Louisiana Record

Wednesday, April 1, 2020

Litigation against oil and gas giants benefits attorneys, not the environment, industry leaders say


By Karen Kidd | Aug 30, 2019


NEW ORLEANS — Coastal erosion lawsuits that oil and gas producers have fought for more than half a decade are designed to enrich plaintiff attorneys, rather than fix any environmental problems – and Louisianans know it – legal and fuel industry influencers said during recent interviews.

"With these predatory state-sanctioned lawsuits, Louisiana's government is essentially sending a message to job creators that they should think twice before locating here," Pelican Institute for Public Policy Government Affairs Vice President Renee Amar told the Louisiana Record. "We continue to see this as countless jobs and opportunities continue to flee our state and are being embraced by our friendlier, fairer neighbors."

Plaintiff attorneys certainly were quick to notice when coastal erosion litigation began to ramp up in 2013,  Louisiana Lawsuit Abuse Watch Executive Director Lana Sonnier Venable said during a separate Louisiana Record interview.

"Coastal lawsuits have become a cottage industry for a handful of well-heeled firms pursuing big payouts," she said. "Since 2013, the parties have been mired in this litigation with no immediate resolution in sight. Even if these suits are successful, there is no requirement that the parishes or cities use any eventual settlement funds for remediation."

That has not been good for business, Louisiana Oil & Gas Association President Gifford Briggs told the Louisiana Record.

"These coastal lawsuits are the biggest hurdle for Louisiana’s oil and gas industry to reach its full potential," Gifford said. "After the election of President [Donald] Trump, our nation's oil and gas industry was filled with optimism and responded with significant investments. Unfortunately, Louisiana was unable to benefit like the rest of the nation. These lawsuits have weakened Louisiana's business environment, turned investors away from increasing activity and ultimately hurt the working families of Louisiana most."

The interviews came on the heels of release of a U.S. Chamber of Commerce's Institute for Legal Reform study about the coastal erosion lawsuits filed by Louisiana parishes against the oil and gas industry. The study concluded that in filing the lawsuits, the parishes bypass state laws and pursue jury awards in ways that could equal tremendous paydays for plaintiff attorneys.

The study's compilers also pointed to separate economic research that shows the true costs of coastal erosion litigation "and Louisiana's broader runaway lawsuit system," $4,000 in tort costs in 2016 for each household in the state, a news release issued with the study said.

The report in no way downplays the seriousness of coastal erosion, Venable said during her Louisiana Record interview.

"As noted in the report, coastal erosion is a serious issue, but the current approach of targeting industry is not the solution," Venable said. "In fact, this approach has only slowed collaborative efforts with industry, which is currently funding restoration efforts through production in the Gulf."

Meanwhile, a new online poll conducted by the U.S. Chamber Institute for Legal Reform found support for these lawsuits is eroding in the state. The majority of Louisianans who participated in the poll, 57 percent, said coastal erosion lawsuits were more about "trial lawyers looking for a payday" than fixing environmental damage.

The energy sector's impact on the state's economy is well documented. The state's Coastal Protection and Restoration Authority is working on its 2013 Coastal Master Plan but the most recent master plan, released in 2017, makes clear that Louisiana's location on the Gulf helps make it a leading fuel export state. With 17 oil refineries, Louisiana boasts almost a fifth of the U.S.’s refining capacity, with a top capacity of 3.3 million barrels of crude oil per day.

Infrastructure along the Louisiana coast supplies about 90 percent of the nation's outer continental shelf oil and gas and is "at the heart of the U.S. petrochemical industry," the 2017 master plan says. That helps make the state the largest producer of crude oil, the second-largest natural gas producer and the third-largest petroleum producer, as well as the third-leading state in petroleum refining, according to the 2017 master plan.

But all of that fuel productivity has come at the price of coastal erosion along the coast and coastal governments have for years been lawyering up in an attempt to make fuel producers pay for remediation.

Coastal land loss litigation tracks back to the summer of 2013, when Southeast Louisiana Flood Protection Authority–East's Board of Commissioners, which operates levee flood protection jurisdiction in Orleans, Jefferson and St. Bernard Parishes sued 97 oil and gas companies in Orleans Parish Civil District Court. Lawsuits have continued to mount and work their way through the courts ever since.

Last spring, the City of New Orleans added its litigation to those of six parishes suing oil and gas producers in the state for alleged coastal land loss.

"The 43 suits filed by six parishes and the City of New Orleans send the wrong message about Louisiana," Venable said. "Our natural resources have driven Louisiana’s economy for generations, transforming the Pelican State into one of the nation’s leading oil and gas producers."

The "misguided suits" threaten the state's long-term economic growth, discourages continued energy sector investment and reinforces "our long-held reputation as one of the worst states for doing business in the country," Venable said.

Another approach is needed, she said.

"Instead of targeting the deep pockets of these job creators, Louisiana must work in partnership with industry-leading scientists and researchers," Venable said. "The state should share their expertise with that of industry and invest in restoration and remediation efforts to address coastal erosion now, as well as in the future."

Amar, of the Pelican Institute, said that making that happen will take political will.

"We need leaders willing to put the well-being of Louisiana's working families ahead of politics, because there are many decisions being made now that are holding us back and will continue to inflict harm for decades to come," she said.

Editor's note: The Louisiana Record is owned by the U.S. Chamber Institute for Legal Reform.

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Organizations in this Story

U.S. Chamber Institute for Legal Reform (ILR)Louisiana Oil & Gas AssociationCivil District Court for the Parish of OrleansLouisiana Lawsuit Abuse WatchPelican Institute for Public PolicyCoastal Protection and Restoration Authority of LouisianaSoutheast Louisiana Flood Protection Authority-East