Local Leaders Push Back Against Coastal Lawsuit Abuse
Last week, a three-judge panel from the U.S. Fifth Circuit Court of Appeals ruled that a state court must hear a lawsuit Plaquemines Parish brought against several oil companies. Plaquemines Parish alleges that drilling activity by Chevron, Exxon, and ConocoPhillips–that took place 80 years ago in support of the United States’ war effort–caused environmental damage. The plaintiff’s case relies on the State and Local Coastal Resources Management Act, a state law passed in 1980, thirty-nine years after the U.S. entered World War II.
The defendant oil companies may request an en banc hearing at the 5th Circuit or appeal to the U.S. Supreme Court. If the defendants are unsuccessful, this case and forty-two others will likely be heard in state court.
For a decade, the lawyers involved in these suits have promised that the funds from the lawsuits would be used for coastal restoration. Yet, in an oil-rich state, the consistent lawsuits brought against oil and gas companies have devastated Louisiana’s economy. It comes as no surprise that these businesses have been reluctant to do business in Louisiana because of the increased risk of being sued. Our research estimates that Louisiana’s economy loses $44.4 million to $113.0 million per year due to lawsuit risk, plus 2,000 jobs.
Fortunately, local leaders realize that these suits are costing their communities jobs and opportunity while doing nothing to rebuild our coast. Terrebonne, Lafourche, Vermilion, and St. Mary Parishes have rejected the proposed Freeport-McMoRan settlement. The settlement, which would resolve the claims against an oil company that no longer has a presence in Louisiana, purports to provide $100 million for coastal restoration. However, the $100 million is generated through an environmental crediting scheme that is likely to deliver less than 15% of those dollars.
Moreover, the settlement allows for forty percent of the money to be spent on projects unrelated to coastal restoration. Thankfully, Louisiana’s legislature has twice rejected the legislation required to set up the Coastal Zone Recovery Authority, which would be an unelected bureaucracy tasked with administering the settlement funds.
Restoring and protecting Louisiana’s coast should be a priority for lawmakers. Therefore, it’s time to abandon the empty promises made by the trial lawyers and shift our focus to solutions that will actually generate funds that protect our coast and create jobs for Louisianans.