A New Orleans-area levee authority was told Thursday that it will be on the hook for “a couple million dollars” that have been spent on its lawsuit against scores of oil and gas companies if it prevents its attorneys from appealing a federal judge’s dismissal of the case.
With that warning from the lead attorney on the suit, it appears the Southeast Louisiana Flood Protection Authority-East’s case will be appealed to the 5th U.S. Circuit Court of Appeals without any explicit action by the authority’s commissioners.
The nine-member board remains split but appeared at a meeting Thursday to narrowly favor continuing the case, though some commissioners who oppose the suit argued it was improper for the appeal to go forward without a board vote in favor of that action.
Commissioners appointed by Gov. Bobby Jindal in an effort to kill the suit, which alleges the energy industry is responsible for billions of dollars in damage to southeast Louisiana’s coastline, sparred with Gladstone Jones, the lead attorney on the case, over the status of the suit in light of U.S. District Judge Nannette Jolivette Brown’s ruling.
Those commissioners pressed the attorneys on what it would take to consider the lawsuit dead and exactly who was in the driver’s seat as decisions are made about the appeal.
“Are we the client or are you?” asked Commissioner Jeff Angers, one of the four anti-lawsuit commissioners appointed to the authority since the suit was filed in mid-2013.
Angers and others seeking to kill the suit are at a disadvantage in the debate over the appeal due to the way the contract hiring the lawyers is structured. That agreement requires the board to see the suit through to the end, at which point the attorneys handling it would either receive a share of the winnings or go away empty-handed if they lose. If the case is halted at any point, the Flood Protection Authority is required to pay for the attorneys’ time and expenses — a “poison pill” clause aimed at preventing political interference in the suit.
Flood Protection Authority Vice President Joe Hassinger, an attorney and an opponent of the suit, said Brown’s ruling should count as the end of the case. Appeals are rarely granted and even more rarely result in dismissals being overturned, Hassinger said, and bringing the 5th Circuit into the issue could lead to unforeseen consequences for the Flood Protection Authority, he said.
Jones, however, said the attorneys pursuing the suit believe they still have a strong case to make.
“It is not unusual, not unusual at all that early decisions can be appealed,” Jones said, adding later that the lawyers “think factually and legally (Brown) got it wrong.”
While saying the board has the ability to stop the appeal, Jones said that would amount to firing the firms working on the case — and that would trigger the requirement that the authority pay them for their time and expenses.
Pro-lawsuit commissioners seized on that provision, arguing that there is no downside in letting the appeals process play out.
“Is there any advantage to us in taking the action to terminate the representation?” Commissioner Paul Kemp asked.
Jones said he expected to file an appeal in the next week and that a decision from a three-judge panel of the 5th Circuit could take six to nine months. If they lose there, the lawyers could ask the entire 5th Circuit to hear the case and, potentially, attempt to pursue an appeal to the U.S. Supreme Court. The lawyers will decide whether it would be worth pursuing those additional appeals or whether to recommend dropping the case, Jones said.
The fight over the lawsuit has raged in both state and federal courts, at the Legislature and on the Flood Protection Authority’s board since it was filed.
Supporters argue the suit is the only way to force the oil and gas industries to pay for decades of drilling and dredging activities that severely damaged the coastal marshes in southeast Louisiana. They say the loss of those wetlands, in turn, has subjected the New Orleans area to more destructive storm surges, which has increased the complexity and cost of the flood protection systems the authority oversees.
In addition, supporters of the suit have argued that only a politically independent levee board could bring a suit against the powerful energy industry; they have pointed to the many attempts to stop the case as evidence for that position.
But opponents, including Jindal and members of his administration, have argued the Flood Protection Authority exceeded its legal role in filing the suit and was not the proper entity to pursue such claims.
Brown gave some support to that position in her ruling, arguing the Flood Protection Authority did not have legal claims on the energy industry for coastal damage.
Hassinger argued that continuing the suit would distract the Flood Protection Authority from its basic mission and could create further problems for the board.
“I’d rather spend the next year, 18 months, five years working with the people we’ve alienated by filing the suit,” Hassinger said.
But dropping the case now would essentially be a costly waste for the board, President Stephen Estopinal said.
“I’d suggest we not play the Roman fool and fall on our sword before we get through the appeal,” he said. “We’ve started this. We may as well see it through to the end and let the chips fall where they may.”
Follow Jeff Adelson on Twitter, @jadelson.