Case: 22-30379 Document: 142-1 Page: 1 Date Filed: 06/09/2025
United States Court of Appeals
for the Fifth Circuit
____________
United States Court of Appeals
Fifth Circuit
No. 22-30379
____________ FILED
June 9, 2025
Dow Construction, L.L.C., Lyle W. Cayce
Clerk
Plaintiff—Appellee/Cross-Appellant,
versus
B P X Operating Company,
Defendant—Appellant/Cross-Appellee.
______________________________
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 5:20-CV-9
______________________________
Before Clement, Graves, and Higginson, Circuit Judges.
James E. Graves, Jr., Circuit Judge:
Under Louisiana law, the Commissioner of Conservation may join
separate tracts of land into a forced pooled drilling unit. After doing so, the
Commissioner appointed BPX Operating Company to operate one of these
units, which included a property leased by Dow Construction, L.L.C. When
Dow received its share of the proceeds, post-production costs had been
deducted. Dow took issue with that and sought judgment awarding it the
operator-deducted post-production costs. In turn, BPX sought dismissal and
summary judgment for varied reasons.
Case: 22-30379 Document: 142-1 Page: 2 Date Filed: 06/09/2025
No. 22-30379
The district court held that: Dow had standing to sue, the Louisiana
doctrine of negotiorum gestio allows for operators to recover post-production
costs, the forced-pooling statute’s forfeiture provision—La. Rev. Stat.
§ 30:103.2—includes post-production costs, and claims under § 30:103.2 are
subject to a ten-year prescriptive period. We AFFIRM in part, REVERSE
in part, VACATE in part, and REMAND for further proceedings
consistent with this opinion.
I.
A.
Louisiana is one of many states that has forced pooling laws. Under its
scheme, Louisiana’s Commissioner of Conservation may join separate tracts
of land into a forced drilling unit “whenever necessary to prevent waste or
avoid needless drilling, even if owners of oil and gas interests have not agreed
to pool their interests.” 1 TDX Energy, L.L.C. v. Chesapeake Operating, Inc.,
857 F.3d 253, 257 (5th Cir. 2017) (citing La. Rev. Stat. §§ 30:9(B),
30:10(A)(1)). This is to “afford the owner of each tract the opportunity to
recover or receive his just and equitable share of the oil and gas in the pool.”
La. Rev. Stat. § 30:10(A)(1)(a) (2019).
Once a unit has been established, the Commissioner appoints an
operator, and the “operator is responsible for drilling within the unit but pays
a proportionate share of production to owners of oil and gas interests for any
_____________________
1
La. Rev. Stat. § 30:9(B) provides that:
For the prevention of waste and to avoid the drilling of unnecessary wells,
the commissioner shall establish a drilling unit or units . . . . A drilling unit,
as contemplated herein, means the maximum area which may be efficiently
and economically drained by the well or wells designated to serve the
drilling unit . . . . This unit shall constitute a developed area as long as a
well is located thereon which is capable of producing oil, gas, or brine in
paying quantities.
2
Case: 22-30379 Document: 142-1 Page: 3 Date Filed: 06/09/2025
No. 22-30379
acreage on which the operator does not have an oil and gas lease.” TDX
Energy, 857 F.3d at 257–58 (emphasis added) (citing La. Rev. Stat.
§ 30:10(A)(1)(b)).
Nonoperators also share in certain drilling risks and costs. Id. at 258.
“Each oil and gas interest owner is responsible for a share of development
and operation costs.” Id. (citing La. Rev. Stat. § 30:10(A)(2)). “To
prevent free riding, the statute creates a mechanism for sharing the risk that
a well, once drilled, will not produce enough to cover drilling costs.” Id.
After the operator sends notice to specific owners, those owners may
choose to “participate in the risk by contributing to drilling costs up front”
or opt out and be subject to a risk charge, which the operator may deduct
from the non-participating interest owners’ share of production after sale. Id.
(citing La. Rev. Stat. §§ 30:10(A)(2)(a)(i), (b)(i)). Completely unleased
owners, however, are not subject to this risk charge. Id. at 263 (citing La.
Rev. Stat. § 30:10(A)(2)(e)).
At unleased owners’ request, operators must issue reports containing
sworn statements about the drilling and operating costs, amount of
production, and price received for sale of production. See La. Rev. Stat.
§ 30:103.1 (2019). When an operator does not provide this information within
ninety days of completing a well, and thirty additional days lapse after
receiving notice of its failure to comply with its reporting obligation, the
operator forfeits its right to demand contribution for the costs of the drilling
operations. Id. § 30:103.2 (2019).
B.
The instant dispute involves BPX, the operator of the HA RA SUE
drilling unit, in which Dow leases property. Dow sent a request for well cost
information to Petrohawk Operating Company, the previous operator of the
unit, pursuant to § 30:103.1(A). But Petrohawk, failed to adequately respond
3
Case: 22-30379 Document: 142-1 Page: 4 Date Filed: 06/09/2025
No. 22-30379
to the initial demand. Dow then sent a second demand for an accounting of
costs, which Petrohawk ignored. BPX then became Petrohawk’s successorin-interest.
Thereafter, Dow filed a petition in Louisiana state court seeking a
judgment awarding it the operator-deducted post-production costs. The
action was then removed to federal district court.
Dow argued that BPX “forfeited any right to demand contribution
from the owner or owners of the unleased oil and gas interests for the costs
of the drilling operations of the well.” Further, Dow alleged that BPX
improperly deducted post-production costs from Dow’s proceeds because
post-production costs may not be assessed under La. Rev. Stat. § 30:10.
BPX filed a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), arguing that § 30:10(A)(3) did not apply to lessees like
Dow because the provision only applies to forced pooled-unit interests that
are not subject to any mineral lease. The district court denied BPX’s motion,
holding that § 30:10(A)(3) applied “to any mineral interest owner in a forced
pool unit who has no lease with the operator.” BPX filed a motion for
reconsideration that the district court denied.
BPX then moved for summary judgment. The district court granted
the motion in part and denied it in part. As to the first issue, the district court
held that the Louisiana doctrine of negotiorum gestio allows for operators to
recover post-production costs incurred by an operator to market the mineral
interest owner’s share of production. As to the second, the court concluded
that post-production costs are included within § 30:103.2’s forfeiture
provision.
BPX also filed a separate motion to dismiss, arguing that any claim
made under § 30:103.2 was subject to a one-year prescriptive period that had
lapsed. The district court denied the motion, finding that claims under
4
Case: 22-30379 Document: 142-1 Page: 5 Date Filed: 06/09/2025
No. 22-30379
§ 30:103.2 are quasi-contractual and personal and, as a result, are subject to
a ten-year prescriptive period. That same day the district court granted
BPX’s motion for certification to permit this interlocutory appeal.
II.
We review dismissals pursuant to Rule 12(b)(6) de novo, accepting all
well-pleaded factual allegations as true. Alexander v. Verizon Wireless Servs.,
L.L.C., 875 F.3d 243, 249 (5th Cir. 2017). We also review the district court’s
grant of summary judgment de novo. Ibarra v. UPS,
695 F.3d 354, 355 (5th
Cir. 2012).
III.
We have been presented with four questions for review: A) whether
§ 30:10(A)(3) applies to any mineral interest owner in a forced pool unit who
has no lease whatsoever or who specifically has no lease with the operator of
the well; B) whether § 30:10 precludes operators from seeking
reimbursement of post-production costs incurred by operators when they
market an unleased owner’s share of production; C) whether post-production costs are included within the forfeiture provision, § 30:103.2; and
D) whether § 30:103.2 is subject to a one-year or ten-year perspective period.
We address them in turn.
But first, a note on methodology. In diversity cases like this one we
apply state substantive law. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).
In the absence of a final decision by the Louisiana Supreme Court, we make
an Erie guess and determine, in our best judgment, how it would resolve the
issue if presented with the same case. Am. Int’l Specialty Lines Ins. Co. v.
Canal Indem. Co.,
352 F.3d 254, 260 (5th Cir. 2003).
In making an Erie guess, we employ Louisiana’s civilian methodology
and first examine primary sources of law: the constitution, codes, and
5
Case: 22-30379 Document: 142-1 Page: 6 Date Filed: 06/09/2025
No. 22-30379
statutes. Id. Pursuant to Louisiana Civil Code article 9, “[w]hen a law is clear
and unambiguous and its application does not lead to absurd consequences,
the law shall be applied as written and no further interpretation may be made
in search of the intent of the legislature.” La. Civ. Code Ann. art. 9.
However, when a statute is ambiguous, which is when its language is open to
different interpretations, “it must be interpreted as having the meaning that
best conforms to the purpose of the law.” La. Civ. Code Ann. art. 10. In
other words, a law’s meaning “is determined by considering the law in its
entirety and all other laws concerning the same subject matter and construing
the provision in a manner that is consistent with the express terms of the
statute and with the obvious intent of the lawmaker in enacting it.” Sultana
Corp. v. Jewelers Mut. Ins. Co., 2003-0360, p. 4 (La. 12/3/03);
860 So. 2d
1112, 1116 (La. 2003) (citing In re Succession of Boyter, 1999-0761, p. 9 (La.
1/7/00);
756 So. 2d 1122, 1129).
A.
In addressing the proper interpretation of § 30:10(A)(3) and to whom
it applies, we begin with the text:
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. Rev. Stat. § 30:10(A)(3) (2019) (emphasis added).
The dispute centers on the meaning of “unleased interests.”
According to BPX, § 30:10(A)(3) is inapplicable here because it only applies
6
Case: 22-30379 Document: 142-1 Page: 7 Date Filed: 06/09/2025
No. 22-30379
to interest owners who have no lease at all. In BPX’s view, since it is
undisputed that Dow is a lessee of an interest within the Unit, Dow is not
covered by § 30:10(A)(3). Dow disagrees. In its view, the term “unleased
interests,” as used in the statute, refers to interests unleased by the well
operator. Since Dow has no lease with BPX, it contends it is covered by §
30:10(A)(3).
At first glance, unleased interests may seem unambiguous, but that is
not so. We have previously noted that “Title 30 uses ‘unleased interests’ to
mean different things in different chapters.” TDX Energy, 857 F.3d at 262.
Depending on the context, Title 30 refers to interests that are completely
unleased or unleased only in relation to the well operator. Put simply, the
phrase itself does not resolve this question.
For insight, we must look to the context in which the phrase is used.
See La. Civ. Code art. 12 (noting that when the words of a law are
ambiguous, courts must examine the context in which they occur and the text
of the law as a whole); Yates v. United States, 574 U.S. 528, 537 (2015)
(plurality opinion) (“[T]he same words, placed in different contexts,
sometimes mean different things.”).
The phrase “unleased interest” is used twice in § 30:10. First,
§ 30:10(A)(2)(e)(i) provides that “[t]he provisions of Subparagraph (b) of
this Paragraph with respect to the risk charge shall not apply to any unleased
interest not subject to an oil, gas, and mineral lease.” Second, § 30:10(A)(3),
the provision at issue here, provides: “If there is included in any unit . . . 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 . . . .”
These multiple uses of the phrase are illuminating. BPX posits that
“unleased interests” means just that throughout the statute—not subject to
7
Case: 22-30379 Document: 142-1 Page: 8 Date Filed: 06/09/2025
No. 22-30379
any lease. But that reading of “unleased interest” would make no sense in
§ 30:10(A)(2). If “unleased interest” meant “not subject to any lease
whatsoever,” then the Louisiana legislature adding the exclusionary phrase
“not subject to an oil, gas, and mineral lease” right after would be
superfluous. TDX Energy, 857 F.3d at 262. Canons of statutory interpretation
counsel against reading the statute as BPX would have us do. See TRW, Inc.
v. Andrews,
534 U.S. 19, 31 (2001) (“It is a cardinal principle of statutory
construction that a statute ought, upon the whole, to be so construed that, if
it can be prevented, no clause, sentence, or word shall be superfluous, void,
or insignificant.” (quotations omitted)).
BPX’s reading would not only render language in § 30:10(A)(2)
superfluous but also create the same problem in § 30:10(A)(3). As the district
court explained:
Mineral leases with a landowner typically assign the right to
market production. Thus, a landowner lessee, like Dow,
becomes the “party or parties entitled to market production”
and who has “not made arrangements” to take its interest in
kind. If the Legislature intended to limit this provision of the
statute to the completely unleased interest, the descriptive
phrase would be unnecessary and superfluous because the
landowner of the completely unleased interest would always be
the “party or parties entitled to market production.” The only
purpose this phrase serves is to include any party who has or has
acquired the right to market production of an interest unleased by
the operator.
Dow Constr., LLC v. BPX Operating Co., 564 F. Supp. 3d 479, 486 (W.D. La.
2021) (emphasis added).
Other than creating issues in the statutory text that otherwise do not
exist, BPX’s reading would undermine the intent of the legislature. “[W]hen
an owner or operator drills a well, and that owner or operator has no valid oil,
8
Case: 22-30379 Document: 142-1 Page: 9 Date Filed: 06/09/2025
No. 22-30379
gas, or mineral lease on a portion of that land, the mineral lessee of those
portions not leased by the operator or producer of the well has a claim to
demand an accounting pursuant to La.R.S. 30:103.1, as an owner of a valid
oil, gas, or mineral lease.” XXI Oil & Gas, LLC v. Hilcorp Energy Co., 2016-
269, pp. 3–4 (La. App. 3 Cir. 9/28/16); 206 So. 3d 885, 888. The stated
statutory purpose of mandatory pooling is to afford the mineral interest
owner of each tract “the opportunity to recover or receive his just and
equitable share of the oil and gas in the pool without unnecessary expense.”
La. Rev. Stat. § 30:10(A)(1)(a) (2019). However, as highlighted by the
district court, under BPX’s narrow interpretation, the statute would treat
unleased mineral owners differently depending upon the point at which their
operators choose to sell the unit production. Given the parties’ obligations to
pay costs and share in the production, unleased owners would be able to “free
ride” and the others would be saddled with unnecessary expenses. This
windfall for some and shortfall for others would make little sense given the
relevant policies at issue. See TDX Energy, 857 F.3d at 256–58 (noting that
the statutory scheme creates a mechanism for sharing risk to prevent free
riding); Taylor v. Smith,
619 So. 2d 881, 887 (La. App. 3 Cir. 6/2/93) (“In a
situation, as in this case, where there is no written agreement between the
owner and operator, LSA-R.S. 30:10(A)(3) has supplied the terms of the
contract.”).
To counter this conclusion, BPX cites King v. Strohe, 95-656 (La. App.
3 Cir. 5/8/96); 673 So. 2d 1329. In its view, King is “on-point authority.” We
disagree. There, the plaintiff had a servitude that granted her mineral and
water rights to the subject property. The plaintiff leased those rights to a
company and was therefore a lessor. King thus has limited applicability in this
case.
Instead of reading the term as BPX would have us do—rendering
statutory text superfluous and undermining legislative intent in the
9
Case: 22-30379 Document: 142-1 Page: 10 Date Filed: 06/09/2025
No. 22-30379
process—we read “unleased interests” to mean unleased as to the operator.
After all, § 30:10(A)(3) is “addressed to the operator, and it makes sense that
[it] would use ‘unleased interest’ to mean interests unleased by the
operator.” TDX Energy, 857 F.3d at 262. This conclusion is also consistent
with our precedent.
Id. at 259–60 (“The only appellate court in Louisiana to
address whether sections 103.1 and 103.2 give rights just to owners of wholly
unleased interests or owners of interests not leased to the operator followed
the latter, more expansive view.”). We accordingly AFFIRM the district
court’s holding that § 30:10(A)(3), properly read, applies to mineral interest
owners who are unleased as to the operator.
B.
We turn to post-production costs. BPX argued, and the district court
concluded, “that the doctrine of negotiorum gestio—pursuant to Louisiana
Civil Code article 2292, et seq.—allows operators the mechanism and ability
to recover post-production costs incurred by an operator to market the
mineral interest owner’s share of production.”
In another case in which BPX was a party before this court, this court
certified a question to the Louisiana Supreme Court asking “whether the
doctrine of negotiorum gestio applies to unit operators selling product in
accordance with La. R.S. 30:10(A)(3).” Self v. BPX Operating Co., 2023-
01242, p. 3 (La. 6/1/24); 388 So. 3d 366, 368, reh’g denied, 2023-01242 (La.
8/2/24);
389 So. 3d 828 (discussing Self v. BPX Operating Co.,
80 F.4th 632
(5th Cir. 2023)). The Louisiana Supreme Court held that “negotorium gestio
does not apply and cannot be a basis for liability.”
Id. It reasoned that “[a]
party is only a gestor if his action is taken ‘without authority.’”
Id. (quoting
La. Civ. Code art. 2292). “A unit operator who sells an owner’s
production under the statutory authority of La. R.S. 30:10(A)(3) cannot
therefore be a gestor under La. C.C. art. 2292 as a gestor is one who acts
10
Case: 22-30379 Document: 142-1 Page: 11 Date Filed: 06/09/2025
No. 22-30379
‘without’ authority.’” Id. at 369 (quoting Self,
80 F.4th at 637 (Dennis, J.,
dissenting)).
Given the Louisiana Supreme Court’s holding, in Self we vacated the
district court’s order as inconsistent with now-established Louisiana law and
remanded for further proceedings consistent with the Louisiana Supreme
Court’s opinion. Self v. BPX Operating Co., No. 22-30243, 2024 WL 4273824
(5th Cir. Sept. 19, 2024) (per curiam). We do the same here. We VACATE
the district court’s order insofar as it granted BPX partial summary judgment
based on the holding that negotiorum gestio allows operators to recover post-production costs incurred to market the mineral interest owner’s share of
production, and REMAND for further proceedings consistent with the
Louisiana Supreme Court’s opinion.
C.
Next, we take up whether post-production costs are included within
§ 30:103.2, the forfeiture provision. Section 103.2 provides that when an
operator fails to timely provide the information required of them by
§ 30:103.1, the operator loses the “right to demand contribution from the
owner or owners of the unleased oil and gas interests for the costs of the
drilling operations of the well.” Id. § 30:103.2 (2019).
Section 103.1, in turn, provides that:
A. Whenever there is included within a drilling unit, as
authorized by the commissioner of conservation, lands
producing oil or gas, or both, upon which the operator or
producer has no valid oil, gas, or mineral lease, said operator or
producer shall issue the following reports to the owners of said
interests by a sworn, detailed, itemized statement:
(1) Within ninety calendar days from completion of the
well, an initial report which shall contain the costs of
drilling, completing, and equipping the unit well.
11
Case: 22-30379 Document: 142-1 Page: 12 Date Filed: 06/09/2025
No. 22-30379
(2) After establishment of production from the unit
well, quarterly reports which shall contain the following:
(a) The total amount of oil, gas, or other
hydrocarbons produced from the lands during
the previous quarter.
(b) The price received from any purchaser of unit
production.
(c) Quarterly operating costs and expenses.
(d) Any additional funds expended to enhance or
restore the production of the unit well.
...
D. Notwithstanding any other provision of this Section to the
contrary, at the time a report is due pursuant to this Section, if
the share of the total costs of drilling, completing, and
equipping the unit well and all other unit costs allocable to an
owner of an unleased interest is less than one thousand dollars,
no report shall be required. However, during January of the
next calendar year, the operator or producer shall report such
costs to the owner.
La. Rev. Stat. § 30:103.1 (2019) (emphasis added).
Recently, we described the interplay between these two provisions:
Section 103.2 adds teeth to § 103.1; it disincentivizes
operators’ failure to comply with § 103.1’s reporting
requirements. Taken together, §§ 103.1 and 103.2 address an
information asymmetry that arises from the forced pooling of
mineral resources when there is no lease or contract between
the operator and the owner of the oil and gas . . . . Thus,
§§ 103.1 and 103.2 help remedy the information asymmetry by
creating an enforceable mechanism for nonoperators that have
unleased interests in the minerals to obtain an accounting of
what the operator is doing.
12
Case: 22-30379 Document: 142-1 Page: 13 Date Filed: 06/09/2025
No. 22-30379
B. A. Kelly Land Co. v. Aethon Energy Operating, L.L.C., 25 F.4th 369, 376
(5th Cir. 2022) (citations and internal quotation marks omitted).
At bottom, the parties dispute which costs are covered by the phrase
“costs of drilling operations” in § 103.2. On the one hand, BPX argues the
phrase only encompasses the enumerated set of specific drilling costs. Dow
retorts that “costs of the drilling operations” refers back to the expenditures
referenced in section 103.1, and “operating costs and expenses” and “funds
expended to enhance . . . the production of the unit well,” capture post-production costs. Therefore, Dow argues, “costs of drilling operations”
include post-production costs as well.
Absent binding authority from the Louisiana Supreme Court, we look
to the only intermediate-court case that appears to have addressed this
question: XXI Oil & Gas, LLC v. Hilcorp Energy Co., 2016-269 (La. App. 3
Cir. 9/28/16); 206 So. 3d 885. There, the Louisiana Third Circuit Court of
Appeal held that the penalty for “costs of the drilling operations” includes
both pre- and post-production costs.
Id. at 890. In coming to this conclusion,
the court emphasized that the two provisions should be read together to
discern the intention of the legislature.
Id. Comparing the original statute
with the current version, the court determined that the legislature used the
phrase “cost of the drilling operations” to refer back to the expenditures
referenced in § 103.1. Id. As such, the term “drilling operations” connotes
both drilling and operational aspects of taking and producing oil and gas from
land. Id. “Otherwise, there would be no incentive for the operator or
producer to provide the quarterly reports.” Id.
The context surrounding the text supports this reading. The statutory
scheme provides an exception to the reporting requirement if the “share of
the total costs of drilling, completing, and equipping the unit well and all
other unit costs allocable to an owner” is less than $1,000. See La. Rev.
13
Case: 22-30379 Document: 142-1 Page: 14 Date Filed: 06/09/2025
No. 22-30379
Stat. 30:103.1(D) (2019). In which case “the operator or producer shall
report such costs to the owner” during January of the next calendar year.
Id.
(emphasis added).
The phrase “such costs” in the clause relates to the costs addressed
earlier in the section, specifically “costs of drilling, completing, and
equipping the unit well and all other unit costs.” Id. The phrase “all other”
costs naturally encompasses post-production expenses as they are “other
unit costs.” As the district court recognized, it would be odd for the
legislature to require operators to report post-production expenses when
total costs are less than $1,000 and relatively negligible but not when total
costs are greater.
Further, the text also requires reporting multiple categories of costs
that could encompass post-production costs. Take “operating costs and
expenses.” See 30:103.1(A)(2)(c) (2019). The term “operating” is
commonly defined as “of, relating to, or use for or in operations.” 2 It is
reasonable to think that post-production costs could be categorized as
“operational costs and expenses” because they form an integral part of the
overall business operations. After all, the value of minerals is contingent upon
a series of actions that must be taken to render them useful, including but not
limited to transportation, marketing, processing, dehydration, treatment,
compression, and collection. Without these measures, minerals are often
deemed worthless. See Merritt v. Sw. Elec. Power Co., 499 So. 2d 210, 213–14
(La. Ct. App. 1986). Of note, this interpretation aligns perfectly with what
Petrohawk, BPX’s transferor, did; they classified expenses linked to
marketing, taxes, gathering, and transportation as “operational expenses.”
_____________________
2
Operating, Merriam-Webster (2025), https://www.merriam-webster.com/ dictionary/operating.
14
Case: 22-30379 Document: 142-1 Page: 15 Date Filed: 06/09/2025
No. 22-30379
Moreover, this interpretation is consistent with the purpose of the
statute. It goes against the foundation of the forced-pooling framework to
suggest—as BPX does—that an operator can subtract post-production
expenses without any responsibility to disclose this information to lessees. As
stated above, these provisions were put in place to remedy information
asymmetry by creating an enforceable mechanism “for nonoperators that
have unleased interests in the minerals to obtain an accounting of what the
operator is doing.” B.A. Kelly Land Co., 25 F.4th at 376 (quotation omitted).
To accept BPX’s argument would mean reading an information asymmetry
safe haven into a statute created to remedy information asymmetries. We
decline to do so and AFFIRM the district court on this front.
D.
Finally, we address whether § 30:103.2 is subject to a one-year or ten-year perspective period. BPX argues that the one-year delictual period
applies, whereas Dow contends (and the district court concluded) that the
ten-year contractual period is more appropriate.
Under Louisiana law, “[t]he correct prescriptive period to be applied
in any action depends on the nature of the action; it is the duty breached that
should determine whether an action is in tort or contract.” Terrebonne Par.
Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870, 886 (5th Cir. 2002); accord Trinity
Universal Ins. Co. v. Horton, 33,157, p. 2 (La. App. 2 Cir. 4/5/00);
756 So. 2d
637, 638.
“The classical distinction between contractual and delictual damages
is that the former flow from an obligation contractually assumed by the
obligor . . . .” Terrebonne, 310 F.3d at 886. Even where there is a contract
between the parties, Louisiana courts will still scrutinize the claims to
determine if they are contractual or delictual. See Terrebonne,
310 F.3d at 887
& n.45 (collecting cases); see also Delict, Black’s Law Dictionary
15
Case: 22-30379 Document: 142-1 Page: 16 Date Filed: 06/09/2025
No. 22-30379
(10th ed. 2014) (“A violation of the law; esp., a wrongful act or omission
giving rise to a claim for compensation; TORT.”). Ultimately, Louisiana
courts treat an action as delictual unless a plaintiff alleges the violation of a
specific contractual provision. See Kroger Co. v. L.G. Barcus & Sons, Inc.,
44,200, p. 4 (La. App. 2 Cir. 6/17/09); 13 So. 3d 1232, 1235.
The Louisiana Supreme Court has stated “that where an action arises
out of ‘the breach of duty as imposed by law, the damages arose ex delicto,
and are extinguished by the prescription of one year.’” DePhillips v. Hosp.
Serv. Dist. No. 1, 2019-01496, p. 7 (La. 7/9/20); 340 So. 3d 817, 822 (cleaned
up) (quoting Lagrone v. Kansas City So. Ry. Co.,
102 So. 669, 670 (1925)).
Further, the court concluded that “plaintiff cannot circumvent the one-year
prescriptive period applicable to his claims where the source of the
underlying duty is statutory. ‘The mere fact that the circumstances arose in
the context of a contractual relationship does not make the cause of action
contractual.’”
Id. at 824 (quoting Thomas v. State Emps. Grp. Benefits
Program, 2005-0392, p. 5 (La. App. 1 Cir. 3/24/06);
934 So. 2d 753, 757).
Here, Dow does not allege that BPX violated any specific contractual
provision; rather, it alleges a violation of a statutory duty. Again, “where an
action arises out of ‘the breach of duty as imposed by law, the damages arose
ex delicto, and are extinguished by the prescription of one year.’” DePhillips,
340 So. 3d at 819.
Moreover, Dow’s claims flow from the same general statutory duty at
issue in Self. It is undisputed that Dow alleges a breach of the notice provision
of § 103.1. The statutory scheme creates a remedy for that breach in § 103.2,
so that an operator that breaches “shall forfeit his right to demand
contribution from the owner or owners of the unleased oil, gas, or brine
interests for the costs of the drilling operations of the well.” This is not an
“obligation contractually assumed by the obligor” based on a specific
16
Case: 22-30379 Document: 142-1 Page: 17 Date Filed: 06/09/2025
No. 22-30379
contract provision. Terrebonne, 310 F.3d at 886. Instead, by the plain language
of the Act, this is statutorily owed by the operator to all interest owners who
call attention to the operator’s failure to timely account for costs.
Accordingly, we conclude that Dow’s claims are subject to the one-year
prescriptive period that applies to delictual claims and REVERSE the
district court’s denial of BPX’s motion to dismiss based on the prescriptive
period having elapsed.
IV.
For the foregoing reasons, we AFFIRM in part, REVERSE in part,
VACATE in part, and REMAND for further proceedings consistent with
this opinion.
17
