Louisiana Pipeline Intrusion Case Remanded to Determine a Remedy

The baseball season might be in jeopardy, but litigants are swinging for the fences. In Mary v. QEP Energy, the parties entered into a Pipelins Servitude Agreement over Ms. Mary’s 160 acres. One of QEP’s pipelines extended beyond the servitude by 31 feet and another by 15 feet.

Ms. Mary sued claiming the pipeline was placed in bad faith and sought disgorgement of QEP’s profits or an order permitting removal of the pipeline.

The parties agreed that the case turned on Louisiana Civil Code art. 486:

A possessor in good faith acquires the ownership of fruits he has
gathered. If he is evicted by the owner, he is entitled to
reimbursement of expenses for fruits he was unable to gather.

A possessor in bad faith is bound to restore to the owner the fruits
he has gathered, or their value, subject to his claim for
reimbursement of expenses

The question was whether the standard for good faith was governed by La. CC art. 487 or La. CC art. 670. In granting summary judgment for QEP the district court ruled that art. 670 applied. But art. 670 applies only to construction of a building by a landowner. Under Louisiana law a servitude owner is not a landowner, and a pipeline is not a building.

The Fifth Circuit determined that art. 487 governs:

A possessor is in good faith when he possesses by virtue of an act translative of ownership and does not know of any defects in his ownership.  He ceases to be in good faith when these defects are made known to him or an action is instituted against him by the owner for the recovery of the thing.

What’s next?

Ms. Mary’s at-bat continues. Because the district court incorrectly relied on art. 670, the case was remanded for the district court to determine whether her cause of action for QEP’s intrusion is for trespass, accession, or some other provision of Louisiana law.  The Fifth Circuit instructed the district court to apply the relevant definition of bad faith (assuming the cause of action requires such a showing) to decide whether Ms. Mary is entitled to disgorgement of profits.

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