Global Marketing Solutions, L.L.C. v. Chevron U.S.A. Inc., Exxon Mobil Corporation, Key Production Company, Inc., Seal Energy Company, and Warren Operating Company

STATE OF LOUISIANA

I COURT OF APPEAL

FIRST CIRCUIT

NO. 2018 CA 1765

GLOBAL MARKETING SOLUTIONS, L.L.C.

VERSUS

CHEVRON U. S. A. INC., EXXON MOBIL CORPORATION,
KEY PRODUCTION COMPANY, INC., SEAL ENERGY COMPANY,
AND WARREN OPERATING COMPANY

Judgment Rendered: September 27, 2019

Appealed from the 18" Judicial District Court
In and for the Parish of West Baton Rouge
State of Louisiana
Case No. 1044039

The Honorable Alvin Batiste Judge Presidingg

Donald T. Carmouche Counsel for Plaintiff/Appellant
Victor L. Marcello Global Marketing Solutions, L.L.C.
John H. Carmouche
William R. Coenen, III
Brian T. Carmouche
Todd J. Wimberley
Ross J. Donnes
D. Adele Owen
Baton Rouge, Louisiana
and

Richard J. Ward, Jr.
Maringouin, Louisiana

Michael R. Phillips Counsel for Defendant/Appellee
Claire E. Juneau Chevron U.S. A., Inc.
Jeffrey J. Gelpi
New Orleans, Louisiana
and

L. Victor Gregoire
Baton Rouge, Louisiana

Joe B. Norman Counsel for Defendant/Appellee
Kelly Brechtel Becker Exxon Mobile Corporation
James E. Lapeze

Kathryn Zainey Gonski
New Orleans, Louisiana

David M. Culpepper Counsel for Defendant/Appellee
New Orleans, Louisiana Key Production Company, Inc.

BEFORE: HIGGINBOTHAM, PENZATO, AND LANIER, JJ.

LANIER, J.

In this appeal, plaintiff, Global Marketing Solutions, L.L. C. (" Global"),

challenges the district court's judgment sustaining the peremptory exceptions

raising the objection of res judicata filed by defendants, Chevron U. S. A., Inc.

Chevron"), Exxon Mobil Corporation (" Exxon"), and Key Production Company,

Inc. (" Key"), resulting in the dismissal of Global's claims against defendants, with

prejudice. For the reasons set forth below, we affirm the district court's judgment.

FACTS AND PROCEDURAL BACKGROUND

The underlying history of this case is familiar to this court as it has

previously been before us on numerous occasions, dating back to 2010. Pertinent

to the instant appeal is our prior holding in Global Marketing Solutions, LLC v.

Blue Mill Farms, Inc., 2013- 2132 ( La. App. 1 Cir. 9/ 19/ 14), 153 So. 3d 1209, writ

denied, 2014- 2572 ( La. 4/ 23/ 15), 173 So. 3d 1164 (" Global I")

According to the record, Global owns 144 acres of land located in the Bayou

Choctaw Oil & Gas Field (" Global Tract"). Global alleges that after purchasing

the Global Tract, it discovered that both the surface and subsurface soils and

waters of the land had been contaminated by various forms of toxic waste from

drilling operations that had been conducted since at least the 1930s. At no time did

Global possess mineral rights to the land. The mineral rights had been severed

years prior by various mineral leases beginning in the 1930s. Through

investigation and discovery, Global learned that the defendants were mineral

lessees at various points in the land' s history and had conducted drilling operations.

In March 2006, Global filed suit naming as defendants Chevron, Exxon, and

Key, among others, asserting contract and tort claims. According to Global, the

various defendants were responsible for the contamination of the property at issue.

Among other things, Global alleged the following: ( 1) the land in the Global Tract

was contaminated by the defendants as a result of the operation of oil and gas wells

3

at varying times, and under various mineral leases, from 1942 through 2005; ( 2)

the named defendants were negligent and strictly liable; ( 3) the defendants were in

breach of their oil, gas, and mineral leases; ( 4) the defendants were contractually

obligated under the leases to restore the property to its original condition and failed

to do so, causing damage to the property; ( 5) the defendants breached the standards

imposed by the Louisiana Civil Code and the Louisiana Mineral Code in failing to

act as prudent administrators and failing to restore Global' s property to its original

condition; and ( 6) the defendants who were owners of a mineral interest or

servitude were obligated to restore the property to its original condition pursuant to

La. R. S. 31: 22.

In a subsequent supplemental and amending petition, Global added a

paragraph alleging that one or more mineral servitude owners for the Global Tract

had assigned to Global 99 percent of their claims for damages caused by the

oilfield operations on the Global Tract. Global sought to pursue claims against

Chevron, Exxon, Key, and other defendants based upon assignments by three

mineral servitude owners, Priscilla Davis Gravely, Mary G. Rutrough, and Georgi

Davis Duwe.

In response to Global' s suit, Chevron, Exxon, Key, and other defendants

filed various exceptions including no right of action and no cause of action

objections, as well as motions for summary judgment. Following a hearing on the

various exceptions, the district court denied the no right of action objection and

motions for summary judgment. In reaching its ruling, the district court relied on

the opinion of this court found in Marin v. Exxon Mobil Corporation, 2008- 1724

La. App. 1 Cir. 9/ 30/ 09) 2009WL7004332 ( unpublished opinion), which, at the

time, was under review by the Louisiana Supreme Court.

Following the district court's ruling, the defendants applied for supervisory

writs of review with this court, which were denied with the stipulation that

4

defendants be allowed to re -urge their exceptions should the Marin case be

reversed by the supreme court. The defendants subsequently applied for

supervisory writs to the supreme court. In the interim, Marin was reversed,

Marin v. Exxon Mobil Corporation, 2009- 2368 ( La. 10/ 19/ 10), 48 So. 3d 234, as

was a similar case out of the fourth circuit court of appeal, Eagle Pipe and

Supply, Inc. v. Amerada Hess Corporation, 2010- 2267 ( La. 10/ 25/ 11), 79 So. 3d

246. Thus, the supreme court granted the defendants' writs and remanded the case

to the district court for reconsideration of its previous ruling in light of the Eagle

Pipe decision.

The defendants re -urged their motions, and on May 29, 2013, the matter

came before the district court on remand. After hearing argument from the parties,

the district court ruled from the bench as follows:

I]t is the same thing that you have here with Global being the
subsequent purchaser, and there' s no dispute as to any of the facts, I
think, in this case, Global being the subsequent purchaser, that an
absent -- an assignment or a stipulation pour autrui will have no right
to sue for damages that were caused to the property. And we' re
talking about damages in terms of tort or contract, any damages that
occur to the property prior to their purchasing the property. It would
have been incumbent upon those owners at that time to seek any
damages that were owed to the property.

The probably more troubling issues with regard to the
assignment of the mineral leases, which again are not in dispute, that
it occurred at the time that leases were no longer in existence or had
been terminated or had expired. And so just limiting the Court's
decision based on that narrow issue of the law, the Court will also find
that due to the fact that the assignment took place after the expiration
of leases that the assignments, therefore, are not effective.

I will adopt and incorporate, by reference, the reasons set forth
in the briefs of the defendant, also along with the oral reasons given
today in court as the basis for the Court's ruling in this matter granting
the motions for summary judgment.

9

In a judgment signed on June 24, 2013, the district court granted the motions

for summary judgment' in favor of the defendants, dismissing Global' s claims,

with prejudice. The district court noted that the new judgment was made in light

of the Eagle Pipe decision. Global appealed, arguing, among other things, that the

trial court erred " in failing to find that Global [ had] the right to seek remediation as

an assignee of the rights of the mineral servitude owners."

In Global I, this court affirmed the district court's judgment, concluding that

mineral leases convey only personal rights. Global, 153 So. 3d at 1216. Finding

no ambiguity in the language of the supreme court' s decision in Eagle Pipe, this

court noted that " an owner's right to sue for damage to his property is a personal

right and is held by the person who was the owner at the time the damage was

caused" and that the " personal right is not transferred to a subsequent owner

without a clear stipulation that the right has been transferred." Global I, 153 So. 3d

at 1215. This court further concluded that the finding in Marin paralleled the

Eagle Pipe principle that rights and obligations under a mineral lease do not

2
transfer to a third party without assignment. Global, 153 So. 3d at 1216.

Following this court's decision in Global I, Global sought supervisory review with

the Louisiana Supreme Court, which was subsequently denied.

In November 2017, over four years after the rendition of the June 24, 2013

judgment that formed the basis of our decision in Global I, Global filed a petition

in the instant case (" Global II"). As in Global I, Global asserted claims for

alleged environmental damage to the Global Tract. Global again named Chevron,

Exxon, and Key, among others, as defendants, asserting contract and tort claims.

The parties had agreed that the previously urged no right of action objections would be
reconsidered by the court as motions for summary judgment.
2 In Marin, landowners sued a mineral lessee for damage to the land after the mineral lease had
expired. Marin, 48 So. 3d at 255. Even though the lease was in effect at the time the plaintiffs
purchased the property, it had expired by the time the suit was filed, and the plaintiffs were never
named as third -party beneficiaries to the lease. The Marin court found that the plaintiffs would
not have a right to sue the mineral lessee under these circumstances. Id.

2

In Global II, Global' s suit for damages was based upon the purported assignment

of claims from thirty-one alleged mineral servitude owners, including two owners,

Priscilla Davis Gravely and Georgi Davis Duwe, whose alleged assignments were

at issue in Global I and found to be ineffective because the assignments took place

after the expiration of the leases.

In response to the petition in Global II, Key filed exceptions raising the

objections of no cause of action, res judicata, and prescription. Exxon raised the

objections of res judicata and prescription, and adopted the exceptions filed by the

other defendants " to the extent that those [ e] xceptions apply to [ Exxon]." Chevron

filed exceptions raising the objections of res judicata, no right of action, and

prescription.
Like Exxon, Chevron also adopted any exceptions filed by other

defendants that may apply to it.

A hearing on the exceptions was held on August 29, 2018. According to the

minutes, all exhibits previously filed and attached to the memorandums were filed

into evidence, and Global filed three additional exhibits into evidence. The district

court agreed to hear argument on the res judicata exceptions first. After hearing

argument from counsel, the district court sustained the exceptions raising the

objection of res judicata. On September 13, 2018, the district court signed a

judgment as follows:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED
that the Exceptions of Res Judicata filed by Defendants Exxon Mobil
Corporation, Key Production Company, Inc., and Chevron U.S. A.
Inc., be and are hereby GRANTED, and accordingly all claims of

Plaintiff Global Marketing Solutions, L.L.C. against Exxon Mobil
Corporation, Key Production Company, Inc., and Chevron U.S. A.
Inc., be and are hereby dismissed with prejudice, at Global Marketing
Solutions, L.L.C.' s costs.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED
that the Exceptions of No Cause of Action filed by Defendants Exxon
Mobil Corporation and Key Production Company, Inc. and the
Exception of No Right of Action filed by Defendant Chevron U.S. A.
Inc., be and are hereby deemed moot.

7

It is from this judgment that Global has appealed, assigning the following

specifications of error for our review:

1. The [ district] court committed error in granting the exceptions of
res judicata.

2. The [ district] court committed error in applying the legal
requirements of res judicata as set forth in La. R. S. 13: 4231.

3. The [ district] court committed error in failing to find that the causes
of action asserted in Global II did not arise out of the same
transactions or occurrences as the causes of action in Global I.

4. The [ district] court committed error in failing to find that Global's
rights to bring claims for restoration under the Global II assignments
were not "
actually litigated" or " essential" to the final judgment in
Global I.

5. The [ district] court committed error in failing to find that the cause
or causes of action asserted in Global II did not exist at the time of the
final judgment in Global I.

6. The [ district] court committed error in failing to find that Global
appears in different capacities in Global I and Global H.

7. The [ district] court committed error in failing to find that a mineral
servitude owner has the right to enforce the end of the lease
restoration obligations of a mineral lessee who has damaged property
burdened by the mineral servitude, and that this right is assignable
after the mineral lease expires.[']

RES JUDICATA: ISSUE PRECLUSION

Louisiana Revised Statutes 13: 4231 provides:

Except as otherwise provided by law, a valid and final
judgment is conclusive between the same parties, except on appeal or
other direct review, to the following extent:

1) If the judgment is in favor of the plaintiff, all causes of
action existing at the time of final judgment arising out of the
transaction or occurrence that is the subject matter of the litigation are
extinguished and merged in the judgment.

2) If the judgment is in favor of the defendant, all causes of

action existing at the time of final judgment arising out of the

3 We note that assignments of error numbers three and five address the elements of claim
preclusion, which are not at issue in this instant case and, thus, will not be discussed herein.
Rather, our discussion will focus solely on the elements of issue preclusion, which is what was
argued below and what the district court considered in sustaining the defendants' res judicata
exceptions.

0

transaction or occurrence that is the subject matter of the litigation are
extinguished and the judgment bars a subsequent action on those
causes of action.

3) A judgment in favor of either the plaintiff or the defendant

is conclusive, in any subsequent action between them, with respect to
any issue actually litigated and determined if its determination was
essential to that judgment.

Res judicata is an issue and claim preclusion device found both in federal

law and in state law. The purpose of both federal and state law on res judicata is

essentially the same— to promote judicial efficiency and final resolution of

disputes by preventing needless relitigation. Terrebonne Fuel & Lube, Inc. v.

Placid Refining Co., 95- 0654 ( La. 1/ 16/ 96), 666 So. 2d 624, 631.

Louisiana Revised Statutes 13: 4231 embraces the broad usage of the phrase

res judicata" to include both claim preclusion ( res judicata) and issue preclusion

collateral estoppel).' Under claim preclusion, the res judicata effect of a

judgment on the merits precludes the parties from relitigating matters that were or

could have been raised in that action. Under issue preclusion or collateral estoppel,

however, once a court decides an issue of fact or law necessary to its judgment,

that decision precludes relitigation of the same issue in a different cause of action

between the same parties. Thus, res judicata used in the broad sense has two

different aspects: 1) foreclosure of relitigating matters that have never been

litigated but should have been advanced in the earlier suit; and 2) foreclosure of

relitigating matters that have been previously litigated and decided. Mandalay Oil

Gas, L.L.C. v. Energy Development Corp., 2001- 0993 ( La. App. 1 Cir.

8/ 4/ 04), 880 So. 2d 129, 135- 136, writ denied, 2004- 2426 ( La. 1/ 28/ 05), 893 So. 2d

72.

Although prior to 1991, Louisiana law on res judicata was substantially narrower than federal
law, the 1991 amendments expanded the law to include issue preclusion. See Comment( b)-
1990, La. R.S. 13: 4231, which provides, in pertinent part, that issue preclusion " serves the
interests of judicial economy by preventing relitigation of the same issue between the same
parties."

Under issue preclusion, once a court decides an issue of fact or law

necessary to its judgment, that decision precludes relitigation of the same issue in a

different cause of action between the same parties. Sanchez v. Georgia Gulf

Corp., 2002- 1617 ( La. App. 1 Cir. 8/ 13/ 03), 853 So. 2d 697, 706. Thus, under La.

R. S. 13: 4231( 3), the three requirements for issue preclusion are: ( 1) a valid and

final judgment; ( 2) identity of the parties; and ( 3) an issue that has been actually

litigated and determined if its determination was essential to the prior judgment.

Horrell v. Horrell, 99- 1093 ( La. App. 1 Cir. 10/ 6/ 00), 808 So. 2d 363, 373, writ

denied, 2001- 2546 ( La. 12/ 7/ 01), 803 So. 2d 971.

The doctrine of res judicata is not discretionary and mandates the effect to

be given final judgments. Diamond B Const. Co., Inc. v. Department of

Transp. and Dev., 2002- 0573 ( La. App. 1 Cir. 2/ 14/ 03), 845 So. 2d 429, 435. The

burden of proving the facts essential to sustaining the objection is on the party

pleading the objection. Union Planters Bank v. Commercial Capital Holding

Corp., 2004- 0871 ( La. App. 1 Cir. 3/ 24/ 05), 907 So. 2d 129, 130. If any doubt

exists as to its application, the exception raising the objection of res judicata must

be overruled and the second lawsuit maintained. Wicker v. Louisiana Farm

Bureau Casualty Insurance Company, 2018- 0225 ( La. App. 1 Cir. 9/ 21/ 18), 257

So. 3d 817, 821- 822. The concept should be rejected when doubt exists as to

whether a plaintiffs substantive rights actually have been previously addressed and

finally resolved. Patin v. Patin, 2000- 0969 ( La. App. 1 Cir. 6/ 22/ 01), 808 So. 2d

673, 676.

When an objection of res judicata is raised before the case is submitted and

evidence is received on the objection, the standard of review on appeal is

traditionally manifest error with regard to factual findings of the district court.

Cepriano v. B Square Builders, L.L.C., 2014- 1568 ( La. App. 1 Cir. 4/ 24/ 15),

170 So. 3d 1043, 1047. However, the res judicata effect of a prior judgment is a

10

question of law that is reviewed de novo on appeal. Mitchell v. Aaron' s, Inc.,

2018- 0131 ( La. App. 1 Cir. 9/ 21/ 18), 257 So. 3d 812, 814- 815. 5

As to the first requirement of issue preclusion, for purposes of res judicata, a

valid judgment is one rendered by a court with jurisdiction over both the subject

matter and the parties after proper notice was given, and a final judgment is one

that disposes of the merits in whole or in part. Oliver v. Orleans Parish School

Bd., 2014- 0329 ( La. 10/ 31/ 14), 156 So. 3d 596, 612, cert. denied, U.S. ,

135 S. Ct. 2315, 191 L.Ed.2d 979 ( 2015). We note that the June 24, 2013 judgment

of the district court, which was affirmed by this court in Global I, disposed of the

merits of all of Global' s claims, dismissing Global' s claims against defendants,

with prejudice. Moreover, it is undisputed by the parties that the underlying

judgment, upon which defendants' res judicata exceptions are based, is a valid and

final judgment. Thus, the first element of issue preclusion is present herein.

The second requirement for issue preclusion is identity of the parties. This

requirement does not mean that the parties must have the same physical identity,

but that the parties must appear in the same capacities in both suits. Wicker, 257

So. 3d at 823. An identity of parties exists whenever the same parties, their

successors, or others appear, so long as they share the same quality as parties.

Welch v. Crown Zellerbach Corp., 359 So. 2d 154, 156 ( La. 1978); Mandalay

Oil & Gas, L.L.C., 880 So. 2d at 140. Identity of parties is satisfied when a privy

of one of the parties is involved. In its broadest sense, " privity" is the mutual or

successive relationship to the same right of property, or such an identification in

5 We note that in response to Global's appeal herein, Key argues that the applicable appellate
standard of review is the manifest error/clearly wrong standard of review. However, our review
of the reasons given by the district court at the end of the August 29, 2018 hearing reveals that
the district court did not make any factual findings, but rather made a legal conclusion based on
the decision in Global I. Therefore, we will conduct a de novo review to determine if the district
court was legally correct in sustaining the res judicata exception. See Pierrotti v. Johnson,

2011- 1317 ( La. App. 1 Cir. 3/ 19/ 12), 91 So. 3d 1056, 1063- 1064.

11

interest of one person with another as to represent the same legal right. Smith v.

LeBlanc, 2006- 0041 ( La. App. 1 Cir. 8/ 15/ 07), 966 So. 2d 66, 78.

Global argues that the assignments in Global I contained resolutory

conditions that negated the assignments in the event the assigned claims were

dismissed. Thus, Global maintains, because the Global I assignments were

declared void and without effect, Global did not appear in Global I in the capacity

of an assignee of the rights of the mineral servitude owners. By contrast, Global

asserts that in Global II, Global appears in the capacity of an assignee. The issue

of the effectiveness of the assignments would not have been before the district

court but for the fact that Global appeared in Global I not only in its capacity as

the surface owner, but also in its capacity of an assignee of the rights of the mineral

servitude owners.
Thus, Global' s capacity in both suits is the same.

Moreover, even assuming that the present mineral servitude owners were not

actually parties in Global I, the res judicata effect of the June 24, 2013 judgment

still bars Global' s attempt to relitigate the issue in Global II. The interests of the

present mineral servitude owners were adequately represented by Global and its

assignors in Global I. The preclusive effect of a judgment binds the parties to the

action, as well as those nonparties who are deemed " privies" of the parties in

circumstances where "
the nonparty's interests were adequately represented by a

party to the action, who may be considered the ' virtual representative' of the

nonparty, because the interests of the party and the nonparty are so closely

aligned." Mandalay Oil & Gas, L.L.C., 880 So. 2d at 142. The second

requirement of issue preclusion is met in this case.

The final requirement for issue preclusion is that the issue must be one that

has been actually litigated and determined in the prior action, and its determination

must have been essential to the prior judgment. Global argues that the terms of the

Global I assignments are entirely different from the terms of the Global II

12

assignments and that Global's right to bring this action based on the Global II

assignments was not " actually litigated" in Global I. Defendants counter that the

only pertinent fact for purposes of the preclusive effect of the prior judgment is

that like the assignments in Global I, the assignments acquired in Global II were

acquired after the mineral leases at issue expired. Thus, defendants maintain,

pursuant to the valid, final judgment in Global I, the Global II assignments are

likewise ineffective as a matter of law, regardless of their individual terms, and the

district court correctly found that Global' s claims were barred by res judicata. We

agree.

Although the ruling in Global I did not address the specific terms of the

assignments, the fact remains that they were given after the leases had expired. In

Global I, the district court noted that the assignments " occurred at the time that

leases were no longer in existence or had been terminated or had expired" and that,

accordingly, the assignments were not effective. Thereafter, in its judgment signed

on September 13, 2018, the district court granted defendants' motions, dismissing

all of Global' s claims against them, with prejudice. Accordingly, the issue before

us in the instant matter, i.e., whether Global has a right to sue defendants based on

assignments obtained from mineral servitude owners after the mineral leases

expired, was clearly litigated in Global I and essential to the district court's

dismissal of Global' s claims therein. Moreover, the district court's ruling was

affirmed on appeal to this court, and Global' s subsequent writ application to the

Louisiana Supreme Court was denied. Accordingly, the final requirement of issue

preclusion is met.

EXCEPTIONAL CIRCUMSTANCES EXCEPTION

Louisiana Revised Statutes 13: 4232 sets forth exceptions to the general rule

of res judicata and provides, in pertinent part, that a judgment does not bar a

subsequent action when " exceptional circumstances justify relief from the res

13

judicata effect of the judgment." La. R.S. 13: 4232( A)( 1). The discretion to grant

relief from the judgment for exceptional circumstances is necessary to allow the
court to balance the principle of res judicata with the interests ofjustice. The court

must exercise this discretion on a case- by-case basis and grant such relief only in

truly exceptional cases, otherwise the purpose of res judicata would be defeated.

La. R.S. 13: 4232, comment - 1990. Global argues that this case presents obvious

convoluted factual and legal scenarios that qualify as exceptional circumstances.

This court addressed the application of this provision in Chaisson v.

Oceanside Seafood, 97- 2756 ( La. App. 1 Cir. 6/ 29/ 98), 713 So. 2d 1286. After

analyzing various cases in which the exceptional circumstances provision had been

considered, this court stated:

These cases suggest that the " exceptional circumstances"

provision is likely to be applied most often in complex procedural
situations, in which litigants are deprived of any opportunity to
present their claims because of some quirk in the system which could
not have been anticipated. " Exceptional circumstances" might also be
applied to factual scenarios that could not possibly be anticipated by
the parties or decisions that are totally beyond the control of the
parties.

Chaisson, 713 So. 2d at 1289.

The case before us does not involve such a situation. Global had an

opportunity to fully present its case in Global I. Global is now simply challenging

the correctness of not only the district court's ruling in Global I, but also this

court' s ruling in affirming the district court's judgment and the supreme court's

denial of its application for supervisory review. The purpose of res judicata— to

promote judicial efficiency and final resolution of disputes by preventing needless

relitigation— would be defeated if relief from the res judicata effect of the Global

I judgment were granted in this matter. See Terrebonne Fuel & Lube, Inc., 666

So. 2d at 631. Therefore, we decline to apply the exceptional circumstances

provision under these circumstances.

14

DECREE

For the above and foregoing reasons, we affirm the district court' s

September 13, 2018 judgment, sustaining the res judicata exceptions filed by

defendants and dismissing, with prejudice, all claims
of Global Marketing

Solutions, L.L.C. against defendants. We assess all costs associated with this

appeal against Global Marketing Solutions, L.L.C.

AFFIRMED.

15