Lawsuits filed by seven coastal parishes against oil and gas companies remained on the chopping block Tuesday after a state Senate committee dismissed an in-house analysis that a bill to kill those lawsuits might cost the state big dollars.
The Senate Finance Committee approved Senate Bill 359 on a 7-1 vote – but not before chastising the legislative staffer who produced the analysis and not allowing comments from a private attorney opposed to the bill who would have backed her findings.
SB359 now passes to the full Senate. If it wins approval there, the measure would move to a House committee for consideration.
Winning passage of the bill is a major priority for oil and gas companies, which spent heavily last year to elect a more favorable Legislature and whose representatives say the lawsuits have chilled investment in Louisiana. Gov. John Bel Edwards, who received major contributions from trial attorneys, has supported the suits. He says he opposes SB359 because it would retroactively nullify existing lawsuits.
The parishes that have filed lawsuits are: Plaquemines, St. John the Baptist, St. Bernard, Vermilion, Jefferson, Cameron and Orleans.
At issue Tuesday was an analysis by the Legislative Fiscal Office, a nonpartisan branch of the Legislature, that SB359 could result in “a significant increase in expenditures” because the attorney general and the state Department of Natural Resources would take over the lawsuits if the Legislature annuls those filed by the parishes.
State Sen. Bob Hensgens, R-Gueydan, SB359’s sponsor, had been prepared to have the full Senate act on his bill Monday. But the cost estimate in a revised fiscal note forced SB359 to detour through the Finance Committee Tuesday.
Hensgens complained to the committee that the fiscal office had not projected a cost from either the Attorney General’s Office or the Department of Natural Resources when the Senate Natural Resources Committee, which he chairs, approved it on May 11. He also said the fiscal office had relied on a newspaper story for its analysis.
“I have never seen anything like it,” Hensgens told the committee.
Rebecca Robinson, the legislative staffer, acknowledged that she had read a newspaper story that quoted attorney John Carmouche, who has filed lawsuits for six of the parishes, as saying he had spent $9 million so far. In the story, Carmouche was questioning whether the state could afford to take over the lawsuits. The lawsuits aren’t costing state taxpayers anything now because Carmouche’s firm is footing the bill.
Robinson said she had less than 24 hours to prepare the initial fiscal analysis before Hensgens’ committee heard the bill. But afterward, with additional time, she verified the newspaper account with Carmouche’s public testimony before the Natural Resources Committee and further checked it with the Department of Natural Resources, she said.
The agency is a party to the lawsuit and estimates that each of the 43 lawsuits filed by the parishes would cost at least $4.3 million – to pay for depositions of expert witnesses and for attorneys at $150 to $500 per hour.
“We said if the state continued with lawsuits, the cost would likely be significant,” Robinson said and noted later that pursuing a lawsuit against BP, following the 2010 oil spill, cost the state $40 million.
She added, however, that if Attorney General Jeff Landry and the Department of Natural Resources – which is under Edwards’ authority – chose not to pursue the cases against the oil and gas companies, “the cost would be zero.”
Deputy Attorney General Bill Stiles said the Attorney General’s Office anticipated no additional cost if the bill passes because “it does not change the authority” of his office. His comments did not address how much his office would have to spend if it chose to pursue the lawsuit.
State Sen. Greg Tarver, D-Shreveport, asked if the state could avoid a big tab by hiring outside attorneys on contingency fees. Donald Price, DNR’s special counsel, said state law prohibits that.
The Carmouche law firm is not working on a contingency basis – not exactly, anyhow. A judge would determine its fee in a settlement or after a successful trial. The Carmouche firm has won a tentative settlement with one oil and gas company, Freeport McMoRan, for $100 million, but a bill to create a framework to divide the payments died before Hensgens’ committee last week.
On Tuesday, state Sen. Mike Fesi, R-Houma, called Robinson’s account “fictitious.”
State Sen. Cameron Henry, R-Metairie, asked Robinson if she had seen receipts from Carmouche verifying his $9 million cost claim for two of the 42 lawsuits his firm has filed.
Robinson replied that she hadn’t but noted that the Department of Natural Resources had supported Carmouche’s figure.
Henry asked if she had verified the receipts with the agency. When she said she assumed the information was accurate, Henry said it was dangerous public policy to assume information from an opponent of a bill.
Carmouche was sitting in the committee hearing room. But the committee’s chairman, Bodi White, R-Central, did not allow him or anyone else to testify on the bill, after citing time constraint concerns.
Carmouche was angry afterward, saying he could have shown how he had spent the $9 million and how the state would have to spend tens of millions of dollars to continue the lawsuits.
“How can you make an educated decision if you don’t want to hear all the facts?” Carmouche said in an interview. “It would have taken me 10 minutes to go through all of this in detail. They didn’t want to hear the truth.”
Voting to advance SB359 to the full Senate (7): Sens. Mark Abraham, R-Lake Charles; Heather Cloud, R-Turkey Creek; Mike Fesi, R-Houma; Cameron Henry, R-Metairie; Ronnie Johns, R-Lake Charles; Greg Tarver, D-Shreveport; Glen Womack, R-Harrisonburg.
Voting against advancing the bill (1): Sen. Regina Barrow, D-Baton Rouge.