A wetlands damage lawsuit filed by Jefferson Parish against nine oil and gas companies must go to trial, a 24th Judicial District Court judge ruled Thursday (Nov. 10), saying attempts by the parish and the state of Louisiana to enforce provisions of permits under which the companies damaged the environment “would be irreparably inadequate.” The ruling by Judge Stephen Enright Jr.sets the stage for similar lawsuits to go forward and for the state to file suits in other coastal parishes, which could result in billions of dollars for Louisiana’s coastal restoration program if they are successful in the litigation.
Jefferson has filed seven suits against oil companies for wetlands damages from their exploration and development operations, and 34 similar suits have been filed by Plaquemines, St. Bernard, Cameron and Vermilion parishes. If the new ruling is not challenged by the oil and gas defendants or is upheld on appeal, it also clears the way for Gov. John Bel Edwards to move forward with his plan to have all coastal parishes file similar lawsuits, said Donald Price, an attorney representing the state Department of Natural Resources.
“This issue, and all issues involving conditional use permits, need to be resolved in each of the parishes,” Price said. “We hope that the parishes will shortly be able to tell us if they are going to file their own lawsuits, and if not, the secretary (of Natural Resources) is going to pursue claims in those parishes on behalf of the state.”
“We are, as we speak, working on drafting lawsuits, and we are in the next several weeks going to be working on getting them filed,” Price said.
The Louisiana Oil and Gas Association and the Louisiana Mid-Continent Oil and Gas Association, whose members are defendants in the suits, attacked the ruling and Edwards for his intent in moving forward with the suits. “Judge Enright’s reversal is based entirely on assertions made by Gov. Edwards and DNR officials that the state doesn’t have the staff, the funding or the capability to address permit violations alleged in the coastal lawsuits,” said the associations’ statement.
“Governor Edwards’ and DNR’s claim that they are incapable of addressing the alleged violations through the state’s well established administrative enforcement process is absurd,” the statement said. “DNR manages an annual budget of $69 million and employs hundreds of scientists and inspectors. DNR’s primary duty and obligation under state law is to do the work that the Edwards administration is now calling on our judicial system to do.”
The statement also hinted that this ruling and the rest of the lawsuits will continue to be challenged in court: “Gov. Edwards’ sue-first strategy will not result in a quick payday,” the statement said. “As we have said on behalf of our member companies from the beginning, LOGA and LMOGA will continue to vigorously defend Louisiana’s oil and gas industry from this ill-conceived and divisive litigation.”
Louisiana Attorney General Jeff Landry intervened in the 39 parish lawsuits that had been in effect in March of this year, and Edwards intervened in early April. Both want the judges handling the suits to require any money awarded to be used for coastal restoration.
Louisiana law requires half of the money from enforcement of the state’s coastal zone management permitting program to go to the state’s coastal restoration trust fund, and another 25 percent to be returned to parishes that have approved mitigation programs within their borders, said Meghan Carroll, another Department of Natural Resources attorney. When he intervened in the suits, Edwards also sent a letter asking all parishes to file damage suits, or inform the state if they were not, so the state could do so.
Enright’s new ruling reverses his Aug. 9 decision to throw out the Jefferson suit. In the earlier ruling, he sided with oil and gas company defendants in saying the parish did not exhaust administrative remedies before going to court.
He had dismissed the suit without prejudice, however, and held an Oct. 26 hearing on a motion for new trial, letting local and state officials present evidence on the ability of the state to enforce its regulations. At that hearing, Natural Resources Secretary Thomas Harris said his agency is not equipped with the staff or other resources necessary to determine whether the oil companies violated the law during the more than 30 years that passed before the filing of this and other suits by the parish against other oil companies.
“The claims in these suits arise from the conduct of unpermitted oil and gas activities, or the violation of the terms and conditions of permits that were previously issued by the (Office of Coastal Management) or its predecessors,” Harris said in an affidavit filed with the court. “The parish lawsuits involve many thousands of alleged past violations” of State and Local Coastal Resources Management Act.
Harris said his agency “does not have the staff, funding or capability to conduct the thousands of administrative enforcement actions that would be necessary to address the violations alleged in the parish lawsuits. The LDNR also lacks the ability to consolidate the thousands of administrative enforcement actions that would be necessary, and it lacks the ability to handle all such actions while continuing to perform its everyday monitoring and enforcement duties.”
As a result, he said, his department has chosen litigation and waived the standard administrative process for the allegations involved in the lawsuits.
Carroll said her department has only six field biologists, who already are tied up handling new applications and current violations. “We’re talking about hundreds of violations just in this case, and there are 41 cases,” Price said. “Over the last decade or so, DNR has averaged less than a hundred enforcement actions per year.”
But in their joint statement, President Chris John of the Louisiana Mid-Continent Oil and Gas Association and acting President Gifford Briggs of the Louisiana Oil and Gas Association said Louisiana does have the ability of prosecuting permit violations on its own, without tying up the state’s courts. “We fundamentally disagree with the view that our overworked, overburdened courts are more capable of enforcing the terms of state issued permits than an entire state department that has the resources and the constitutional obligation to do just that,” the statement said.
In the October hearing before Enright, the state also argued that the “exhaustion of administrative remedies” doctrine originally cited by the judge does not apply to governmental entities.
Attorneys representing Jefferson Parish hope to see this first lawsuit go to trial within 18 months. But there’s still quite a few hurdles for the parish and state to clear before that happens, said John Carmouche, a private attorney representing the parish.
The question of whether the Department of Natural Resources had the ability to review the violations was only one of several technical “exceptions” filed by the energy companies and argued in the October hearing. Enright has not yet ruled on those.
The energy companies also could challenge Enright’s ruling at the 5th Circuit Court of Appeal and eventually to the state Supreme Court. There’s been no indication from the defendant companies of their plans.
Carmouche said a state judge in Plaquemines Parish is holding a similar hearing on whether the first of 21 suits there should go forward in March.
He said his law firm began putting together a team of scientific experts 2 1/2 years ago. The team has been investigating violations of existing permits and cases where violations occurred but companies had not applied for permits. The team includes hydrogeologists, environmental scientists, geophysicists and biologists.
“All have been asked to look at the information regarding the operations of the oil fields to tell us in the operating areas what was caused by the oil companies and how can we fix it,” Carmouche said. “In addition, personnel have been reviewing individual permits, and we know that 90 percent — if not 95 percent — of the violations we’ve identified were oil companies not obtaining permits, rather than obtaining a permit and violating it.”
He said 85 percent to 90 percent of the violations that have been identified occurred between 1978 and the present, and fall under the provisions of the Coastal Zone Management Act. But his team has identified some damage that pre-dates that state law. In those cases, including the abandonment of oilfield waste permits before 1978, the team must be able to prove the company’s actions violated state laws in existence at the time.
Carmouche said that if successful, the lawsuits already filed could result in significant financial damages. “We’re not tracking the total coast, but we’re talking billions of dollars that it’s going to take to protect these local people and local businesses, which is what he suit is all about,” he said.
The Baton Rouge-based law firm of Carmouche was the first to reach out to parishes and offer to file suits against the energy companies on their behalf. Other law firms have been added to the plaintiffs’ team, as additional parishes have filed their own suits. And the governor and attorney general’s office also are represented in the case.
Matthew Block, executive counsel to Edwards, said the financial risk for filing the suits is currently the responsibility of the private law firms, not the state and parishes. If the suits are successful, he said, state law provides for judges to award legal fees and court costs, which would likely include the cost of experts hired to conduct research necessary to prosecute the individual suits.
“These counsel are taking the risk, putting their own resources into these cases moving forward,” Block said. “That’s a good deal for the state and the best way for the state to move forward, and maybe the only way for the state to move forward.”
But the oil and gas associations said going to court against industry is not the way to finance coastal restoration.
“The Edwards administration’s shortsighted approach to litigation also makes the false assumption that energy producers are not doing their part to help solve the complex challenges facing our coast. Nothing could be further from the truth,” their statement said.
“Today, the oil and gas industry is the No. 1 private investor in Louisiana’s coast and environment. In addition to annual investments of as much as $200 million to support public sector projects included in the state’s coastal master plan, the industry also supports dozens of coastal and environmental projects being led by our private and nonprofit partners. These investments clearly illustrate that collaboration is much more effective than litigation in moving us toward our collective goal of protecting Louisiana’s coast.”