Oil and gas companies have struck out in their attempt to kill lawsuits filed by seven parishes that accuse the companies of destroying coastal marshes and wetlands during decades of drilling and exploration activities.
“We ran out of time,” state Sen. Mike Fesi, sponsor of the legislation, Senate Bill 440, said in an interview Thursday. “We’ll shoot for it next year.” Fesi is a Republican from Houma.
The development represents a major defeat for oil and gas companies, who had labeled it their biggest priority during this year’s legislative session, which ends Monday night.
“Unfortunately, the shortened session created a timing issue,” Gifford Briggs, president of the Louisiana Oil and Gas Association, and Tyler Gray, president and general counsel of the Louisiana Mid-Continent Oil and Gas Association, said in a statement. “Nonetheless, we look forward to continuing the conversation on ending these meritless lawsuits and bringing our oil and gas workforce home.”
The defeat of SB440 represents a major win for the Talbot Carmouche Marcello law firm in Baton Rouge that has filed most of the lawsuits, beginning eight years ago.
“The taxpayers of Louisiana had a huge victory today because they’re not going to have to pay to restore the coast of Louisiana,” said attorney John Carmouche. “Big Oil, which damaged the coast, will have to pay for provable damages caused by their operations, and the coast of Louisiana will be restored.”
The defeat of SB440 is also a victory for Jefferson Parish President Cynthia Lee Sheng and St. Bernard Parish President Guy McInnis, who came to Baton Rouge twice to testify against it.
“It was the right thing to do for the citizens of this state,” McInnis said. “Now I think we’ll have talks and can come to a solution” that could be a settlement between the two sides.
Carmouche has reached a tentative settlement with one small player in Louisiana, Freeport McMoRan, that calls for the company to pay 12 coastal parishes $100 million over 20 years. He said he has been in settlement discussions with other oil and gas companies.
SB440 had passed the Senate narrowly on May 20 and won approval Wednesday in the House Natural Resources Committee after being amended. But SB440 had to pass another legislative step, the House Appropriations Committee, because the Legislative Fiscal Office had determined that its cost to the state was “likely to be significant.”
That’s because the Carmouche law firm is bankrolling the 42 lawsuits filed by six of the parishes: Jefferson, St. Bernard, St. John the Baptist, Plaquemines, Vermilion and Cameron. Carmouche said the firm has spent $9 million on just two of the cases.
Retroactively nullifying those lawsuits would have allowed the state Department of Natural Resources or Attorney General Jeff Landry to take over the lawsuits. But the state agency pegged the cost at $4.3 million per case for the state to do so.
Carmouche can pay for the parish lawsuits and seek payment for its legal fees from a judge if the firm reaches a settlement or wins a judgement against oil and gas companies. State law, however, would require the state to hire lawyers, at $150 to $500 per hour.
“Potential future costs could include additional expert reports to address remediation, restoration, and damages, as well as attorney costs associated with the continued litigation in either federal or state court,” reported the Legislative Fiscal Office. The office noted that the state would incur no cost if the Department of Natural Resources or Landry decided not to continue them.
Another bill to kill the lawsuits, Senate Bill 359, stalled before the full Senate after winning approval by a Senate committee.
The death of SB440 leaves the oil and gas industry with one remaining measure to express its opposition to the lawsuits.
Senate Concurrent Resolution 7 urges the parishes to drop their lawsuits and says the parishes “have contracted with private legal counsel to improperly bring unprecedented enforcement actions.”
SCR7, sponsored by state Sen. Sharon Hewitt, R-Slidell, needs only approval of the full House to take effect.
As a resolution, it does not change the law but is an expression of legislative intent. Gov. John Bel Edwards, an opponent of SB440, cannot veto it.
SCR7 appears to be an attempt to influence the federal judges who will be deciding whether the parish lawsuits should be heard in federal court (as the oil companies favor) or in state court (as the parish attorneys favor).
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