Grace Ranch, LLC v. BP America Production, Co., No. 20-30224 (5th Cir. 2021)
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A Louisiana law, La. Stat. Ann. 30:16, allows citizen suits to enforce state conservation laws, but any injunction the citizen might obtain must be entered in favor of the Commissioner of Louisiana's Office of Conservation. Plaintiff filed suit contending that this potential state involvement at the end of the litigation precludes diversity jurisdiction in federal court because there is no such jurisdiction when a State is a party. The district court disagreed, held that it had subject matter jurisdiction, and remanded to state court anyway based on Burford abstention.
The Fifth Circuit denied the motion to dismiss the appeal for lack of jurisdiction; reversed the remand order; and remanded for further proceedings. The court concluded that it has subject matter jurisdiction over Grace Ranch's suit. The court explained that, despite Grace Ranch's listing of Louisiana in the style of the case, the State is not a proper party because it has not authorized landowners to sue in its name. Furthermore, Grace Ranch's real-party-in-interest argument for state involvement fares no better because Louisiana has only a general interest in the outcome of this suit. The court also concluded that it has appellate jurisdiction to review the district court's abstention-based remand order. Making explicit what was previously implicit in its caselaw, the court reasoned that a discretionary remand such as one on abstention grounds does not involve a removal "defect" within the meaning of 28 U.S.C. 1447(c). Finally, the court weighed the factors for Burford abstention and concluded that abstention is not warranted.
The court issued a subsequent related opinion or order on February 26, 2021.
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