In this case, Certain Insurers appealed the trial court’s approval of a settlement agreement in a property contamination lawsuit. The insurers raised two issues for the court to decide: (1) whether the trial court erred by not determining whether remediation was required before approving the settlement, and (2) if remediation was necessary, whether the court erred by not ordering the deposit of funds into the court registry.
The litigation involved historic oil and gas operations in Jefferson Davis Parish, and the plaintiffs sued Riceland and BP for damages and remediation. Riceland, in turn, filed a third-party demand against Certain Insurers seeking coverage under applicable insurance policies. After years of litigation, the plaintiffs, BP, and Riceland reached a compromise to resolve all claims. The settlement agreement included provisions for remediation by state regulatory standards, and Riceland assigned its rights against Certain Insurers to the plaintiffs.
The settling parties provided notice and a redacted copy of the settlement agreement to the Louisiana Department of Natural Resources (LDNR) and the Louisiana Attorney General (AG) as required by law. The LDNR issued a letter stating no objection to the settlement. The plaintiffs then sought court approval, which the trial court initially granted. However, Certain Insurers requested a conference, arguing that the court failed to comply with statutory requirements. They claimed that the court should have held a contradictory hearing, determined the need for remediation, and ordered funds to be deposited into the court registry.
The trial court held a telephone conference and agreed to hold a contradictory hearing as requested by Certain Insurers. However, the trial court ultimately rejected the insurers’ interpretation of the law and approved the settlement, finding that the statute’s requirements had been satisfied. The trial court designated the judgment as final, and Certain Insurers appealed.
The appellate court reviewed the trial court’s approval of the settlement agreement under an abuse of discretion standard. It also reviewed the trial court’s interpretation of the statute de novo. The primary issue was the interpretation of Louisiana Revised Statute 30:29(J)(1), which outlined the requirements for approval of settlements in legacy lawsuits.
The court analyzed the language of the statute and determined that three requirements were mandatory for all settlements governed by Act 312: court approval, notice to the LDNR and AG, and their review and comment. The court further found that the remaining provisions of the statute, including the requirement for a contradictory hearing and the deposit of funds into the court registry, only applied in certain circumstances.
Certain Insurers argued that a contradictory hearing and a determination on remediation were necessary in all cases. However, the court disagreed and concluded that a contradictory hearing was only required if there was an objection to the proposed remediation. Since no objection was raised in this case, the court found that the trial court’s approval of the settlement was legally sound.
The court also noted that the settlement agreement complied with the public policy of protecting and remediation of the environment. The settlement included provisions for remediation following state regulatory standards, which aligned with the legislative intent behind Act 312.
Based on these findings, the appellate court affirmed the trial court’s judgment, concluding that the trial court had properly approved the settlement. Costs of the appeal were assessed to Certain Insurers. In this case, the trial court’s decision supported the absence of objections and the explicit agreement of the settling parties to remediate the property according to state regulatory standards. This ruling affirms the importance of following statutory provisions while recognizing the legislative intent to encourage court-approved settlements in legacy lawsuits involving environmental remediation.
Additional Sources: Britt, et al., v. Riceland Petroleum Company, et al. (2018).
Written by Berniard Law Firm Blog Writer: Callie Ericksen
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