Environmental & Toxic Tort Update (Summer 2014)

Summer 2014

Every quarter we provide our readers with an update on select environmental and toxic tort developments. These updates are generally helpful as a quick reference for recent activities or as practice pointers for those involved with and/or employed in the oil, gas, chemical and related industries.

In these updates, we will note statutory or regulatory changes, and report on environmental and toxic tort litigation and judicial decisions that influence related cases in these areas.

Christoffer C. Friend, Senior Partner

Environmental Updates Environmental law Updates Legacy Case Update: Constitutionality of the 2012 Limited Admission Amendments to Act 312 Challenged in Agri-South ................................ Page 1 The New Definition of Water: Clarification or Power Grab? ........................................ Page 5

LEGACY CASE UPDATE: CONSTITUTIONALITY OF THE 2012 LIMITED ADMISSION AMENDMENTS TO ACT 312 CHALLENGED IN AGRI-SOUTH Brett F. Willie, Senior Associate Attorney

The plaintiffs in one of Louisiana’s “legacy lawsuits” have recently challenged the constitutionality of the 2012 amendments to Act 312 relating to limited admissions of liability. The case, Agri-South Group, L.L.C. versus Exxon Mobil Corp., was filed in Catahoula Parish in 2006 and involves claims by landowners that oil and gas exploration and production activities were negligently conducted on their property resulting in contamination and other damages.

In their challenge, the plaintiffs claim that the limited admission amendment to Act 312 “cannot be applied retroactively to disturb the plaintiffs’ vested rights without violating due process and impairing contracts.” The plaintiffs have also challenged the amendment on (continued on page 2)

Focus on the Firm ..................................... Pages 4, 7 One Year In: The President’s Climate Action Plan and its Impact for Louisiana ....................................... Page 8

Regulatory Summaries .............................. Page 10 Jurisprudential Updates ........................... Page 11 legislative Updates ....................................... Page 13 Practice pointers

A Primer on eDiscovery, Part IV ................................ Page 16

This update is intended for general informational purposes only.

The contents contained herein should not be construed as formal legal advice nor the formation of a lawyer/client relationship. The reader is urged to consult his or her personal attorney concerning specific legal questions and/or situations. This is an advertisement.

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grounds that it violates the equal protection clauses of both the Louisiana and United States Constitutions.

Limited Admission of Liability The Limited Admission of Liability portion of the Act 312 amendments was codified as Article 1563 of the Louisiana Code of Civil Procedure and enacted by Act 754 of the 2012 Legislative Session, continuing the Legislature’s effort to expedite the evaluation and remediation of contaminated oilfield sites across the state, an effort that had become increasingly bogged down with ongoing litigation.

Article 1563 created a procedure through which any party admitting liability for environmental damage pursuant to R.S. 30:29 (Act 312) could limit that admission to responsibility for implementing the “most feasible plan” to evaluate and, if necessary, remediate all or a portion of the contamination at issue to regulatory standards. That limited admission may not be construed as an admission of liability for damages under Act 312 and it doesn’t result in the waiver of any rights or defenses of the admitting party. Where one or more defendants has made a timely limited admission pursuant to Article 1563, the Court is required to refer the matter to the Louisiana Department of Natural Resources, Office of Conservation (Department), to conduct a public hearing for the purpose of approving or structuring a plan which the Department determines is the most feasible plan to evaluate and remediate the environmental damage at issue under the applicable regulatory standards pursuant to the provisions of Act 312.

In the Agri-South case, that hearing took place over several days in August 2013. After considering the parties’ competing proposals and the testimony of numerous experts, the Department ultimately ruled that neither parties’ plan was the most feasible to address the damaged soil and groundwater.

The Agency thereafter structured its own “most feasible plan” to address the contaminated soil and groundwater.

Constitutional Challenge In February 2014, as trial in Agri-South was set to begin, the plaintiffs gave notice of their intent to file a “Motion for Declaratory Judgment Declaring that the 2012 Limited Admission Amendments to Act 312 Are Unconstitutional,” however the Court denied the Motion as untimely. In response, the plaintiffs requested leave of Court to file a written objection to the admissibility of LDNR’s “most feasible plan” based on the grounds that the 2012 Amendments to Act 312 are unconstitutional and cannot be applied retroactively to disturb the plaintiffs’ vested rights. The Court granted Plaintiffs leave to file

their objection and then overruled the objection. The plaintiffs immediately requested a stay of the proceedings to allow them an opportunity to seek supervisory writs on the Court’s ruling. The request was granted.

Thereafter, the plaintiffs filed a Motion in Limine and/ or Peremptory Exception of No Cause of Action and/or Objection to Admissibility of “Feasible Plan” On the Ground That the 2012 Limited Admission Law is Unconstitutional If Applied Retroactively. In their motion, the plaintiffs cited the Louisiana Supreme Court’s decision in Bourgeois v.

AP Green Industries, 2006-1528 (La. 4/3/01), 783 So. 2d 1251, which held that “when a party acquires a right to assert a cause of action prior to a change in the law, that right is a vested property right which is protected by the guarantee of due process.” In Agri-South, the plaintiffs argued that, because their cause of action accrued years before the Limited Admission of Liability law was enacted and especially because their cause of action had already been asserted, it could not be disturbed or impaired by subsequent legislation. If applied retroactively, the plaintiffs claimed, the 2012 limited admission amendments would impermissibly impair and reduce “their vested rights to complete restoration under article 22 of the Mineral Code.” The plaintiffs argued that, to the extent the new law authorizes the introduction of LDNR’s “feasible plan”, their vested rights would be disturbed insofar as the trial jury would be required to consider what they claim is a “drastically” inferior restoration remedy that falls well below their vested contractual and statutory remedies.

In a supplemental motion, the plaintiffs argued that the 2012 amendments likewise violate the equal protection clauses of the Louisiana and United States Constitutions.

They pointed to the fact that Act 754 provides that “[t]he provisions of this Act shall not apply to any case in which the court on or before May 15, 2012, has issued or signed an order setting the case for trial, regardless of whether such trial setting is continued.” Therefore, they claimed, the Act creates two classes of otherwise equally situated (continued on page 3)

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litigants based solely on whether an order setting trial had been signed on or before May 15, 2012. The plaintiffs argued that this classification is not only impermissibly arbitrary but it serves no legitimate governmental purpose.

The Act should therefore be declared unconstitutional and struck down in its entirety. In the alternative, the Act should be narrowly interpreted to apply only prospectively to those suits filed after the effective date of the Act. Plaintiffs’ Argument Defendant’s Admission The plaintiffs argued in their motion that the defendant, Tensas Delta, had admitted that the retroactive application of the “limited admissions” law to the present case was unconstitutional. The plaintiffs had previously requested attorneys’ fees and other expenses associated with participating in LDNR’s “most feasible plan” hearing.

In opposing their request, they claimed the defendant repeatedly argued that because the plaintiffs had no right to recover such fees and expenses before the suit was filed, any subsequent change in the law granting such a right was an impermissible disturbance of their vested right not to pay such fees and expenses and, as such, a denial of their due process.

Tensas Delta responded by arguing that the plaintiffs’ reliance on its Opposition to Plaintiffs’ Motion for Attorney’s Fees and Costs was essentially misplaced and their claims mischaracterized Tensas Delta’s opposition. Tensas Delta argued that the bulk of the 2012 amendments were, in fact, constitutional and could be applied retroactively.

Only the substantive and previously non-existent provisions of those amendments, which granted the plaintiffs a right to recover fees and costs associated with its limited admission, were objectionable to Tensas Delta.

Line of Supreme Court Cases In their objection to the retroactive application of the 2012 limited admission of liability amendment, the plaintiffs cited a number of Louisiana Supreme Court cases which addressed vested rights and constitutional prohibitions against disturbing those rights. Simply stated, the plaintiffs argued that any legislation, whether procedural or remedial, is unconstitutional if it disturbs, even slightly, a vested property right.

Tensas Delta argued that the cases cited by Plaintiffs were “easily distinguishable, in that the retroactive application of statutes in each of those cases actually denied the plaintiff of a vested right or cause of action.” The 2012 amendments, it claimed, simply require the admission

into evidence of Tensas Delta’s limited admission and LDNR’s most feasible plan and in no way operate to divest the plaintiffs of any claims or right of recovery.

The 2012 “Limited Admissions” Legislation Disturbs Vested Rights The plaintiffs claimed that in making LDNR’s “most feasible plan” admissible, the 2012 amendments effectively compromise the plaintiffs’ pre-existing rights under both the original deed creating the servitude at issue and article 22 of the Mineral Code, both of which Plaintiffs claimed are vested rights that existed long before the 2012 amendments became law. The original deed creating the servitude, they claimed, makes Tensas Delta responsible for “all damages” caused by its exploration and production activities while article 22 grants the landowner a vested right to have its property restored to its “original condition.”

The plaintiffs argued that LDNR’s plan provides for “significantly less” than “all damages” and does not require restoration of the property to its “original condition.” This, Plaintiffs claimed, is a “drastic reduction” in their substantive rights as landowner and constitutes a disturbance that cannot be retroactively applied without violating state and federal constitutional guarantees of due process.

Tensas Delta pointed out that while the plaintiffs’ objection was premised upon their claim that the 2012 “Limited Admission” amendments cannot be retroactively applied because it would disturb their vested rights, violate due process and impair contact obligations, they failed to articulate what vested rights would be disturbed or how such a disturbance would be fostered by the amendments.

The amendments, Tensas Delta claimed, are procedural and provide only for the admissibility of evidence of its limited admission and LDNR’s “most feasible plan.” Tensas Delta argued that no vested right or remedy possessed by the plaintiffs prior to the amendment has been altered in any way. Citing the 3rd Circuit Court of Appeal in the case of Savoie v. Richard, 2013-1370 (La. App. 3d Cir. 4/2/14, ____So.3d ______, Tensas Delta argued that an LDNR plan is not a final decision, only evidence to be considered by the trial court in determining the most feasible plan. Tensas Delta further stated that “the mere fact that the most feasible plan is admissible into evidence does not preclude plaintiffs from seeking or recovering damages or restoration in excess of the DNR plan.”

Tensas Delta further argued that the plaintiffs possessed identical remedies for damage following the enactment of the 2012 amendments as they had (continued on page 4)

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beforehand but they had no vested right in procedural matters. The limited admission amendment, Tensas Delta stated, is an evidentiary statute, which is procedural and, as such, should be applied retroactively.

The New Legislation is Unconstitutional on Equal Protection Grounds The plaintiffs claimed that the 2012 amendments to Act 312 violate the equal protection clauses of both the Louisiana and United States Constitutions. They argued that because the provisions of Act 754 do not apply to cases in which the court, on or before May 15, 2012, issued or signed an order setting the case for trial, it arbitrarily creates two classes of otherwise equally situated litigants based solely on whether an order setting trial was signed on or before May 15, 2012.

This, Plaintiffs argued, is impermissibly arbitrary and serves no legitimate governmental purpose. The Act therefore should be struck down in its entirety or, in the alternative, be narrowly interpreted to apply only prospectively to those suits filed after the effective date of the Act. Tensas Delta countered the plaintiffs’ argument by citing United States and Louisiana Supreme Court cases which found that “litigants have no vested rights in the application of existing rules of evidence.” Rules of procedure and evidence, it claimed, are within legislative control and changing such rules “cannot be said to affect vested rights.” Tensas Delta further responded to the plaintiffs’ equal protection argument by highlighting their focus

on the language of the amendment that differentiates between those cases where a trial order has been signed on or before May 15, 2012 and those without such an order. Tensas Delta argued that federal and state courts have consistently refused to find equal protection violations based solely upon a statute’s effective date.

Finally, Tensas Delta argued that the application of the limited admission statute to Agri-South is not arbitrary in that it serves a compelling state interest in expediting the process of remediating contaminated properties across the state; a process that had become increasingly bogged down with the current duration of legacy litigation.

Hearing on Plaintiffs’ Constitutional Challenge A contradictory hearing on the plaintiffs’ objection to admissibility of LDNR’s “most feasible plan” on the grounds that the 2012 limited admission of liability statute is unconstitutional if applied retroactively was held on April 24, 2014. Upon review of the pleadings and hearing the parties’ arguments, the Court ruled from the bench maintaining the constitutionality of the 2012 limited admissions laws.

The plaintiffs subsequently filed their Notice of Intention to File Application for Supervisory Writs with the 3rd Circuit Court of Appeal seeking review of the Court’s ruling denying their initial and supplemental motions/objections. A return date of May 23, 2014 was set and the 3rd Circuit subsequently confirmed receipt of the plaintiff’s Application for Writs. n

Focus on the Firm CURRY & FRIEND, PLC CONGRATULATES OUR 2014 SUPER LAWYERS Curry & Friend, PLC would like to congratulate Managing Partner Guy C. Curry for being chosen for inclusion on the 2014 Louisiana Super Lawyers® list, and Senior Associate Attorneys Lauren E. Godshall and Kat A. Rito for being selected to the 2014 Louisiana Rising Stars list. These honors are reserved for those lawyers who exemplify excellence in the practice of law.

Super Lawyers® utilizes a patented, multi-phased and rigorous independent research evaluation of candidates to rate and select outstanding lawyers from more than 70 practice areas, who have attained a high degree of peer recognition and professional achievement.

We applaud this professional achievement, and celebrate Guy, Lauren and Kat’s accomplishments and success.

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THE NEW DEFINITION OF WATER: CLARIFICATION OR POWER GRAB? Meghan E. Smith Associate Attorney Definition of “Waters of the United States” Under the Clean Water Act, Proposed Rule, 79 Fed. Reg. 22188 (April 21, 2014)(to be codified at 33 C.F.R. pt. 328 and 40 C.F.R. pts.

110, 112, 116, et al) On April 21st the United States Environmental Protection Agency (EPA) and the Department of the Army Corps of Engineers (COE) published a proposed rule in the federal registry that may fundamentally alter the breadth of federal oversight of the nation’s waterways.

Background In 1972, Congress passed amendments to the Federal Water Pollution Control Act charging the EPA with the task of setting nationwide limits for discharges of pollutants into the navigable waters of the United States. These and subsequent amendments came to be known as the Clean Water Act (CWA). The CWA’s stated objective is to “restore and maintain the chemical, physical, and biological integrity of the nation’s waters.”1 “Navigable waters” is defined by the CWA as simply “waters of the United States, including its territorial seas,”2 and EPA regulations previously defined most interstate waterways or intrastate

water bodies used for interstate travel or commerce and their adjacent wetlands as “waters of the United States.”3 Whether a water body falls within the defined “waters of the United States,” is crucial for industrial operators when determining whether a CWA imposed regulatory scheme will be triggered. These schemes include permitting programs for point source discharges,4 any dredge or fill operations,5 and a system to prevent, report, and respond to spills of oil and hazardous materials.6 Some states have EPA-approved programs to allow state agencies to be the primary enforcement officers over waters of the United States within their borders. However, the federal agency retains ultimate oversight of the waters of the United States. Even if a state has an authorized permit program, the EPA may be able to initiate an enforcement action in the event that 1) a state determines that no action is warranted or 2) a state is also proceeding against a violator.7 Given the stakes, the application of EPA regulations defining the “waters of the United States,” has been the subject of protracted litigation and uncertainty, particularly as applied to intrastate water bodies. Two Supreme Court decisions significantly complicated this determination. In 2001, the Court opened the door for EPA and COE to potentially exert CWA jurisdiction over all non-traditionally navigable waters in Solid Waste Agency of Northern Cook County (SWANCC) v. Corps of Engineers.8 In 2006, the United States Supreme Court handed down a split decision in Rapanos v. United States which only added to the uncertainty amongst industrial operators and lower courts alike.9 The plurality opinion explained that “waters of the United States” are “navigable in fact or susceptible of being made so” and are “relatively permanent, standing or flowing bodies of water.”10 Wetlands with a “contiguous surface connection” to such waters should be included in the definition.11 Justice Kennedy’s concurring opinion argued that wetlands possessing a “significant nexus” to traditionally navigable waters are also “waters of the United States”.12 In response to Rapanos, the EPA and COE issued guidance to their staff on December 2, 2008 after public notice and comment to

Sec. 101(a), 33 U.S.C. § 1251(a) Sec. 502(7), 33 U.S.C. § 1362 (7) 3 40 C.F.R. pt. 122.2 4 Sec. 402, 33 U.S.C. § 1342 5 Sec. 404, 33 U.S.C. § 1344 6 Sec. 311, 33 U.S.C. § 1321 7 Sec. 309(a), 33 U.S.C. § 1319(a); See U.S. vs. Smithfield Foods, Inc., 191 F.3d 516 (4th Cir. 1999) cert. denied, 531 U.S. 813 (2000).

8 Solid Waste Agency of Northern Cook County (SWANCC) v. Corps of Engineers, 531 U.S. 159 (2001) 9 Rapanos v. United States, 547 U.S. 715 (2006) 10 Id. at 734; Id. at 739 11 Id. at 742.

12 Id. at 759 1 2

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attempt to implement the Supreme Court’s decision to its determination of jurisdiction.13 However, the confusion persisted and led to a split among the circuits over which standard to apply. An attempt to issue further guidance was met with controversy and was never finalized.

Proposed Changes The April 21, 2014 proposed rule attempts to “clarify protection under the Clean Water Act for streams and wetlands that form the foundation of the nation’s water resources,” and to “benefit businesses by increasing efficiency in determining coverage of the Clean Water Act.”14 The rule purports to alleviate the confusion created by Rapanos and SWANCC.15 The proposed rule will significantly add and expand definitions consulted when determining whether a water body falls within “waters of the United States.” According to the Congressional Research Service, the rule, if finalized, would bring an additional 3% of U.S. waters under CWA jurisdiction.

The following key provisions are most significant: Tributaries While tributaries were included in the previous EPA regulations as “waters of the United States,” the proposed rule defines the term “tributary” as a potentially far reaching concept that could conceivably include ditches and streams that are “perennial, intermittent, or ephemeral,” provided that they drain into a water body which eventually links up with waters used in interstate commerce, interstate waters, territorial seas, or impoundments of the same. Under the new rule, a tributary includes water bodies characterized by the presence of a bed and banks and ordinary high water mark which contribute flow to these waters. In addition, wetlands, lakes, and ponds are tributaries if they contribute flow to similar waters, regardless of whether a bed or a bank is visible. A tributary can be natural or manmade and it will not lose its status if there are one or more manmade or natural breaks as long as a bed and banks can be identified upstream of the break.16 Other Waters The current rule includes a non-exclusive list of waters which may be within the jurisdiction as “waters of the

United States,” and sets the standard requiring “the use, degradation or destruction of [the water] could affect interstate commerce.” Under the proposed rule, “other waters” require a case-by-case determination of whether the water holds a significant nexus to a traditional navigable water, an interstate water, or the territorial seas.17 The “other water” may be evaluated individually, or as a group of waters if similarly situated in a region.

Adjacent Waters In a controversial edit, the proposed rule expands the consideration of adjacency from just wetlands to all waters “separated from other waters of the United States by manmade dikes or barriers, natural river berms, beach dunes, and the like.” The term “adjacent” means “bordering, contiguous or neighboring,” with “neighboring” more precisely defined as “waters located within the riparian area or floodplain.” To qualify as an “adjacent water,” there must be a significant nexus to traditional navigable waters, interstate waters, and the territorial seas.”18 Significant Nexus This aspect of the proposed rule most directly speaks to the confusion between the standard handed down by the Supreme Court in Rapanos. Unsurprisingly, it is one of the more controversial changes proposed. The rule defines “significant nexus” to mean that “a water, including wetlands, either alone or in combination with other similarly situated waters in the region…significantly affects the chemical, physical, or biological integrity of a,” traditional navigable water, interstate waters, and the territorial seas.19 (continued on page 7)

13 EPA, U.S. Army Corps of Engineers, Clean Water Act Jurisdiction Following the U.S. Supreme Court’s Decision in Rapanos v. United States & Carabell v. United States (December 2, 2008), available at http://water.epa.gov/lawsregs/guidance/wetlands/upload/2008_12_3_wetlands_CWA_Jurisdiction_Following_Rapanos120208.pdf 14 EPA, U.S. Army Corps of Engineers [3/25/2014]. EPA and Army Corps of Engineers Clarify Protection for Nation’s Streams and Wetlands: Agriculture’s Exemptions and Exclusions from Clean Water Act Expanded by Proposal. [Press Release].

15 79 Fed. Reg. 22188 16 Id. pp. 22201-22202 17 Id. p. 22192 18 Id. p. 22207 19 Id. pp. 22199-22200

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Public Reaction and Comments The proposed rule was met with immediate opposition as an attempted power grab by the EPA and the federal government into waters that had previously not been subject to oversight. The reaction in Congress has ranged from reasonable to incendiary, as Congress is wont to do leading up to an important midterm election. The House of Representatives Transportation and Infrastructure Committee’s Subcommittee on Water Resources and Environment has held a hearing on the potential impacts.

Republican and Democrat Representatives from rural districts whose economies are heavily dependent on agriculture or mining pointed to the rule as a reason to curb other instances of EPA overreach.20 A group of thirty Republican Senators from farm states introduced the Protecting Water and Property Rights Act (S. 2496) which would prohibit the proposed rule from being finalized and promulgated. And on July 1, 2014 a group of ten Republican Senators sent a letter to EPA Administrator Gina McCarthy detailing their specific concern that the proposed definition would “exacerbate th[e] disturbing trend” of CWA citizen lawsuits challenging Fourth of July firework displays that occur near “waters of the United States.”

While Congress engages in its latest incendiary tactics, the most vocal, organized, and visible opposition seems to be coming from “Big Ag.” The expanded definition of tributaries and adjacent waters could present significant problems for agriculture operations both large and small.

The industry is concerned that the proposed rule could potentially subject every seasonal grass ditch to federal oversight. Despite the provisions in the CWA that exempt agricultural runoff from pollution discharge requirements, the new rule could impose requirements at the point where these ditches meet a larger body of water. The concern for all industries that must navigate the statutory and regulatory permitting systems imposed by the CWA is twofold. If more waters are subject to CWA jurisdiction, then more permitting and compliance activity will be required.

However, even if the rule does not expand the number or areas of waters within CWA jurisdiction, the “clarification” function of the rule could lead to increased citizen suits.

Recognizing the complexity and extent of public interest in the Proposed Rule, the EPA and COE have extended the comment period from July 21, 2014 to October 20, 2014. n

20 See Regulatory Certainty Act (H.R. 4854), a bipartisan measure in the house to clarify EPA’s veto power in the CWA Section 404 permitting process introduced by Rep. Bob Gibbs (R-OH) and Rep. Nick Rahall (D-WV)

Focus on the Firm CURRY & FRIEND CONGRATULATES OUR NEWEST LNCC

Curry & Friend is pleased to announce that Jamie A. Myers, RN, achieved the distinction of Certified Legal Nurse Consultant (LNCC) in March of 2014.

Jaime joined Curry & Friend in November of 2012, bringing 10 years of clinical experience to our legal team. Jamie began her nursing career caring for patients at the Labor and Delivery bedside. As her love of nursing grew, so did her skill set, and she began to manage the care of High Risk Obstetric patients suffering from complications such as preeclampsia, gestational diabetes, placenta previa and preterm labor. From Obstetrics, she assumed the role of Clinical Nurse Educator where she honed her research and teaching skills.

Jamie holds a Master of Science in Nursing from Loyola University and a certification in Inpatient Obstetrics (RNC-OB). She is a member of the American Association of Legal Nurse Consultants (AALNC), the Association of Women’s Health, Obstetric, and Neonatal Nurses (AWHONN), and the Sigma Theta Tau International Honor Society of Nursing.

Jamie assists our health care team with medical chart reviews, medical research and critical analysis of medical legal cases. Her clinical experience and her background in medical research and education bring valuable skills to our team, further enhancing the quality of this firm’s legal representation of its healthcare, oil, gas, chemical and related industry clients.

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ONE YEAR IN: THE PRESIDENT’S CLIMATE ACTION PLAN AND ITS IMPACT FOR LOUISIANA Lauren E. Godshall Partner The President’s Climate Action Plan was announced one year ago, an event we have previously written about here.

Since that time, much has happened along the executive and judicial fronts – while, perhaps unsurprisingly, little to no action has transpired in the legislative branch of our government.

Among the boldest action items to emerge from the plan’s proposals are the EPA’s rules for new and existing power plants. The proposed carbon standards for new power plants, set out under Section 111(d) of the Clean Air Act, were introduced by the EPA in September of 2013 and officially published in January of 2014. This rule received much public scrutiny and comment, especially given industry’s response that such standards would almost by default eliminate the construction of any new coal-based power plants. Essentially, the rule as proposed would create a dual standard with specific emissions limits for new construction – one limit for coal fired plants and another limit for natural gas fired plants. Critics of the new rule say that it will end the construction of any future coalfired power plants in the country, as the emissions limits proposed are not technologically feasible for coal-fired plants to achieve.

The public comment period on the new plant rule closed in March of 2014 and we await EPA’s announcement of a final rule, anticipated for January of 2015.

Following the publication of its proposal for new power plants, EPA went on a multi-state “listening tour,” seeking input as it developed its plan to regulate greenhouse gas emissions from existing power plants (the rule above

applies only to new construction). Finally in June, EPA proposed a “Clean Power Plan,” which is aimed at reducing greenhouse gas emissions from power plants significantly by 2030. The proposed rule applies to state governments, and not to power plant owners and operators directly. The rule requires states to submit a plan to EPA to show how that state will reach a target carbon dioxide emissions rate for its existing non-nuclear power plants by 2030, as well as how we will reach interim targets before then. Each state has a different target rate, and already those individualized targets have been the focus of criticism and scrutiny.

For Louisiana, the EPA has stated that: In 2012, Louisiana’s power sector CO2 emissions were approximately 45 million metric tons from sources covered by the rule. The amount of energy produced by fossil-fuel fired plants, and certain low or zero emitting plants was approximately 67 terawatt hours (TWh) So, Louisiana’s 2012 emission rate was 1,466 pounds/megawatt hours (lb/MWh).

EPA is proposing that Louisiana develop a plan to lower its carbon pollution to meet its proposed emission rate goal of 883 lb/MWh in 2030.

(See http://cleanpowerplanmaps.epa.gov/CleanPowerPlan)

This is a major request for Louisiana: reduction from 1,466 lb/MWh to 883 lb/MWh represents a 40% reduction in emissions for our state from fossil-fuel fired plants. This is far greater than the original 30% reduction proposed in the President’s Climate Action Plan for the nation as a whole.

Other states have been asked to do even more – Arkansas has been tasked with reducing 44.5% of its current emissions, and Oregon, which only emits 717 lb/MWh currently, has been asked to reduce 48% of its emissions by 2030. Texas has been told to reduce by 39% and California by only 23%.

The EPA is envisioning a wide range of ways in which each state responds to its targeted reduction, and has suggested that “Louisiana will choose how to meet the goal through whatever combination of measures reflects its particular circumstances and policy objectives. A state does not have to put in place the same mix of strategies that EPA used to set the goal. Louisiana may work alone or in cooperation with other states to comply with the proposed rule. EPA estimates that states could achieve their goals most cost effectively if they work with others.” Publicly, the EPA Administrator Gina McCarthy has stressed the importance (continued on page 9)

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of regional cap-and-trade programs in allowing states to most economically reach their goals.

The EPA is accepting comments – and will no doubt receive millions of them – through October 2014. The rule will likely be finalized by June of 2015, giving states one year from then to submit their state implementation plans. Emission reductions must begin by 2020.

This rule is a big, splashy game-changer and, as can be expected, there has already been controversy and pushback.

Hearings have been held by Congress on the legality of the proposal, and a lawsuit has already been filed in the D.C. Circuit Court: In re Murray Energy Corporation, D.C. Cir. No. 14-1112. The Murray case is a writ of prohibition, asking for “a writ prohibiting EPA’s ultra vires rulemaking styled Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units.” (Document #1498341, p. 9.) Although originally filed only by an energy company, the case has subsequently been joined by nine states (although Louisiana is not among them). The U.S. House Committee on Appropriations has also released a proposed bill that would block the EPA’s proposed rules from moving forward.

While the battle rages on between EPA, industry, and various arms of government, the judicial branch of government has also seen action on the climate change issue. The most important ruling was the U.S. Air Regulatory Group v. EPA, No. 12-1146 (U.S., June 23, 2014), which Heather Valliant previously discussed in the last edition of this update.

In a divided opinion, the Supreme Court struck down the EPA’s “workaround” rules regulating greenhouse gases from under another section of the Clean Air Act. This work-around was EPA’s initial response to greenhouse gas regulation, and used existing PSD and Title V permitting programs. The EPA added the requirement that greenhouse gases must also be considered as an air pollutant and subject to permitting requirements under the PSD and Title V programs. The addition of greenhouse gases as a pollutant under these programs was never a perfect fit, and the Court recognized this when striking down these rules.

However, in a footnote, the Court acknowledged that it was specifically not addressing whether the EPA could properly use other CAA programs – such as Section 111(d), the source of the new rules discussed above – to regulate greenhouse gas emissions a different way. The Court also acknowledged right at the outset that it was not eliminating the regulation of greenhouse gases from the PSD and Title

V permitting programs entirely, but instead limiting them to being considered “me too” pollutants that will also be regulated only where a facility is already subject to permitting requirements. Greenhouse gas emissions alone cannot trigger the PSD and Title V permitting requirements.

However, most major greenhouse gas emitters are already emitting other pollutants subject to the PSD and Title V rules. Thus, in reality, the ruling will only affect about 3% of currently regulated facilities.

Although a mixed outcome like this will be hailed as a victory by all sides, it is important to note that the Supreme Court could have, but did not, entirely prevent the EPA from adding greenhouse gas emissions as a “me too” pollutant under existing regulations. Then again, the opinion authored by Justice Scalia did note that, “We are not willing to stand on the dock and wave goodbye as EPA embarks on this multiyear voyage of discovery. We reaffirm the core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.”

In any event, it will be nearly impossible to predict the outcome of the inevitable challenge to the EPA’s pending rules on new and existing power plants. As media reports have pointed out, section 111(d), the basis of the pending, controversial rules, is “a seldom-used and never-litigated provision of the Clean Air Act.” (Keith Goldberg, “Carbon Rule Sends EPA into Unchartered Legal Territory,” Law360, June 13, 2014.)

With this backdrop, it is important for Louisiana manufacturers, industrial businesses, and energy companies to keep in mind that the President’s Climate Action Plan has already proved itself much more than a mere set of platitudes and aspirations, and it is instead being used as support for aggressive new regulations that may dramatically affect our state. n

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Jurisprudential Updates LDEQ – Notice of Intent Office of the Secretary – Legal Division Surface Water Quality (LAC 33:IX.Chapter 11)(WQ088); p. 1022

Regulatory Updates Brett F. Willie Senior Associate Attorney Every quarter we provide our readers with a brief update of select environmental regulatory actions, including the adoption of noteworthy emergency rules, proposed legislation and/or final rules adopted by the Louisiana Department of Environmental Quality (LDEQ) and the Louisiana Department of Natural Resources (LDNR). These updates are generally helpful as a quick reference resource for those involved with and/or employed by the communities regulated by LDEQ and LDNR and more specifically those involved with the oil and gas industry.

Below you will find brief descriptions of the latest regulatory activity in the industry. The full text of these regulatory actions can be viewed at the website for the Louisiana Register by going to: www.doa.louisiana.gov/osr/reg/register.htm

Regulatory Summaries – May 2014 LDNR – Rules Office of Coastal Management Mitigation (LAC 43:I.724) Source: La. Register for January; p. 1010 The Department of Natural Resources, Office of Coastal Management has amended LAC 43:I.724 relative to the rules and procedures for mitigation.

This Rule is intended to remove extraneous information and is not a substantive change.

Rulemaking procedures have been initiated to amend the Water Quality regulations, LAC 33:IX.1105, 1109 and 1119 (WQ088). This Rule contains revisions to LAC 33:IX.Chapter 11, which will correct outdated and unclear language in Sections 1109 and 1119. A definition is being removed from Section 1119 and replaced with a more appropriated definition in Section 1105. Other minor changes include correcting punctuation, grammar and misspelled words.

This Rule is necessary to update language in the Water Quality regulations that is unclear, outdated or inaccurate.

This Rule will also provide consistency in state language. The basis and rationale for this Rule is to enhance and protect the waters of the state. This Rule meets an exception listed in R.S. 30:2019(D)(2) and R.S. 49:953(G)(3); therefore, no report regarding environmental/health benefits and social/ economic costs is required.

The comment period for this proposed regulation ended on July 2, 2014. These proposed regulations are available on the internet at www.deq.louisiana.gov/portal/tabid/1669/ default.aspx. They are also available for inspection at the following DEQ office locations from 8 a.m. until 4:30 p.m.: 602 North Fifth Street, Baton Rouge, LA 70802; 1823 Highway 546, West Monroe, LA 71292; State Office Building, 1525 Fairfield Avenue, Shreveport, LA 71101; 1301 Gadwall Street, Lake Charles, LA 70615; 111 New Center Drive, Lafayette, LA 70508; 110 Barataria Street, Lockport, LA 70374; 201 Evans Road, Bldg. 4, Suite 420, New Orleans, LA 70123. A public hearing was held on June 25, 2014. n

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Jurisprudential Updates already awarded to the family.

Shell appealed, arguing that: (1) the trial court erred in failing to advise the jury of La.R.S. 30:29 in its jury charges; (2) the trial court erred in awarding the Savoies $30 million as a cash payment for regulatory cleanup; (3) the award of that $30 million in addition to the performance of the cleanup amounts to an impermissible double recovery; and (4) the trial court erred in denying its motion for directed verdict.

Lauren E. Godshall Partner The following are synopses of notable holdings, some published and some not, rendered since the spring of 2014 by Louisiana appellate courts.

In Act 312 Clean-Ups, Money Awarded In Excess of Actual Cost of Remediation Will Go Back to Defendants, Not Plaintiffs In the latest installment of a storied Act 312 case, the Louisiana Third Circuit Court of Appeal made an interesting ruling that could limit the possibility of exorbitant awards for landowners that exceed the actual costs of remediation many times over.

In 2011, the Savoie family sued several Shell entities, claiming that oil and gas exploration and production activities on their property had caused environmental damage. Following a month-long trial in Cameron Parish, the jury found in favor of the Savoies and awarded them $34 million to restore their property to state regulatory standards, per Statewide Order No. 29-B, as well as an additional $18 million to remediate their property to the standards in the mineral leases (which exceeded the state requirements).

After the trial, Shell submitted its remediation plan to the Department of Natural Resources (DNR) in accordance with La. R.S. 30:29. (The Savoies failed to object to the Shell plan and also did not propose a plan of their own, although the opinion does not explain why.) The DNR then adopted a remediation plan in line with Shell’s proposal that would cost around $4 million to implement. That $4 million plan was then approved by the court. However, the trial court then converted the remaining $30 million out of the original $34 million remediation award to a personal judgment in favor of the Savoies, adding to the additional $18 million

The Third Circuit issued its opinion on April 2, 2014. Savoie v. Richard, 2013-1370 (La. App. 3 Cir. 4/2/14), 137 So. 3d 78, 83, reh’g denied (May 21, 2014). First addressing the jury charge issue, the court found that there was no real error in the jury charge: “Shell did arguably suffer some prejudice in that the jury awarded such a large amount while conceivably under the notion that remediation to state requirements was not assured without a vast award, despite La.R.S. 30:29 guaranteeing cleanup to those levels if the jury found Shell responsible. However, the trial court was also careful to craft a jury verdict form and instructions that accomplished the goals of Act 312, even if the Act and the post-trial procedure were not specifically mentioned.”

Then, and more significantly, the court turned to whether the $30 million left over from the remediation award could be converted to a personal award. The court said no: “We find that the Savoies are not entitled to a private judgment for this additional $30 million.” Further, “this money was awarded specifically for remediation to state standards, to serve the public interest as identified by La.R.S. 30:29, and not for [the Savoies’] private ‘excess’ claims . . . . In other words, landowners are not to recover any award made specifically for remediation to state standards, i.e., that amount required to return the land to a state that suits the public interest.”

Thus, the entire $34 million award had to go to the registry of the court and could not be distributed to the Savoies: “We find that, because the trial court and jury specifically awarded the $34 million for remediation to state requirements, which is clearly for the public interest and not the Savoies’ private interest, the entire $34 million judgment should go into the registry of the court until the remediation is complete.” Even better news for Shell was what happens after remediation is complete: “At the time the trial court is satisfied that its plan has been complied with, any remaining money in the registry should be (continued on page 12)

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returned to Shell, as noted in the trial court’s judgment.”

The Savoies, having lost what was briefly a $48 million damages award, filed a motion for rehearing, which the appellate court denied. If the family appeals this outcome to the Louisiana Supreme Court, the proceedings there will be significant for all currently-proceeding Act 312 lawsuits.

Supreme Court Upholds Cross-State Pollution Rule in Another Win for the EPA In recent years the EPA has taken on a more aggressive, active role in addressing air pollution issues – stepping in to fill the void in the years in which Congressional action on air pollution issues has been lacking. One such action was the Cross State Air Pollution Rule (“CSAPR”), introduced in 2011 and aimed at reducing power plant pollution from 28 states whose emissions drift into downwind states. The 28 regulated states are primarily coal-dependent states in the Midwest and South. Louisiana and other states like Texas, Virginia and Ohio, along with industrial groups and energy organizations, opposed the rule and sued the EPA, claiming that the EPA had exceeded its authority under the CAA. The rule had the support of New York, North Carolina and Illinois. Louisiana, Texas and others had successfully opposed an earlier multi-state “good neighbor” rule, the “CAIR” or Clean Air Interstate Rule, which was struck down by a court in 2008. The EPA then replaced CAIR with CSAPR, which requires upwind States to address their significant contributions to downwind States’ air pollution problems and gives EPA the authority to step in when the States fail to meet this obligation. A new element of CSAPR was the fact that the EPA could consider costs of reduction in determining how states could best reduce emissions. For example, if Louisiana and Texas were contributing equally to air pollutants drifting downwind, but the EPA decided that Texas could reduce more emissions more cheaply than Louisiana, Texas could be required to reduce a greater share of emissions than it had proportionally contributed.

In 2012, Louisiana and other states prevailed against the EPA in the D.C. circuit court, which vacated CSAPR. The D.C. circuit court held that EPA could not consider costs in determining significant contributions to downwind nonattainment from upwind States. Instead, the court held, the EPA must consider only physically proportionate contributions from upwind States to downwind nonattainment. Also, the EPA could not impose a federal implementation plan, or “FIP,” until it had first specified in a rulemaking each State’s specific contribution to downwind nonattainment and then given each upwind State up to three years to develop a state implementation plan to address that contribution.

On April 29, 2014, the Supreme Court reversed the lower court decision and upheld the CSAPR. EPA v. EME Homer City Generation, L.P., No. 12-1182, 134 S.Ct. 1584, 2014 WL 1672044 (2014). The Court determined that CSAPR was a “permissible, workable, and equitable interpretation” of the Clean Air Act’s Good Neighbor provision, requiring deference by federal court. The Supreme Court also upheld EPA’s power to abridge the pre-FIP grace period as EPA sees fit. In view of those holdings, the Court reversed the judgment of the D.C. Circuit and remanded the cases for further proceedings.

With regard to the cost-based approach, Louisiana and the other upwind states and industry opponents argued that the CAA requires EPA to set the emissions budgets based on “proportionality,” i.e., each state’s proportional contribution to downwind air quality problems. The Supreme Court disagreed, holding instead that the Act does not require such proportionality, and EPA reasonably applied its discretion to utilize the cost-based approach instead.

This outcome was described as both a blow to the coal industry, as coal plants are the primary target of the rule, and as a further victory for both the EPA’s rulemaking authority and the President’s Climate Action Plan.

Federal Court Upholds First Post-Deepwater Horizon Oil Leases in Gulf of Mexico Two years after the Deepwater Horizon oil rig exploded, caught fire, and triggered the largest oil spill in modern U.S. history, the bureau of Ocean Energy Management (BOEM) began to again auction lease rights for oil and gas exploration and development in the Gulf of Mexico.

Following BOEM’s approval of the first two leases in the area near the Deepwater Horizon, environmental groups sued the BOEM, arguing the agency failed to properly consider the National Environmental Policy Act, the Administrative (continued on page 13)

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Procedure Act, and the Endangered Species Act when approving the leases. The environmental groups also sued the National Marine Fisheries Services for failing to conform with the Administrative Procedures Act in the aftermath of the spill by issuing a “Biological opinion.” All parties moved for summary judgment and, in Oceana v. Bureau of Ocean Energy Management, No. 12-0981, US. D.C. , Mar. 31, 2014, 2014 WL 1281996, the D.C. district court granted all of the defendants’ motions for summary judgment and denied the plaintiffs’ motion, thus upholding the lease sales and the agency’s actions in determining the area was fit for further leasing and development.

The plaintiffs argued that BOEM violated NEPA and the APA in three ways: (1) by failing to gather information essential to a reasoned choice among alternatives in violation of 40 C.F.R. § 1502.22; (2) by failing to adequately consider new analyses of the risks of another large oil spill; and (3) by failing to consider a true “no action” alternative.

The court disagreed, going step-by-step through BOEM’s analysis and how it applied research and studies to every element of the requisite decision-making process: “BOEM relied on various studies, both dated pre-and post-oil

spill, and made evaluations of the environmental impacts to the particular resource in light of those studies.” The administrative record showed that BOEM gathered as much information as it could and comported with the initial requirements of 40 C.F.R. § 1502.22. In addition, lease stipulations and other regulatory requirements that apply at this stage would adequately minimize potential harm to endangered species The court noted throughout its opinion that it did not necessarily agree with how BOEM handled itself: “To be sure, BOEM could have waited until all the essential post-oil spill data became available before it moved forward with the lease sales. But nothing in 40 C.F.R. § 1502.22 requires the agency to halt action in the face of uncertain information— it just requires disclosure that such information is lacking, and commands the agency to provide as comprehensive an analysis it can with the information available to it.”

In light of this opinion, parties interested in obtaining leases in the Gulf of Mexico, including leases in the immediate vicinity of Deepwater Horizon, can be more assured of the finality and validity of those leases, even upon attack by outside interests. n

legislative Updates Civil Procedure Summary Judgment Evidence Act 187, HB 599 - amends La. Code Civ. P. art. 966 (F)(2) and (3) to provide that documentary evidence filed with a motion for summary judgment or opposition may be filed in any electronically stored format that is authorized by the local court rules of the district court or approved by the clerk. Objections to any evidence submitted may be raised in memorandum or in a motion to strike, which must be served pursuant to Article 1313 within the time limits provided in District Court Rule 9.9.

Heather M. Valliant Partner The Legislature passed 875 Acts during the 2014 Regular Session. Unless otherwise noted, the amendments and enactments become effective August 1, 2014. Below are a few of the highlights in the areas of civil and trial procedure; coastal resources; and minerals, plus a new law related to internet privacy.

Service of Process on the State Act 379, SB 221 - amends and reenacts R.S. 13:5107(D)(1) and La. Code Civ. P. arts. 1201(D) and 3955(D) relating to service of process on the state, a state agency, or a political subdivision to add that a request for service made within the 90-day period enunciated therein shall be considered timely “if requested on the defendant within the time period provided by this Section, notwithstanding insufficient or erroneous service.”

(continued on page 14)

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contradictory hearing if it is opposed. A party applying for a protective order or for an order enforcing, quashing, or modifying a subpoena (or subpoena duces tecum) issued by a clerk of court must comply with the district court’s rules, the Code of Civil Procedure, and the Rules of Professional Conduct and be submitted to the district court that issued the subpoena.

Appointment of Special Master Act 521, HB 623 – amends La. R.S. 13:4165, which addresses the appointment of a special master in litigation proceedings.

Paragraph E of that statute indicates: “Notwithstanding any other provisions of law to the contrary, including Code of Evidence Article 706, the provisions of this Section shall provide the sole authority and procedure for the appointment, duties, powers, and compensation of a special master.”

Expert Testimony Act 630, HB 624 – amends Louisiana’s Code of Evidence Article 702 relative to expert testimony to identically reflect the language of Federal Rule of Evidence 702. Thus, admissibility of expert testimony, in accordance with La. Code. Evid. Art. 702, is now further influenced by federal jurisprudence applying the federal rule.

Identification of Experts Act 655, HB 607 – amends La. Code Civ. P. art. 1425 to provide that a party has no obligation to identify testifying experts in the absence of a discovery request or an order from the court requiring production of an expert report, legislatively overruling Quillian v. The Dixie Bonded Warehouse, 105 So.3d 71 (La. App. 2 Cir. 8/29/12).

Out-of-State Discovery Act 793, HB 619 – amends and re-enacts the statutes related to depositions and discovery procedures for out-of-state discovery, and also enacts La. R.S. 13:3825, known as the Uniform Interstate Depositions and Discovery Act (UIDDA), which mirrors the uniform discovery laws in a number of other states. The Act also references La. Code Civ. P. art.

1435, which provides an alternative procedure to that found in La. R.S. 13:3825.

Under the new statutes, when a party seeks discovery in another state that requires a commission or letter rogatory from a court in this state, the party seeking the commission or letter rogatory shall apply for it by written motion in the court of this state. The court shall issue the commission or letter rogatory ex parte if it is not opposed, or after a

Mandate Act 356, HB 1133 - changes the law of mandate to permit someone other than the principal to challenge the actions of a mandatary. La. R.S. 9:3851 now provides that when a principal is a natural person for whom a curator with appropriate authority has not qualified, any of the following may petition a court on behalf of the principal to review the acts of the principal’s mandatary and to grant relief: 1) a person authorized to make healthcare decisions; 2) a spouse, parent, or descendant; 3) a presumptive heir or legatee; 4) a person named as a beneficiary to receive any real or personal right upon the death of the principal; 5) a trustee or beneficiary of an inter vivos trust or testamentary trust created by or for the principal; 6) a caregiver of the principal; or 7) any other person with sufficient interest in the welfare of the principal. The principal may file a motion to dismiss the petition but must testify at the hearing on the motion to dismiss (or by visual remote technology or by deposition). “The court shall grant the principal’s motion to dismiss the action if it finds that the principal is able to comprehend generally the nature and consequences of the acts of the mandatary and that the mandatary’s authority to act is not the result of fraud, duress, or undue influence.”

Upon the death of the principal, the court shall allow a curator with appropriate authority or the principal’s legal successor to be substituted for the plaintiff, because the principal’s death terminates the mandate.

Judicial Signatures Act 144, HB 46 - amends and reenacts Code Civ. P. arts. 1911 and 4906 to require judges to sign and print their names on all final judgments, or to have their name typewritten on the judgment. If the judge’s name is not printed or typewritten on the final judgment, however, the judgment is not invalidated. Act 606, SB 606 now permits judges to use electronic signatures.

Coastal Resources Coastal Erosion Litigation Act 544, SB 469 – effective June 6, 2014, in response to the “coastal erosion” lawsuits that certain governmental authorities have filed against oil and gas producers. The Act (continued on page 15)

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adds a provision to the State’s coastal zone management statutory scheme that attempts to prohibit a “local or regional flood protection authority” from pursuing litigation relating to coastal erosion, though parishes may pursue such claims. Additionally, the Act provides that any money damages received by a governmental entity related to the violation or enforcement of the coastal zone management laws “shall be used for integrated coastal protection, including coastal restoration, hurricane protection, and improving the resiliency of the coastal area.” It is widely believed that Act 544 will be subjected to a number of legal challenges, including whether the Act may constitutionally prohibit a lawsuit that has already been filed, and whether the Act was passed in accordance with governmental notice and open-meeting standards.

Representation Act 796, HB 799 – provides that any outside attorneys representing the attorney general or any state agency, board, or commission, must be paid according to an hourly rate (not more than $500/hour) and shall not be compensated on a contingency fee or percentage basis, in the absence of express statutory authority. In addition, any special attorney retained by the attorney general or state agency may not be compensated by a third party.

Coastal Louisiana Levee Consortium Act 387, SB 305 – Establishes the Coastal Louisiana Levee Consortium consisting of members of the levee districts, flood protection authorities, or parishes situated within a coastal area. The Consortium is an advisory commission of the Coastal Protection and Restoration Authority Board.

Hazardous Substances Act 527, HB 850 – enacts La. R.S. 49:214.5.2(G) to provide that the Coastal Protection and Restoration Authority “may enter into a contract for the study, investigation, and cleanup of, or response to, hazardous substances directly with any person or entity who has entered into a contract with the United States Army Corps of Engineers for an integrated coastal protection program or project where the hazardous

substance is located and if federal law, rules, regulations, guidance, or the terms of a cooperative, partnership, or other agreement for the program or project require the state of Louisiana to directly take action with regard to the study, investigation, and cleanup of, or response to, the hazardous substance.”

Minerals Remediation of Oilfield Sites Act 400, SB 667 - amends La. R.S. 30:29 and provides additional bases upon which a plaintiff may recover remediation for environmental damages. First, if a defendant is dismissed at a preliminary hearing and is not rejoined later in the lawsuit due to the discovery of additional evidence implicating that defendant, the party who asserted the claim may be liable for the defendant’s reasonable attorney’s fees and costs.

Next, if the defendant makes a limited admission of liability relating to the environmental damage, La. Code Civ. P. art.

1563 (A)(2) provides a rebuttable presumption that the plan approved by the Department of Natural Resources and/ or the Department of Environmental Quality is the “most feasible plan” under La. R.S. 30:29 standards. If the case is tried to a jury, the court shall instruct the jury regarding this presumption if a party requests it.

When the defendant has made a limited admission of liability, the plaintiff may collect the cost of funding the feasible plan, and may be awarded damages above the cost of the feasible plan, but only if there is an express contractual provision requiring remediation to the property’s original condition or to some other specified standard. If the plaintiff can show that the environmental damage was caused by unreasonable or excessive operations based on rules, regulations, lease terms, or standards applicable at the time of the activity, plaintiff may also collect the cost of evaluating, correcting, or repairing the damage if that cost is not included in the damages for the feasible plan and other contractual provisions between the parties. Finally, plaintiff may be awarded the cost of nonremediation damages.

Prescription of Non-Use Act 473, SB 570 – enacts La. R.S. 31:149(I) to provide for a 20-year prescription of non-use for mineral rights that are reserved in a transfer made in connection with a state economic development project, rather than the traditional 10-year period for prescription for non-use. The 20year period begins “from the date of acquisition whether the title to the land remains in the acquiring authority or is subsequently transferred to a third person, public or private.” (continued on page 16)

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Internet Privacy Online Account Privacy Protection Act Act 165, HB 340 - enacts Chapter 28 of Title 51 of the Louisiana Revised Statutes to create the Personal Online Account Privacy Protection Act relative to internet privacy.

Under the Act, an employer may not require an employee or applicant for employment to disclose any information relating to access to that persons’ individual online account.

An employer may require the disclosure of a username and password to gain access to a device that is paid for or supplied in whole or in part by the employer, or to an account or service provided by the employer, however. In addition,

an employer may conduct an investigation and require the employee to cooperate in the investigation if there is specific information about the employer or employmentrelated activity on the employee’s personal account. An employer may also restrict access to certain websites while the employee is using an electronic communications device paid for or supplied in whole or in part by the employer.

The employer is also permitted to view information about an employee that can be obtained without username and password information or that is otherwise in the public domain. All of these same provisions apply to educational institutions as well. n

PRACTICE Pointers CAR assumes that you will be reviewing electronically stored information. Your electronically collected information may consist in both (1) information that was originally created in electronic format (email, word documents, Excel spreadsheets), and (2) documents that have been converted from paper to electronic format via scanning and OCR’ing.

A Primer on eDiscovery – Part IV

“PREDICTIVE CODING” OR “COMPUTER ASSISTED REVIEW”: THE NEW NORMAL Susan R. Laporte Partner

In this issue, we continue a series of short articles on eDiscovery.

We hope you find these discussions informative and useful.

Our eDiscovery series has acquainted you with the procedures necessary to locate, identify, and preserve electronic information. This installment discusses two techniques for reviewing that information once you have collected it. These techniques are both forms of “computer assisted review,” or CAR. As its name implies, computer assisted review describes alternatives to having an attorney manually read and review each and every electronic document. The two most commonly used techniques are “keyword” searching and “Predictive Coding.”

“Keyword” searches are exactly what the name implies: a search in a database for words, terms, or phrases that have been identified as “key” to your litigation. The shortcomings of this method are obvious: the person who, three years ago, wrote an email that today may be relevant to issues in your lawsuit, did not prepare that email for your benefit, and may not have used the words that you have now determined are “key” to the analysis of the issues in the instant lawsuit. As a result, a multitude of documents may fail to include these “key” words and will not be returned by your “keyword” search. Those documents, thus, may, falsely, be treated as irrelevant or nonresponsive.

An alternative method for using the computer as a tool in document review is commonly referred to as “predictive coding.” “Predictive Coding” uses a small set of manually reviewed and coded documents as the basis for a computergenerated predictive model. That model is then used to predict the relevance of documents in a larger set of documents. The manually-reviewed documents are called a “seed set.” In a voluminous documents case, this may consist of up to several thousand documents. As more documents are manually reviewed, and/or as more documents are collected, the computer can be continuously updated until its predictions attain an accuracy rate that is acceptable in the case at hand. In other words, it is the human review (continued on page 17)

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that determines which documents are relevant. Then those documents that are known to be relevant are submitted to “train” the computer to recognize patterns contained in these documents. The “trained” computer can then seek out these patterns in the remaining database, identifying those documents that fit the pattern. This review should be conducted by attorneys experienced in the case, as their review will enhance the accuracy of the documents coded by the computer as relevant or non-relevant. The documents returned should be reviewed for accuracy, and the sampling, coding, return and review process should occur multiple times.

As a tool, Predictive Coding is most effective on a large database of electronic information. It may take thousands of reviewed documents to develop the computer program that will recognize relevant documents. In a smaller case, that may be all or close to all of the documents at issue.

Additionally, because predictive coding will never return 100% of all relevant documents (neither will a human reviewer), its greatest value is in a case with document review of monumental proportions, increasing the likelihood that an acceptable percentage of responsive documents will be located, making the review more efficient and a better value.

CAR or predictive coding does not substitute for human review. Rather, it provides the human reviewer with a tool to sift through mountains of electronic data to find that which is statistically more likely to be relevant. The success of CAR is measured statistically, by the metrics of recall (the

number of documents ultimately tagged as responsive) and precision (the fraction of responsive documents found in the database). Tracking these metrics will allow the reviewers to defend this technique of computer assisted document review.

Just as Predictive Coding allows you to review your client’s electronic documents for relevance and responsiveness to discovery, so too it is a tool you can employ to identify documents that are relevant to particular issues when produced by an opposing party. When faced with an opponent’s “document dump”, predictive coding allows the computer to recognize document type, language, content, party, timeframe, individual names, and other elements that indicate a document’s prospective significance.

Although the debate over the propriety of computed assisted review is still on-going, Judge Andrew Peck of the federal district court for the Southern District of New York first accepted this technology in the case commonly known as “da Silva Moore,” saying simply: “This judicial opinion now recognizes that computer-assisted review is an acceptable way to search for relevant ESI in appropriate cases.” Moore v. Publicis Groupe, 287 F.R.D. 182, 183 (S.D.N.Y. 2012) adopted sub nom. Moore v. Publicis Groupe SA, 11 CIV. 1279 ALC AJP, 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012). Just as the methods of document and data creation have changed from paper and pen to electronic media, so too the methods of document and data review are changing.

Predictive coding promises to be one of the more valuable tools in this era of electronic discovery. n

Environmental Legal Team Contributors Christoffer C. Friend Senior Partner, Covington christofferfriend@curryandfriend.com

Heather M. Valliant Partner, New Orleans heathervalliant@curryandfriend.com

Brett F. Willie Senior Associate Attorney, Covington brettwillie@curryandfriend.com

Susan R. Laporte Partner, New Orleans susanlaporte@curryandfriend.com

Lauren E. Godshall Partner, New Orleans laurengodshall@curryandfriend.com

Meghan E. Smith Associate Attorney, New Orleans meghansmith@curryandfriend.com