Saturday, April 13, 2024

Oil companies facing lawsuits over coastal damage ask court to reconsider sending the cases to state court

by BIZ Magazine

By David Jacobs | The Center Square

Oil and gas companies are asking a federal appeals court to reconsider its previous decision that parish lawsuits alleging damage of coastal wetlands should be heard in state court.

A three-judge panel of the New Orleans-based U.S. Court of Appeals for the Fifth Circuit in August unanimously rejected the companies’ argument that the case belongs in federal court. The defendants are asking the panel and the court as a whole to review that decision.

In 2013, local governments in Louisiana’s coastal region filed lawsuits against more than 200 oil and gas companies, seeking compensation for damage they say the companies caused to the region’s wetlands. The companies say they followed their permits and the law as it stood at the time.

The Fifth Circuit panel’s ruling last month only applied directly to lawsuits by Plaquemines and Cameron parishes, though it could have broader implications given the similarities shared by the various lawsuits, experts say. The decision focused on an expert report Plaquemines Parish produced in 2018 that notes some of the alleged damage dates back to World War II.

At the time, the companies argue, they were under strict wartime regulation and essentially were acting as agents of the federal government. That raises a federal issue, which means the cases should be heard in federal court, they say.

But the three judges, all nominated by President Donald Trump, said the companies didn’t raise the issue in time. They said the ties to wartime activities cited in the 2018 report already were established in earlier evidence, and the defendants missed their window to ask for a removal on that basis.

In documents filed late Tuesday, the companies are asking the court to revisit that decision, in part because they say they only had access to well serial numbers prior to the 2018 report and had no way to know when the wells were drilled or operated.

Melissa Landry, a spokeswoman for the oil companies’ legal teams, said the report was the first indication that plaintiffs were alleging damage from dredging that occurred over decades prior to enactment of Louisiana’s State and Local Coastal Resources Management Act of 1978. The request to remove to federal court was filed shortly after the report was introduced, she said.

“They are now attempting to apply Louisiana’s State and Local Coastal Resources Management Act of 1978 retroactively to attack decades of federally authorized and/or federally directed oil and gas activities dating back to World War II, many of which were permitted by the federal government, long before the state adopted a coastal management framework,” Landry told The Center Square via email.

She said the panel also failed to consider their argument that the lawsuits raise important federal questions that ought to be resolved in federal court. That claim is separate from the argument related to federal control.

Corporate defendants tend to prefer federal court, Keith Hall, an LSU law professor who directs the school’s John P. Laborde Energy Law Center, told The Center Square last month. Federal courts are more apt to end a case quickly rather than let it get to a jury, he said, and corporations might face a less sympathetic jury in state court.

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