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New judge in Spanish Lake oil field contamination suit orders new hearings on Shell liability

PLAQUEMINE — A retired appellate judge appointed to hear a longstanding oil field legacy lawsuit involving the Spanish Lake swamp breathed new life into the landowners’ damage claims this week when he granted them new hearings that keep Shell Oil firmly in the dispute.

Filed in 2010 in Iberville Parish, the lawsuit brought by Spanish Lake Restoration, a wetland mitigation bank holding 4,000 acres of the swamp southwest of Baton Rouge, has never gone to on trial on the merits.

The plaintiffs allege wastes from decades of drilling have contaminated the surface and subsurface under old drilling areas in the St. Gabriel oil field and migrated under Spanish Lake Restoration land, causing hundreds of millions of dollars in damage to hundreds of acres.

They claim the damage was masked because the swamp basin was flooded for years by a floodgate at Bayou Manchac.

Shell has argued the time period to bring the claims has long since elapsed and, even if it were liable, the damage is far less extensive, requiring a remediation of 16 acres for $1.3 million.

The case has been in years of settlement negotiations and litigation over whether the plaintiffs even had a legal claim against Shell Oil and other former oil drillers due to the passage of time and the piecemeal expiration of Shell’s original drilling lease, which dates from 1940.

A number of oil drilling companies were named in the suit but none bigger than Shell, which cut the deal with the landowners before other drillers took over portions of the lease through the years.

Last year, attorneys for Shell and Spanish Lake had three days of hearings over whether the claims against Shell were brought within legal deadlines to sue.

The question turned primarily on what the former landowners knew about the contamination and when they knew it, before Spanish Lake Restoration bought the property in 2009. Most legal deadlines to sue rely on this date.

On Oct. 2, retired 21st Judicial District Judge Bruce Bennett, the former ad hoc judge on the case, sustained Shell’s arguments that the legal claims had expired, except for possibly one 20-acre tract. But, eight days later, Bennett recused himself over concerns raised by the plaintiffs, even after Bennett initially said he wouldn’t.

Before he left the case, however, Bennett found the prior owners of the land knew of a surface salt kill, which the judge called “open and obvious,” that should have prompted further investigation. A salt kill is where vegetation is killed by salt concentrations. In this instance, the plaintiffs say there was also salt contamination underground, not just on the surface. Bennett, however, said the surface salt kill should have been enough to put the owners on notice they needed to investigate what was going underground too.

The judge added that those owners had been solicited in 2004 by the Talbot, Carmouche and Marcello law firm for a possible legacy suit, in which the firm told them then that they had a claim against Shell.

The same firm, which is the leading plaintiff’s outfit in legacy cases, represents Spanish Lake Restoration.

Bennett called this letter “powerful and significant evidence” that the prior owners knew about the damage and had a duty to investigate before legal deadlines expired.

But, on Monday, Judge Edward “Jimmy” Gaidry, the ad hoc judge now presiding on the case, found that Bennett erred when he put the burden of proof on the plaintiffs to show the damage claims against Shell haven’t expired, instead saying it was Shell’s obligation prove.

Gaidry, who is the third judge on the case in less than two years and replaced Bennett in July, actually sustained Bennett’s ruling Aug. 15. But Gaidry said Monday that he didn’t independently verify the ruling’s validity and the burden of proof matter requires a fresh look at the case.

“I feel I’ve got to grant a new trial” on Shell’s contentions, Gaidry said at the Iberville Parish Courthouse in Plaquemine.

In prior motions for new trial, Spanish Lake Restoration had argued the burden of proof was wrongly placed on the plaintiffs.

Pat Gray and George Arceneaux, attorneys for Shell, on Monday disputed that Shell bore that burden and, in earlier pleadings, argued that Bennett’s recusal shouldn’t affect the validity of his ruling. They added that Gaidry had the authority as an ad hoc judge to sustain Bennett’s earlier order without new hearings.

Gaidry didn’t agree and set a four days of hearing on the legal dispute beginning Nov. 12.

Gaidry was a district judge in Terrebonne Parish and a 1st Circuit Court of Appeal judge for 10 years until his retirement in 2012. He was appointed to the Spanish Lake case July 9 by Supreme Court Justice Jeff Hughes III.

Attorneys for Spanish Lake Restoration and Shell declined to comment after the hearing Monday, but Shell’s lawyers in their pleadings haven’t been happy with the recusals.

In court papers last year opposing Bennett’s recusal, they pointed out that he and the original judge, Iberville Parish Judge Alvin Batiste Jr., were removed after they issued adverse rulings limiting the plaintiffs’ claims against Shell.

“It is another attempt to obtain a judge who SLR hopes will favor its cause. It also had the effect of delaying the trial yet again. This case has now been set for trial and continued three times,” Gray, Shell’s attorney, wrote in October.

In prompting Bennett’s self-recusal, Spanish Lake Restoration’s attorneys had raised questions about a call Bennett made to the plaintiffs days before his ruling as a trial on the merits of the case and settlement negotiations were then pending.

Though Bennett was returning a missed call from the plaintiffs, the plaintiffs later argued his call, in combination with the subsequent ruling for Shell, constituted grounds for recusal because Bennett had inquired about the status of the settlement negotiations on the phone.

The ruling against the plaintiffs, they argued, could be seen as retribution for the plaintiffs’ not settling.

In his recusal order, Bennett wrote that the fear “most certainly is not true” but recognized that the combination of events “could be perceived by an uninitiated party litigant as some sort of judicial retribution or punishment for failing to settle and, therefore, a reasonable basis, to question my impartiality.”

“As far-fetched as it sounds, it does seem to have a reasonable basis to it,” Bennett wrote.

Bennett added that he had asked about settlement talks because the trial was close and he had to see whether he needed to issue his ruling, which required work with a voluminous court record.

In April, the Supreme Court denied Shell’s appeal of Bennett’s recusal, leading to Gaidry’s appointment over the summer.

SOURCE

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