Oil and gas companies have no legal obligation to pay a New Orleans-area levee authority for decades of damage to southeast Louisiana’s wetlands, a federal judge ruled Friday as she dismissed a wide-ranging suit that could have put the energy industry on the hook for billions of dollars worth of coastal erosion.
Lawyers for the Southeast Louisiana Flood Protection Authority-East are expected to seek to appeal U.S. District Judge Nannette Jolivette Brown’s ruling, which brings to an end the first chapter of a legal and political battle that has raged for more than a year and a half.
The levee authority had sought to keep the suit alive in the federal courts while also battling a case that would have derailed it in state courts and fighting against efforts by Gov. Bobby Jindal and the Legislature to have the case withdrawn or nullified.
Those efforts included a law passed last year with the intention of killing the suit. But in her ruling, Brown — a former New Orleans city attorney named to the federal bench by President Barack Obama in 2011 — did not even mention that law, instead generally arguing that federal and state laws did not provide any avenue by which the levee authority could successfully bring suit.
She also did not address the issue of whether the 88 companies currently involved as defendants in the suit had caused the massive environmental damages alleged in the Flood Protection Authority’s case.
Energy industry officials and the Jindal administration cheered Brown’s decision late Friday.
“We are gratified by this court’s ruling to dismiss this ill-conceived, unwise and divisive litigation, which we have contended all along was nothing more than an attempt to subvert the existing legal and regulatory processes,” Greg Beuerman, a spokesman for the Shell, Chevron and BP legal teams, said in a statement.
At the same time, an attorney for the levee authority said its legal team could appeal the decision with the Flood Protection Authority’s permission.
“We’re disappointed with the ruling, but I think it was always clear this wouldn’t be resolved in the district court,” said Jim Swanson, one of the lead attorneys on the case. “I don’t think this is the final word on this subject.”
The Flood Protection Authority’s suit alleged that oil and gas companies were responsible for massive coastal erosion in the New Orleans area that increased the intensity of storm surges in the area during hurricanes. That, in turn, increased the cost, size and complexity of the system of levees, floodwalls and gates the Flood Protection Authority is charged with maintaining to protect New Orleans and Jefferson and St. Bernard parishes, the suit said.
If successful, the suit’s proceeds would have gone toward restoring that damage or paying for the operation and maintenance of the levee system.
But Brown argued that any damage to the coastal wetlands did not provide a way for the Flood Protection Authority to sue for damages. She rejected each of four arguments by the authority that it had a claim against the oil and gas companies, ruling that the levees were too far from, or too indirectly affected by, the alleged damage. She also said the authority had no right to sue under permits issued by the state or the U.S. Army Corps of Engineers that allowed the companies’ energy exploration or transportation activities in the first place.
Swanson said he believed the suit’s claims would be supported on appeal to the 5th U.S. Circuit Court of Appeals, even though that court is generally viewed as conservative and pro-business.
The issue is whether the laws and permits were “designed to protect the public and were they designed to protect the levee district and was that (responsibility) foreseeable? I think ultimately the final word on the subject is going to be ‘yes’ on that score,” Swanson said.
The lawyers working for the Flood Protection Authority were doing so on a contingency basis, meaning they would collect compensation only as a portion of the proceeds if they succeeded in the case.
However, the attorneys included a “poison pill” in their contract with the authority, mandating they would be owed all of their costs and fees if political pressure or influence caused the suit to be withdrawn. That clause was seen as a way of staving off political interference with the suit.
If the dismissal is the end of the case, the Flood Protection Authority would not be on the hook for those costs.
Despite that provision, the suit has been the subject of intense political battles.
Since it was filed in mid-2013, Jindal has worked to fill the nine-member levee authority with new members who oppose the suit, to the point where those in favor of continuing the case — originally approved unanimously — maintain only a one-vote majority. Brown’s ruling could provide ammunition for the newer appointees to argue against pursuing the case any further.
In addition, the Legislature approved and Jindal signed a law last year aimed at killing the suit by preventing the levee authority from pursuing such cases. Lawyers for the authority maintained the law was so poorly crafted that it did not actually apply to the levee authority and that even if it did, it was unconstitutional. A state district judge in Baton Rouge agreed with those arguments last year, ruling the law was unconstitutional.
The law was not mentioned in Brown’s ruling.
Jindal spokeswoman Shannon Bates Dirmann said in an email Friday night that the ruling vindicated the administration’s position.
“We appreciate the judge’s ruling and are pleased that this frivolous lawsuit has come to an end,” Bates Dirmann said. “We’ve maintained that this was not a claim (the Flood Protection Authority) had the authority to bring, and we are glad the court agreed.”
Follow Jeff Adelson on Twitter, @jadelson.