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Supreme Court of Louisiana
FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #064 FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 20th day of October, 2009, are as follows:

BY JOHNSON, J.:

2009-C -0449 C/W 2009-C -0469

KERN BROUSSARD v. HILCORP ENERGY COMPANY, BETA OPERATING COMPANY, LLC, CHEVRON U.S.A., INC., TEXAS PETROLEUM INVESTMENT COMPANY, CONOCOPHILLIPS, UNION OIL COMPANY OF CALIFORNIA, SWIFT ENERGY COMPANY, PACIFIC ENTERPRISES OIL COMPANY (USA), K-EXPLORATION CO., SANDOZ & ASSOCIATES, INC., J.O. EASLEY, INC., WINSTON L. STOKES, STATE OF LOUISIANA (Parish of Vermilion) Judge Benjamin Jones, of the Fourth Judicial District Court, assigned as Justice Pro Tempore, participating in the decision. For the foregoing reasons, we find that the written notice requirement, and delay for performance, required by Mineral Code article 136 are not applicable to the Plaintiffs' claims. Plaintiffs have not alleged that defendants failed to develop and operate the property as a reasonably prudent operator as contemplated by Articles 122 and 136 of the Mineral Code. Thus, Plaintiffs were not required to provide defendants with pre-suit notice and an opportunity to perform prior to filing suit. AFFIRMED AND REMANDED TO THE TRIAL COURT FOR FURTHER PROCEEDINGS. GUIDRY, J., dissents with reasons. WEIMER, J., dissents and assigns reasons. VICTORY, J., dissents for the reasons assigned by Justice Weimer

10/20/09

SUPREME COURT OF LOUISIANA No. 09-C-0449 CONSOLIDATED WITH No. 09-C-0469 KERN BROUSSARD VERSUS HILCORP ENERGY COMPANY, BETA OPERATING COMPANY, LLC, CHEVRON U.S.A., INC., TEXAS PETROLEUM INVESTMENT COMPANY, CONOCOPHILLIPS, UNION OIL COMPANY OF CALIFORNIA, SWIFT ENERGY COMPANY, PACIFIC ENTERPRISES OIL COMPANY (USA), K-EXPLORATION CO., SANDOZ & ASSOCIATES, INC., J. O. EASLEY, INC., WINSTON L. STOKES, STATE OF LOUISIANA ON WRIT OF CERTIORARI TO THE COURT OF APPEAL THIRD CIRCUIT, PARISH OF VERMILION JOHNSON, Justice* We granted this writ application to determine whether La. R.S. 31:136 applies to the plaintiffs' claims, thus requiring plaintiffs to provide defendants with pre-suit notice and an opportunity to perform prior to filing suit. For the following reasons, we affirm the court of appeal, and hold that La. R.S. 31:136 is inapplicable to the plaintiffs' claims. FACTS AND PROCEDURAL HISTORY Plaintiffs, Kern Broussard and Nettie Ann Dubois Broussard, own certain real property in Vermilion Parish, Louisiana, on which mineral, surface, and subsurface leases were granted to various corporate entities to conduct oil and gas operations. On
Judge Benjamin Jones, of the Fourth Judicial District Court, assigned as Justice Pro Tempore, participating in the decision. 1
*

March 31, 2004, Plaintiffs filed suit against numerous companies, including applicants ConocoPhillips Company ("Conoco") and Chevron U.S.A., Inc. ("Chevron"), alleging that the defendants negligently conducted their oil and gas operations, resulting in contamination of the property, and alleging that the property required restoration.1 Defendants filed numerous exceptions, including exceptions of improper venue, lack of subject matter jurisdiction, improper cumulation of actions, prematurity/want of amicable demand, and vagueness. At issue in the instant consolidated writ applications are the exceptions of prematurity/want of amicable demand filed by defendants Conoco and Chevron. These exceptions are based on Conoco's and Chevron's assertions that La. R.S. 31:136, also known as Mineral Code article 136,2 mandates that the Plaintiffs provide defendants with written notice and a reasonable opportunity to perform, prior to filing suit, where there are allegations that a mineral lessee breached an obligation to operate the leased property as a reasonably prudent operator. The exceptions were heard by the trial court on May 7, 2007. Several exceptions, including the exception of prematurity, were granted, and Plaintiffs were given additional time to cure the bases for granting the exceptions. Following Plaintiffs' Fourth Supplemental and Amending Petition, defendants re-urged several exceptions, including the exceptions of prematurity/want of amicable demand. On October 3, 2007, the trial court found that the amended petition had not cured the

Made defendants in this suit were: Hilcorp Energy Company; Beta Operating Company, L.L.C.; Chevron U.S.A., Inc.; Texas Petroleum Investment Company; ConocoPhillips Co.; Union Oil Company of California; Swift Energy Company; Pacific Enterprises Oil Company; KExploration Co.; Sandoz & Associates, Inc.; Easley, Inc., J.O.; Winston L. Stokes; State of Louisiana, through the Dept. Of Natural Resources; State of Louisiana, through the Dept. Of Environmental Quality; Beta Operating Inc.; Shell Pipeline Company, L.P.; Plaints Pipeline, L.P.; Rodney Lemaire; Texaco Exploration and Production, Inc.; Sabine Pipeline, Inc.; Sea Robin Pipeline; and Bridgeline Gas Distribution, L.L.C. Sections of the Revised Statutes contained in this Title are commonly referred to as "Articles" of the Mineral Code. La. R.S. 31:1. 2
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defects underlying the exceptions and made the basis of the court's ruling of May 7, 2007, and dismissed Plaintiffs' action, without prejudice. Plaintiffs appealed the trial court's ruling, arguing that they were not required to make amicable demand prior to suit, and that their claims were ripe for review. The court of appeal affirmed the trial court's ruling in part, but reversed the trial court's dismissal of the action based on the failure to provide the written notice required by Article 136.3 Conoco and Chevron ("Applicants") filed the instant writ applications solely on the issue of whether plaintiffs were required to provide written notice pursuant to Mineral Code Article 136 prior to filing suit. This Court granted the writ applications.4 DISCUSSION The issue in this case involves the interpretation of Mineral Code article 136. Thus, it is a question of law, and reviewed by this Court under a de novo standard of review. Thibodeaux v. Donnell, 2008-2436, p. 3 (La. 5/5/09), 9 So.3d 120, 122-123; Holly & Smith Architects, Inc. v. St. Helena Congregate Facility, Inc., 2006-0582 (La.11/29/06), 943 So.2d 1037. After our review, we "render judgment on the record, without deference to the legal conclusions of the tribunals below. This court is the ultimate arbiter of the meaning of the laws of this state." Thibodeaux, 08-2436 at p. 3, 9 So. 3d at 123 (citing Holly & Smith Architects, Inc., 943 So. 2d at 1045). In deciding whether Article 136 requires notice, or amicable demand, in this case, we first examine the concept of "putting in default," and its history in the Civil Code and Mineral Code. "Putting in default" exists in the civilian system as a general requirement that an "obligor's failure to perform must be turned into a default that

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Broussard v. Hilcorp Energy Co., 2008-233 (La. App. 3 Cir. 12/10/08), 998 So. 2d 946.

Broussard v. Hilcorp Energy Co., 2009-0449 (La. 4/24/09), 7 So. 3d 1202; Broussard v. Hilcorp Energy Co., 2009-0469 (La. 4/24/09), 7 So. 3d 1202. 3

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entails legal consequences." Litvinoff, 6 Louisiana Civil Law Treatise: The Law of Obligations,

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