Opinion ID: 601816
Heading Depth: 4
Heading Rank: 1

Heading: Are Chevron's plug and abandon indemnity claims moot?

Text: 67 Two of the investors, Tellurogenic, Inc. (Tellurogenic) and Spencer Oil Company (Spencer Oil), raise a mootness argument. They point to the 1990 amendment to section 30:4.C(1) of Louisiana's Revised Statutes, which states that only an owner--i.e., the person who has the right to drill into and produce from a pool and to appropriate the production either for himself or for others--may be held liable by the Louisiana Conservation Commissioner for plugging and abandoning wells on an oil and gas lease. They argue that this amendment has rendered moot any case or controversy respecting the parties' liability for plugging and abandoning wells on the Bayou Couba lease. 68 A controversy becomes moot where, as a result of intervening circumstances, there are no longer adverse parties with sufficient legal interests to maintain the litigation. Mills v. Green, 159 U.S. 651, 653, 16 S.Ct. 132, 133, 40 L.Ed. 293 (1859). Mootness can arise in one of two ways: First, a controversy can become moot when the issues presented are no longer 'live.'  Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 1951, 23 L.Ed.2d 491 (1969). A controversy can also become moot when the parties lack a legally cognizable interest in the outcome. Id. 69 There are two problems with the mootness argument advanced by Tellurogenic and Spencer Oil. One is that it ignores the express promise made by Chevron's predecessor Gulf, in its original lease with Delta Securities Company, to plug and abandon all wells on the released and surrendered acreage in accordance with the rules and regulations of any governmental agency, official or department having jurisdiction. Under section 129 of the Louisiana Mineral Code, [a]n assignor ... is not relieved of his obligations or liabilities under a mineral lease unless the lessor has discharged him expressly and in writing. LA.REV.STAT.ANN. § 31:129 (West 1989); see also Kleas v. Mayfield, 404 So.2d 500, 506 (La.App. 3d Cir.1981). The 1990 amendment to section 30:4.C(1) of the Louisiana Revised Statutes does not, therefore, affect Chevron's obligation under the original lease with Delta Securities to plug and abandon the wells. The second problem with the argument is that it ignores the possibility that Chevron might be held liable for plugging and abandoning the wells as a prior owner of the Bayou Couba lease. That is, nothing in the language of 1990 amendment prohibits the Louisiana Conservation Commissioner from interpreting the word owner broadly and proceeding against a prior owner of the Bayou Couba lease. See Memorandum from the Louisiana Comm'r of Conservation re: Enforcement Policy--Abandoned Wells and Pits (July 24, 1990). Because there is still a substantial possibility that Chevron will be held liable for plugging and abandoning the wells on the Bayou Couba lease, we hold that the 1990 amendment does not moot Chevron's claim for a declaratory judgment that Rocky Mountain and the investors are liable to indemnify Chevron for any subsequently incurred plug and abandon obligations. 70