This document discusses the use of historical evidence in determining the reasonableness of oil and gas operations in light of contractual obligations and legislation. It notes a past court case that awarded large damages for environmental harm and the subsequent legislation that was passed. The document also discusses challenges in interpreting contracts and applying changing laws, and examines what standards and knowledge were considered reasonable based on the time period in question. Expert historians may be able to provide context on scientific and industry standards from the relevant time to help determine historical reasonableness.

1. The Use of Historical Evidence in
Light of LL & E and Act 400
By Loulan J. Pitre, Jr.
Kelly Hart & Pitre
LOGA Oil & Gas Seminar
September 16, 2014

2. Corbello
“[W]e decline to set forth a rule of law ... that in cases of
breach of a contractual obligation of restoration in a
lease, the damage award to [the surface owning]
plaintiffs must be tethered to the market value of the
property. To do so would give license to oil companies to
perform their operations in any manner with
indifference to the aftermath of its operations because
of the assurance that it would not be responsible for the
full cost of restoration.”

3. Corbello, Continued
• Large damage award based on theoretical cost
of groundwater remediation, more in the
nature of a pubic harm
• Landowner not required to remediate property
under law at that time

4. $35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
$108,000
$33,000,000
C o r b e l l o ' s U n t e t h e r i n g
Property Value
Damage Award

5. After Corbello
• Reactive legislation passed in 4 of 12 years
• Several hundred lawsuits claim environmental damage
arising from oil and gas exploration and production
operations
• Courts attempt to interpret and apply complex law in the
face of repeated legislative changes

6. The Traditional View
• Rohner v. Austral Oil Exploration Co. (1958):
– Corn and watermelon crops (express provision)
– Land’s Loss of Productivity (no express provision)
– “Poor Man’s Cut” in fence (no express provision)

7. Castex (2005)
“Although the temptation may be to thrust a great part of the
solution to the problem of coastal restoration upon the oil and
gas companies and other private parties, . . . we decline to do so
out of respect for the terms of the mineral lease to which these
parties agreed. Thus, we reverse the courts below and find that,
where the mineral lease expressly grants the lessee the right to
alter the surface in the manner it did, and is silent regarding
restoration, article 122 only imposes a duty to restore the surface
to its original condition where there is evidence of unreasonable
or excessive use.”

8. Act 312
• Defendants required to remediate to current
regulatory standards if contamination admitted
or proven
• Plaintiffs still attempt to articulate theories for
money they can keep

9. Marin (2010)
• Decided after full trial on the merits
• Court determined operations were negligent
• Court determined that 29-B remediation
satisfied lease requirements
• 1994 v. 1941

10. LL & E
• Operator admitted environmental damage
under Act 312
• Operator obtained a partial summary
judgment that no “excess” damage award was
possible as a matter of law
• Supreme Court and Court of Appeal reverse
the summary judgment, suggesting that
reasonableness of operations requires a
factual inquiry

11. Reasonable When?
• Example: Marin
– 1994 lease vs. 1941 lease
– Parties’ contemplation
– “environmental unsoundness”
• La. R.S. 30:29(M):
“. . . rules, regulations, lease terms and implied lease
obligations arising by operation of law, or standards applicable
at the time of the activity complained of.”

12. Historical Evidence: Witnesses

13. Historical Evidence: Ancient Documents
Scientific Data from 20 years ago-
EPA Legal Document

14. Expert Historians
• “The reason science historians are in demand is that
science does not invariably progress in a strictly linear
or cumulative fashion. Scientific knowledge is
accepted (or ignored) in different ways at different
times and places, making it important to establish
what was known concretely by specific individuals at
a given place and time.” -- Dr. Robert N. Proctor,
Stanford University

15. Daubert Factors
(i) whether the theory or technique can and has
been tested;
(ii) whether the theory or technique has been
subjected to peer review and publication;
(iii) the theory or technique's “known or potential
rate of error”;
(iv) whether there are standards that control the
theory or technique's operation; and
(v) the degree to which the theory or technique has
been accepted in the relevant scientific community
(“general acceptance” test).

16. Kumho Tire
“A trial judge determining the admissibility of an engineering
expert's testimony may consider one or more of the specific
Daubert factors. . . . The Daubert factors do not constitute a
definitive checklist or test . . . and the gatekeeping inquiry
must be tied to the particular facts. Those factors may or may
not be pertinent in assessing reliability, depending on the
nature of the issue, the expert's particular expertise, and the
subject of his testimony.”

17. Examples
• EEOC v. Sears, Roebuck & Co.: gender
discrimination
• Cayuga Indian Nation of New York v. Pataki:
land rights
• Irving v. Penguin Books: libel & the Holocaust
• B. Waterhouse v. R.J. Reynolds Tobacco Co.:
public awareness of the dangers of smoking

18. Possible Questions with Respect to
Historical Reasonableness
• Were others in the industry using a practice at that
time?
• Were alternatives to the practice well-known and cost-effective
at that time?
• What was the generally accepted scientific knowledge
at that time?
• What were the common expectations of lessees and
lessors at that time?
• Was there an express or implied consensus at that time
of lessors, lessees, and policymakers to accept certain
practices in exchange for the economic benefits of oil
and gas production?