Texaco, Inc. v. Duhe

44 F. Supp. 2d 809, 1998 U.S. Dist. LEXIS 21758, 1998 WL 1035350
District Court, W.D. Louisiana·Decided December 10, 1998·No. Civ.A. 97-1523·Published·Cited by 1 cases

Opinion

RULING

LITTLE, Chief Judge.

Before this court is defendants’ John M. Duhe, Jr., Gladys Duhe Deutschle, Joseph Preston Duhe, Elias “Bo” Ackal, and Edna Aekal Brower (collectively “defendants”) Request for Permission to Appeal Pursuant to 28 U.S.C. § 1292. For the reasons elucidated below, this motion is DENIED.

I. BACKGROUND

Defendants in this action own royalty interests in hydrocarbon production from real property located in Louisiana. On 3 July 1997, defendants, together with Betty Chauvin Roden, a non-diverse party, issued a demand letter to Texaco Inc. and Texaco Exploration & Production Inc. (collectively “Texaco”) under Article 137 of the Louisiana Mineral Code seeking recovery for alleged underpayment of royalties. That same day, defendants and Roden filed suit in the Sixteenth Judicial District Court for the Parish of Iberia (“defendants’ state suit”). Defendants’ state suit sought a declaration of rights with regard to the mineral interests of four classes of juridical persons. Also on 3 July 1997, *811 after filing the state suit, defendants, excepting Roden, also filed a federal declaratory judgment action.

On 17 July 1997, before serving the federal complaint on Texaco, defendants filed an ex parte Motion for Abstention and Stay of the federal proceedings in light of the pending state action. The federal court granted the stay on 18 July 1997.

Alleging, among other things, that Ro-den was improperly joined to the state court proceedings, Texaco removed the state court case on 23 July 1997. On 27 October 1997, this court remanded that suit to the Sixteenth Judicial Court.

On 1 August 1997, Texaco responded to the defendant’s demand letter of 3 July 1997. Contemporaneously with the issuance of the response, Texaco instituted this federal declaratory judgment action seeking a “complete resolution” of the parties’ disputes, including declaratory judgment as to the following: the effectiveness of defendants’ individual notice under the Louisiana Mineral Code; whether Texaco’s response states a reasonable cause for non-payment; and whether Texaco performed all of its contractual, statutory and legal obligations to defendant's. Texaco further requests that, in the event it is determined that defendants are owed any sum as alleged underpayment of royalties or other amounts in this matter, the court render an accounting of the amount owed.

On 18 August 1997, defendants moved for abstention and a stay of this proceed--ing in favor of the state court action. This court denied that motion on 18 November 1997. Noting that the defendants’ state suit intentionally excluded any requests for monetary relief, this court determined that this declaratory proceeding allowed for complete resolution of the issues surrounding the payment of royalty' interests to defendants. This court also ascertained that Texaco had not engaged in forum shopping, nor would inequity or inconvenience result from proceeding with this suit.

On 8 July 1998, defendants’ filed a motion re-urging this court to abstain and stay these proceedings in favor of the state court proceedings. On 9 September 1998, this court denied that motion, finding that the posture of the ease had not changed sufficiently since 18 November 1997 such that abstention was now necessary. Though defendants had since joined their state suit with another class action suit that included, claims for monetary relief, the absence of a request for monetary relief was merely one factor in this court’s prior decision. The state and federal cases have consolidated discovery, the two cases were proceeding at an identical pace, and no inequity or inconvenience results from these parallel suits.

Defendants now seek permission to appeal, pursuant to 28 U.S.C. § 1292, this court’s decision not to abstain and stay these proceedings. In their request to appeal, defendants proffer three primary arguments. First, they urge that this court’s decision to proceed is erroneous because this action is narrower than the state action in the following respects: (1) it excludes non-diverse class representatives; (2) it cannot afford the defendants the remedy of lease cancellation; and (3) the state suit includes “unsettled issues of Louisiana Mineral law as to the efficacy of a statewide demand letter and mandatory joinder of all lease interest holders.” Def.’s Req. for Perm, to Appeal, ¶ 9. Defendants argue that a resolution in this suit will have res judicata effects on their state claim, and therefore will deny them their choice of a state court forum.

Second, defendants argue that issuing a declaratory judgment in this suit would violate the Anti-Injunction Act. Finally, they maintain that Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942), mandates abstention because the state forum may more appropriately apply intricate, complex state law. Defendants also assert that this court must abstain under the Fifth Circuit’s decision in Texas Employ *812 ers’ Ins. Ass’n v. Jackson, 862 F.2d 491 (5th Cir.1988) (en banc) [hereinafter Jackson II]. 1

Texaco responds that defendants have not met the standard for an interlocutory appeal, namely, that there was an order involving a controlling question of law, as to which there is substantial ground for difference of opinion, and that an immediate appeal may materially advance the ultimate termination of the litigation. Texaco argues that defendants cannot point to a controlling issue of law on which the decision not to abstain rests — rather the decision was a fact-based exercise of discretion. Moreover, Texaco proffers that defendants merely disagree with the court’s decision, which does not constitute a substantial ground for difference of opinion. And immediate appeal will only delay the proceedings.

II. ANALYSIS

A. Legal Standard for Interlocutory Appeal

The standard for certifying an interlocutory appeal is straightforward. Defendants must show that this court issued an order “involving a controlling issue of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b).

Defendants argue that this matter is narrower in scope than the pending state court case, that proceeding would violate the Anti-Injunction Act, an that Brillhart and Jackson II mandate abstention.

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Texaco, Inc. v. Duhe, 44 F. Supp. 2d 809, 1998 U.S. Dist. LEXIS 21758, 1998 WL 1035350 (W.D. La. 1998).

44 F. Supp. 2d 809 (Texaco, Inc. v. Duhe) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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