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           In 1997, DuPont and ConocoPhillips sued the United States pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), alleging entitlement to reimbursement of costs expended cleaning up hazardous waste from fifteen sites previously owned by the government during World Wars I and II, and the Korean War.  E.I. DuPont, et al v. USA, et al, United States District Court for the District of New Jersey, Docket No. 2:97-CV-00487-WJM-MF.  The decade-long dispute finally ended in a compromise wherein the government agreed to pay DuPont $51M and ConocoPhillips $1M for past and future clean-up costs.

            The settlement comes one year after the Supreme Court decision in U.S. v. Atlantic Research Corp. in which the Court established that a potentially responsible party can sue other responsible parties under Section 107 of CERCLA to recover voluntary clean-up costs.  The Third Circuit had previously held that DuPont could not recover under CERCLA.  Following the High Court’s decision in Atlantic Research, however, the Third Circuit remanded the case to the district court for reconsideration.  This settlement agreement was promoted by the Atlantic Research decision. 

            Under the terms of the settlement agreement, DuPont agreed to indemnify the United States up to $51M against any claims, past and future, arising from fourteen of the sites, and ConocoPhillips agreed to indemnity up to $1M for the remaining site.  The government, DuPont, and ConocoPhillips have admitted no liability in connection with the settlement. 

           Effective August 15, 2008, employers will no longer be able to prevent employees from carrying firearms onto employer property if those firearms are in locked, privately-owned vehicles.  The change is the result of Senate Bill 51, which was sponsored by Sen. Joe McPherson and signed into law as Act No. 684 by Governor Bobby Jindal on July 2nd of this year.  Under the new law, people who lawfully possess firearms cannot be prevented from carrying them onto any designated parking area, including garages and parking lots, as long as the firearm is stored in a locked, privately owned vehicle. 

            As written, all property owners are subject to the Act’s provisions, including employers who wish to prevent employees from carrying firearms onto employer property.  Property where firearms are already prohibited under state or federal law is exempt, as are most employer-owned vehicles which are used by employees for business purposes.  In addition, employers are allowed to prevent firearms from being carried in areas where access is restricted by such means as a fence or signage, as long as the employer provides temporary firearm storage facilities or an additional parking area that is unrestricted.    

            Although the Act provides property owners, tenants, employers and business entities with immunity from civil liability for any damages arising out of incidents involving firearms transported or stored on their property pursuant to the Act, concerns exist, particularly among the state’s industrial sector.  The Louisiana Chemical Association (LCA) and the Louisiana Mid-Continent Oil and Gas Association (LMOGA) both opposed the bill, citing safety and liability concerns.

            As businesses begin to sort through compliance issues and assess their firearm policies, questions abound.  Companies are looking at constitutional and preemption issues, as well as similar laws that have been passed in states like Oklahoma and Florida, for answers.

By Clare Bienvenu

Pursuant to Act 547, passed by the Louisiana Legislature in the 2008 Regular Session and recently signed into law by the Governor, the Louisiana Department of Environmental Quality (LDEQ) may now require Louisiana facilities exempt from air permitting requirements to maintain records showing that the actual or potential emissions of the facility meet the exemption.  Under existing Louisiana law, a facility is exempt from air permitting requirements if its potential emissions are: (1) less than 5 tpy (tons per year) for each regulated air pollutant; (2) less than 15 tpy for all regulated pollutants combined; and (3) less than the minimum emission rate for each toxic air pollutant listed in LAC 33:III.5112, Table 51.1.  See La. R.S. 30:2054(B)(2)(b)(ix) (as enacted by Act 918 in 2003).  The original exemption did not authorize LDEQ to mandate the maintenance of emissions records for exempt sources.  Act 547 additionally defines “potential emissions” as “the emissions the facility is capable of emitting considering all control measures in place, utilized and properly maintained and historical practices, including hours of operation and number of employees at the facility.”  Act 547 itself does not require exempt facilities to maintain records, but allows LDEQ to promulgate standards or regulations to create such a requirement.  As such, exempt facilities in Louisiana should be on the lookout for the implementing rule from LDEQ. 

By:  April Rolen-Ogden

Exxon Shipping Co., et al. v. Baker, et al. involved a class action that was filed by commercial fisherman and native Alaskans against Exxon and its tanker captain for economic losses suffered as a result of the now infamous Exxon Valdez oil spill that occurred in 1989. 

On the night of the spill, the supertanker was carrying 53 million gallons of crude oil, which translates to just over a million barrels.  The tanker captain, Joseph Hazelwood, was seen downing at least five double vodkas in the waterfront bars of Valdez just before leaving port on the evening of the spill.  This converts to approximately 15 ounces of 80-proof alcohol, which experts testified would be enough to cause a non-alcoholic to pass out.  The tanker ran aground as a result of Hazelwood’s “inexplicable” decision to leave the bridge two minutes before a tricky course correction was required. 

When the tanker crashed, the hull was torn open and 11 million gallons of crude oil spilled into Prince William Sound.  Exxon spent $2.1 billion in cleaning up the spill; settled a civil action by the United States and Alaska for $900 million; and paid another $303 million in voluntary payments to private parties.

The Court granted certiorari to determine three issues.  The first issue was whether federal maritime law allowed acts of managerial agents to be the basis for corporate liability for punitive damages.  Second, the Court considered whether the Clean Water Act (CWA), 86 Stat. 816, 33 U.S.C. Sec. 1251 et seq. (2000 ed. And Supp. V) preempts punitive damages awards in maritime spill cases.  Finally, the Court analyzed whether the punitive damages awarded against Exxon were excessive as a matter of maritime common law.

The Court was equally divided on the first issue of corporate liability for punitive damages.  Exxon argued that punitive damages were barred against shipowners for actions taken by underlings, which were not directed by the owners.  In response, the plaintiffs relied on the fact that the Restatement imposes liability for “managerial agents.”  The decision to uphold corporate liability for punitive damages for the reckless acts of managerial employees is not precedential given the Court’s equal division on this issue.

 On the CWA preemption issue, the Court held that there is no congressional intent in the CWA to occupy the field of pollution remedies.  Exxon admitted that the CWA does not displace compensatory damages for water pollution.  There is nothing in the statute that indicates a congressional intent to preempt punitive damages, but not compensatory damages, for economic loss.

Finally, and most importantly for the future of maritime claims, the Court held that the punitive damages award against Exxon of $2.5 billion was excessive as a matter of maritime common law.  The Court decided that a 1:1 ratio of punitive damages to compensatory damages was appropriate in maritime cases.  Specifically, the Court concluded that a 1:1 ratio is a fair upper limit.  The Court reasoned that the prevailing American consensus today is that punitive damages are aimed at retribution and deterrence of harmful activity.  The stark unpredictability of high punitive awards was found to be in tension with their punitive function due to an implication of unfairness from an unusually high punitive award.  A penalty should be reasonably predictable.  The Court, thus, limited the punitive damages award to an amount equal to the compensatory damages awarded, which was $507.5 million. 

On July 1, 2008, the Louisiana Supreme Court held that Act 312 of 2006 (“Act 312”) is constitutional and reversed the district court’s judgment declaring Act 312 unconstitutional and unenforceable under La. Const. art. V, § 16, La. Const. art. I, § 4 and the Fifth Amendment of the United States Constitution.  M.J. Farms, Ltd. v. Exxon Mobil Corp., 2007-2371 (La. 7/1/08); ____ So. 2d ____.

            In M.J. Farms, the Louisiana Supreme Court resolved several issues regarding the constitutionality and application of Act 312. First, the Court held that the provisions of Act 312 are “called into play when any litigation or pleading making a judicial demand arising from or alleging environmental damage is filed” and the litigation involves “contamination resulting from activities associated with oilfield sites and exploration and production sites.”  Second, the Court concluded that Act 312 applies retroactively and prospectively, except for a limited number of cases in which an order had been issued or signed setting the case for trial as of March 27, 2006.

            The Court also addressed whether retroactive application of Act 312 would unconstitutionally divest the plaintiff of a vested right in its cause of actions in violation of the substantive due process guaranties established by the Louisiana and United States Constitutions. The Court held that Act 312 does not divest the plaintiff of any cause of actions but, instead, Act 312 established a procedure for judicial resolution of claims for environmental damage.  The Court also concluded that Act 312 represents a “reasonable restriction” of private rights under La. Const. Art. I § 4.

            Additionally, the Court found that Act 312 does not divest the district court of original jurisdiction because 1) the claim for environmental damages is filed in the district court; 2) the claim is not deferred to the Louisiana Department of Natural Resources until the district court determines environmental damage exists and determines the legally responsible party or parties; and 3) the district court determines which remediation plan to adopt.  Finally, the Court held that Act 312 does not deny the plaintiff access to the district court because the district court remains an active participant in the entire restoration process.

            One issue the Court did not resolve was whether two trials were appropriate under Act 312. However, the Court did make it clear that it was aware of the two trial issue. Specifically, the Court noted that the denial of supervisory writs in Duplantier v. B.P. Amoco had “no precedential value.” See Duplantier, 07-293 (La. App. 4 Cir. 5/16/07); 955 So. 2d 763 (the Fourth Circuit held that the two trial procedure is contrary to Act 312 and applicable articles of the Code of Civil Procedure because it would result in bifurcation of the trial without consent of all parties and cause piecemeal litigation), writs denied, 07-1241, 07-1265, 07-1271 (La. 9/28/07), 964 So. 2d 367, 368.

            To read the Louisiana Supreme Court’s opinion in M.J. Farms click here.