A New Orleans-area levee authority’s lawsuit seeking compensation for coastal damage done by oil and gas companies will continue, at least for now, after commissioners deadlocked Thursday on a measure aimed at dropping the case.
The 4-4 vote was the first direct attempt to kill the Southeast Louisiana Flood Protection Authority-East lawsuit since the recent passage of a state law aimed at derailing the case and the replacement of a commissioner who supported the case.
With opponents of the suit unable to muster a majority on the board, it appears that whether the case continues will hinge on whether judges uphold that law and on whether Gov. Bobby Jindal, who has fiercely opposed the suit since it was filed last summer, is able to replace more of the authority’s members.
The outcome of the vote was not a surprise. The commissioners who initially authorized the suit have remained committed to seeing it through, though the members appointed by Jindal over the past year oppose continuing it.
One member of the authority, Louis Wittie, was absent for Thursday’s meeting, but in the past he has supported going ahead with the case.
Lawsuit supporters say it is necessary to hold oil and gas companies accountable for decades of destruction of the area’s wetlands, which serve as a buffer to storm surge. Despite the new law, they say it should be up to the courts to decide if the case should be dismissed.
“Until that’s clear, I believe we should continue to pursue all means we have to protect New Orleans from future flooding, and I believe this lawsuit is an important part of that,” Commissioner Rick Luettich said.
Though the new law was drafted specifically to kill the levee authority’s suit, attorneys pushing the suit have argued that technical issues could keep it from applying to the case. In addition, they have raised constitutional questions about passing a law to retroactively kill a suit.
None of the 97 oil and gas companies named as defendants has yet filed a motion to dismiss the case based on the new law.
As has been the case for most of the debate surrounding the suit, there was little discussion before Thursday’s vote over the almost universally acknowledged damage the oil and gas industry has done to the state’s wetlands. Instead, commissioners who oppose the suit argued that the board should not ignore the will of the Legislature and the governor.
“The governor and the Legislature have told us what the policy of the state is,” Commissioner Joe Hassinger said. “We have an obligation to follow that direction.”
Former Commissioner John Barry, who was the first member of the authority to lose his seat after the suit was filed, argued that state leaders’ unwillingness to tackle the issue left the flood protection authority as one of the few entities willing to bring such a suit. Barry argued that reaching a global settlement with the energy industry would be the ideal solution to the situation and that without the threat of such a lawsuit, there would be no reason for those companies to begin negotiating.
“The inability of the political process to deal with this problem is one of the reasons the members of this board felt they had to move forward,” Barry said. “How do you get them to the table? How do you get them to own up to their responsibility?”
Other supporters, including retired Lt. Gen. Russel Honoré, urged the board to keep moving forward with the case, as well.
Hassinger and other commissioners who oppose the suit zeroed in on a so-called “poison pill” in the authority’s contract with its attorneys. While the contract specifies that the attorneys are working on contingency — meaning they would be paid only out of the proceeds of the suit if it succeeds — it includes a clause requiring the authority to reimburse them for their time and expenses if a decision is made to drop the case.
That provision was put in to protect the attorneys if political pressure or new appointments caused the authority to back out of the suit.
Overall, the firms working on the case have incurred about $700,000 worth of expenses and have spent 14,000 billable hours on the case, said Gladstone Jones, the lead attorney on the case. With each of those hours billed at between $200 and $800, depending on who was responsible for that work, that means the authority could owe the firms between $2.8 million and $11.2 million if the case were dropped today.
Jones said the law firms spent about $1.8 million for lobbying efforts during the legislative session in an attempt to keep the case alive. That money came from the firms themselves, he said, and the authority would not be on the hook for those costs if the suit is abandoned.
Jones said the oil and gas industry had a far more extensive presence at the Capitol this year. While the attorneys had five lobbyists working for them, he said, at least 70 lobbyists from the energy industry were pushing various measures aimed at killing the suit.
Hassinger said he was pushing to end the suit now, rather than letting the issue play out in the courts, because the expenses the flood authority would incur continue to increase, and the replacement of additional board members could soon swing the board’s decision against continuing the suit.
“Let’s say next month, (Commissioner Paul Kemp, who supports the suit) gets replaced on this authority, and there’s a majority then, a clear majority to stop the suit, then we’ve incurred additional fees and costs,” Hassinger said.
Kemp and Commissioner Jeff Angers, who opposes the suit, are both potentially up for reappointment or replacement this year, though the date their terms expire has been debated. The nominating committee that recommends members for the board is planning to meet next week to request Attorney General Buddy Caldwell to weigh in on that matter before proceeding with a nominating process.
While all four appointments Jindal has made to the board since it filed the suit have been in favor of dropping the case, it’s not clear that’s how things will play out should the nominating committee put Kemp’s name forward again. Kemp fills one of the board seats reserved for engineers, scientists or other technical experts. While the nominating committee is required to give the governor a choice between two nominees for most seats on the board, it submits a single name for the technical seats, and the committee has already pushed back against a Jindal administration attempt to reject one of the nominees it sent to the governor.
Follow Jeff Adelson on Twitter, @jadelson.