Oil & Gas News

Wildcatting: Inside the Legal Strategy of Big Oil in Louisiana

I.

The stakes are far too high, and in any case in which a defendant’s primary appeal to the public is to focus on how much money lawyers are making or could be making, they are hoping the public will be distracted enough to forget to ask the most important question, “Are you guilty?”

During the past five years, at least 28 separate petitions on 42 cases filed by five different parish governments and one parish district attorney in Louisiana against dozens of oil and gas companies have languished in the judicial system. Today, we are still more than a year away before the first case could even get heard in court.

Initially, these companies claimed that these individual cases all presented different facts and questions of law, but last week, in a surprise move, they completely reversed themselves, arguing, for the first time, that a federal panel on Multidistrict Litigation should consolidate the cases and assign them to a single federal judge.

The state of Louisiana filed its response on June 26, 2018:

Louisiana

According to legal experts, the request is nothing more than a hypocritical and thinly-veiled delay tactic. To defenders of the industry, however, these cases represent the single-largest existential threat against the oil and gas business in the state’s history. Although not a single case has made it to trial, industry lobbyists like Gifford Briggs of the Louisiana Oil and Gas Association (LOGA) have blamed pending litigation for all of its woes.

Louisiana

The number of wells alleged to have been operated by Defendants in each case, as well as the number of applications for coastal use permits in each case/Operational Area.

To their credit, the lobbyists and public relations consultants hired by LOGA and others have been largely successful in framing the discussion, even though independent polling suggests that, once voters are provided with the uncontested facts, more than 65% of Louisiana residents support suing oil and gas companies for their role in the degradation of the state’s coastal areas.

Yet, this is the message that most Louisianians have likely heard: It’s a digital short commercial produced by a Mandeville-based company, People Who Think, the same firm that handled a substantial portion of commercials and advertisements on behalf of the Koch Brothers’ Americans for Prosperity chapter in Louisiana.

It’s pithy and punchy, and it even begins with a sarcastic claim that their opponents intend to “Clean the Environment,” as if that’s a bad thing.

How did we get here, to a place in which a “clean environment” is merely tossed aside as a joke?

Well, despite the talking points about greedy trial lawyers making fortunes suing to take your jobs away, there is an open secret: Only the mega-billion dollar industry can afford to produce slickly-produced, 30-second television ads. They are hoping to win in the court of public opinion, not because they need to sell more oil and gas but because they need to change the law. Otherwise, they are likely to lose. Those often-derided trial lawyers, it turns out, are spending their money on something else: Winning in the court of law.

But before deconstructing and explaining all of the various procedural stunts that lawyers for Big Oil have performed during the past five years, it is important to understand what these cases are ultimately about, and, regardless of whatever you may have heard from the oil and gas industry and their friends in the legislature, each and every one of these cases involves a company that allegedly broke the laws of the state of Louisiana and, in so doing, caused irreparable and permanent damage to our coast.

Whenever someone like Gifford Briggs, the paid spokesman for LOGA, suggests that oil and gas companies are not investing in Louisiana because of the mere threat of litigation (contrary to the evidence and to his father Don Briggs’s own sworn deposition), he is implicitly and perhaps unwittingly suggesting that these companies should be allowed to break the law without consequence.

We need to consider a more reasonable alternative: The simple expectation that neither people nor corporations break the law, and if they do, that the law will be enforced.

It may sound hyperbolic, but it isn’t: The stakes are far too high, and in any case in which a defendant’s primary appeal to the public is to focus on how much money lawyers are making or could be making, they are hoping the public will be distracted enough to forget to ask the most important question, “Are you guilty?”

II.

In January of 2016, the Obama administration, through the Department of Housing and Urban Development, quietly allocated a $48 million grant to a tiny village floating at the edge of the Louisiana coast, a place called Isle de Jean Charles. Population: Somewhere between 65-100, approximately 25 families and all members of the Biloxi-Chitimacha-Choctaw tribe.

The federal grant had nothing to do with improving Isle de Jean Charles; they were paying people to abandon it.

A year before Donald Trump took over the lease at the White House and Scott Pruitt began paying a lobbyist $50 a night to rent a D.C. condo, the citizens of Isle de Jean Charles became known as America’s very first “climate change refugees.”

Today, at least one federal agency, the Natural Resources Conservation Service, has prohibited the use of the term “climate change,” asking employees to use the phrase “weather extremes” instead.

The new Secretary of the Interior, Ryan Zinke, reassigned the department’s top climate policy expert to the royalty collection division, and Zinke’s new Director of the U.S. Bureau of Safety and Environmental Enforcement, Scott Angelle, the oil industry’s “top cop,” had previously been paid more than $1 million, $380,000 a year, to sit on the board of a pipeline company. At the time, Angelle was serving on Louisiana’s Public Service Commission, the regulatory agency overseeing the state’s telecommunications and utilities industries, including natural gas production.

Scott Angelle in 2016 (Photo Credit: Robin May, The Independent)

III.

To climate scientists and environmentalists, it is not surprising that the nation’s very first climate refugees would be from Louisiana.

In the last 60 years, the people of Isle de Jean Charles have lost 98% of their land.

The state’s coast shrinks by approximately 16.6 square miles every year, or, put into terms that every Saints or LSU Tigers fan can visualize, a football field worth of land is disappearing every 48 minutes, less time than it takes to play a football game.

 

There are a variety of factors that have resulted in coastal land loss in Louisiana- natural subsidence, rising sea levels, storm surges and wave actions, and changes in hydrology, which were frequently caused by the government’s own decisions in the Army Corps of Engineers.

But there is one major factor that even climate change denialists cannot deny: The extensive degradation of the natural habitat and ecosystem caused by nearly a century of activities by the oil and gas industry, the state’s most dominant economic engine and most powerful political force.

The industry has acknowledged this itself, estimating their own liability at around 35% to 40% of the total damage, approximating tens of billions of dollars in value.

In October of 2014, a year after the Southeast Louisiana Flood Protection Authority- East (SLFPA-E) filed suit against 97 different oil and gas companies, alleging they were at least partially responsible for catastrophically damaging the Louisiana coast, in direct violation of the State and Local Coastal Resources Management Act (SLCRMA), The New York Times Magazine, in an extensive report on the landmark case, called it “the most ambitious environmental lawsuit ever.”

The oil and gas industry wasn’t nearly as enthusiastic, and neither were then-Gov. Bobby Jindal and the majority Republican state legislature. Actually, that’s an understatement. They were outraged. It was a brazen usurpation of the state government’s legal authority, Jindal argued, a cynical shakedown against the backbone of Louisiana’s economy by a small group of greedy trial lawyers.

Jindal could have entered the lawsuit on behalf of the state. Given the exhaustive case they had constructed and the experts they had assembled, most reasonable governors would have done just that. But Bobby Jindal, with his eyes set on the White House and knowing that his connections with Big Oil could potentially help him raise a fortune for his campaign, wasn’t even remotely interested. In fact, he wanted to kill the case before it could ever go to trial, which should tell you something about what he thought about its odds, at least in state court.

Yet because he decided not to intervene and to then remove any and all of the SLFPA-E’s more troublesome board members, the case became much more complicated than it should have been.

Without Jindal or his then-Attorney General Buddy Caldwell on board, the Southeast Louisiana Flood Protection Authority-East was not statutorily-authorized to enforce the State and Local Coastal Resources Management Act; only the state could do that.

Instead, the authority decided to sue on a variety of other state and federal violations. The SLFPA-E wound up in federal district court, where it lost on federal question grounds; then, it appealed to the 5th Circuit Court, where it lost again. And finally, it made it all the way up to the United States Supreme Court.

Louisiana

Well, sort of. The Supreme Court denied certiorari (meaning they refused to hear the case). It was over, at least for the SLFPA-E. (If you’re interested in reading the arguments the SLFPA-E made about why the Supreme Court should take the case, you can find their petition here).

Fortunately, though, there were other cases already filed, and all of those cases have one thing in common that the previous case did not: The governor, John Bel Edwards, joined on, as did (believe it or not) Jeff Landry, the state’s attorney general.

IV.

So, what is it, exactly, that oil and gas companies allegedly did that were so terrible to the environment? How did they actually break the law?

In simple terms, they often treated Louisiana as their own playground. But let’s get into the specifics.

In 1924, exactly 21 years after Louisiana’s very first oil well was drilled in the town of Jennings, the State passed Act 133, which prohibited the pollution of natural waterways with substances like oil and salt water. This was a problem because operators were routinely discharging “produced water,” which killed any vegetation in its path. Perhaps not surprisingly, it is also one of the leading causes of land loss.

Then, in 1978, during his second of four terms in office, Gov. Edwin Edwards signed into law the State and Local Coastal Resources Management Act (SLCRMA), and two years later, Louisiana created a Coastal Use Permit program, which required businesses to receive a permit to conduct any work along the coast that “has a direct and significant impact on coastal waters.” And it also said this: If you’ve already legally been working, you don’t need a new permit. The key word here is, of course, legally.

In addition to companies that had been discharging “produced water,” many were also granting themselves permission, without any approval or oversight from the state, to dredge canals wherever and whenever they found it convenient, and these newly-constructed canals were particularly devastating to the hydrology and dramatically accelerated coastal land loss.

Companies in South Louisiana that used horizontal drilling technology would suck out all of the fluid reservoirs from the subsurface, and because they neglected to replace those fluids, the land began caving in, rapidly.

All of these activities are against the law and have been against the law for between 38 and 94 years, depending on the crime, and yet, despite that, oil and gas companies- big companies, some of whom are the wealthiest in the entire world- have continued to routinely break these laws, with zero to little consequence.

Meanwhile, since 1922, two years before Act 133, Louisiana has lost an astonishing amount of land, nearly 2,000 square miles.

Put another way, during the past 96 years, Louisiana has shed two Rhode Islands or, if you prefer, one Delaware.

 

This is not trivial, and it is not just the price of doing business with oil and gas companies. We are now exponentially more vulnerable to hurricanes. We’re having to pay people to abandon their hometowns. We’re scrubbing names off of our maps. And speaking of maps, although it’s not perfect, this is still a more accurate representation of the shape of Louisiana than what you’ll find in a textbook:

Louisiana

The irony is that the Louisiana Oil and Gas Association’s clever little YouTube video is titled “Give ‘Em the Boot.” If they intend on doing that, first, they’ll need to pay for the most expensive cobbler in the history of the world, because, the shoe repair bill is their responsibility.

V.

So, what does any of this have to do with the procedural shenanigans that I mentioned at the very beginning by lawyers representing the industry?

In layman’s terms, they are attempting, in my opinion in bad faith, to kick these cases back and forth from state and federal court with the primary intention of ensuring that justice delayed will be justice denied. The federal courts have already, repeatedly ruled these cases implicate state and not federal law, and in response, these companies have said, “Fine, but they should all be tried separately,” presumably hoping it would result in a series of different verdicts and drag out the process.

Now, they are simply hoping for yet another delay. The State’s response says it best. Quoting (emphasis added):

There is no need for centralization here. There is no need because there is no problem.Defendants practically admit as much in their motion by failing to lodge a single complaint about duplicative discovery, inconsistent pretrial rulings or other inconveniences they suffered during the course of litigating these cases. Instead, they rely completely on imagined hypothetical hardships that have somehow not yet materialized, despite the fact that a majority of these cases have been in litigation for well over four years now.

After all that time litigating these cases in both state and federal courts, defendants fail to identify a single bad experience that merits mention in their motion for centralization. This glaring omission is telling, and it raises the question: “Why?”

Why did defendants neglect to include even a shred of evidence—or at least an allegation—of past problems that §1407 treatment can solve? Why did they fail to argue that centralization is necessary because they attempted alternative means of coordination, but plaintiffs unreasonably refused? Why did they not recount for this Panel how they were unable to convince the District Courts to work together to address their concerns before seeking centralization?

…(T)he answers to these questions raise yet another question: Why was this motion filed, really?

It’s a Hail Mary pass, but unfortunately, their football field is about to go underwater.

Written By: Lamar White Jr.

Published By: The Bayou Brief

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