A lawsuit filed by Jefferson Parish seeking to force oil and gas companies to pay for damage to coastal wetlands will go to trial after a judge reversed his own earlier ruling that those claims must first be handled through the state's regulatory agency.
The new ruling by 24th Judicial District Court Judge Stephen Enright will allow this case, as well as other similar suits brought in Jefferson and other parishes, to move forward. Gov. John Bel Edwards has called on all coastal parishes to take similar measures, or else the state will file suits on their behalf.
Enright initially ruled in August that the Jefferson lawsuit was premature because the parish had not first sought remedies through the state's Department of Natural Resources, which is responsible for enforcing coastal regulations on the energy industry. But attorneys working for the state, which intervened on Jefferson's side in the case, said the department does not have the staff or resources to properly enforce those regulations.
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In Thursday's ruling, Enright agreed with their argument.
The department "does not have the staff, funding or capability to conduct the thousands of administrative enforcement actions that would be necessary to address the violations alleged in the parish lawsuits," Enright wrote.
It also "lacks the ability to consolidate the thousands of administrative enforcement actions that would be necessary, and it lacks the ability to handle all such actions while continuing to perform its everyday monitoring and enforcement duties. Any administrative remedy existing in this situation is irreparably inadequate," he said.
The lawsuit, first filed in 2013, is one of 41 brought by Jefferson, Plaquemines, Cameron, St. Bernard and Vermilion parishes. The cases accuse oil and gas companies of damaging and polluting coastal wetlands through their operations in those areas.
Donald Price, a special counsel for the Department of Natural Resources, said Thursday that handling the issue internally would be essentially impossible. There are hundreds of damage claims in each of the suits, and the six field biologists employed by the department can get through only about 100 claims each year, he said.
By contrast, handling the case through the courts would mean private attorneys brought in by the Governor's Office to manage the case can hire their own experts to gather that evidence, Price said. Those attorneys are working under contracts that allow them to recover their fees and expenses from the defendants if they win.
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"It is a good deal for the state and the best way for the state to move forward and maybe the only way for the state to move forward," said Matthew Block, Edwards' executive counsel.
With Thursday's ruling, administration officials predicted the cases could begin moving to trial in as little as 18 months.
The Louisiana Oil and Gas Association and the Louisiana Mid-Continent Oil and Gas Association, the two major industry groups in the state, argued that the ruling essentially circumvented DNR.
“Gov. Edwards’ and DNR's claim that they are incapable of addressing the alleged violations through the state’s well-established administrative enforcement process is absurd," the industry groups said in a news release. "DNR manages an annual budget of $69 million and employs hundreds of scientists and inspectors. DNR’s primary duty and obligation under state law is to do the work that the Edwards administration is now calling on our judicial system to do.”
“If Gov. Edwards continues to pursue this misguided path, the only thing that’s clear is that this very long legal battle is just getting started," according to the release. "As these unnecessary lawsuits wind their way through the courts over the next 10 or 20 years, many more energy companies will likely go bankrupt, and those who don’t will choose to invest and create jobs elsewhere.”
With Thursday's ruling, the Edwards administration plans to move forward with its call for all coastal parishes to file suits against oil and gas companies. If they don't, Edwards has said he will have the state file its own suits for coastal damage in those parishes.
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Edwards' call for more suits came after he had sought, unsuccessfully, to negotiate a deal with the energy industry for it to pay for damage companies had caused.
None of the state's coastal parishes have taken up the Governor's Office on that call since letters were sent to parish officials in late September, Block said. "We'll see if that changes as a result of the decision today," he said Thursday.