Energy Law

Employee Lacked Personal Liability for Oilfield Environmental Damage Under Louisiana Law

By Kindall James

The issue of whether an individual employee is personally liable for oilfield environmental damages was recently addressed in Kling Realty Co., Inc. v. Texaco, Inc, 2007 WL 81665 (W.D. La. 2007).  The plaintiff mineral lessors claimed that their property had been damaged by oilfield operations, and sued not only the operator, but also a production supervisor.  The plaintiffs argued that the supervisor was individually liable because in his supervisory capacity he had the duty to prevent or limit hazardous pollution affecting the property.  Finding that the plaintiff failed to present any evidence that the supervisor’s responsibilities entailed more than general administrative responsibilities or that the supervisor knew or should have known of any ongoing activities hazardous to the property, the court held that the plaintiffs could not possibly establish that the supervisor was personally liable for their damages, and dismissed the plaintiffs’ claims against him. 

In Kling, the plaintiffs filed suit in state court, and the operator removed to federal court alleging that the individual supervisor and another defendant, a well service company, had been fraudulently joined to avoid federal diversity jurisdiction. On the question of the employee's liability, the court applied the test established by the Louisiana Supreme Court in Canter v. Koehring, 283 So. 2d 716 (La. 1973), which provides the following criteria to determine whether an individual employee is personally liable to a third party: (1) the principal or employer owes a duty of care to the third person; (2) that duty is delegated by the principal or employer to the employee; (3) the employee has breached his duty through personal (in contrast to technical or vicarious) fault; and (4) the employee owes a personal duty to the third party (not just a general administrative responsibility for some function of employment), and causes the third party damages by breaching that duty.  A supervisor, such as a plant manager, may owe a personal duty to a third person where (1) the supervisor is responsible for safe maintenance and operations and (2) the supervisor is “aware or should have been aware of a risk of harm and nevertheless failed to respond to the risk in the manner in which a reasonably prudent supervisor would respond in the same or similar circumstances.”  Finding that there was no possibility of recovery by the plaintiffs against the individual supervisor under Louisiana law, the court held that the supervisor was improperly joined. 

Full post as published by The Energy Law Blog on October 10, 2007 (boomark / email).