Johnson v. Chesapeake Louisiana, L.P. ( 2023 )

Case: 22-30302 Document: 00516979536 Page: 1 Date Filed: 11/27/2023
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
_____________ FILED
November 27, 2023
No. 22-30302 Lyle W. Cayce
_____________ Clerk
Allen Johnson; Linda Johnson; Donald A. Crosslin, Jr.;
Mary Jo Gragg; Rodney M. Hudson; Clifton Layman;
Alfred R. Meshell; Sherman R. Meshell; David E.
Oliver; Tracy Oliver; Laura S. Pendleton; Andrew L.
Piccolo; Karla S. Piccolo; Randall S. Rodgers; Freddie
P. Spohrer; Tim G. Taylor; Charles R. Waldon; Rexford
Galen White; James Shope; Donna Shope; Charlotte
McCune; Jerry McCune,
Plaintiffs—Appellants,
versus
Chesapeake Louisiana, L.P.; Chesapeake Operating,
L.L.C.,
Defendants—Appellees.
______________________________
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 5:16-CV-1543
______________________________
Before Dennis, Elrod, and Ho, Circuit Judges.
Jennifer Walker Elrod, Circuit Judge:
This case concerns the interplay between Louisiana’s relatively new
conservation laws and its deeply rooted negotiorum gestio doctrine. Because
Case: 22-30302 Document: 00516979536 Page: 2 Date Filed: 11/27/2023
No. 22-30302
we cannot make a reliable Erie guess as to the applicability of Louisiana’s
negotiorum gestio doctrine, we CERTIFY a question to the Louisiana
Supreme Court. 1
I
Louisiana oil and gas law authorizes the state Commissioner of
Conservation to combine separate tracts of land and appoint a unit operator
to extract the minerals. La. Stat. Ann. § 30:9(B) (2022); id. § 30:10(A)(1)
(2022). Where a tract is not subject to a lease, the unit operator can sell the
landowner’s share of production but must pay the landowner a pro rata
share of the proceeds within one hundred eighty days of the sale. Id. §
30:10(A)(3) (2022).
Linda and James Johnson own unleased mineral interests in
Louisiana that are part of a forced drilling unit. Chesapeake is the operator.
The Johnsons allege on behalf of themselves and a named class that
Chesapeake has been improperly deducting post-production costs from
their pro rata share of production and that this practice is improper per se. 2
The district court initially granted Plaintiffs’ cross-motion for partial
summary judgment. Chesapeake then filed a Motion for Reconsideration.
That motion for reconsideration was granted, holding that the quasi-
contractual doctrine of negotiorum gestio provides a mechanism for
Chesapeake to properly deduct post-production costs. 3
_____________________
1
We previously certified this same issue in Self v. BPX Operating Co., 80 F.4th
632 (5th Cir. 2023). This opinion reflects the same reasoning as in Self. We certify this
case, so that the parties might have the opportunity to present their case to the Louisiana
Supreme Court.
2
This case was consolidated for oral argument with Self v. BPX, No. 22-30243,
because both cases raise the same statutory interpretation issue.
3
Only the first count of this lawsuit, seeking monetary damages, declaratory
2
Case: 22-30302 Document: 00516979536 Page: 3 Date Filed: 11/27/2023
No. 22-30302
Plaintiffs filed this action as unleased mineral owners whose interests
are situated within forced drilling units formed by the Louisiana Office of
Conservation and operated by Chesapeake. Plaintiffs have not made
separate arrangements to dispose of their shares of production, so the unit
operator can sell the shares but must pay the owners a pro rata share of the
proceeds within one hundred eighty days of the sale. La. Stat. Ann. §
30:10(A)(3) (2022). Chesapeake has been paying the pro rata share of
production but has been withholding from that amount the pro rata post-
production costs for transporting, gathering, marketing, treating, and
compressing produced minerals, as well as amounts related to minimum
volume commitments or capacity reservation fees. Plaintiffs alleged, that
the practice of withholding the post-production costs from their pro rata
share of production is improper per se. See Johnson v. Chesapeake La., L.P.,
No. CV-16-1543, 2019 WL 1301985 (W.D. La. Mar. 21, 2019), vacated on
reconsideration, 2022 WL 989341.
Chesapeake timely removed this action to the district court, based on
diversity jurisdiction. 28 U.S.C. §§ 1332(a). Chesapeake sought dismissal
of the Plaintiffs’ primary claim that Chesapeake can never deduct post-
production costs incurred in the sale of unleased mineral owners’ pro rata
shares of production. The district court granted Chesapeake’s motion for
reconsideration and held that the Louisiana Civil Code doctrine of
negotiorum gestio provides a mechanism for unit operators to be reimbursed
for post-production costs not otherwise covered by specific statutes. La.
Civ. Code Ann. art. 2292 (2023). The district court certified its ruling for
interlocutory appeal pursuant to 28 U.S.C. § 1292(b). This court granted
_____________________
relief, and permanent injunctive relief to prohibit Chesapeake from deducting any post-
production costs from plaintiffs’ pro rata share of production proceeds as per se illegal, is
now at issue.
3
Case: 22-30302 Document: 00516979536 Page: 4 Date Filed: 11/27/2023
No. 22-30302
the Plaintiffs’ motion for leave to appeal from an interlocutory order. This
court took up the appeal.
II
We review a district court’s grant of summary judgment de novo.
Green v. Life Ins. Co. of N. Am., 754 F.3d 324, 329 (5th Cir. 2014). Summary
judgment is appropriate only when there is no genuine dispute of any
material fact and the movant is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(a). “The sole question is whether a ‘reasonable jury drawing
all inferences in favor of the nonmoving party could arrive at a verdict in
that party’s favor.’” Guzman v. Allstate Assurance Co., 18 F.4th 157, 160
(5th Cir. 2021) (quoting Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257,
1263 (5th Cir. 1991)).
On cross-motions for summary judgment, we review each party’s
motion independently. All evidence and inferences are viewed in the light
most favorable to the nonmovant. Amerisure Inss. Co. v. Navigators Ins. Co.,
611 F.3d 299, 304 (5th Cir. 2010). The district court’s denial of a motion
for reconsideration is reviewed for an abuse of discretion. See Austin v.
Kroger Tex., L.P., 864 F.3d 326, 329 (5th Cir. 2017). “The trial court is free
to consider and reverse its decision for any reason it deems sufficient.” Id.
at 336.
III
Louisiana is one of many states with forced pooling laws designed to
prevent the waste of mineral resources. These laws provide mechanisms
for sharing both the risks and benefits of production in the absence of a
contract. TDX Energy, LLC v. Chesapeake Operating, Inc., 857 F.3d 253,
257 (5th Cir. 2017). Accordingly, the forced pooling law allows the recovery
of certain costs:
4
Case: 22-30302 Document: 00516979536 Page: 5 Date Filed: 11/27/2023
No. 22-30302
In the event a drilling unit is formed by a pooling order by the
commissioner and absent any agreement or contract between
owners as provided in this Section, then the cost of
development and operation of the pooled unit chargeable to
the owners therein shall be determined and recovered as
provided herein.
La. Stat. Ann. § 30:10(A)(2) (2022).
Louisiana law and the oil and gas industry in general recognize a
distinction between production and post-production costs. Production
costs end “at the wellhead when the minerals are reduced to possession.
Post-production costs . . . include those related to taxes, transportation,
dehydration, treating, compressing, and gathering.” J. Fleet Oil & Gas
Corp. v. Chesapeake La., L.P., No. CV-15-2461, 2018 WL 1463529, at *6
(W.D. La. Mar. 22, 2018) (citation omitted). The provision addressing
recovery of costs mentions only certain types of production costs: “drilling,
testing, completing, equipping, and operating expenses,” as well as a charge
for supervision. See La. Stat. Ann. § 30:10(A)(2)(b)(i) (2016). It is silent as
to post-production costs. Most relevant here is La. Stat. Ann. §
30:10(A)(3), which addresses payment of production proceeds:
If there is included in any unit created by the commissioner of
conservation one or more unleased interests for which the
party or parties entitled to market production therefrom have
not made arrangements to separately dispose of the share of
such production attributable to such tract, and the unit
operator proceeds with the sale of unit production, then the
unit operator shall pay to such party or parties such tract’s
pro rata share of the proceeds of the sale of production within
one hundred eighty days of such sale.
La. Stat. Ann. § 30:10(A)(3) (2022).
The Plaintiffs contend that “proceeds” of the sale here mean “gross
proceeds.” Chesapeake countered initially that “proceeds” is ambiguous
5
Case: 22-30302 Document: 00516979536 Page: 6 Date Filed: 11/27/2023
No. 22-30302
and should be interpreted to mean “net proceeds,” after deduction of pro
rata post-production costs. Chesapeake later contended, however, that
when section (A)(3) is properly harmonized with Louisiana’s civil code
regime, there is a legal mechanism to support the deductibility of post-
production costs: the quasi-contractual regime of negotiorum gestio.
The Louisiana Supreme Court has held, and the parties agree, that
the relationship between them is quasi-contractual. Wells v. Zadeck, 89 So.
3d 1145, 1149 (La. 2012) (“A quasi-contractual relationship is created
between the unit operator and the unleased mineral interest owner with
whom the operator has not entered into contract.”). The parties disagree,
though, as to what type of quasi-contractual relationship they have. The
Louisiana Code provides two non-exclusive examples that give rise to quasi-
contractual obligations in the state: negotiorium gestio and enrichment
without cause. La. Civ. Code Ann. art. 2292, 2298 (2023); Louisiana is the
only state that employs negotiorium gestio, and it has “deep roots” in the
state. Under this doctrine, a proposed “gestor” must act 1) voluntarily and
without authority, 2) to protect the interests of another, and 3) in the
reasonable belief that the owner would approve of the action if made aware
of the circumstances. La. Civ. Code Ann. art. 2292 (2023). If negotiorum
gestio applies, Louisiana Civil Code Article 2297 requires “[t]he owner
whose affair has been managed [to] . . . fulfill the obligations that the
manager has undertaken as a prudent administrator and to reimburse the
manager for all necessary and useful expenses.” La. Civ. Code Ann. art.
2297 (2023).
Plaintiffs assert that Chesapeake cannot be a gestor because it did not
act “voluntarily and without authority”; it acted pursuant to a statutory
duty. Plaintiffs also contend that Chesapeake did not act exclusively to
protect the unleased mineral owners’ interests, but rather to protect its own
interests. If gestio principles are applicable, Plaintiffs assert, a factfinder
6
Case: 22-30302 Document: 00516979536 Page: 7 Date Filed: 11/27/2023
No. 22-30302
would need to determine that Chesapeake always acted for the plaintiffs’
benefit in marketing unit production before Chesapeake would be entitled
to reimbursement under Article 2297.
Chesapeake contends that Louisiana case law recognizes it as a gestor
in all circumstances when dealing with unleased mineral owners, but the
parties agree that no controlling case deals with the specific facts at hand.
In Taylor v. Smith, the Louisiana Third Circuit Court of Appeal held that a
cause of action under section 30:10(A)(3) of the Louisiana Revised Statutes
should be construed together with the Civil Code’s negotiorum gestio
doctrine. 619 So. 2d 881, 887 (La. App. 1993) (“The statute gives the
owner a cause of action in quasi-contract under LSA-C.C. art. 2292, et.
seq., insofar as the operator, in selling the owner’s proportionate share of
the oil produced, is acting as a negotiorum gestor or manager of the owner’s
business in selling the oil produced.”). The Louisiana Supreme Court cited
Taylor in Wells, where it held that the relationship between an unleased
mineral interest owner and operator is quasi-contractual. Wells, 89 So. 3d at
1149 (citing Taylor, 619 So. 2d 881). Yet that case involved the proper
prescriptive period for an action brought under section (A)(3) and did not
directly reference the part of Taylor discussing gestores. Thus, no
controlling Louisiana case resolves the parties’ issue.
This unsettled state of the law raises the question whether the
appropriate course is to certify the issue for resolution by the state court of
last resort. The rules of the Louisiana Supreme Court allow for certification
from the federal courts of appeals of dispositive questions of Louisiana law.
La. Sup. Ct. R. 12, §§ 1–2 (2023). The issue presented here satisfies that
condition.
The issue presented also satisfies the three factors used by this court
in deciding whether to certify:
7
Case: 22-30302 Document: 00516979536 Page: 8 Date Filed: 11/27/2023
No. 22-30302
1) [T]he closeness of the question and the existence of
sufficient sources of state law;
2) [T]he degree to which considerations of comity are rele-
vant in light of the particular issue and case to be decided;
and
3) [P]ractical limitations on the certification process: signifi-
cant delay and possible inability to frame the issue so as to
produce a helpful response on the part of the state court.
In re Gabriel Inv. Grp., 24 F.4th 503, 507 (5th Cir. 2022); see also Austin v.
Kroger Tex. LP, 746 F.3d 191, 196 (5th Cir. 2014). As explained above,
Louisiana law is unsettled on this issue. “[A]ny Erie guess would involve
more divining than discerning.” McMillan v. Amazon.com, Inc., 983 F.3d
194, 202 (5th Cir. 2020). The Louisiana Third Circuit Court of Appeal and
the district court in this case both concluded that the negotiorum gestio
doctrine applies. But the scholarly dissent provides cogent reasons to think
it does not. And the district court concluded that the issue was sufficiently
close to certify its ruling for interlocutory appeal.
Comity interests also favor certification. The interplay between
Louisiana’s oil and gas law and its unique negotiorum gestio doctrine presents
a complex and novel issue “peculiarly calling for the exercise of judgment
by the [Louisiana] courts.” McKesson v. Doe, 141 S. Ct. 48, 51 (2020).
“Speculation by a federal court” about how to square Louisiana’s new
conservation laws with its ancient civilian doctrines is inappropriate “when
. . . the state courts stand willing to address questions of state law on
certification.” Arizonans for Official Eng. v. Arizona, 520 U.S. 43, 79 (1997)
(internal quotation marks and alteration omitted). Finally, we are unaware
of any practical impediments to certification.
8
Case: 22-30302 Document: 00516979536 Page: 9 Date Filed: 11/27/2023
No. 22-30302
* * *
Accordingly, we CERTIFY the following determinative question of
law to the Louisiana Supreme Court:
1) Does La. Civ. Code art. 2292 apply to unit operators selling
production in accordance with La. R.S. 30:10(A)(3)?
We disclaim any intention or desire that the Louisiana Supreme
Court confine its reply to the precise form or scope of the question certified.
We will resolve this case in accordance with any opinion provided on this
question by the Court. The Clerk of this Court is directed to transmit this
certification and request to the Louisiana Supreme Court in conformity
with the usual practice.
QUESTION CERTIFIED.
9
Case: 22-30302 Document: 00516979536 Page: 10 Date Filed: 11/27/2023
No. 22-30302
James L. Dennis, Circuit Judge, dissenting:
This case is straightforward. La. R.S. 30:10(A)(3), part of
Louisiana’s oil and gas conservation law, allows a unit operator to
unilaterally sell production under specific conditions and imposes a specific
duty of repayment to the owner. Negotiorum gestio, by contrast, is a
traditional civilian doctrine, codified at La. Civ. Code art. 2292, that
allows one person to manage the property of another if certain
circumstances are met. Not only are La. R.S. 30:10(A)(3) and article 2292
distinct legal regimes with different requirements and different duties, they
are necessarily incompatible. A unit operator who sells an owner’s
production under the statutory authority of La. R.S. 30:10(A)(3) cannot
be a gestor as defined in article 2292, because a gestor, as the codal article
provides, is one who acts “without authority.” In certifying the question of
whether a unit operator acting under the authority of § 30:10(A)(3) may
simultaneously act as a gestor under article 2292, the majority disregards not
only the plain text of article 2292 but also basic rules of statutory
interpretation. Because the answer is clear that negotiorum gestio cannot
apply, I find certification to the Louisiana Supreme Court inappropriate. I
respectfully dissent. 1
I.
Title 30 of the Louisiana Revised Statutes includes a comprehensive
regime for the conservation of the state’s oil and gas during extraction. The
Commissioner of Conservation, for the prevention of waste and to avoid the
drilling of unnecessary wells, is vested with authority to establish a drilling
unit for each pool of underground oil or gas. B.A. Kelly Land Co. v. Aethon
_____________________
1
This dissent reflects the same reasons I dissented from certification of the
identical issue in Self v. BPX Operating Co., 80 F.4th 632, 637-41 (5th Cir. 2023) (Dennis,
J., dissenting).
10
Case: 22-30302 Document: 00516979536 Page: 11 Date Filed: 11/27/2023
No. 22-30302
Energy Operating, L.L.C., 25 F.4th 369, 374 (5th Cir. 2022) (citing La.
R.S. 30:9(B)). The Commissioner “has the plenary authority to declare
drilling and production units, to force pool neighboring tracts and leases
into a single unit, to designate a single well and operator for the unit, and to
allocate production from the unit well to each participating tract and
lease—all for the purpose of conserving resources, avoiding waste, and
eliminating unnecessary wells.” Peironnet v. Matador Res. Co., 2012-2292, p.
42 (La. 6/28/13), 144 So. 3d 791, 822 (citing La. R.S. 30:4, 9, 10).
The designated unit operator has several duties. The operator is
charged with drilling within the unit and paying a proportionate share of
production to the owners of mineral interests in the unit. B.A. Kelly, 25
F.4th at 275 (citing T D X Energy, L.L.C. v. Chesapeake Operating, Inc., 857
F.3d 253, 257 (5th Cir. 2017)). However, if an unleased owner is included in
the unit, as relevant here, the law authorizes the unit operator to instead sell
the share of production owed to the unleased owner and provide the owner
the proceeds within 180 days. La. R.S. 30:10(A)(3). Louisiana law also
imposes a duty on operators to report information to unleased owners if
requested. B.A. Kelly, 25 F.4th at 375-76 (citing La. R.S. 30:103.1).
“In both voluntary and compulsory unitization, well cost disputes
arise. When there is an operating agreement [i.e. a contract or mineral lease]
among the parties, such disputes are generally addressed in the agreement.”
Id. at 375 (alteration in original) (quoting 1 Bruce M. Kramer &
Patrick H. Martin, The Law of Pooling and Unitization
§ 14.04 (3d ed. 2016)). But, in a “forced pooling” regime, the statute itself
“‘has to address a number of issues that contracts usually decide, such as
how to allocate costs and risk among those holding interests in the oil and
gas,’ and how the operator should provide an accounting of well production
and costs to owners of oil and gas interests.” Id. (quoting T D X Energy,
L.L.C., 857 F.3d at 256). When the operator proposes to drill a well in a
11
Case: 22-30302 Document: 00516979536 Page: 12 Date Filed: 11/27/2023
No. 22-30302
unit, it may give notice to owners of oil and gas interests within the unit,
allowing owners to elect to participate in the risk by contributing to the
drilling costs up front. Id. (citing T D X Energy, L.L.C., 857 F.3d at 258). If
an owner does not participate and the well produces, the operator may
recover out of production the nonparticipating interest owner’s share of
“expenditures incurred in drilling, testing, completing, equipping, and
operating the well,” and, in certain cases and except in the case of an
unleased mineral owner, a “risk charge” of two hundred percent of the
owner’s drilling expenditure share. La. R.S. 30:10(A)(2)(b)(i), (e)(i); B.A.
Kelly, 25 F.4th at 275. However, if an operator fails to timely comply with
an unleased mineral owner’s request for reporting and also fails to cure its
default within thirty days of receiving notice of such failure from the
unleased owner, then the operator cannot collect from the owner “the costs
of the drilling operations of the well.” La. R.S. 30:103.2; B.A. Kelly, 25
F.4th at 276.
The statute does not specifically address whether a unit operator
may deduct post-production costs—those costs after the minerals are
reduced to possession, including costs related to taxes, transportation,
dehydration, treating, compressing, and gathering. See J. Fleet Oil & Gas
Corp. v. Chesapeake La., L.P., No. CV-15-2461, 2018 WL 1463529, at *6
(W.D. La. Mar. 22, 2018). Unit operators like the Defendant in this case
have raised several arguments for why they ought to be allowed to deduct
post-production costs in the absence of a lease providing as much, but the
only argument before us is the applicability of negotiorum gestio to the sale of
an unleased mineral owner’s share of production under La. R.S.
30:10(A)(3).
12
Case: 22-30302 Document: 00516979536 Page: 13 Date Filed: 11/27/2023
No. 22-30302
II.
As noted, part of Louisiana’s oil and gas conservation law, La. R.S.
30:10(A)(3), authorizes the unit operator to unilaterally sell the share of
production owed to an unleased mineral owner. Section 30:10(A)(3) applies
when there is 1) a unit created by the Commissioner of Conservation 2)
which includes one or more unleased interests 3) for which the party
entitled to market production therefrom has not made arrangements to
separately sell or otherwise dispose of the share of such production
attributable to such tract, and 4) the unit operator sells or otherwise
disposes of such unit production. Then, the unit operator must pay to such
party its pro rata share of the proceeds within 180 days. Id. This relationship
is quasi-contractual. Wells v. Zadeck, 2011-1232, p. 6 (La. 3/30/12), 89 So.
3d 1145, 1149. The purpose of this relationship is to “facilitate[] the sale of
minerals.” See King v. Strohe, 95-656, p. 17 (La. App. 3 Cir. 5/8/96), 673 So.
2d 1329, 1338.
On the other hand, negotiorum gestio—or management of affairs—“is
a typically civilian institution that derives from the Romanist tradition and is
found in all civil codes.” La. Civ. Code art. 2292 cmt. (a). Negotiorum
gestio applies when a person, the manager or gestor, acts 1) without
authority, 2) to protect the interests of another, and 3) in the reasonable
belief that the owner would approve of the action if made aware of the
circumstances. La. Civ. Code art. 2292. The gestor must have
“undertake[n] the management with the ‘benefit’ of the owner in mind”
and not have “act[ed] in [its] own interest or contrary to the actual or
presumed intention of the owner.” Id. cmts. (c)-(d); see also Johnco, Inc. v.
Jameson Ints., 98-1925, pp. 5-6 (La. App. 3 Cir. 6/23/99), 741 So. 2d 867,
870; Kirkpatrick v. Young, 456 So. 2d 622, 624-25 (La. 1984). These
requirements generally “depend[] on facts.” Woodlief v. Moncure, 17 La.
Ann. 241, 242 (La. 1865); see also Bank of the S. v. Fort Lauderdale Tech.
13
Case: 22-30302 Document: 00516979536 Page: 14 Date Filed: 11/27/2023
No. 22-30302
Coll., Inc., 301 F. Supp. 260, 261 (E.D. La. 1969). Only if all these
requirements are met does a person qualify as a gestor such that “[t]he
owner whose affair has been managed is bound to fulfill the obligations that
the manager has undertaken as a prudent administrator and to reimburse
the manager for all necessary and useful expenses.” La. Civ. Code art.
2297. Negotiorum gestio is “rooted in altruism,” and its purpose is to
“encourage people to assist friends and neighbors in need.” See Cheryl L.
Martin, Louisiana State Law Institute Proposes Revision of Negotiorum Gestio
and Codification of Unjust Enrichment, 69 Tul. L. Rev. 181, 186-87, 193
(1994).
“The general rule of statutory construction is that a specific statute
controls over a broader, more general statute.” Burge v. Louisiana, 2010-
2229, p. 5 (La. 2/11/11), 54 So. 3d 1110, 1113. This rule has been especially
true regarding Louisiana’s oil and gas conservation law, modern statutes
intended to alter and override general legal principles that were inadequate
for mineral production and conservation.
The prime example is Nunez v. Wainoco Oil & Gas Co., 488 So. 2d
955 (La. 1986). In that case, a landowner within a drilling unit sued the unit
operator for trespass because a well bore crossed onto his property several
miles below the surface while drilling for oil. Id. at 956-58. The court held
that “private property law concepts, such as trespass, have been
superceded in part by Louisiana’s Conservation Law when a unit has been
created by order of the Commissioner.” Id. at 964. To begin, the court
recounted the developments in Louisiana’s oil and gas conservation law,
from the initial “rule of capture” that resulted in “haste, inefficient
operations, and immeasurable waste within the ground and above” to the
present method of forced pooling into drilling units, which “was found to
convert separate interests within the drilling unit into a common interest
with regard to the development of the unit and the drilling of the well.” Id.14
Case: 22-30302 Document: 00516979536 Page: 15 Date Filed: 11/27/2023
No. 22-30302
at 960-62. This change marked a “departure from the traditional notions of
private property,” and the court “conclude[d] that the established
principles of private ownership, already found inadequate in Louisiana to
deal with the problems of subsurface fugacious minerals, need not
necessarily be applied to other property concepts, like trespass, within a
unit.” Id. at 962-63 (quoting Mire v. Hawkins, 186 So. 2d 591, 596 (La.
1966)). Thus, the court “h[e]ld that the more recent legislative enactments
of Title 30 and Title 31 supercede in part La.Civ.Code Ann. art. 490’s
general concept of ownership of the subsurface by the surface owner of
land.” Id. at 964. Importantly, the court noted that this scheme not only
changed general property principles but also other “legal relationships
between landowners and lessees within the unit.” Id. at 963; see also Amoco
Prod. Co. v. Thompson, 516 So. 2d 376, 393 (La. App. 1 Cir. 1987) (holding
the oil and gas conservation law is “sui generis”); Teekell v. Chesapeake
Operating, Inc., No. 12-0044, 2012 WL 2049922, at *4 (W.D. La. June 6,
2012) (“The Nunez opinion makes it clear that unitization changes the
property rights and obligations of landowners.”); Peironnet, 2012-2292, at p.
42, 144 So. 3d at 822 (“When such units are created, the operations of the
designated operator constitute operations for all lessees participating in the
unit, and the orders of the Commissioner creating said units supersede,
supplement, replace and are incorporated in the provisions and obligations
of the leases subject thereto.”).
As in Nunez, here, the legislature has prescribed a specific quasi-
contractual relationship between unleased mineral owners and unit
operators under La. R.S. 30:10(A)(3) as part of the oil and gas
conservation law. This relationship is separate from negotiorum gestio under
La. Civ. Code art. 2292, as each has distinct and specific requirements
and duties. The mere fact that each relationship is quasi-contractual does
not make them the same, as a quasi-contractual obligation is simply one that
15
Case: 22-30302 Document: 00516979536 Page: 16 Date Filed: 11/27/2023
No. 22-30302
“arise[s] directly from the law, regardless of a declaration of will.” See La.
Civ. Code art. 1757 (emphasis added) (noting a nonexclusive list of quasi-
contractual obligations “in instances such as . . . the management of the
affairs of another . . . and other acts or facts”); see also Martin, supra, at 184
(noting the term “quasi-contract” does not appear anywhere in the Civil
Code but is “simply a shorthand method for distinguishing this particular
type of obligation from a contract”).
In addition to these two relationships being distinct, we cannot apply
them both to a unit operator without conflict. As stated, a gestor must act
“without authority.” La. Civ. Code art. 2292. In that way,
“[m]anagement of another’s affairs pursuant to a legal duty does not give
rise to an action under negotiorum gestio.” See Kilpatrick v. Kilpatrick,
27,241, p. 9 (La. App. 2 Cir. 8/23/95), 660 So. 2d 182, 187. During the 1995
revision of the Civil Code articles governing negotiorum gestio, the legislature
replaced the requirement that the gestor act “of his own accord” with the
requirement that the gestor act “without authority” to make clear that the
requirement is not merely voluntariness but “an absence of authority
altogether,” including authority granted by statute—appropriate for a
doctrine rooted in pure altruism. Martin, supra, at 189-90 (discussing
examples of statutory grants of authority that eliminate negotiorum gestio as a
theory of recovery after the revision). Here, however, the unit operator does
not act without authority. To the contrary, the unit operator is specifically
authorized to sell an unleased mineral owner’s share of production under
La. R.S. 30:10(A)(3). Cf. Martin, supra, at 189-90 (“[A] co-owner has
authority to manage that which is co-owned [under La. Civ. Code art.
802]. Therefore, the phrase ‘without authority’ clearly eliminates
negotiorum gestio as a basis for liability among co-owners.”). Following the
rules of statutory interpretation, we must “give meaning to every word in
the statute” and cannot “read out of the statute” the elements one must
16
Case: 22-30302 Document: 00516979536 Page: 17 Date Filed: 11/27/2023
No. 22-30302
prove to qualify as a gestor, including that one must act without authority.
See Bergeron v. Richardson, 2020-01409, p. 5 (La. 6/30/21), 320 So. 3d 1109,
1113. Because we cannot apply the two statutes together consistently, only
the specific one applicable to conservation applies. See Burge, 54 So. 3d at
1113; Nunez, 488 So. 2d at 962-63. 2
Taylor v. Smith, 619 So. 2d 881, 887-88 (La. App. 3d Cir. 1993),
relied on by the majority, did not hold otherwise. The only issue before the
court in Taylor was whether the liberative prescription period applicable to
actions in tort or the one applicable to actions in quasi-contract applied to
an action by an unleased mineral owner seeking to recover proceeds under
La. R.S. 30:10(A)(3). Id. at 885-88. Because the obligation of the unit
operator was “imposed ‘without any agreement’ but instead, ‘imposed by
the sole authority of the laws,’” the court found the “cause of action
against the unit operator sounds in quasi-contract and is subject to a
liberative prescription of ten (10) years.” Id. at 888. While the court
elsewhere stated, without analysis, that a unit operator “is acting as a
negotiorum gestor or manager of the owner’s business in selling the oil
produced,” that statement was dicta unnecessary to the court’s holding. To
the extent the court did hold negotiorum gestio applied, it did so before the
legislative amendment, discussed above, that clarified a gestor is only one
_____________________
2
I also note a gestor must act “to protect the interests of another . . . in the
reasonable belief that the owner would approve of the action if made aware of the
circumstances,” La. Civ. Code art. 2292, meaning the gestor must have “undertake[n]
the management with the ‘benefit’ of the owner in mind” and not have “act[ed] in [its]
own interest or contrary to the actual or presumed intention of the owner,” id. cmts. (c)-
(d); see also Johnco, 98-1925, at pp. 5-6, 741 So. 2d at 870; Kirkpatrick, 456 So. 2d at 624-
25. It is highly doubtful a unit operator like the Defendant did so when selling the
Plaintiffs’ share of production. However, that is a question of fact on which the
Defendant has the burden of proof. See Woodlief, 17 La. Ann. at 242; Bank of the S., 301 F.
Supp. at 261.
17
Case: 22-30302 Document: 00516979536 Page: 18 Date Filed: 11/27/2023
No. 22-30302
who acts “without authority,” including statutory authority. La. Civ.
Code art. 2292; Martin, supra, at 189-90. This amendment abrogated what
the majority mistakenly believes is the holding in Taylor, that negotiorum
gestio may apply to a unit operator acting under the authority of La. R.S.
30:10(A)(3).
***
Because the oil and gas conservation law provides a unique quasi-
contractual relationship between unleased mineral owners and unit
operators under La. R.S. 30:10(A)(3) and this relationship cannot be
applied consistently with negotiorum gestio under La. Civ. Code art.
2292, utilizing basic rules of statutory interpretation, we should apply only
the specific provision under § 30:10(A)(3). With the proper outcome in this
case clear, certification to the Louisiana Supreme Court is unwarranted.
I respectfully dissent.
A True Copy
Certified Nov 27, 2023
Clerk, U.S. Court of Appeals, Fifth Circuit
18