STATE OF LOUISIANA
FIRST CIRCUIT
2024 CA 0251
LOUISIANA WETLANDS, LLC and NEW 90, LLC
VERSUS
ENERGEN RESOURCES CORPORATION, CHEVRON USA, INC., SOUTHERN NATURAL GAS COMPANY, LLC, EP ENERGY E& P COMPANY, LP, BRAMMER ENGINEERING, INC., AND BP AMERICA PRODUCTION COMPANY
Judgment Rendered:
On Appeal from the 16th Judicial District Court In and for the Parish of St. Mary State of Louisiana Trial Court No. 130, 527
Honorable Suzanne de Mahy, Judge Presiding
James R. Swanson Attorneys for Plaintiff A - ppellee, Harvey S. Bartlett, III James J. Bailey, 111, Individually and Lance C. McCardle as Representative of the Successions E. Blair Schilling of Willie Palfrey Foster and Fairfax New Orleans, Louisiana Foster Bailey
Gladstone N. Jones, III Bernard E. Boudreaux Kevin E. Huddell John T. Arnold Rosa E. Acheson New Orleans, Louisiana
Michael R. Phillips Attorneys for Defendant -Appellant, Louis M. Grossman Chevron U.S. A. Inc. Claire E. Juneau Jeffrey J. Gelpi a--, New Orleans Tmjiqinnn Vt- Tracie J. Renfroe ( pro hac vice) Elizabeth R. Taber (pro hac vice) Houston, Texas
L. Victor Gregoire John C. Funderburk Baton Rouge, Louisiana
Brian D. Melton (pro hac vice) David M. Peterson (pro hac vice) Laranda M. Walker (pro hac vice) Houston, Texas
Richard D. McConnell, Jr. Attorneys for Defendant -Appellant, Alan J. Berteau Southern Natural Gas Company, LLC Baton Rouge, Louisiana
Tyler Moore Kostal Claire E. Juneau New Orleans, Louisiana
BEFORE: GUIDRY, C.J., PENZATO, AND STROMBERG, JJ.
0 PENZATO, J.
Chevron U.S. A. Inc. ( Chevron) and Southern Natural Gas Company, L.L.C.
SNG) appeal the trial court' s July 11, 2023 judgment awarding James J. Bailey, III,
individually and as representative of the Successions of Willie Palfrey Foster and
Fairfax Foster Bailey (Bailey), attorneys' fees and costs pursuant to La. R.S. 30: 29,
sometimes referred to herein as Act 312. 1 For the following reasons, we reverse the
trial court' s judgment to the extent it awarded Bailey' s attorneys hourly rates in
excess of those in line with prevailing rates in St. Mary Parish, and/ or south
Louisiana, for similar services by lawyers of reasonably comparable skill,
experience and reputation; and awarded fees and costs incurred after September 24,
2021, the date the Louisiana Department of Natural Resources, Office of
Conservation ( LDNR),2 filed its most feasible plan ( MFP) in the trial court; and
remand this matter in accordance with our instructions.
FACTS AND PROCEDURAL HISTORY'
This case involves oil and gas exploration and production activities conducted
on the Bailey family property in St. Mary Parish pursuant to a 1948 mineral lease.
In December of 2016, the Bailey family, through their limited liability companies,4
I Louisiana Revised Statutes 30: 29 provides the procedure for judicial resolution of claims for environmental damage to ensure that damage to the environment is remediated to a standard that protects the public interest. La. R. S. 30: 29( A).
2 By 2023 La. Acts No. 150, § 5, effective January 10, 2024, La, R.S. 30: 29 was amended and reenacted to rename LDNR the " Department of Energy and Natural Resources, office of conservation." We will continue to refer to the department as " LDNR."
3 Additional facts and procedural history of the underlying oil and gas activities and contamination issues are contained in prior appeals. See Louisiana Wetlands, LLC v. Energen Resources Corporation, 2021- 0290 ( La. App. 1 Cir. 10/ 4/ 21), 330 So. 3d 674, 676- 78, writ denied, 2021- 01610 (La. 1/ 12/ 22), 330 So. 3d 614; Louisiana Wetlands, LLC v. Energen Resources Corporation, 2022- 1169 ( La. App. I Cir. 11/ 30/ 23), 380 So. 3d 38, 41- 42, writ denied, 2024- 00004 ( La. 2/ 27/ 24), 379 So. 3d 1265; and Louisiana Wetlands, LLC v. Energen Resources Corporation,
2023- 0564 ( La. App. 1 Cir. 12/ 11/ 24), So. 3d , _, 2024 WL 5100161, * 1- 2 ( on reh' g).
a The original plaintiffs were Louisiana Wetlands, LLC and New 90, LLC. Through the second supplemental and amending petition, filed in July 2019, Louisiana Wetlands, LLC was removed as party plaintiff, and Bailey was added as a new party plaintiff. In Louisiana Wetlands, 330 So. 3d at 678, all claims of New 90, LLC were dismissed through summary judgment. 3 filed this lawsuit, alleging that testing conducted on the property revealed
environmental damage caused by these historical oil and gas operations. In their
petition for damages, the Bailey family asserted tort and breach of contract claims
against Chevron, SNG, and several other defendants, as the oil and gas lessees who
operated at various times throughout the property' s history of oil and gas production.
The Bailey family sought damages arising from the historical oil and gas operations
on their property, alleging environmental damage to their property, and to have their
contaminated property cleaned and restored to its original condition.
In August and September of 2020, SNG and Chevron, respectively, filed
limited admissions under La. R.S. 30: 29. Each admitted it was a " responsible party"
for environmental damage on certain areas of the Bailey property. As a result, the
trial court referred the matter to LDNR for a determination of the MFP for the
evaluation or remediation of the Bailey property to applicable regulatory standards.
See La. R.S. 30: 29( 0)( 1). Both Chevron and SNG submitted plans to LDNR. Bailey
submitted responses to Chevron' s and SNG' s plans but did not submit an alternative
plan to LDNR.
Following a public hearing in February 2021, LDNR partially accepted the
plans submitted by Chevron and SNG, but ultimately structured its own plan, which
required further evaluation and testing in some areas of Bailey' s property,
remediation of soils in some areas, and groundwater monitoring in other areas. On
September 24, 2021, LDNR filed its MFP in the trial court in accordance with La.
R.S. 30: 29. Thereafter, on May 3, 2022, Bailey filed a proposed MFP, authored by
ICON Environmental Services, Inc. ( ICON).
On July 14- 15, 2022, the trial court held a hearing on Chevron and SNG' s
motion to adopt the " Most Feasible Plan," and on July 15, 2022, issued a judgment
adopting LDNR' s MFP as the " Most Feasible Plan." In reasons for judgment, the
trial court noted that the LDNR MFP was an evaluation plan, which complied with
11! La. R.S. 30: 29. The trial court further indicated that the ICON plan submitted by
Bailey, which proposed immediate remediation before first completing a full
evaluation of environmental damage, was unreasonable, and not feasible. This Court
affirmed the trial court' s judgment adopting the LDNR MFP. Louisiana Wetlands,
LLC v. Energen Resources Corporation, 2022- 1169 ( La. App. 1 Cir. 11/ 30/ 23), 380
So. 3d 38, writ denied, 2024- 00004 ( La. 2/ 27/ 24), 379 So. 3d 1265.
On September 8, 2022, the trial court signed a partial final judgment granting
a motion to enter a judgment of dismissal filed by Chevron and SNG.S The judgment
dismissed Bailey' s claims against Chevron and SNG, while retaining jurisdiction
under R.S. 30: 29 to ensure compliance with the MFP adopted by the trial court on
July 15, 2022. 6
Thereafter, in December of 2022, Bailey filed an application for attorneys'
fees and costs pursuant to La. R.S. 30: 29( E)( 1), which authorizes an award of "all
costs attributable to producing that portion of the evidence that directly relates to the
establishment of environmental damage." In his application, Bailey asserted that he
incurred $ 3, 294, 566. 50 in attorneys' fees and $ 756, 980. 43 in costs provided for
under La. R.S. 30: 29( E)( 1) through September 8, 2022.
In response, Chevron and SNG argued that the majority of attorneys' fees and
costs claimed by Bailey were not related to the establishment of environmental
damage against Chevron and SNG. Chevron and SNG also argued for a reduction
of certain attorneys' hourly rates and reductions for the firms' billing techniques.
Chevron and SNG calculated the attorneys' fees and costs incurred by Bailey to be
no more than $ 389,032. 79 in attorneys' fees and $ 192, 893. 04 in costs.
5 The basis for the motion was this Court' s reversal of the trial court' s denial of Chevron and SNG' s motion for summary judgment on prescription as well as a holding by the trial court that a claim for damage caused by unreasonable or excessive operations is a " tort claim." 6 Bailey appealed the September 8, 2022 judgment; that appeal is currently pending before this Court ( 2024 CA 0167).
5 Following an evidentiary hearing and post -hearing briefing on Bailey' s
application, the trial court issued reasons for judgment and, on July 11, 2023, signed
a partial final judgment granting the application with regards to attorneys' fees in
the amount of $2, 253, 465. 42 and costs in the amount of $644,916. 77. 7 It is from
this judgment that Chevron and SNG appeal.
1. Burden of Proof. The trial court erred by failing to hold Bailey to his burden of
proving the specific fees and costs that are recoverable and reasonable.
2. Scope of Award. The trial court erred by failing to limit the award to only those
fees and other costs " attributable to producing that portion of the evidence that
directly relates to the establishment of environmental damage" under Act 312.
3. Hourly Rates. The trial court abused its discretion by awarding fees at hourly
rates far above the prevailing market rates in the relevant community.
STANDARD OF REVIEW
The trial court has much discretion in fixing an award of attorneys' fees, and
its award will not be modified on appeal absent a showing of an abuse of discretion.
City ofBaton Rouge v. Donahue, 2023- 0319 ( La. App. I Cir. 12/ 27/ 23), 380 So. 3d
666, 673- 74.
LAW AND ANALYSIS
An award of attorneys' fees in this case is authorized by La. R.S. 30:29( E)( 1),
which provides:
E. ( 1) In any civil action in which a party is responsible for damages or payments for the evaluation or remediation of environmental damage, a party providing evidence, in whole or in part, upon which the judgment is based shall be entitled to recover from the party or parties admitting responsibility or the party or parties found legally responsible
7 The trial court issued a written judgment on June 2, 2023 along with its reasons for judgment. Chevron and SNG filed a motion for amendment of the judgment or, alternatively, a limited motion for new trial, alleging an error in the trial court' s calculation of the costs, and to designate the judgment as final under La. C. C. P. art. 1915( B). Bailey consented to the granting of Chevron and SNG' s motion, and the trial court thereafter rendered the July 11, 2023 judgment.
31 by the court, in addition to any other amounts to which the party may be entitled, all costs attributable to producing that portion of the evidence that directly relates to the establishment of environmental damage, including, but not limited to, expert witness fees, environmental evaluation, investigation, and testing, the cost of
developing a plan of remediation, and reasonable attorney fees incurred in the trial court and the department.
Courts have awarded fees pursuant to this statute in the following two
instances.
Sweet Lake
In Sweet Lake Land & Oil Company, LLC v. Oleum Operating Company,
L.C., 2021- 169 ( La. App. 3 Cir. 12/ 1/ 21), 362 So. 3d 486, writ granted in part and
remanded, 2022- 00497 ( La. 9/ 20/ 22), 345 So. 3d 1022, the plaintiff filed suit against
British Petroleum corporate entities ( BP) and other oilfield operators in connection
with decades -long oilfield operations on its property. At a 2015 trial, the jury found
BP to be solely responsible for environmental damage on the property. Id. at 490.
The trial court referred the matter to LDNR for development of an MFP pursuant to
La. R.S. 30: 29. In October 2016, LDNR issued its MFP; following a hearing, the
trial court rejected the LDNR plan as ambiguous. Id. at 495. When no MFP had
been approved by the trial court by April 2020, the plaintiff filed a motion seeking fees and costs. Ina July 28, 2020 judgment, the trial court awarded $ 5, 330, 479. 11
in attorneys' fees, expert fees, and costs pursuant to La. R.S. 30: 29( E). The Third
Circuit Court of Appeal affirmed. Id. at 514.
BP sought review from the Louisiana Supreme Court, challenging the award
insofar as it encompassed fees and costs the plaintiff incurred in pursuing claims for
non -regulatory remedies outside of La. R.S. 30: 29. The Louisiana Supreme Court
granted BP' s writ application in part, and remanded the matter to the Third Circuit
to determine what costs and fees were attributable to ' producing that portion of the
evidence that directly relates to the establishment of environmental damage.' La.
7 R.S. 30: 29(E)." Sweet Lake Land & Oil Company, LLC v. Oleum Operating
Company, L. C., 2022- 00497 ( La.. 9/ 20/ 22), 345 So. 3d 1022, 1023.
On remand, the Third Circuit concluded the trial court' s award to the plaintiff
must be limited to those fees and costs incurred in the trial court and in the LDNR
in pursuit of establishing environmental damages and the remediation thereof
prescribed by La. R.S. 30: 29." Sweet Lake Land & Oil Company, LLC v. Oleum
Operating Company, L. C., 2021- 169 ( La. App. 3 Cir. 12/ 7/ 22), 354 So. 3d 740, 745,
writ denied, 2023- 00034 ( La. 3/ 7/ 23), 357 So. 3d 349. The Third Circuit therefore
reversed in part and amended the trial court' s judgment, reducing the overall fees
and costs awarded the plaintiff by the amount attributable to the work performed in
pursuit of private damage claims.' Id. The Third Circuit addressed the duration of
the recoverable fees and costs, indicating the specific wording of La. R.S.
30: 29( E)( 1) anticipates a " judgment" as well as either an admission of responsibility
or a finding of responsibility by the court. The judgment under review (the July 28,
2020 judgment on the plaintiff' s motion to set fees and costs) only resulted after a
full jury trial in May 2015. The Third Circuit rejected BP' s position that it could not
be cast in judgment for attorneys' fees and related costs incurred after the May 2015
trial, reasoning that because proceedings had been ongoing in the LDNR and the
trial court had not yet approved an MFP, the trial court correctly included fees and
costs through July 28, 2020, the date of the trial court' s judgment on the plaintiff's
motion to set fees and costs. Id. at 747- 48.
Hero Lands
In Hero Lands Co., L.L. C. v. Chevron U.S.A. Inc., 2022- 0383 ( La. App. 4 Cir.
5/ 22/ 23), 382 So. 3d 271, writ granted in part and remanded, 2023- 01050 ( La.
10/ 10/ 23), 370 So. 3d 1062, and writ denied, 2023- 01055 ( La. 10/ 10/ 23), 371 So. 3d
8 BP conceded the reasonableness of the hourly rates charged by the plaintiffs counsel; thus, that issue was not before the court. Sweet Lake, 354 So. 3d at 747.
Rl 460, the plaintiff filed suit against Chevron and several other defendants seeking
remediation damages for environmental damage to four tracts of land, as provided
for by Act 312, as well as private damages outside the scope of Act 312. After more
than two years of litigation, Chevron entered a limited admission of liability as to
three of the four tracts of land, pursuant to La. R.S. 30: 29( C), which was referred to
LDNR to develop an MFP for remediation of the environmental damage. On April
7, 2021, LDNR submitted the proposed MFP to the trial court; however, as of the
submission of the appeal, the trial court had not approved and adopted an MFP. On
April 26, 2021, the case proceeded to a jury trial on the plaintiff' s claims for private
damages on the three tracts of land to which Chevron admitted liability for
environmental damage, and the claims for remediation damages and private
damages on the fourth tract of land. The jury rendered a verdict in favor of Chevron,
finding no liability for environmental damage on the fourth tract and no liability for
the plaintiff' s private damages claims on any of the four tracts of land. The plaintiff
thereafter filed a motion to fix attorneys' fees and costs pursuant to La. R.S.
30: 29( E). Id. at 276- 77. The trial court ordered Chevron to pay to the plaintiff
3, 566, 067. 70 in attorneys' fees and $ 744,936. 78 in costs. Chevron appealed,
alleging the trial court erred in awarding fees and costs incurred by the plaintiff in
its unsuccessful pursuit of private damages claims and in pursuit of claims against
other defendants. The plaintiff answered the appeal, arguing that the trial court erred
by reducing its attorneys' recoverable rates. With regard to the reasonableness of
attorneys fees, the trial court had determined that the hourly billing rates of plaintiff' s
counsel, which ranged from $ 472. 50 to $ 850. 00 per hour, were unreasonable, and
reduced them to a range of $400. 00 to $ 525. 00 per hour. Upon review, the Fourth
Circuit Court of Appeal found no abuse of the trial court' s discretion in reducing the
rates. Id. at 287.
X In connection with Chevron' s appeal, the Fourth Circuit concluded the trial
court erred in awarding fees and costs incurred for prosecution of private claims
outside the establishment of environmental damage and statutory remediation
damages available under La. R.S. 30: 29. Id. at 282. With regard to the duration of
the award, the Fourth Circuit found that the language of La. R.S. 30: 29( E) allows
for recovery of costs encompassing all of the work involved in the LDNR
proceedings, which all directly relate to the establishment of environmental damage.
Id. at 283. The Fourth Circuit concluded that the fees and costs incurred by the
plaintiff from April 26, 2021, the date that trial began, through May 31, 2021, the
last date included in the submitted billing records, must be excluded from the total
award. Id. at 284.
The Fourth Circuit rejected Chevron' s argument that the scope of recoverable
fees and costs could not include the plaintiffs pursuit of claims of environmental
damage against other defendants. - 1d. at 285. Upon review, the Louisiana Supreme
Court found the Fourth Circuit erred in holding that Chevron was responsible for
paying attorneys' fees and costs incurred in plaintiff' s pursuit of claims against other
defendants, and remanded the matter. Hero Lands Company, L.L. C. v. Chevron
U.S.A. Inc., 2023- 01050 ( La. 10/ 10/ 23), 370 So. 3d 1062, 1063 ( Mem). On remand,
the Fourth Circuit found there was insufficient information to accurately distinguish
the fees and costs incurred in pursuit of claims against defendants other than
Chevron, and remanded the matter to the trial court for an evidentiary hearing to
determine as accurately as possible the amount of fees and costs incurred by the
plaintiff in pursuit of claims against other defendants. Hero Lands Company., L.L. C. v. Chevron U.S.A. Inc., 2022- 0383 ( La. App. 4 Cir. 11/ 9/ 23), So. 3d _,
2023 WL 7402414.
Hearing on Bailey' s Application for Fees and Costs
UU1 At the hearing on Bailey' s application for fees and costs, one of his attorneys,
Gladstone Jones, testified that through September 8, 2022, the attorneys in his firm,
Jones, Swanson, Huddell & Daschbach, LLC, recorded 5, 253. 55 hours, which, at
the applicable rates for the firm' s attorneys, totaled $ 2, 622, 260. 00 in attorneys' fees.
Mr. Jones testified that although he was representing Bailey on a contingency fee
basis, he calculated his hourly rate to be $ 850. 00. He conceded that he did not tie
his hourly rate to the market rates in St. Mary Parish, had never represented anyone
in St. Mary Parish and charged $850. 00, nor did he know anybody in St. Mary Parish
who charged $ 850. 00 per hour. He acknowledged that in the only other case in
which he was awarded attorneys' fees under Act 312, Hero Lands, he and his partner
Bernard Boudreaux were awarded $ 525. 00 per hour, James Swanson was awarded
500. 00 per hour, and other attorneys were awarded rates of $400. 00-$ 425. 00 per
hour.9
Mr. Jones further testified that the costs incurred by Bailey that were billed by
his firm for producing the portion of the evidence that directly related to
establishment of environmental damage and the costs to develop a plan of
remediation amounted to $ 712, 152. 89. The billing and cost records were admitted
into evidence in connection with Mr. Jones' s testimony. Mr. Jones testified that the
entirety of the hours performed by his firm were related to the establishment of
environmental damage. He further testified that the expert witness fees and other
costs incurred all related to environmental damage. Mr. Jones acknowledged that
roughly 10% of the billings was spent on issues related to other defendants. He
9 Mr. Jones testified that James Swanson, Emma Daschbach, Kevin Huddell, Harvey Bartlett, John Arnold, and Lindsay Reeves were involved in both Hero Lands and the present case. Mr. Swanson' s requested hourly rate in this case is $ 648. 18 per hour. Ms. Daschbach and Mr. Huddell' s requested rates in this case are $ 550.00 per hour; in Hero Lands, their rates were reduced to $ 425. 00 per hour. Mr. Arnold and Ms. Reeves' requested rates in this case are $ 475. 00 per hour; in Hero Lands, their rates were reduced to $400.00 per hour. Mr. Bartlett' s requested rate in this case is $ 384. 52 per hour; he received $425. 00 per hour in Hero Lands.
11 further testified that $ 14, 733. 50 and a travel charge in the amount of $442. 56 were
mistakenly included in the costs.
E. Blair Schilling testified at the hearing that she was a partner at Fishman
Haygood, L.L.P., a law firm also representing Bailey in this litigation. In Ms.
Schilling' s affidavit offered into evidence at the hearing, she stated that through
September 8, 2022, the attorneys in her firm recorded 1, 926. 8 hours, which, at the
applicable rates for the firm' s attorneys, totaled $ 664, 581. 50 in attorneys' fees. Ms.
Schilling testified that two attorneys in her firm did transactional work in St. Mary
Parish at a rate of $500. 00-$ 525. 00 per hour. She further testified that the costs
incurred by Bailey that were billed by her firm for producing the portion of the
evidence that directly related to establishment of environmental damage and the
costs to develop a plan of remediation amounted to $ 44, 827. 54. The billing and cost
records were admitted into evidence in connection with Ms. Schilling' s testimony.
She agreed with Mr. Jones that fees improperly included for another case as well as
a 10% reduction for other defendants should be removed from the total. According
to Ms. Schilling, most of the work done on the case involved Chevron and SNG
because the majority of the contamination was in the areas where they operated. She
further testified that the work done after the limited admissions were filed by
Chevron and SNG went toward establishing environmental damage.
Bailey also introduced into evidence Chevron' s discovery responses showing
rates higher than $ 850. 00 charged by several of Chevron' s attorneys in this litigation.
The trial court noted that those attorneys were from a Houston firm, and although
their hourly rate was relevant, the trial court would not necessarily use those rates as
comparison for the rates charged by Bailey' s attorneys.
In opposition to the testimony and exhibits offered by Bailey, Chevron and
SNG offered into evidence the affidavit of Ralph A. Litolff, Jr., a certified public
accountant and consultant hired by Chevron and SNG to examine the fee bills for
12 the attorneys representing Bailey in this litigation. As counsel for Chevron and SNG
explained at the hearing, they created certain categories for the time entries contained
on the time sheets submitted by Bailey' s attorneys and assigned the entries to each
of the created categories. Based upon the categorization of Bailey' s attorneys' fees
made by counsel for Chevron and SNG, Mr. Litolff calculated that Bailey incurred
389, 032. 79 in attorneys' fees and $ 192, 893. 04 in costs. The trial court admitted
Mr. Litolff' s affidavit into evidence, noting, however, that the categories were not
substantiated by anything other than Chevron and SNG' s argument of how the
billing should be separated.
Chevron and SNG also introduced into evidence an invoice from Robert P.
Fuhrer, one of Bailey' s attorneys who practiced in St. Mary Parish. Mr. Fuhrer
charged $ 300. 00 per hour for in -court work and $ 150. 00-$ 175. 00 per hour for out-
of-court work for this case.
At the conclusion of the hearing, the trial court indicated there was a line of
demarcation after which Bailey' s attorneys' work was no longer attributable to
producing evidence directly related to the establishment of environmental damage.
Based on its interpretation of La. R.S. 30: 29, the trial court determined that line was
when it adopted the MFP on July 15, 2022. The trial court further advised that with
regard to attorneys' fees, in this kind of case, which required specific legal
experience, it would look outside of St. Mary Parish to Louisiana as a whole to
determine what the industry was charging for this type of litigation. The trial court
reduced the $ 850.00 per hour rates requested by attorneys Jones and Boudreaux to
700.00, while concluding the hourly rates of the other attorneys and staff were
reasonable. The trial court provided Bailey the opportunity to revise his application
in accordance with these rulings.
According to Bailey' s revised application for fees, he incurred $ 2, 493, 032. 19
in attorneys fees ($ 801, 534. 31 less than original request) and $ 692, 715. 09
13 64,265. 34 less than original request) in costs for work performed through July 15,
2022 at the revised rates for attorneys Jones and Boudreaux.
In its July 11, 2023 judgment, the trial court reduced the requested fees and
costs and awarded $ 2, 253, 465. 42 in attorneys fees ($ 239, 566. 77 less than requested
in Bailey' s revised application) and $ 644,916. 77 in costs ($ 47, 798. 32 less than
requested in Bailey' s revised application). In its reasons for judgment, the trial court
set forth the following reasons why it granted Bailey' s request in a reduced amount:
1. At the hearing, Bailey' s attorneys conceded that Chevron and SNG
could not be held responsible for fees and costs incurred in pursuing claims
against other defendants and also testified that their billing entries erroneously
included fees and costs from other cases being handled by the law firms. After
removing the attorneys' fees and costs that should have been allotted to other
defendants and that were erroneously billed, the trial court considered the
remainder of the application.
2. After reviewing the factors outlined in Rivet v. State, Department of
Transportation and Development, 96- 0145 ( La. 9/ 5/ 96), 680 So. 2d 1154, and
La. Rule of Professional Conduct 1. 5( a), 10 and considering the evidence, the
to In Rivet, 680 So. 2d at 1161- 62, the Louisiana Supreme Court set forth factors to be taken into consideration in determining the reasonableness of attorney fees: ( 1) the ultimate result obtained; 2) the responsibility incurred; ( 3) the importance of the litigation; ( 4) the amount of money involved; ( 5) the extent and character of the work performed; ( 6) the legal knowledge, attainment, and skill of the attorneys; ( 7) the number of appearances involved; ( 8) the intricacies of the facts involved; ( 9) the diligence and skill of counsel; and ( 10) the court's own knowledge. The Supreme Court further noted that these factors are derived from Rule 1. 5( a) of the Rules of Professional Conduct, which provides:
a) A lawyer' s fees shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
3) The fee customarily charged in the locality for similar legal services;
4) The amount involved and the results obtained;
14 trial court reduced the hourly rates of attorneys Jones and Boudreaux to
700. 00. It further determined the hourly rates of the other attorneys and staff
to be reasonable.
3. In reviewing requested costs, the trial court considered that the
fees/ costs for work done by ICON was not separated by claims against
individual defendants. Based on the testimony of Mr. Jones, the trial court
determined that at least 10% of the costs associated with " expert fees" of
ICON should not be assessed to SNG and Chevron, and reduced the award
1 accordingly.'
4. In determining a timeline as to when attorneys' fees and costs could
no longer be assessed pursuant to Act 312, the trial court determined that once
it adopted the MFP on July 15, 2022, Bailey was no longer incurring costs
attributable to producing that portion of the evidence that directly related to
the establishment of environmental damage. Although Bailey' s evidence
presented at the hearing regarding the MFP was not adopted as a portion of
the MFP, the trial court found that costs associated with such were attributable
to producing evidence related to establishment of environmental damage.
5. The trial court determined that fees and costs incurred with
subsequent purchaser doctrine" issues did not deal with " establishment of
5) The time limitations imposed by the client or by the circumstances;
6) The nature and length of the professional relationship with the client;
7) The experience, reputation, and ability of the lawyer or lawyers performing the services; and
8) Whether the fee is fixed or contingent.
11 In its original June 2, 2023 judgment, the trial court reduced the award for costs in the amount of $ 1, 880. Following Chevron and SNG' s motion for amendment of the judgment or, alternatively, limited motion for new trial, the trial court reduced the award by the correct amount. N environmental damage," and reduced the attorneys' fees and costs by
removing those associated with " subsequent purchaser doctrine" issues.
Assignments of Error
1. Burden of Proof
In their first assignment of error, Chevron and SNG contend the trial court
erred by failing to hold Bailey to his burden of proving the fees and costs that fall
within the scope of Act 312, instead placing the burden on them to prove what fees
and costs were not recoverable.
As noted above, Bailey produced testimony and supporting documentation
regarding the work his attorneys performed to produce the portion of the evidence
Bailey contends directly related to the establishment of environmental damage. In
opposition, Chevron and SNG provided what the trial court characterized at the
hearing as argument (how the billing entries should be separated).
The trial court indicated in its July 11, 2023 judgment that it considered the
testimony of Mr. Jones and Ms. Schilling and the evidence presented in issuing its
judgment. We find that Bailey submitted evidence to meet his burden of proof.
This assignment of error has no merit.
2. Scope of Award.
In their second assignment of error, Chevron and SNG contend the trial court
erred by awarding fees and costs beyond the limited scope of La. R.S. 30: 29( E)( 1).
Specifically, Chevron and SNG contend that Bailey cannot recover fees or costs
related to his pursuit of claims against other defendants, or related to his claim for
private damages." Chevron and SNG argue that the trial court engaged in no
meaningful analysis to determine what portion of Bailey' s fees and costs were
recoverable and instead, without articulating the basis for its calculation, awarded
roughly 91% of the total fees and costs Bailey incurred through July 15, 2022, when
the MFP was adopted.
16 Claims Against Other Defendants
Chevron and SNG contend that despite Bailey' s concession that at least 10%
ofthe fees and costs incurred through July 15, 2022, were related to other defendants,
the trial court could not have applied the full 10% reduction because the difference
between the trial court' award and the total in Bailey' s revised fee application is less
than 10%. ( Compare $ 3, 185, 747.28, the total contained in Bailey' s revised fee
application, with $ 2, 898, 382. 19, amount of award, which is approximately 91% of
that total.)
In its reasons for judgment, the trial court indicated it reduced Bailey' s request
by removing erroneous billing entries, and fees and costs incurred in pursuing claims
against other defendants and " subsequent purchaser doctrine" issues. The trial court
further indicated it reduced the hourly rates of attorneys Jones and Boudreaux.
While the trial court did not assign a dollar amount to the reduction, it is evident that
the trial court reviewed the evidence presented, and reduced the amount requested
by Bailey by approximately 10%. Upon our review of the evidence provided, we
cannot conclude that the trial court failed to exclude the work it determined was
performed in connection with other defendants.
Private Damage Claims
Chevron and SNG next argue that, pursuant to Act 312, the award here must
be limited to the fees and costs attributable to producing the evidence that resulted
in Chevron' s and SNG' s limited admissions and Bailey' s participation at the LDNR
hearing. They contend that Act 312 does not allow recovery of any fees and costs
incurred after LDNR files its plan with the trial court and that the costs related to
Bailey' s attempt at the MFP hearing before the trial court to prove the ICON plan
was more feasible than LDNR' s plan are not recoverable because that attempt failed.
Bailey argues on appeal that while private damage claims must be segregated
from those that are directly related to the establishment of environmental damage
17 under La. R.S. 30: 29( E), how the trial court engages in that segregation is a fact issue
subject only to manifest error/abuse of discretion review. Bailey argues that the trial
court' s method for making this segregation — a " line of demarcation" recognizing
when the Act 312 part of the proceedings that had been intertwined with the " private
damages" claims had come to at least a momentary conclusion —cannot be an abuse
of this discretion where it is supported by testimony in the record and is cohesive
with similar approaches to the substantive overlap of these claims in Sweet Lake and
Hero Lands.
As noted above, the trial court rejected Chevron and SNG' s argument that all
work performed by Bailey' s attorneys after LDNR filed its plan with the trial court
was in pursuit of private damage claims. Rather, the trial court reasoned that, based
upon the language of La. R.S. 30: 29{ E), Bailey was allowed to recover fees and costs
incurred to prepare for the MFP hearing before the trial court, including the costs
associated with presenting the ICON plan, even though the trial court did not adopt
any of that plan.
As the trial court recognized at the hearing on Bailey' s application for fees
and costs, this case is distinguishable from Sweet Lake and Hero Lands because in
neither of those cases had the MFP been adopted " ahead of time." In Sweet Lake,
the Third Circuit allowed fees and costs through the date of the trial court' s judgment
on the plaintiff' s motion to set fees and costs. The Third Circuit found that La. R.S.
30: 29(E) anticipates a " judgment" as well as either an admission of responsibility or
a finding of responsibility by the court. Sweet Lake, 354 So. 3d at 747. However,
the Third Circuit did not cut off the attorneys' fees and costs at the time of the 2015
trial at which the jury found BP responsible for environmental damage on the
property. Rather, the Third Circuit found that the record in that case reflected that
Un. proceedings were ongoing in the LDNR and the trial court had not yet approved an
MFP. 12 7d. at 748.
In Hero Lands, the Fourth Circuit concluded that the language of La. R.S.
30: 29( E) allows for recovery of costs encompassing all of the work involved in the
LDNR proceedings. Hero Lands, 382 So. 3d at 283. In Hero Lands, LDNR filed
its MFP on April 7, 2021, and trial began on April 26, 2021 on the plaintiff' s claims
for private damages on the three tracts of land to which Chevron admitted liability
for environmental damage, and the claims for remediation damages and private
damages on the fourth tract of land, which trial resulted in a verdict in favor of
Chevron. In considering the record in that case, specifically with an eye toward
determining the costs and fees attributable to the work performed by Hero in
producing that portion of the evidence that directly relates to the establishment of
environmental damage" in both the trial court and the LDNR proceedings, the Fourth
Circuit concluded that the fees and costs incurred by Hero from April 26, 2021, the
date that trial began, through May 31, 2021, the last date included in the submitted
billing records, must be excluded from the total award. Id. at 284.
While we agree with the Third Circuit in Sweet Lake, 354 So. 3d at 747, that
La. R.S. 30: 29( E) anticipates a " judgment" as well as either an admission of
responsibility or a finding of responsibility by the court, we note that La. R.S.
30: 29( E)( 1) only allows recovery of the costs of producing that portion of the
evidence directly relating to the establishment of environmental damage upon
which the judgment is based. As noted above, the trial court indicated it did not
adopt any of the plan submitted by Bailey at the hearing that resulted in the MFP.
12 Unlike in the present case, in Sweet Lake Land & Oil Company, LLC v. Oleum Operating Company, L. C., 2017-464 ( La. App. 3 Cir. 10/ 18/ 17), 229 So. 3d 993, 1002, the trial court had refused to adopt the MFP proposed by LDNR, which did not include a plan for groundwater or flowline remediation, but, rather, consisted of further testing by BP, finding the plan was incomplete. The Third Circuit found no error in the trial court' s failure to approve the plan. See also Louisiana Wetlands, 380 So. 3d at 43 n. 7.
19 Thus, Bailey did not produce any evidence at the July 14- 15, 2022 hearing upon
which the judgment was based. Rather, at the time LDNR filed its MFP in the trial
court on September 24, 2021, the evidence relating to the establishment of
environmental damage upon which the judgment was based had been produced.
Thus, we find the trial court erred in awarding fees and costs from September 24,
2021 through July 15, 2022. We find the posture of this case to be more similar to
that presented in Hero Lands, and find the date of September 24, 2021 to be
consistent with the duration of the award in that case. See Hero Lands, 382 So. 3d
at 283.
3. Hourly Rates.
Finally, in their third assignment of error, Chevron and SNG contend the trial
court abused its discretion by awarding fees at hourly rates far above the prevailing
market rates in the area, despite Bailey offering no evidence to prove those rates
were reasonable.
In reviewing a trial court' s determination of a reasonable hourly rate, the
Louisiana Supreme Court stated as follows:
A reasonable hourly rate is to be determined " according to the prevailing market rates in the relevant community" for attorneys of similar experience in similar cases. Blum v. Stenson, 465 U.S. 886, 895, 104 S. Ct. 1541, 1547, 79 L.Ed.2d 891 ( 1984) .... " To inform and assist the court in the exercise of its discretion, the burden is on the fee applicant to produce satisfactory evidence— in addition to the
attorney' s own affidavits— that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation." Blum, 465 U.S. at 895 n. 11, 104 S. Ct. 1541. A rate determined in this way is
normally deemed to be reasonable, and is considered to be " the prevailing market rate." Id. To be sure, an award of attorney fees should be high enough to " facilitate plaintiffs' access to the courts to vindicate their rights by providing compensation sufficient to attract competent counsel." McClain v. Lufkin Indus., Inc., 649 F. 3d 374, 381 5th Cir.201 1). We reiterate that, in determining the amount of reasonable attorney fees to award under federal fee shifting statutes, the district court is afforded considerable discretion. Hensley, 461 U.S. at 437, 103 S. Ct. at 1941.
20 Covington v. McNeese State University, 2012- 2182 ( La. 5/ 7/ 13), 118 So. 3d 343,
350.
Upon review of the record, we find the trial court failed to properly consider
whether the hourly rates requested by Bailey' s attorneys were in line with those
prevailing in the community for similar services by lawyers of reasonably
comparable skill, experience and reputation. The only evidence presented of market
rates in St. Mary Parish was the testimony of Ms. Schilling that attorneys in her firm
charged $ 500. 00-$ 525. 00 per hour for transactional work and the billing records of
MT. Fuhrer showing hourly rates of $ 150. 00-$ 300. 00. Additional evidence was
presented regarding the hourly rates awarded in Hero Lands, which was heard in the
25th Judicial District Court in Plaquemines Parish, a community similar to St. Mary
Parish. The record contains no evidence that hourly rates of $700. 00 are in line with
those prevailing in south Louisiana for similar services by lawyers of reasonably
comparable skill, experience and reputation. Thus, we find the trial court abused its
discretion in awarding attorneys Jones and Boudreaux $ 700. 00 per hour.
Based upon the evidence in the record, we find that the maximum reasonable
hourly rate for this case is $ 525. 00. We therefore reduce the hourly rate of attorneys
Jones and Boudreaux to $ 525. 00. We further find the trial court erred in failing to
consider the rates of those attorneys with hourly rates over $400.00. However, there
is insufficient evidence in the record for us to set reasonable hourly rates for these attorneys. We therefore remand this matter to the trial court for it to set reasonable
hourly rates for those attorneys upon consideration of the relevant market, namely
the 16th Judicial District Court in St. Mary Parish, and/ or south Louisiana.
In addition, because we are unable to determine the applicable hourly rates for
Bailey' s attorneys, we are unable to reduce the award in accordance with our finding
that the fees and costs incurred by Bailey from September 24, 2021, the date LDNR
21 filed its MFP, through July 15, 2022, the date the trial court adopted LDNR' s MFP,
must be excluded from the total award.
CONCLUSION
For the foregoing reasons, we reverse the trial court' s July 11, 2023 judgment
to the extent it awarded Bailey' s attorneys hourly rates in excess of those in line with
prevailing rates in St. Mary Parish, and/ or south Louisiana, for similar services by
lawyers of reasonably comparable skill, experience and reputation; and awarded fees
and costs incurred after September 24, 2021. We remand this matter to the trial court
to: ( 1) set hourly rates for those attorneys with requested hourly rates over $ 400. 00
that are in line with those prevailing in St. Mary Parish, and/or south Louisiana, for
similar services by lawyers of reasonably comparable skill, experience and
reputation; and ( 2) thereafter calculate the amount of attorneys' fees, based on those
rates, and the rate of $525. 00 per hour for attorneys Gladstone Jones and Bernard
Boudreaux, through September 24, 2021; and ( 3) reduce the award of costs to
remove those incurred after September 24, 2021.
REVERSED AND REMANDED WITH INSTRUCTIONS.
22 STATE OF LOUISIANA
ENERGEN RESOURCES CORPORATION, CHEVRON USA, INC., SOUTHERN NATURAL GAS COMPANY, LLC, EP ENERGY E& P COMPANY, LP,, BRAMMER ENGINEERING, INC., AND BP AMERICA PRODUCTION COMPANY
STROMBERG, J., concurring in part. I respectfully concur as to that part of the
majority' s opinion reversing the trial court' s award of attorneys' fees based on
hourly rates in excess of the prevailing rates in St. Mary Parish and/or south
Louisiana for similar services by lawyers of reasonably comparable skill,
experience, and reputation. Based on the evidence presented in this case, I concur
with the majority' s reversal of the attorneys' fee awards. However, under different
circumstances, a higher award of attorneys' fees would not be precluded. In
handling specialized oilfield legacy cases, for effective representation in such
complex cases, plaintiffs may seek attorneys with expertise and specific experience
who may not be available in their geographic area.