In the first legislative hearing of a widely ballyhooed compromise to revamp landowner lawsuits against big oil, a state Senate panel Wednesday rejected one bill, then amended another before sending it to the full Senate for consideration.
Gov. Bobby Jindal publicly backed the legislation that was hyped as a fix to the so-called “legacy lawsuits,” in which landowners sue because the property they leased to energy companies, sometimes decades ago, was never cleaned up. Jindal said at a March 27 news conference that the legislation would speed environmental remediation and address a worry that energy company executives say keep them from expanding in Louisiana.
Senate Bill 467 would require the court to suspend trial until a remediation plan is approved when an oil company admits responsibility for environmental damage.
“The goal is to drive cleanup,” said Stephen Waguespack, director of the Louisiana Association Business and Industry. “We think this will encourage parties to go and get that cleanup plan.”
State Sen. Rick Ward, R-Port Allen, said his experience has been that jury trials are difficult to schedule. If an oil company came in at the 11th hour and announced liability, then under SB467, trial would be postponed, probably for 18 months or more.
“This is going to do exactly what it says it’ll do, but it’ll have the exact opposite effect,” Ward said.
The state Senate Natural Resources Committee voted 4-2 to involuntarily defer SB 467.
The panel then amended before accepting Senate Bill 667, which would limit the amount of damages that could be collected in a legacy lawsuit. Opponents, who represented smaller landowners, claim the bill allows big oil to duck its contractual obligations.
State Sen. Robert Adley, R-Benton, said under current law, the oil and gas industry is responsible for cleanup costs and other regulatory costs. Under SB667, the landowners must prove the oil company acted unreasonably and excessively before collecting additional damages.
Clarifying ambiguity cuts into the amount of money awarded by the court, Adley said. It also provides predictability for energy companies, he said.
Supporters say the language in the compromise could have been used retroactively. But state Sen. Dan “Blade” Morrish, R-Jennings, introduced a change in language that would allow the 300 or so pending lawsuits to continue. The amendment passed, over the objections of Adley, on a vote of 4-2.
Arguing against allowing any amendments was Jimmy Faircloth, a Pineville lawyer and former Jindal administration executive counsel who represented the large landowners and helped negotiate the compromise. He said changes in the wording agreed to by the landowners and the oil companies could complicate efforts to hold the compromise together.
“This was not a quick fix,” Faircloth said. “Every single word mattered.”
“This is not a compromise bill,” said John Carmouche, a Baton Rouge lawyer who represents families, school boards and the Catholic Church in the lawsuits.
“We represent 80 percent of the lawsuits that have been filed. I don’t understand why we weren’t invited to the room,” Carmouche said.
Generally, the large oil companies explored, drilled and produced oil and gas in fields across the state since the 1920s. The bigger companies eventually sold the leases to smaller operators, who often were not involved in creating the damage.
Carmouche argues that under SB667 the only time bigger companies can be found liable is if it has been proven they acted unreasonably and excessively back in the day. Otherwise, it’s the small independents who will get sued.
“This is a big oil immunity bill,” Carmouche said.
The committee advanced the amended measure to the full Senate without objection.