STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
DOCKET NUMBER
2018 CA 1425
CROSSTEX ENERGY SERVICES, LP; CROSSTEX LIG, LLC;
AND, CROSSTEX PROCESSING SERVICES, LLC
VERSUS
rl
Az- TEXAS BRINE COMPANY, LLC, ET AL.
Decision Rendered: APR 1 1 2022
On Appeal from the
23rd Judicial District Court
Assumption Parish, Louisiana
Docket Number 34, 202
Honorable Thomas J. Kliebert, Jr., Ad HocJudge Presiding
Martin A. Stern Attorneys for Appellant/ Appellee/ Defendant
Leigh Ann Schell Occidental Chemical Corporation
Raymond P. Ward
Alexandra Roselli
Jeffrey E. Richardson
New Orleans, Louisiana
Kathy Patrick, pro hac vice
Laura Kissel Cassidy, pro hac vice
Samuel W. Cruse, III, pro hac vice
Angus J. Dodson, pro hac vice
Caitlin Halpern, pro hac vice
Houston, Texas
Richard Hymel
Lafayette, Louisiana
Brad D. Brian
Bethany W. Kristovich
Grant Davis -Denny
Daniel B. Levin
Los Angeles, California
Christopher Friend
Meghan Smith
New Orleans, Louisiana
IN e. S t e/ ) C o n C. v-, (' S
Martin A. Stern Attorneys for Appellant/ Appellee/ Defendant
Leigh Ann Schell Oxy USA Inc.
Raymond P. Ward
Alexandra Roselli
New Orleans, Louisiana
Kathy Patrick, pro hac vice
Laura Kissel Cassidy, pro hac vice
Samuel W. Cruse, III, pro hac vice
Caitlin Halpern, pro hac vice
Houston, Texas
Martin A. Stern Attorneys for Appellant/ Appellee/ Defendant
Leigh Ann Schell Occidental Petroleum Corporation
Raymond P. Ward
Alexandra Roselli
New Orleans, Louisiana
Kathy Patrick, pro hac vice
Laura Kissel Cassidy, pro hac vice
Samuel W. Cruse, III, pro hac vice
Caitlin Halpern, pro hac vice
Houston, Texas
Roy C. Cheatwood Attorneys for Appellant/ Appellee/ Defendant
Kent A. Lambert Legacy Vulcan, LLC
Tyler Weidlich
Adam B. Zuckerman
Matthew S. Chester
Colleen C. Jarrott
Matthew C. Juneau
Leopoldo J. Yanez
Lauren Brink Adams
Paul C. Thibodeaux
New Orleans, Louisiana
James M. Garner Attorneys for Appellant/ Appellee/ Defendant
Leopold Z. Sher Texas Brine Company, LLC
Peter L. Hilbert, Jr.
Martha Curtis
Jeffrey D. Kessler
Christopher T. Chocheles
David A. Freedman
Melissa R. Harris
Laurie A. Dearman
Rebekka C. Veith
Darnell Bludworth
New Orleans, Louisiana
Robert Ryland Percy, III
Gonzales, Louisiana
Travis J. Turner
Gonzales, Louisiana
Dane S. Ciolino
Metairie, Louisiana
2
Royce I. Duplessis
New Orleans, Louisiana
James E. Kuhn
Ponchatoula, Louisiana
Leopold Z. Sher Attorneys for Appellee/ Defendant
James M. Garner United Brine Services Company, LLC
Peter L. Hilbert, Jr.
Christopher T. Chocheles
Jeffrey D. Kessler
Darnell Bludworth
David A. Freedman
Melissa R. Harris
Laurie A. Dearman
New Orleans, Louisiana
Robert Ryland Percy, III
Gonzales, Louisiana
Royce I. Duplessis
New Orleans, Louisiana
James E. Kuhn
Ponchatoula, Louisiana
Travis J. Turner
Gonzales, Louisiana
Dane S. Ciolino
Metairie, Louisiana
Shawn Carter Counsel for Appellees/ Defendants
Matthew Randazzo, III Browning Oil Company, Colorado Crude
Christopher Bailey Company, LORCA Corporation
Will Montz
Lafayette, Louisiana
Joseph L. Shea, Jr. Counsel for Appellee/ Defendant
Katherine Smith Baker Reliance Petroleum Corporation
Ashley G. Gable
Joshua S. Chevallier
Shreveport, Louisiana
Frank H. Spruiell, Jr. Counsel for Appellee/ Defendant
Reid A. Jones Sol Kirschner
Seth M. Moyers
Anna W. O' Neal
Shreveport, Louisiana
BEFORE: McDONALD, THERIOT, and HESTER, 33.
3
McDONALD, J.
Legacy Vulcan, LLC f/k/ a Legacy Vulcan Corp. and/ or Vulcan Materials
Company ( Legacy Vulcan), Occidental Chemical Corporation ( Oxy), Occidental
Petroleum Corporation ( Oxy Petro), OXY USA Inc. ( Oxy USA), and Texas Brine
Company, LLC ( Texas Brine) appeal a judgment determining causation, liability, and
apportionment of fault for the formation of a sinkhole and the damage it caused in
Assumption Parish, Louisiana. United Brine Services Company, LLC ( UBS) filed an
answer in response to the appeals filed by Legacy Vulcan, Oxy, Oxy Petro, and Oxy
USA. For the following reasons, we reverse in part, amend in part, and affirm in
part. We deny UBS' s answer to the appeals.
FACTS AND PROCEDURAL HISTORY
This appeal relates to one of several lawsuits arising from the August 3, 2012
sinkhole that developed near Bayou Come in Assumption Parish, Louisiana. The
plaintiffs in this suit, Crosstex Energy Services, LP, Crosstex LIG, LLC, and Crosstex
Processing Services, LLC, ( collectively Crosstex) operated a natural gas pipeline and
storage facility in the vicinity of the property affected by the sinkhole. In its original
petition for damages, Crosstex sought to recover damages for its unusable pipeline
and storage facility from Texas Brine, due to the alleged negligence of Texas Brine's
operation of the Oxy Geismar No. 3 Well ( OG3), which collapsed and created the
sinkhole.
Two additional suits were filed against Texas Brine by affected pipeline
companies, namely Pontchartrain Natural Gas System v. Texas Brine Company, LLC,
23rd Judicial District Court, docket no: 34, 265 and Florida Gas Transmission
Company, LLC v. Texas Brine Company, LLC, 23rd Judicial District Court, docket no:
34, 316. Although the claims asserted in these three pipeline cases are similar, the
parties resisted consolidation, except for purposes of trial.' The district court held
the liability trial for the three pipeline cases in the fall of 2017 for the purpose of
Appeals were filed in each matter following the liability trial: Pontchartrain, 18- 1249 ( La. App. 1 Cir.
12/ 30/ 20), 317 So. 3d 715; Florida Gas, 18- 1391 ( La. App. 1 Cir. 5/ 3/ 21), 324 So. 3d 1090, and the
instant Crosstexappeal under our docket under 2018 CA 1425.
4
determining what caused the sinkhole and which parties, if any, were at fault under
any theory of law. All other issues were reserved for subsequent trials.
The district court signed a judgment pertaining to liability on December 21,
2017, finding Oxy, Texas Brine, and Legacy Vulcan liable for the formation of the
sinkhole. The district court apportioned fault as follows: 50% to Oxy, 35% to Texas
Brine, and 15% to Legacy Vulcan. In its written reasons, the district court concluded
that the sinkhole was caused, in various degrees, by three factors: ( 1) the cavern' s
proximity to the edge of the salt dome resulting in an unreasonably thin cavern wall
and an eventual brine leak; ( 2) the substantial depressurization of the OG3 cavern
caused by brine leaking from the cavern into the AH -1 reservoir ( associated with a
neighboring oil and gas well); and ( 3) the timing of the plugging and abandoning of
the OG3.
Several parties then filed motions for new trial, primarily challenging the
apportionment of fault and the language of the judgment. After a contradictory
hearing on the motions and taking the matter under advisement, the district court
granted the motions in part and denied them in part. In a judgment signed on April
18, 2018, the district court reapportioned fault as follows: 40% to Oxy, 5% to Oxy
Petro, 5% to OXY USA, 25% to Texas Brine, 10% to UBS, and 15% to Legacy
Vulcan. From this judgment, Legacy Vulcan, Oxy, Oxy Petro, Oxy USA, and Texas
Brine appeal. UBS answered the appeals filed by all but Texas Brine.
Additional Issues in the Crosstex Appeal
Unlike in Pontchartrain and Florida Gas, after the instant appeal was lodged,
the Louisiana Supreme Court ordered Texas Brine and Oxy to participate in a
separate trial regarding Texas Brine' s fraud claims against Oxy, which had been
dismissed via summary judgment prior to the liability trial. Crosstex Energy Services,
LP v. Texas Brine Company, LLC, 18- 1128 ( La. 10/ 29/ 18), 255 So. 3d 587 ( per
curiam). Because of the procedural posture of the case at the time Texas Brine
sought to set a date for the fraud trial, a panel of this court found that the district
court had been divested of jurisdiction over liability issues, which included fraud
claims, by virtue of the order of appeal entered by the district court. Accordingly,
5
this court vacated the order setting the trial on the fraud claims until this appeal was
final. Crosstex Energy Services, LP v, Texas Brine Company, LLC, 19- 0089 ( La. App.
1 Cir. 6/ 13/ 19), 2019 WL 2487494 ( unpublished). The Louisiana Supreme Court
once again granted writs in part as follows:
Granted in part. Considering our order in Crosstex Energy Services, LP
v. Texas Brine, Co., LLC, 2018- 1128 ( La. 10/ 29/ 18), 255 So. 3d 587, the
judgment of the court of appeal is vacated insofar as it finds the district
court is divested of jurisdiction to consider Texas Brine' s fraud -based
claims in the Crosstex matter. We hereby grant a limited remand of
the Crosstex appeal in order to permit the district court to conduct the
trial, as scheduled, of Texas Brine' s fraud -based claims in the Crosstex
matter only. In all other respects, the writs are denied.
Florida Gas Transmission Company v. Texas Brine Company, LLC, 19- 0978 ( La.
6/ 18/ 19), 275 So. 3d 266 ( per curiam).
It is undisputed that after the above Supreme Court actions, the district court
conducted a fraud trial in the summer of 2019, and that trial remains unconcluded as
the parties have spent over two years in a post -trial discovery debacle.
Although Texas Brine asserts that this post -liability trial activity affects this
appeal immensely, we disagree. As this court has noted previously, the Louisiana
Supreme Court made no mention regarding the arbitrability of claims in either per
curiam opinion, nor did it order a stay of the appeal of the liability trial judgment
pending the fraud trial, or otherwise divest this court's jurisdiction from acting on the
liability trial appeal. Rather, it is this court's view that the second per curiam opinion
split the issue of fraud from the appeal of the liability trial judgment in order for the
district court to complete a separate and distinct trial on the fraud claims, while
jurisdiction regarding the liability trial judgment remained with this court.
Accordingly, we deny Texas Brine' s exception of res judicata regarding the
arbitrability of tort claims; Texas Brine and UBS' s motions to stay this appeal pending
the outcome of the fraud trial; Oxy, Oxy Petro, and Oxy USA' s motion to set a
deadline to file an opposition to Texas Brine' s motion to stay; and, Texas Brine' s
motion to remand this appeal due to the fraud trial.
2
ANALYSIS
Another panel of this court decided a nearly identical appeal in Pontchartrain
Natural Gas System v. Texas Brine Company, LLC, 18- 1249 ( La. App. 1 Cir.
12/ 30/ 20), 317 So. 3d 715, writs denied, 21- 00382, 21- 00386 ( La. 6/ 8/ 21), 317 So. 3d
323. Although that case involved different plaintiffs, the same April 2018 liability
judgment, evidence, assignments of error, and factual and legal considerations at
issue here were at issue in Pontchartrain. This court thoroughly discussed the
procedural history of the case, the evidence presented at trial, and analyzed the
applicable legal principles - all of which we adopt by reference here. Id. The
Pontchartrain court affirmed the district court's conclusion that the sinkhole was
caused by a combination of the closeness of the cavern to the edge of the salt dome,
which resulted in an unreasonably thin cavern wall and eventual brine leak, and the
plugging and abandoning of the OG3. Id, at 749- 50. However, this court concluded
that the district court manifestly erred by finding that the presence of the AH -1
reservoir was a cause -in -fact of the collapse of the OG3 cavern. Id. at 748. Finally,
this court determined that the milling procedure and pressurization of the OG3 in
2010, performed in anticipation of a mechanical integrity test ( MIT), exacerbated any
damage or leak already present within the cavern. Id, at 757- 58.
The only basis to allocate fault to Oxy Petro and Oxy USA was their
relationship to the AH -1 well and reservoir. Id, at 748- 49, 760. Similarly, a portion
of fault allocated to Oxy also stemmed from the AH -1. Id. at 760. Upon finding the
AH -1 reservoir was not a causative factor, the Pontchartrain court concluded that
Oxy Petro and Oxy USA were not liable and that Oxy' s percentage of fault should be
reduced. Id.
The Pontchartrain court gave in depth consideration to the remaining parties'
duties and their relationships with each other and the OG3, all of which we adopt by
reference here. After its analysis, the Pontchartrain court affirmed the district court' s
remaining duty/ breach determinations but also concluded that the district court
manifestly erred to the extent it failed to find that Texas Brine breached its duty to
act as a prudent operator when it milled and pressurized the OG3. Id. at 759. The
Pontchartrain court then reversed and amended the April 2018 judgment to
reallocate fault, reducing Oxy's fault to 30% and increasing Texas Brine' s fault to
45%. Id. at 762, 763. The Pontchartrain court also affirmed the district court's
allocation of 15% fault to Legacy Vulcan. Id. at 761. Finally, because UBS's answer,
wherein it sought a modification of the judgment, was untimely, the Pontchartrain
court affirmed the judgment against UBS without discussion of the merits of the
arguments raised in the answer. Id. at 759.
Thereafter, in Florida Gas Transmission Company, LLC v. Texas Brine
Company, LLC, 18- 1391 ( La. App. 1 Cir. 5/ 3/ 21), 324 So. 3d 1090, writs denied, 21-
00770, 21- 00773 ( La. 10/ 19/ 21), 326 So. 3d 255, 260, while considering a nearly
identical appeal, this court adopted the aforementioned Pontchartrain decision, and
thoroughly reviewed the merits of UBS' s answer which was found to be timely. Id.
at 1094. After careful consideration, the Florida Gas court found that the record
supported the conclusion that UBS was at fault for causing the sinkhole and affirmed
the allocation of 10% fault for its actions. Id, at 1097.
Due to the indistinguishable nature of the appeals taken in the present matter,
Pontchartrain, and Florida Gas, we adopt the Pontchartrain and Florida Gas courts'
factual findings, legal conclusions and holdings concerning arbitration, causation,
duty, and breach, as well as the liability determinations and fault allocations as to
Legacy Vulcan, Oxy, Oxy Petro, Oxy USA, Texas Brine and UBS. 2 See Pontchartrain
Natural Gas System v. Texas Brine Company, LLC, 18- 0001 ( La. App. 1 Cir. 6/ 4/ 18),
253 So. 3d 156, 156, writ denied, 18- 1124 ( La. 9/ 28/ 18), 253 So. 3d 147 ( recognizing
that, where a subsequent appeal involves the same background, issues, and
assignments of error that this court has already thoroughly discussed, we are bound
by the " law of the circuit doctrine" to follow the prior opinion.)
Therefore, we find the district court was manifestly erroneous in its fault
allocation to Oxy, Oxy Petro, Oxy USA, and Texas Brine. We reallocate fault such
that Oxy shall bear 30% fault, Texas Brine shall bear 45% fault, and Oxy USA and
z We likewise adopt the Pontchartrain court's conclusion that the district court was not manifestly
erroneous in declining to allocate fault to Dr. Joseph Ratigan, a geological engineer who frequently
provided opinions and analysis concerning the OG3. Pontchartrain, 317 So. 3d at 763, n. 34.
0
Oxy Petro shall bear no fault. Finally, we find no error in the district court's
allocation of 15% fault to Legacy Vulcan and 10% fault to UBS. 3
We further dispose of all pending motions and exceptions filed with this court
by adopting the rulings made in Pontchartrain, 317 So. 3d 715, and Florida Gas, 324
So. 3d 1090, as the motions and exceptions filed in this appeal are materially
indistinguishable from those considered in those appeals.4
CONCLUSION
For the reasons fully set forth in this opinion, in Pontchartrain, 317 So. 3d 715,
and in Florida Gas, 324 So. 3d 1090, we reverse in part, amend in part, and affirm in
part the district court's April 18, 2018 judgment. We reverse that portion of the
judgment allocating 5% fault to Occidental Petroleum Corporation. We reverse that
portion of the judgment allocating 5% fault to Oxy USA Inc.
We amend that portion of the judgment that allocated 40% fault to Occidental
Chemical Corporation to reflect the allocation of 30% fault to Occidental Chemical
Corporation. We further amend that portion of the judgment that allocated 25%
fault to Texas Brine Company, LLC to reflect the allocation of 45% fault to Texas
Brine Company, LLC.
We affirm the remainder of the district court's judgment, allocating 15% fault
to Legacy Vulcan, LLC f/k/ a Legacy Vulcan Corp. and/ or Vulcan Materials Company
3 We therefore deny as moot, Oxy, Oxy Petro and Oxy USA' s exception of res judicata regarding UBS's
answer; Oxy's exception of res judicata regarding the issue of arbitration; Legacy Vulcan' s exception
of res judicata, Legacy Vulcan' s motion to supplement the appellate record in connection with its
exception of res judicata, and Legacy Vulcan' s motion to set deadline to file opposition to its exception
of res judicata.
4
Specifically, we adopt the disposition set forth in Florida Gas, 324 So. 3d at 1098, n. 7, denying, as
moot, Texas Brine's February 12, 2021 and March 22, 2021 motions to strike the letters filed by the
three Oxy entities pursuant to Uniform Rules of Louisiana Courts of Appeal, Rule 2- 12. 6. 1.
We further adopt the dispositions set forth in Pontchartrain, 317 So. 3d 715, denying the following:
1) Oxy, Oxy Petro, Oxy USA, and Legacy Vulcan' s motion to consolidate the three liability appeals
appearing in docket numbers 2018 CA 1249, 2018 CA 1391 and 2018 CA 1425. Id. at 724, n. 3.
2) Oxy, Oxy Petro, and Oxy USA' s motion to consolidate the Phase I liability appeals. Id.
3) Texas Brine' s motion to strike Oxy's response to per curiam. Id. at 744, n. 28.
4) Texas Brine's motion to stay Phase I appeal considering supplemental production of documents by
Legacy Vulcan. Id. at 763, n. 35.
5) Texas Brine' s motion for limited remand regarding reallocation of fault due to newly produced
documents by Legacy Vulcan. Id.
We likewise adopt the disposition in Pontchartrain, 317 So. 3d at 763, n. 35, granting Oxy's motion to
supplement illustrations for its original brief.
9
and 10% fault to United Brine Services Company, LLC. We deny United Brine
Services Company, LLC' s answer to the appeals.
We issue this memorandum opinion in accordance with Uniform Rules of
Louisiana Courts of Appeal, Rule 2- 16. 1B. Each party shall bear its own costs on
appeal.
REVERSED IN PART; AMENDED IN PART; AFFIRMED IN PART;
ANSWER TO APPEALS DENIED.
10