Trial lawyers have carved out a cottage industry suing Louisiana’s oil and natural gas companies. Now they are teaming up for a huge jackpot — multibillion-dollar awards based on blaming the energy industry for Louisiana’s coastal land erosion.
The charge ignores history, practices unrelated to the oil industry, and basic reality.
The opportunistic and predatory trial lawyers would have the people of Louisiana and America believe that the energy industry alone is responsible for decades-long coastal erosion.
In concocting this narrative, they leave out vitally important facts: studies demonstrating the impact of natural erosion from ocean currents in the Gulf of Mexico; hurricane and other storm impacts; human actions such as the Army Corps of Engineers building levees along the Mississippi River; and soil conservation practices through the Midwest and beyond, which have greatly reduced silt entering the river and reaching the delta.
The prospect of a multimillion-dollar prize gives the lawyers powerful incentive to pursue “jackpot justice.”
However, they have produced no credible evidence correlating coastal land loss with drilling projects that go back as far as the 1930s. No signs indicate any present-day energy industry impacts on coastal erosion.
Even more outrageous, these energy projects were sanctioned, permitted and encouraged by Louisiana and its regulatory agencies. The energy producers abided by state laws and regulations. In more recent decades, federal regulators also got involved in reviewing and issuing permits.
Nevertheless, the lawyers are trotting out river barge loads of junk science in pursuit of billion-dollar judgments. Even if successful, money remaining after the trial lawyers’ princely cut would likely evaporate within the state’s general fund, leaving little for actual solutions to coastal erosion.
The oil and gas industry has been the backbone of Louisiana’s economy for decades, with many families, friends, and neighbors working to build the industry. The industry has generated billions in employee earnings in Louisiana and along the Gulf Coast.
Each year, oil and natural gas companies in Louisiana pay nearly $3 billion in taxes — roughly 30% of all taxes collected by the state. The companies pay more than $1.3 billion annually to the state’s parishes and cities. In the decade between 2006 and 2016, the industry paid $14 billion just for the opportunity to do business in the Pelican State.
They’ve also paid countless billions in federal lease bonuses, rents, royalties, taxes, and salaries related to drilling and production further offshore — by workers, facilities, and transportation operations located in Louisiana and moving through the delta region.
Sadly for Louisiana and other U.S. citizens, the trial lawyers have stacked the deck. They provided overwhelming support to fellow trial lawyer John Bel Edwards in his successful bid for governor and have worked to ensure that their hand-picked Louisiana Supreme Court nominees were put on the bench.
In 2016, Governor Edwards hosted representatives from several energy companies in a meeting and — reading from a script apparently prepared by the jackpot lawyers — issued a directive that they begin settlement negotiations the following week, to avoid further litigation.
When asked about other contributors to Louisiana’s land loss problem, the governor responded that he is not interested in immune or insolvent defendants.
It’s certainly hard to argue that state Supreme Court Justices James Hughes and Jefferson Genovese don’t favor trial lawyers when the lawyers accounted for nearly half the justices’ campaign expenditures.
It’s easy to see why the trial lawyers hope to keep these cases in Louisiana courts, where they exert a powerful influence, and away from federal courts that have strict rules against “junk science” and where the issues would be adjudicated properly and fairly.
The U.S. Chamber of Commerce’s Lawsuit Climate Survey evaluates how fair and reasonable state tort liability systems are. The 2017 survey found that, in nearly every category, Louisiana’s was at the very bottom.
The survey also found that 85% of senior attorneys at major American companies say a state’s litigation climate is likely to impact important business decisions at their companies — such as where to locate or do business.
Louisiana remains at the forefront of safe exploration and production of oil and natural gas. The industry has a long-standing history of cooperation with public officials, community leaders, and natural resource and environmental experts. It remains the top private investor in Louisiana’s Gulf Coast.
Decades of state and national investment, infrastructure, jobs, community involvement and revenue generation could be destroyed by a greedy cadre of trial lawyers who think they’ve found the perfect “get rich quick” scheme. Only by sending these cases to federal courts can any fair resolution be found.
Driessen is senior policy analyst for the Committee for a Constructive Tomorrow and author of articles and books on public policy.
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