BATON ROUGE – A leader in the state’s energy industry says that Louisiana’s trial bar is trying to shake down the oil and gas industry to pay for coastal restoration.
He likened their Mardi Gras-like behavior to lawyers yelling: “Throw me something, mister,” the traditional shout of revelers to krewe members riding on parade floats.
Don Briggs, president of the Louisiana Oil and Gas Association, said that in an attempt to win over public sentiment, the trial bar is making specious cause and effect arguments by linking the energy industry to climate change, Hurricane Katrina and this summer’s deadly flooding.
Briggs
“It’s wrong, but publicly, it’s an easy sell,” said Briggs.
If the trial bar campaign gains any traction, the oil and gas industry in Louisiana might never recover, even when energy prices rise, he suggested.
Under the tutelage of former trial lawyer and now Louisiana Gov. John Bel Edwards, the plaintiffs’ bar is looking for a piece of the action as the state demands billions from energy and pipeline companies to restore the Louisiana coastline.
With promises of payoffs from 40 parish-level lawsuits filed in the name of coastal restoration, the trial bar’s claims have resonated with some local governments whose revenues are flat or falling with the energy sector’s slow down.
Briggs says that this kind of litigation threatens the viability of independent operators.
“Ninety-five percent of the wells drilled in Louisiana are drilled by independent oil and gas producers—not by the integrated major oil companies,” Briggs said. “Independents are risk takers, investing their own capital as well as capital from outside investors. They have the choice where to invest capital. Should you poll a group of investors you would find very quickly that they will not risk their hard earned capital on investments where the legal climate is unfair and unpredictable.”
The trial bar has been gearing up for this play for years, but work started in earnest early this summer when Edwards, who took office in January 2016, held a closed-door meeting with industry officials, telling them they had to contribute a third of the $100 billion needed to restore the coastline.
One industry official in attendance said no one even responded to the governor’s demand because “we were all in shock.”
A few months later, Edwards turned up the pressure further with the appointment of one of his top fundraisers to represent the state in litigation against the industry.
According to court records recently uncovered by local news outlets, former state Rep. Taylor Townsend and six other plaintiff lawyers were quietly hired to lead the governor’s private legal team.
Townsend, who heads Edwards’s super PAC fundraising committee, Louisiana Families First, and the other attorneys, gave at least $130,000 in support of the governor’s election, according to campaign finance records.
Townsend was given authority to wield the weight of not just the Department of Natural Resources, but also the Department of Wildlife and Fishers, Revenue, the Coastal Protection and Restoration Authority and other state agencies.
Legal experts say the move was unprecedented and it raises a slew of legal and ethical questions.
“Is it really in the public’s best interest for Governor Edwards to outsource the legal authority of so many state departments to private lawyers whose financial interests may be at odds with those of the state?” said Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch.
Some elected officials are also raising concerns about a controversial fee-shifting arrangement included in the contract, which could allow the governor’s hired legal guns to make billions from the case.
State law prohibits private lawyers from being paid on a contingency-fee basis unless expressly approved by the Legislature. But under the legal contract authorized by the governor’s office, lawyers can charge the state up to $225 an hour for their work and can also seek additional attorney fees from defendants in the event of a settlement or judgment.
Just last week, Louisiana Attorney General Jeff Landry (no relation to Melissa Landry) took issue with the fee arrangement and ruled the contract "unacceptable on multiple grounds.”
In a letter to the governor’s executive counsel, Landry’s top aide said, “We believe this creates an illegal and unconstitutional contingency fee arrangement.”
The letter also described the scope of the proposed contract as “entirely too vague and overly broad” because it does not limit Townsend’s services to any specific representation or cases.
Edwards did not respond to repeated requests to provide details on the fundraising relationship with Townsend or the legal contract in question.
It is unclear where the legal dispute will ultimately end up in court, and the future of Louisiana’s energy industry is in limbo as well.
According to the U.S. Energy Information Administration, Louisiana lost more than 20,000 oil industry workers since 2014 as the number of active rigs in the state declined by more than 70 percent.