Oil and gas companies won the first round Thursday night in a legislative effort to kill lawsuits filed against them by parish governments over the loss of coastal wetlands.
The Senate Natural Resources Committee approved Senate Bill 359 on a 4-3 vote. The bill now advances to the full Senate.
The committee hearing pitted oil and gas lobbyists against John Carmouche, a politically powerful trial attorney backed by representatives from parish governments that hired him to sue the companies.
“For years, Big Oil has run this state,” said state Sen. Eddie Lambert, R-Gonzales, a sharp critic of the bill. “It’s time for them to pay up.”
Potentially billions of dollars are at stake. Carmouche has already reached a tentative settlement for $100 million with Freeport McMoRan, one of the smaller oil and gas players in Louisiana. Passage of the bill would deep-six that deal, which calls for the money to restore wetlands.
Carmouche and the oil companies also are battling in court.
For all the political drama, Thursday night’s hearing turned on an obscure legal question: whether the 1978 Coastal Zone Management Act allows parish governments to sue oil and gas companies for the coastal use permits issued by the state. Those lawsuits allege that the companies’ drilling activities destroyed wetlands and demand that the companies pay to restore the coast.
SB359’s sponsor, state Sen. Bob Hensgens, R-Gueydan, the chairman of the committee, said his measure would simply clarify that parish governments did not have the right to sue oil and gas companies under the 1978 act for permits issued by the state.
Only the state can file the lawsuits, Hensgens said.
“This (bill) was introduced due to a troubling number of lawsuits by local governments,” he said in his introductory remarks.
Hensgens said passage of SB359 would mean Gov. John Bel Edwards or Attorney General Jeff Landry still could pursue the lawsuits.
Backing his view was Tyler Gray, president and general counsel of Louisiana Mid-Continent Oil & Gas Association, who argued that local governments do not have the authority to enforce the state coastal use permits in court. Local governments, he said, can only “provide input.”
Carmouche, a big donor in political races, has filed 42 lawsuits on behalf of six parishes: Plaquemines, Jefferson, St. Bernard, St. John, Vermilion and Cameron.
Carmouche dominated the hearing with an hourlong presentation. At the beginning of the hearing, Hensgens asked everyone to be brief, but he made no attempt to interrupt Carmouche.
“I did not want to be accused of shutting down debate on my bill,” Hensgens said at the end of the 3½-hour hearing.
Carmouche argued that the Legislature in 2014 and a federal judge several years later affirmed the right of parish governments to pursue the lawsuits.
He said supporters of the bill were doing the bidding of oil companies.
“Let’s unveil the truth here,” Carmouche said and noted that the state has no money to pursue the lawsuits. He said his law firm — Talbot Carmouche Marcello — has spent nearly $9 million on just two of the cases. He would collect his share of any successful lawsuit depending on what the judge ordered.
Having the state take over the lawsuits from the parishes would mean shifting the cost to state taxpayers, Carmouche said.
The cost would be “very, very expensive,” Jimmy Faircloth, who represented Gov. Bobby Jindal in the BP oil spill, told the committee members.
Gifford Briggs, president of the Louisiana Oil and Gas Association, said the Legislature could decide to appropriate money to hire lawyers.
State Sen. Mike Fesi, R-Houma, said he blames the loss of coastal marshes not on the oil companies but on construction of levees along the Mississippi River.
“The oil companies have spent millions and millions of dollars on restoration,” Fesi said.
State Sen. Sharon Hewitt, R-Slidell, said the parish lawsuits have had “a chilling” impact on investment in the state.
State Sen. Bret Allain, R-Franklin, said the council chairmen of Terrebonne and Lafourche parishes supported SB359.
Jefferson Parish President Cynthia Lee Sheng testified against the bill, along with Parish Council members Ricky Templet, Scott Walker, Jennifer Van Vrancken and Deano Bonano.
“Our local rights are the backbone of our parish,” Lee Sheng said.
Walker called it a “travesty” that they had to shift their focus to the bill at a time when the council members are responding to the coronavirus crisis.
“We as a council have decided not to take up anything controversial” during the pandemic, Van Vrancken said, advising the senators to follow suit.
Voting for the bill were: Hensgens, Fesi, Allain and Hewitt.
Voting against the bill: Lambert; Sen. Patrick Connick, R-Marrero; and Sen. Joseph Bouie, D-New Orleans.