The civil lawsuits filed by parishes seeking billions of dollars from Louisiana energy companies for their alleged role in coastal erosion should be decided in state rather than federal courts, a federal appeals court has decided.
A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit issued the ruling on Oct. 17. The appeals court said that a federal district court decided correctly that the energy companies being sued by Plaquemines Parish were not acting under federal authority when they were engaged in production activities in coastal areas in the 1940s.
Louisiana oil and gas companies had wanted the case to be tried in federal court based on the relationship between the industry and U.S. officials during World War II. Forty-one similar cases have been against energy companies over coastal erosion.
“We hold that producers are not entitled to removal under (federal statutes) because (1) there is insufficient ‘evidence of any contract, any payment, any employee/employee relationship or any principal/agent arrangement’ indicating that the oil companies acted under a federal officer’s or agency’s directions; and (2) we find producers’ alternative theories on this issue unpersuasive,” the court said in its opinion.
A spokesman for the legal team representing BP America, Chevron, ConocoPhillips, Exxon Mobil Corp. and Shell said the companies were disappointed by the appeals court’s ruling and will weigh their legal options.
“The allegations in this case, like the other similar parish lawsuits against oil and gas companies, challenge oil production practices going back for decades, including World War II, a unique period in the relationship between the federal government and the oil and gas industry,” Jason Harbison said in an email to the Louisiana Record.
The energy companies argue that specific federal interests underlie these lawsuits and that they should be heard in a federal forum, Harbison said.
“Regardless of whether these cases are heard in federal or state court, the companies look forward to disproving the unfounded allegations against them,” he said.
Plaquemines Parish initially filed its complaint in state court, arguing that energy companies had violated Louisiana’s State and Local Coastal Resources Management Act, which mandates that businesses obtain coastal use permits before extracting natural resources. That law took effect in 1980, but the parish alleged that the energy companies’ operations dating back to the 1940s were not grandfathered in under the act and departed from “prudent industry practices.”