Louisiana Record

Sunday, October 20, 2019

Association: Flood authority's case could harm oil companies despite Supreme Court denial to hear appeal

By Karen Kidd | Nov 10, 2017

BATON ROUGE – Southeast Louisiana Flood Protection Authority-East's failed lawsuit against oil companies could harm the industry's ability to do business in Louisiana, a trade association official said.

"We cannot comment on current litigation," Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said in an email to the Louisiana Record. "It is our hope for continued validation of our point with the U.S. Supreme Court decision dismissing the SLFPA-E’s lawsuit."

The U.S. Supreme Court recently denied the New Orleans-area levee authority's appeal, leaving in place a lower court's ruling that SLFPA-E has no standing to bring claims against energy-producing companies for damage to the Louisiana coast. SLFPA-E has claimed for decades that drilling along the Louisiana coast, as well as dredging and building canals, left the region more vulnerable during storms and has lead to coastal wetland destruction.

Chris John, President of the Louisiana Mid-Continent Oil and Gas Association (LMOGA)

It is a claim taken up by others in many other lawsuits, but the argument is flawed, John said. 

"Considering Louisiana’s current legal climate, there are countless frivolous suits relating to legacy claims and alleged violations of the coastal zone management act," he said. "I say 'alleged' because the activities parishes are seeking to collect on are for permitted activities."

U.S. 5th Circuit Court of Appeals handed down its decision against SLFPA-E in March, agreeing with a 2015 ruling from the U.S. District Court for Louisiana's Eastern District the 97 oil and gas companies in the original suit didn't have a federally mandated duty to repair the damage allegedly caused by their activities. An earlier attempt to get the case sent back to state courts also failed when a federal judge denied the request.

About a month after upholding the district court ruling, the appeals court denied a SLFPA-E request for rehearing, and petitioners in the case filed for a writ of certiorari with the U.S. Supreme Court. The high court denied the request Oct. 30, which likely ended the litigation.

"It’s three strikes, and you’re out," Don Briggs, President of the Louisiana Oil and Gas Association, said in a press release shortly after the Supreme Court's decision was announced. "The SLFPA-E lawsuit was dismissed in a U.S. District Court, refused by a U.S. Circuit Court of Appeals, and denied by the U.S. Supreme Court. These and similar frivolous lawsuits against oil and gas companies are destroying Louisiana’s competitiveness to attract future investment."

That negative economic impact naturally follows cases such as the SLFPA-E’s lawsuit, John said during his Louisiana Record interview. 

"While it's impossible to connect each individual company's decision to drill with lawsuits, these claims are a big deal in deterring oil and gas companies from exploring and producing oil in Louisiana," John said. "Not only are the higher producing areas water locations, which are inherently more expensive, the locations on land carry additional liabilities for all operators of a well."

Those issues became so burdensome that there were no bids submitted for an October lease sale, John said. 

"As oil prices increase, the Permian Basin is booming, the U.S. Government is preparing for largest lease sale in the Gulf of Mexico, Louisiana has zero bids for state leases," he said.

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Organizations in this Story

Louisiana Mid-Continent Oil and Gas Association Louisiana Oil & Gas Association Southeast Louisiana Flood Protection Authority-East U.S. Court of Appeals for the Fifth Circuit U.S. District Court for the Eastern District of Louisiana