126 F.4th 1047
5th Cir.2025Background
- The City of New Orleans sued several oil and gas pipeline companies and Entergy New Orleans, LLC in Louisiana state court, alleging violations of the State and Local Coastal Resources Management Act of 1978 (SLCRMA) for damage to coastal zones.
- Entergy, the only in-state defendant, owned pipelines constructed prior to SLCRMA's effective date (1980). The City argued Entergy's post-construction negligence exacerbated canal erosion, threatening the storm buffer.
- Defendants removed the case to federal court, contending Entergy was improperly joined due to the "Historical-Use Exception"—which exempts pre-1980 uses from permitting rules—and thus diversity jurisdiction existed.
- The City moved to remand the case to state court, but the district court denied the motion, dismissed Entergy as a party, and stayed the case pending appeal.
- On appeal, the City claimed Entergy was properly joined and that its presence (and/or the State of Louisiana's) defeated diversity jurisdiction, thus requiring remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Entergy was properly joined and subject to SLCRMA claims | Entergy's ongoing negligence caused a "significant change" nullifying exemption | Entergy's pipelines predate SLCRMA and are exempt under the Historical-Use Exception | Entergy properly dismissed as exempt; improper joinder |
| Applicability of FEIS to SLCRMA interpretation | FEIS carves out exceptions to Historical-Use Exception for significant post-1980 use | FEIS is procedural, not substantive law; cannot displace SLCRMA’s plain text | FEIS not controlling—plain text of SLCRMA governs |
| District court's use of contemporaneous construction doctrine | District court's reference implies SLCRMA ambiguity requiring remand | Doctrine was only referenced as further evidence, not primary basis for decision | Doctrine not determinative; decision based on statute |
| Whether the City was a nominal party for the State (affecting diversity) | City's suit is on behalf of Louisiana (real party in interest), destroying diversity | City sued only in its own name and stands to benefit; only named parties matter | Louisiana not a party; City is real plaintiff; diversity exists |
Key Cases Cited
- Allen v. Walmart Stores, L.L.C., 907 F.3d 170 (5th Cir. 2018) (outlining the standard for improper joinder)
- Int’l Energy Ventures Mgmt. v. United Energy Grp., 818 F.3d 193 (5th Cir. 2016) (defining improper joinder)
- Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278 (5th Cir. 2007) (remand required if any claim against in-state defendant is valid)
- Gray ex rel. Rudd v. Beverly Enters.-Miss., Inc., 390 F.3d 400 (5th Cir. 2004) (remand required if a single valid state law claim against in-state defendant exists)
- Lincoln Property Co. v. Roche, 546 U.S. 81 (2005) (diversity determined by named parties only)
- Bostock v. Clayton Cnty., 590 U.S. 644 (2020) (plain meaning of statutory text controls)