State of Louisiana v. RLI Insurance Company, LLC

Line of Business : Surety
Case Type : Commercial Suretyship|Surety Rights|Bankruptcy

Case Description :

Surety – Commercial Suretyship – Reclamation
Surety – Surety Rights – Jurisdiction, Venue, Indispensable Partiers, Procedural Issues
Bankruptcy – Jurisdiction and Withdrawal of Reference by District Court

In State of Louisiana v. RLI Insurance Company, LLC, 2020 U.S. Dist. Lexis 179794 (M.D. La. September 30, 2020), the principal on bonds guaranteeing that certain oil and gas wells would be plugged and abandoned filed for bankruptcy and abandoned the wells covered by the bonds. The Louisiana Department of Natural Resources (DNR) sued the surety in Louisiana state court, and the surety removed the case to federal court. The court adopted the Report and Recommendation of the Magistrate Judge dated, September 15, 2020, and remanded the case. The DNR was an alter ego of the State and, therefore, not subject to diversity jurisdiction. The suit was not a core proceeding in the bankruptcy matter, and even if it were "related to" the bankruptcy proceeding "both permissive abstention, 28 U.S.C. §1334(c), and equitable remand, 28 U.S.C. §1452(b), apply here and support remand of the State’s cause of action."

In State of Louisiana v. RLI Insurance Company, LLC, 2020 U.S. Dist. Lexis 179794 (M.D. La. September 30, 2020), the principal on bonds guaranteeing that certain oil and gas wells would be plugged and abandoned filed for bankruptcy and abandoned the wells covered by the bonds. The Louisiana Department of Natural Resources (DNR) sued the surety in Louisiana state court, and the surety removed the case to federal court. The court adopted the Report and Recommendation of the Magistrate Judge dated, September 15, 2020, and remanded the case. The DNR was an alter ego of the State and, therefore, not subject to diversity jurisdiction. The suit was not a core proceeding in the bankruptcy matter, and even if it were “related to” the bankruptcy proceeding “both permissive abstention, 28 U.S.C. §1334(c), and equitable remand, 28 U.S.C. §1452(b), apply here and support remand of the State’s cause of action.”

Surety Protects

Learn how surety
bonds protect taxpayers,
save time,
reduce costs and
keep projects on track.

U.S. Senate Unanimously Supports Surety Bonds and the Protections and Economic Value They Provide to Our Nation’s Critical Infrastructure Development

See Senators Capito, Carper and Van Hollen speak on the Senate floor about the importance of surety.

The Surety & Fidelity Association of America Foundation Awards 19 Students With $47,500 in Scholarships

SFAA Foundation announces 19 students selected as recipients of a $2,500 scholarship as part of the Surety and Fidelity Intern and Scholarship Program for 2023.

News & Events

Surety Industry Advances Critical Federal Policy

SFAA and NASBP led a Legislative Fly-In with members from across the industry to educate Congress on the value of construction surety bonds and advocate for key legislative priorities. Surety professionals held over 135 meetings with policymakers and staff to emphasize the significant savings that surety bonding provides to taxpayers across the country.

The Surety & Fidelity Association of America Foundation Awards Record $90,000 in Scholarships

The Surety & Fidelity Association of America Foundation (SFAA Foundation) has awarded a record $90,000 in scholarships to thirty-one students through its Surety and Fidelity Intern and Scholarship Program.

SFAA’s Alex Gleason Named Among Nation’s Top Lobbyists for 2025

The Surety & Fidelity Association of America (SFAA) has announced that Alex Gleason, Head of Federal Government Affairs, has been named one of the 2025 Top Lobbyists by the National Institute for Lobbying & Ethics (NILE).