In July 2013, the South Louisiana Flood Protection Authority-East filed suit against 97 energy companies. The suit singles out the oil and gas industry to pay for damage to Louisiana’s coast — damage that, even proponents of the lawsuit admit, has been caused by a variety of factors including the government’s own policies and actions.
Louisiana taxpayers were promised at the time that this legal action would quickly bring the energy industry to the negotiating table, and that suing the state’s most important economic engine would serve to speed up the process of funding a solution to coastal erosion.
Despite what may be the best of intentions, here are three reasons this lawsuit could do more harm than good:
1. It may delay, rather than expedite, the process of saving the coast. One of the primary arguments supporting this litigation has been that the suit will force oil and gas companies to sit down and negotiate a reasonable contribution for the costs of coastal restoration in Louisiana. Instead, the threat of a cataclysmic judgment has triggered a political process that puts any possible deal on the back burner. While the suit may produce a number of “nuisance value” settlements that do little to address funding needs, the larger energy firms may take a different approach.
Lawsuit proponents claim that oil and gas companies have too much influence in the Capitol, but filing this suit was the surest way to ignite a political battle that the energy industry is unlikely to lose. As long as this litigation hangs over the industry, oil and gas companies are likely to put more time and effort into killing the suit than into collaborative efforts to fight wetlands loss.
2. The legal process is unlikely to deliver a satisfactory outcome. Given the complex legal and environmental questions at hand, the ability of a court to make a credible determination of liability is uncertain at best. Reasonable people can and do disagree over the exact causes of coastal erosion, so attempting to resolve environmental causes and legal obligations between various actors over many years is likely an exercise in futility.
Further, while contractual obligations should be enforced, there is something questionable about attempting to impose liability for actions that were not flagged by the relevant state or federal agencies over a period of decades. This is particularly true given that oil companies have paid the state billions of dollars over the years in taxes and royalty payments. The question of how the energy industry can and should contribute to coastal restoration is not one that can be resolved in a courtroom.
3. The trial lawyers’ meter is running. Today, more than 450 days after the suit was filed, the clock continues to tick, the courts continue to ruminate, no trial date has been set, and the plaintiff lawyers continue to rack up huge bills, which, thanks to an ill conceived “poison pill” in their contract with SLFPA-E, could easily stick the taxpayer with the tab. That tab, based on the plaintiff lawyers’ own public comments, may be as high as $17,700 per day ($8 million over 450 days). Given the scope and complexity of this case, these costs can be expected to skyrocket.
Louisiana faces a challenge in funding the state’s Coastal Master Plan. While it makes sense to engage the energy industry in this process, suing them was an attempted shortcut that has had the practical effect of dividing the parties while running up costs.
How to fund and implement coastal restoration efforts are vital questions of public policy that should be addressed by elected policymakers. If Louisianans don’t believe that elected officials are doing enough to protect the coast, they can change this via the ballot box. But allowing appointed board members to direct Louisiana public policy through the courtroom is a mistake that should be rectified before more damage is done.
Kevin Kane heads the New Orleans-based Pelican Institute for Public Policy, a conservative group that studies state issues.