U.S. Fifth Circuit Affirms Application of the Subsequent Purchaser Doctrine in Oilfield Contamination Case, Recognizes “Clear Consensus” Among Louisiana Appellate Courts, and Declines Certification to the Louisiana Supreme Court

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In Guilbeau v. Hess Corporation, the United States Fifth Circuit Court of Appeals unanimously affirmed the application of Louisiana’s subsequent purchaser doctrine to bar a plaintiff’s claims for property damage resulting from alleged oilfield contamination that occurred prior to his purchase of the property.  The court specifically rejected the plaintiff’s attempt to characterize the multitude of relevant Louisiana appellate court rulings as a “mishmash of appellate jurisprudence,” noting instead that “a clear consensus has emerged among all Louisiana appellate courts that have considered the issue.”

Indeed, the court analyzed several recent decisions from Louisiana’s First, Second, and Third Circuits, each of which concluded that the subsequent purchaser doctrine applies in cases involving mineral leases.  These decisions uniformly held that, under the reasoning of Eagle Pipe & Supply, Inc. v. Amerada Hess Corp.—the Louisiana Supreme Court’s pivotal decision applying the doctrine to non-apparent property damage in a case that did not involve mineral rights—the right to sue for damage to property is a personal right that does not pass to a subsequent purchaser without a valid assignment.  And this fundamental legal principle, on which the subsequent purchaser rule is based, is not affected by the categorization of mineral rights as real rights under the Louisiana Mineral Code.

The court additionally rejected the plaintiff’s request for certification of the issue to the Louisiana Supreme Court.  The court stated that the aforementioned cases “demonstrate a consensus supporting the application of the subsequent purchaser doctrine to cases involving mineral leases.”  Moreover, the court expressly acknowledged the Louisiana Supreme Court’s consistent refusal to take up the issue, despite being presented with multiple opportunities to do so.  Finding the appellate decisions in accord and the law not unsettled, the court held that certification was unwarranted.

This decision provides yet another example of the unwavering application of the subsequent purchaser doctrine in cases involving mineral rights under Louisiana law.  Jonathan Hunter argued the appeal for Hess.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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