Kenneth Guilbeau v. 2 H, Incorporated
2017 U.S. App. LEXIS 6691
| 5th Cir. | 2017Background
- Hess’s predecessors operated oil and gas wells on a tract until operations ceased in 1971; leases expired in 1973.
- All wells were plugged and abandoned before the tract sale.
- In 2007 Kenneth Guilbeau purchased the surface property; the sale did not assign any pre-purchase causes of action.
- Guilbeau sued Hess for contamination damages resulting from the earlier oil- and gas-related activities.
- Hess moved for summary judgment, asserting the subsequent purchaser rule bars recovery for pre-purchase damage; the district court granted summary judgment.
- The Fifth Circuit affirmed, relying on Louisiana law and appellate precedent applying the subsequent purchaser doctrine to mineral-lease contexts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a purchaser without an assignment can recover for property damage caused before purchase | Guilbeau: he can recover for contamination despite lacking an assignment; Eagle Pipe footnote creates uncertainty for mineral leases | Hess: subsequent purchaser rule bars claims for pre-purchase damage absent assignment or subrogation | The rule bars recovery; plaintiff cannot sue for pre-purchase damages without assignment |
| Whether the subsequent purchaser rule applies to expired mineral leases | Guilbeau: mineral-code rights or correlative duties create a transferable right/remedy | Hess: rights to sue for past lease-based damage are personal and do not transfer with title | Louisiana appellate consensus: subsequent purchaser rule applies to expired mineral leases |
| Whether correlative rights or adjacent-owner obligations create a post-sale cause of action | Guilbeau: Mineral Code correlative rights or adjacency duties impose ongoing obligations allowing suit | Hess: parties were not contemporaneous owners or neighbors when damage occurred, so no reciprocal duties arose | Court: no reciprocal correlative or adjacency obligations giving purchaser a claim when leases expired before purchase |
| Whether the Fifth Circuit should certify unsettled state law to the Louisiana Supreme Court | Guilbeau: state supreme court guidance needed because Eagle Pipe footnote left ambiguity | Hess: appellate consensus removes genuine uncertainty; certification not warranted | Court: declined certification; appellate courts are in accord so law is not unsettled |
Key Cases Cited
- Eagle Pipe & Supply, Inc. v. Amerada Hess Corp., 79 So.3d 246 (La. 2011) (articulates the subsequent purchaser rule and distinguishes real rights from personal rights to sue)
- Global Marketing Solutions, L.L.C. v. Blue Mill Farms, Inc., 153 So.3d 1209 (La. Ct. App. 2014) (applied Eagle Pipe to bar purchaser’s suit for pre-purchase drilling contamination absent assignment)
- Walton v. Exxon Mobil Corp., 162 So.3d 490 (La. Ct. App. 2015) (applied subsequent purchaser doctrine to bar pre-purchase damage claims)
- Boone v. ConocoPhillips Co., 139 So.3d 1047 (La. Ct. App. 2014) (held purchaser lacks action against prior lessee for pre-purchase damage without assignment)
- Bundrick v. Anadarko Petroleum Corp., 159 So.3d 1137 (La. Ct. App. 2015) (expressly applied the subsequent purchaser rule to mineral-lease facts and rejected remediation action based solely on lessee’s real rights)