate the pipeline, but that Texas Brine’s widening of the diameter of the pipeline constituted a trespass.
The Louisiana Supreme Court granted writs sought by Texas Brine and W&T. In its original decision, the Louisiana Supreme Court reversed the court of appeal’s decision and reaffirmed the district court’s decision that ruled in favor of Texas Brine. W&T Offshore, L.L.C. v. Texas Brine Corp., 2018-0950 (La. 6/26/19), — So.3d–. The Louisiana Supreme Court “determined the district court did not err in dismissing the trespass and damages claim asserted by [W&T].” Id. That decision became final after the Louisiana Supreme Court reviewed the case again on rehearing. W&T Offshore, L.L.C. v. Texas Brine Corp., 2018-00950 (La. 1/29/20), — So.3d—(“W&T Rehearing”). Of note is the concurrence of Justice Hughes, who wrote that “Texas Brine chose the most reasonable option, least burdensome to the landowners, to fulfil its obligations under the contract in an environmentally safe and economically feasible fashion.” W&T Rehearing, 2018-00950, at p. 2 (Hughes, J., concurring).
Sher Garner began representing Texas Brine prior to the Louisiana Supreme Court component of the litigation and, in that representation, successfully obtained an affirmation of the favorable parts and a reversal of the unfavorable parts of the court of appeal’s decision. The result was a complete victory for Sher Garner’s client.
Sher Garner successfully defends Texas Brine in high-profile bet-the-company sinkhole litigation
The Firm represents Texas Brine Company, LLC, the largest independent brine producer in the United States, as lead counsel in a broad array of bet-the-company litigation and arbitration proceedings arising out of the 2012 sinkhole in Assumption Parish, Louisiana. The owners of multiple natural gas pipelines alleged that their pipelines were damaged as a result of the sinkhole; in addition, a mandatory evacuation was imposed on the nearby city of Bayou Corne following the sinkhole. Through Sher Garner’s efforts, Texas Brine recently received a highly-favorable verdict following a three-week bench trial before Hon. Thomas J. Kliebert, Jr. of Louisiana’s 23rd Judicial District Court. From the outset, Texas Brine was viewed in the eyes of the media, government regulators, and the public at large as the sole responsible party. But at trial, Texas Brine was adjudged to be only 35% at fault, with other parties, including Occidental Petroleum, Occidental Chemical Company, Oxy USA, Inc., and Legacy Vulcan LLC (formerly known as Vulcan Materials Company) being held 65% responsible for the formation of the sinkhole. This ruling is even more noteworthy in light of the fact that the Occidental entities and Vulcan settled with the plaintiffs (pipeline companies Florida Gas Transmission Company and Pontchartrain Natural Gas Systems) shortly before trial, creating a five-against-one dynamic at trial, where the aforementioned parties, along with Browning Oil Company, Inc., portrayed Texas Brine as being exclusively at fault.
Texas Brine has conducted salt mining operations on land owned by Occidental Chemical dating back to 1975. The sinkhole arose out of the sidewall collapse of the Oxy Geismar #3 brine well – a well drilled by Texas Brine in 1982, operated by Texas Brine from 1982-2009, and plugged in June 2011. The sinkhole appeared fourteen months after the well’s plugging and promptly drew international attention, as well as comprehensive scientific analysis. While the popular narrative focused solely upon Texas Brine’s operations, Sher Garner vigorously argued that OxyChem and Vulcan controlled and directed Texas Brine’s operations while withholding vital information and documents from Texas Brine. Sher Garner also identified and developed a causation theory, based upon a pressure differential created by the operations of an adjacent oil and gas well on Oxy-owned property, which the Court ultimately accepted.
Based upon (1) the decades of operation of the Oxy Geismar #3 well, coupled with (2) the complex scientific theories involving the interaction of the oil and gas well, Sher Garner’s team had to manage and synthesize millions of pages of documents, several dozen expert witnesses, and the depositions of over a hundred fact witnesses. The trial featured the testimony, either live or by deposition, of over four dozen witnesses, and nearly seven hundred exhibits were entered into evidence.
At trial, Sher Garner’s team successfully navigated the five-on-one dynamic: while the other parties argued that Texas Brine should be held 100% responsible for the sinkhole, and while Texas Brine accepted some measure of fault, the Court agreed with Texas Brine that other parties were more responsible than Texas Brine. The allocation of just 35% of the fault has substantial ramifications for the company’s survival– not only with respect to the pipeline plaintiffs’ damages claims (which will be adjudicated at a later date), but also with respect to Texas Brine’s own claims for its unreimbursed out-of-pocket expenditures incurred in connection with the sinkhole, which currently approximate $120 million.
Along the way to trial, Sher Garner won many smaller battles on behalf of Texas Brine before the trial court and appellate courts: most importantly, substantial victories preserving the company’s liability insurance coverage and defeating the claims against its corporate affiliate, Texas United Corporation, on summary judgment.
Port of St. Bernard Defeats Constitutional Challenge to Expropriation
Sher Garner represents the St. Bernard Port, Harbor and Terminal District in an expropriation case in which the Port has expropriated approximately 70 acres of land with improvements along the Mississippi River in St. Bernard Parish. The Port’s maritime operations are at capacity, and the Port needed additional land and river frontage to conduct cargo operations. The property, owned by a single landowner, was expropriated in December 2010, pursuant to Article I, s 4 of the Louisiana Constitution, which identifies public ports as a public purpose for expropriation. The landowners challenged the Port’s ability to take the property under the Constitution. On February 1, 2012, the district court conducted an evidentiary hearing and ruled in favor of the Port, upholding the expropriation.
After the expropriation was upheld, the parties conducted a lengthy valuation trial in which the landowners again challenged the public purpose. On July 31, 2016, district court ruled again that the property had been taking for a public purpose. Both the Louisiana Fourth Circuit Court of Appeal and the Louisiana Supreme Court affirmed that the Port had taken the property for a public purpose, to facilitate the transport of goods in domestic or international commerce, pursuant to the Louisiana Constitution.
Sher Garner obtains Supreme Court stay of judgment, avoiding house arrest for City Mayor Mitch Landrieu
On behalf of the City of New Orleans, its Mayor, and its City Council members, the Firm successfully obtained from the Louisiana Supreme Court a stay of a judgment of contempt that would have placed City Mayor Mitch Landrieu under house arrest for not having paid a $75 million ($142 million with interest) judgment in favor of a class of New Orleans firefighters. The class action suit relates to back pay for firefighters mandated by state law and has been pending for several decades. The City administration under Mayor Landrieu has taken numerous steps to address a consent judgment inherited from prior administrations: obtaining approval from the state legislature to propose a millage to taxpayers, establishing a task force to analyze firefighter pension and pay issues, and supporting several proposals to pay the judgment. The plaintiff class filed a motion for contempt against the City, the City Council members, and the Mayor. The district court granted the motion, found the Mayor in contempt, and ordered that if he did not resolve the issue of paying the underlying judgment within one week, he would be placed under house arrest every weekend from 5:00 p.m. on Friday to 5:00 p.m. on Sunday.
The Firm filed numerous pleadings to protect the Mayor and the Council members from the effects of the contempt judgment. The same day that the contempt judgment issued, the Firm filed two notices of intent to seek supervisory writs of review in the appellate courts, two petitions for suspensive appeal of the judgment, and a motion to stay the judgment pending appellate review.
A round of briefing in the district court ensued, after which the district court declined to rule on any of the City’s filings, leaving the Mayor with an inability to pay the underlying judgment and facing house arrest. With a 5:00 p.m. house arrest looming, on Friday, September 11, 2015, the Firm filed on behalf of the City defendants, in both the Louisiana Fourth Circuit Court of Appeal and the Louisiana Supreme Court, applications for writs of mandamus and related motions to stay, seeking a writ of mandamus directing the district court to rule on the City’s requests for a stay and a suspensive appeal of the contempt judgment. That same day, a rapid-fire round of oppositions and replies in both appellate courts ensued, after which the Fourth Circuit, late Friday afternoon in a 2-1 decision, denied mandamus relief. To protect the Mayor and the Council, the Firm proceeded to file additional writ applications on the merits of the contempt judgment and related motions to stay after 4:30 p.m. Shortly after 4:50 p.m., and with only minutes to spare before the 5:00 p.m. house arrest deadline, the Supreme Court granted the writ of mandamus, reversed the Fourth Circuit’s decision, stayed the entire contempt judgment (including the house arrest sanction), and ordered the district court to grant the City an appeal that suspends all effects of the contempt judgment.