The Board of Commissioners of the Southeast Louisiana Flood Protection Authority-East filed a lawsuit in Louisiana state court against various companies involved in the exploration for and production of oil reserves off the southern coast of the United States. The Board alleged that Defendants' exploration activities caused infrastructural and ecological damage to coastal lands overseen by the Board that increased the risk of flooding due to storm surges and necessitated costly flood protection measures. Defendants removed the case to federal court, and the district court denied the Board's motion to remand, on the ground that the Board's claims necessarily raise a federal issue. Defendants also moved to dismiss the case for failure to state a claim on which relief can be granted, and the district court granted the motion. We affirm.
In July 2013, the Board of Commissioners of the Southeast Louisiana Flood Protection Authority-East (the Board) filed a lawsuit in Louisiana state court against ninety-seven entities (the Defendants) involved in the exploration for and production of oil reserves off the southern coast of the United States. The Board, whose purpose is "regional coordination of flood protection,"
The Board's asserted bases for recovery from Defendants include negligence, strict liability, natural servitude of drain, public nuisance, private nuisance, and breach of contract as to third-party beneficiaries. The Board describes the "highly costly but necessary remedial measures" that it has undertaken or will undertake to protect against the increased storm surge risk. These measures include "abatement and restoration of the coastal land loss at issue," including backfilling and revegetating each canal dredged by Defendants; the joint state-federal Hurricane and Storm Damage Risk Reduction System, some of the cost of which has been borne by the Board; investigation and remediation of defects in the local levee systems to comply with relevant certification standards; and "additional flood protection expenses," including the construction of "safe houses" for use by employees during dangerous flooding conditions.
The complaint describes "a longstanding and extensive regulatory framework under both federal and state law" that protects against the effects of dredging activities and establishes the legal duties by which Defendants purportedly are bound. It enumerates
The Board seeks "[a]ll damages as are just and reasonable under the circumstances," as well as injunctive relief requiring the backfilling and revegetating of canals, "wetlands creation, reef creation, land bridge construction, hydrologic restoration, shoreline protection, structural protection, bank stabilization, and ridge restoration."
Defendants removed the case to federal court, asserting five separate grounds for federal jurisdiction. The Board moved to remand, and the district court denied the motion, concluding that the Board's state law claims "necessarily raise a federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing the congressionally approved balance of federal and state judicial responsibilities." Defendants moved to dismiss the case pursuant to Federal Rule of Civil Procedure 12(b)(6) as preempted by federal law and barred under state law. The district court granted the motion with respect to all of the Board's claims, concluding that none of the Board's stated grounds for relief constituted a claim upon which relief could be granted under state law. The Board appealed.
We review an order denying remand to state court de novo.
The district court concluded that three of the Board's claims necessarily raise federal issues: the negligence claim, which purportedly draws its requisite standard of care from three federal statutes; the nuisance claims, which rely on that same standard of care; and the third-party breach of contract claim, which purportedly is based on permits issued pursuant to federal law.
The Board argues that the district court was incorrect to conclude that the nuisance and negligence claims necessarily raise a federal issue, because although the state law claims "could turn to federal law for support, federal law is not necessary for their resolution." It points to this court's holding in MSOF Corp. v. Exxon Corp. that an allegation that a facility was maintained "in violation of federal regulations as well as in violation of state and local regulations" was not enough for the action to arise under federal law.
Defendants dispute the Board's contention that the negligence or nuisance claims could be resolved solely as a matter of state law; they note that although the negligence claim draws its cause of action from a Louisiana statute, the "sole basis" for any standard of care is found in the federal regulatory scheme. Unlike in MSOF, the Board is seeking a remedy — the backfilling of canals — that could not be required under any state law-based conception of negligence, and accordingly the claim of necessity has a "federal substance." Similarly, Defendants argue that the nuisance claims posit an obligation not to make "unauthorized" changes or alterations to levee systems — an imperative that they argue could only exist under federal law.
The Board's negligence claim in fact requests relief for multiple distinct injuries and refers to multiple sources of law that might establish a duty of care, and it is not the case that just because some of these sources are drawn from state law and some from federal law that the two sources are redundant and therefore "alternative." The claims for negligence and strict liability in MSOF arose out of the alleged contamination of plaintiffs' land with toxic chemicals, which undisputedly gave rise to a cause of action under state law.
The absence of any state law grounding for the duty that the Board would need to establish for the Defendants to be liable means that that duty would have to be drawn from federal law. Supreme Court precedent is clear that a case arises under federal law where "the vindication of a right under state law necessarily turn[s] on some construction of federal law,"
The Board argues that even if its claims necessarily raise federal issues, those issues are not "actually disputed." But its argument draws entirely on district court cases in which the parties did not disagree with respect to the proper interpretation of federal statutes unrelated to those raised in the Board's complaint.
For a federal issue to give rise to federal jurisdiction, "it is not enough that the federal issue be significant to the particular parties in the immediate suit.... The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole."
The district court concluded that the substantiality requirement was met in this case, both because the relevant federal statutes plainly regulate "issues of national concern" and because the case affects "an entire industry" rather than a few parties. Moreover, it called the lawsuit "a collateral attack on an entire regulatory scheme ... premised on the notion that [the scheme] provides inadequate protection." The Board disagrees and argues that it raises that regulatory scheme "to support the obligations created under state law."
The Board is correct that the federal regulatory scheme is only relevant to its claims insofar as the scheme provides the underlying legal basis for causes of action created by state law. But of course Defendants dispute whether the federal scheme provides such basis at all. The dispute between the parties does not just concern whether Defendants breached duties created by federal law; it concerns whether federal law creates such duties. As Defendants point out, the validity of the Board's claims would require that conduct subject to an extensive federal permitting scheme is in fact subject to implicit restraints that are created by state law.
In Singh, we considered whether the area of law relevant to the plaintiff's claims "has traditionally been the domain of state law," and in that case we concluded that "federal law rarely interferes with the power of state authorities to regulate" that area of law.
The Board points out that each of the three federal statutes that forms the basis of its claims contains a savings clause, which it argues supports an inference that exercising federal jurisdiction would disrupt the balance struck by Congress.
In Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, the Supreme Court explicitly rejected "[a] general rule of exercising federal jurisdiction over state claims resting on federal... statutory violations," and it also rejected the proposition that "any ... federal standard without a federal cause of action" is enough to support federal jurisdiction over a lawsuit.
The Grable Court was persuaded that "the absence of threatening structural consequences" was relevant to its inquiry, and the same logic militates in favor of federal jurisdiction here.
Because we conclude that the Board's negligence and nuisance claims necessarily raise federal issues sufficient to justify federal
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"
To state a claim for negligence under Louisiana law, the Board must establish, inter alia, that Defendants "had a duty to conform [their] conduct to a specific standard."
The district court held that the requirements imposed by the RHA, the CWA, and the CZMA "do not extend to the protection of [the Board]." It stated that (1) the primary purpose of the RHA is to ensure that waterways remain navigable, and the provision therein that makes it illegal for any person to damage a levee did not impose a duty to protect the Board; (2) the CWA is meant to restore and maintain the integrity of the United States water supply, and the issuance of permits for the discharge of dredged or fill materials under it does not establish private duties; and (3) the issuance of permits licensing oil and gas exploration activities under the CZMA does not impose private duties to prevent environmental damage. The district court also denied that Louisiana state law creates a duty of care by which the Board is bound, because in the Fifth Circuit case that arguably suggested as much, Terrebonne Parish School Board v. Columbia Gulf Transmission Co.,
Defendants note both that the Board has not explained how the federal statutes it enumerates serve to create a duty of care under state law and that the Board does not appear to allege that Defendants have caused any actual loss, because the Board states only that Defendants' dredging activities have weakened coastal lands such that "flood protection costs" have increased. They also point to Terrebonne Parish School Board v. Castex Energy, Inc., in which the Louisiana Supreme Court found no implied duty for a mineral right lessee to restore coastline, even where the lessee was obligated by statute to "develop and operate the property leased as a reasonably prudent operator for the mutual benefit of himself and his lessor."
The district court was correct that neither federal law nor Louisiana law creates a duty that binds Defendants to protect the Board from increased flood protection costs that arise out of the coastal erosion allegedly caused by Defendants' dredging activities. Although it is true that this court "has often held that violation of a Federal law or regulation can be evidence of negligence,"
Similar logic applies in the context of the CWA. That the CWA, its attendant regulations, and permits issued thereunder might require Defendants to maintain canals and to mitigate the environmental impact of their dredging activities might bear some relation to the general purpose of the Act, which is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters."
The Board's claims with respect to the CZMA are more non-specific, and even if the Board is correct to state in its complaint that the Act imposes "a litany of duties and obligations expressly designed to minimize the adverse ... environmental effects associated with" Defendants' activities, those duties do not protect the Board, in light of the Supreme Court's acknowledgment that the Act "has as its main purpose the encouragement and assistance of States in preparing and implementing management programs to preserve, protect, develop and whenever possible restore the resources of the coastal zone of the United States."
The complaint is equally vague in its references to applicable state regulations, and although the Board now notes that certain state statutes have the declared policy of serving ends similar to those supported by the above federal statutes, there is little evidence that any of the cited provisions create private liability. The best source of law for the proposition is Terrebonne Parish, in which the Fifth Circuit denied summary judgment to defendants who allegedly had breached a private duty to protect canals against breaches and widening.
Under Louisiana law, a claim for strict liability requires that a duty of care was breached, just as a negligence claim does.
The complaint alleges that the lands dredged by Defendants constitute "dominant estates" under the Louisiana Civil Code that carry a natural servitude of drain over the "servient estates" owned by the Board, because "water naturally flows" from Defendants' property to the Board's property.
The Board argues that this conclusion was incorrect, noting that Louisiana Civil Code article 648 provides that "[n]either contiguity nor proximity of the two estates is necessary for the existence of a ... servitude. It suffices that the two estates be so located as to allow one to derive
The explanation of the natural servitude claim contained in the complaint does little more than recite the legal requirements of such a claim. It does not name or describe the location of any of the relevant properties, and it does not explain the properties' relation to each other, other than by way of reciting the circumstances of any natural servitude claim. It does not specify which properties constitute the servient and dominant estates, and it therefore cannot allege that any particular property receives naturally flowing surface waters from any other. The Board says that Exhibits B through G to its claim exhibit a "wealth of specificity" on these questions, but the exhibits merely comprise a map indicating the location of the levee districts of the Southeast Louisiana Flood Protection Authority; the names and serial numbers of wells operated by Defendants; descriptions of the locations of wells subject to Defendants' dredging permits; and descriptions of the locations subject to Defendants' right-of-way permits. Because the Board does not argue that every single one of the hundreds of listed locations constitutes a dominant estate, it must intend only to allege that some of those locations are dominant estates. However, it has not made such an allegation. Another possibility is that its argument is that Defendants' actions have altered the flow of water into certain bodies of water, which in turn poses a storm surge risk to the lands the Board oversees. But this would hardly constitute "[a]n estate situated below ... receiv[ing] the surface waters that flow naturally from an estate situated above,"
Below and here, the parties analyzed both the public and private nuisance claims as arising under Louisiana Civil Code article 667, which provides that "[a]lthough a proprietor may do with his estate whatever he pleases, still he cannot make any work on it, which may deprive his neighbor of the liberty of enjoying his own, or which may be the cause of any damage to him."
The lack of specificity that plagues the Board's servitude claim also makes its nuisance claim little more than a restatement of Louisiana law. The complaint states generally that Defendants have "dredged a network of canals to access oil and gas wells," and that this and other oil and gas activity have damaged Louisiana's coast. Although the Board is correct to point out that "there is no rule of law compelling `neighbor' to be interpreted as requiring a certain physical adjacency or proximity,"
For the foregoing reasons, the district court's dismissal of the Board's claims is AFFIRMED.