| Law & Industry Daily
Published on: Monday, March 19, 2012

Fifth Circuit Rejects Appeal in $20M Transocean Case

 
 

NEW ORLEANS, La., March 19 (LID) – A U.S. appeals court has rejected an appeal over a lawsuit seeking $20 million for water contamination caused by gas exploration in Louisiana’s Avoyelles Parish.

ICAROM, formerly known as the Insurance Corporation of Ireland, asked the U.S. Court of Appeals for the Fifth Circuit to overturn a trial-court decision that remanded to state court a lawsuit Bepco LP filed against Transocean subsidiary Santa Fe Minerals Inc. and ICAROM to recoup money paid to settle the water-contamination case.

Stewart

ICAROM argued the motion to remand the case was not filed within the 30-day window prescribed by 28 U.S.C. § 1447(c).

The statute requires that any defect other than lack of subject matter jurisdiction must be made within 30 days after the notice of removal is filed.

In a March 15 ruling, a three-judge panel of the Fifth Circuit cited a lack of jurisdiction in rejecting ICAROM’s appeal.

“Bepco’s timely motion to remand, combined with the district court’s reliance on a permissible Section 1447(c) ground, effectively renders the district court’s remand order unreviewable on appeal,” Circuit Court Judge Carl Stewart wrote for the panel.

The panel found that the district court remanded the lawsuit based on both contractual-waiver and timeliness grounds. The untimeliness of a removal petition, they ruled, is a ground for remand that is authorized under Section 1447(c).

“Any order issued on the grounds authorized by Section 1447(c) is immunized from all forms of appellate review, whether or not that order might be deemed erroneous by an appellate court,” Stewart wrote.

The matter before the Fifth Circuit stems from a $320 million lawsuit filed in April 2005 by a group of landowners who alleged that a drinking water aquifer was tainted by contamination from oil wells on property owned by oil exploration services provider Bepco and Santa Fe Minerals Inc.

After the filing, Santa Fe filed for Chapter 11 bankruptcy protection. The following day, the plaintiff- landowners dismissed Santa Fe from their so-called Tebow lawsuit.

Bepco went on to settle with plaintiffs for $20 million, in February 2007. Bepco, in turn, filed a lawsuit to recover the money it had paid.

Santa Fe Minerals sought indemnity from ICAROM but the insurer exercised its right to removal under the Foreign Sovereign Immunities Act.

The U.S. District Court for the Western District of Louisiana remanded the case to Louisiana state court.

Bepco had argued that ICAROM’s right of removal was waived in service-of-suit clause in Santa Fe’s policy. The company also claimed that because ICAROM had been a party to the suit since March 2010, its January 2011 removal was untimely.

Additionally, Bepco argued that Transocean improperly joined ICAROM solely to “manufacture an opportunity” to invoke federal jurisdiction for removal of the lawsuit from state court.

In January 2011, ICAROM removed the case to the Western District of Louisiana. Some 10 months later, the District Court remanded the case to Louisiana state court.

The case is Bepco v. Santa Fe Minerals Inc. et al., No. 11-30986, Fifth Circuit (New Orleans). The Fifth Circuit decision is available at http://www.ca5.uscourts.gov/opinions/pub/11/11-30986-CV0.wpd.pdf.

 

Stewart

Judge Carl Stewart was appointed to the U.S. Court of Appeals for the Fifth Circuit in 1994 by President Bill Clinton (D). Stewart previously sat on Louisiana’s Second Circuit Court of Appeal.

In 1985, the former assistant U.S. attorney won election to a six-year term as a Louisiana state district court judge in Louisiana. After his term, he was elected to the state’s Second Circuit Court of Appeal.

Stewart is the first African-American to serve on the Fifth Circuit. He earned his juris doctor degree from Loyola University in 1974.

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