Rainbow Gun Club, Inc. v. Denbury Resources, Inc., 2014 WL 869504 (W.D. La. March 5, 2014).

In this action, the District Court affirmed a remand order finding that CAFA’s local “single event exception” can include mass actions involving manifestation of multiple events caused by a significant occurrence.

The lessors and royalty owners of certain mineral leases in the Cameron Parish, brought an action against the defendants in the Thirty-Eighth Judicial District Court for the Parish of Cameron.  The plaintiffs, who numbered well over 100, alleged that they were owed money damages from the defendant-lessees for the defendants’ imprudent operation of the Rainbow Gun Club No. 1 Well (the “Well”).  The plaintiffs alleged that the defendants were negligent in their drilling of the Well in allowing extraneous water to pour into the gas reservoir, thereby ruining the well’s productive capabilities.

The defendants removed the case to federal court asserting that it qualified as a mass action under CAFA.  The plaintiffs filed a motion to remand, which the magistrate judge granted, holding that the plaintiffs had sufficiently demonstrated that the local single event, exception to mass action applied to the instant case.  The defendants filed this appeal.

At the very outset, the District Court noted that the local single event states that the term ‘mass action’ shall not include any civil action in which all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State.

The plaintiffs petition alleged that (i) the defendants failed to heed recognized methods of operating that reduce or eliminate the likelihood of getting drill pipe stuck; (ii) failed to isolate the reservoir from adjacent water sands by properly cementing the stuck drill pipe in the Well; (iii) failed to properly cement the casings/liners in the side track well etc.

The defendants relying on this language, argued that those were several, distinct, and disparate events that should preclude the application of the local single event exception.  However, the defendants cited to no case law in support of this argument.  The District Court remarked that every occurrence was invariably divisible into increasingly tiny units of time, the only way that the statute’s application avoids descent into the absurd was to acknowledge that “the ordinary meaning of the words ‘event’ and ‘occurrence’ was not always limited to something that happened at a particular moment in time.  Under the circumstances, the District Court concluded that it could not find that the holding of the Magistrate Judge was either clearly erroneous or contrary to law.

Accordingly, the District Court adopted the Memorandum Order of the Magistrate Judge and affirmed the order remanding the case to the state court.