Are Excessive Lawsuits Fueling Pain At The Pump?

Melissa Landry May 11, 2011, 11:35am


Next time you are filling up your gas tank, and feeling the pain at the pump, think about this: if the source of your gasoline is Louisiana onshore drilling, then every other time you fill your tank it comes from an oil producer that's probably been hit by a lawsuit and may have had to pay millions of dollars to get out of it.

How's that resonate with you while paying nearly four dollars a gallon?

Obviously oil and gas is shipped far and wide and many factors go into the price we ultimately pay at the pump, but the cost of defending against frivolous lawsuits is certainly one of them. And as far as Louisiana onshore oil is concerned, a few lawyers are probably buying yachts with the money they're making off of these suits, while the rest of us may be deciding whether we can afford to drive to the beach this summer or have to stay home and save on the gas.

The effects of lawsuit abuse are all around us – from schools with "no hug" policies for teachers, to higher food prices, to extra medical bills for unnecessary tests and procedures that we're subjected to simply because our physicians are afraid of getting sued. Lawsuit abuse impacts everything we do, and in Louisiana it affects our gasoline tanks, too.

Hundreds of small to mid-size Louisiana companies as well as bigger companies across the nation that are involved in exploring for and extracting onshore oil are finding that Louisiana is a bad place to do business because of what are known as "legacy" lawsuits.

These cookie-cutter suits aimed at so-called "legacy" well sites in Louisiana are supposed to help clean up the environment from damage that may have occurred years or decades ago. But the only real impact they're having is slowing down oil production at a time when we need it most.

In fact, onshore Louisiana oilrig activity is stagnant while drilling is much more active in other states such as Texas. According to the state's independent oil producers association, this is largely due to the fact that our existing laws make Louisiana very attractive to some personal injury lawyers and a great place to play the legacy lawsuit "lottery."

The worst part is some of the lawyers filing these suits seem to be more interested in cleaning up in court than they are in cleaning up the environment. The effect of these lawsuits – in addition to driving oil jobs and investment to other states and making a handful of Louisiana personal injury lawyers rich – is that where there are drilling-related environmental problems they are not being corrected promptly.

Legacy lawsuits are often filed in a remote parish courtroom claiming hugely exaggerated environmental damages, and the personal injury lawyer in the case seeks to avoid the state's system for dealing with environmental oilfield claims, called Act 312.

If the Act 312 process is avoided in court, then the state environmental damage experts are kept out of the process for years, and there is no reality check on the damage claims that are made by the personal injury lawyers. These lawsuits can drag on for years, delaying environmental cleanup, and then if they are settled, millions of dollars may go in the back pocket of a few lawyers and their clients, rather than fixing the so-called damage.

For example, a few years ago, the Corbello case paid out $33 million in cleanup funds, and the Louisiana Supreme Court ruled the money did not have to be spent to clean up the property damage that was the very basis of the lawsuit!

Public outrage led to the creation of a fair system to address land claims, Act 312, but now a few law firms are going around the law to abuse the system and drive oil jobs to Texas and other states. Let's hope people hear about these job-killing legacy lawsuits and that our legislators jump in to fix the issue right away.

More than a thousand companies involved in the Louisiana onshore oil business have been hit with legacy lawsuits, and these companies produce more than half of our state's onshore crude. Hence, if Louisiana's onshore oil exploration is the source of your gasoline, then every other tank of gas in your car is the "lawsuit abuse tankful."

Tell your friends and neighbors: one-out-of-two "lawsuit abuse tanks of gas" is one-out-of-two too many.

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