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.
“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
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
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.
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.
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.