Possible effect on BP claims to be studied
A bill aimed at killing a coastal erosion lawsuit filed by a New Orleans-area levee authority remained unsigned on Gov. Bobby Jindal’s desk Monday as the Legislature wrapped up its annual session and attorneys sought to determine whether the measure — a major administration priority for the year — would harm claims brought by local governments in the wake of the Deepwater Horizon oil spill.
Supporters of the suit warned that, by targeting the Southeast Louisiana Flood Protection Authority-East’s suit, the state could imperil billions of dollars in claims against BP and potentially put federal funding for coastal programs at risk. They also raised a new claim shortly after the session was gaveled to a close: that Senate Bill 469 had missed its main target and would allow the levee authority’s case against nearly 100 oil and gas companies to proceed.
The bill’s status and its potential impact remained uncertain Monday night, leaving what has been a nearly yearlong political battle over the lawsuit in a state of flux that will likely be up to the courts to sort out.
Jindal had planned to sign SB469 at a news conference Monday afternoon, but he left the bill untouched after Attorney General Buddy Caldwell asked for time to look into a claim it could be used by lawyers for BP to scuttle suits brought for economic damages during the 2010 oil spill. That claim, put forward by law professors, first arose over the weekend.
“We’re not signing the bill today,” Jindal said Monday. “The attorney general asked for some additional time to look at it, and out of an abundance of caution, we’ll give the attorney general time to do that,” he said.
“We will not do anything that impedes our folks in Louisiana’s ability to file legitimate claims out of the 2010 explosion,” Jindal said. “Our attorneys don’t think this bill does that.”
The Attorney General’s Office did not respond to a request for comment on the bill and its potential impact on the BP suits.
Jindal can sign the bill, veto it or allow it to go into effect without his signature.
He characterized the legislation as merely an attempt to clarify state law.
“We’re simply saying this was a frivolous lawsuit filed by an entity that never had the authority and shouldn’t have filed the lawsuit in the first place,” Jindal said.
The flood protection authority’s suit, filed last summer, accuses 97 oil and gas companies of severely damaging the wetlands in the New Orleans area by drilling wells, dredging canals and running pipelines through the fragile ecosystems. That damage contributed to widespread erosion of southeast Louisiana’s coast, eliminating a natural buffer that had limited the effects of storm surge in the area, according to the suit.
The lawsuit calls for the energy companies to pay to restore the damaged or destroyed wetlands or else compensate the authority for the cost of maintaining larger and more expensive structures to minimize flooding in the New Orleans area during hurricanes.
Jindal and officials in his administration quickly denounced the suit and have been seeking to have it withdrawn.
Legislators filed more than a dozen bills aimed at killing the lawsuit, but only one made it to the governor’s desk by the time lawmakers wrapped up their work Monday.
Measures that would have given the governor more control over the members of the flood protection authority stalled in the face of opposition from legislators and citizens’ groups from the New Orleans area, who warned those changes would undermine the reason for creating independent boards to oversee flood protection after the failure of area levees during Hurricane Katrina.
Other bills that would have forced changes to the contract between the flood authority and its attorneys also failed to make it to a final vote.
That left a raft of bills targeting the suit itself. Opponents of the suit pinned their hopes on SB469. That bill would change state law to prevent the flood protection authority, and some other governmental entities, from having the ability to claim damages from oil and gas activities that were subject to state or federal permitting.
The bill specifies that it is to be applied retroactively.
In a memo released over the weekend, Loyola University law professor Robert Verchick, a former deputy associate administrator for policy at the U.S. Environmental Protection Agency, argued SB469 is broad enough to prevent suits related to the BP spill from going forward.
While the bill specifically references activity in Louisiana’s coastal waters, the target of the flood authority’s suit, it also includes language prohibiting suits for “related” activities. Interpreted broadly enough, that could include the Deepwater Horizon oil rig.
Such an issue would likely be up to the courts to decide, though Verchick, the Gauthier-St. Martin Eminent Scholar Chair in Environmental Law at Loyola, argued that even if the courts apply the measure’s provisions narrowly, it would hurt the legal position of local governments.
“Regardless of how the court ultimately rules, the very existence of these eventualities will devalue the plaintiffs’ settlement posture and perhaps lengthen the time those governmental entities will go without recompense for these categories of economic loss,” Verchick wrote. “Should BP raise defenses based on SB469 and succeed even partially, the results would needlessly deprive Louisiana and its communities of precious revenue and cause considerable embarrassment for state leaders.”
Jefferson Parish President John Young, whose parish is one of the numerous local governments that have sued BP for damages from the spill, said outside attorneys reviewed Verchick’s memo and disagreed with its concerns. Those lawyers informed parish officials that the bill would not prevent the parish suits from going forward, and Young said two other factors further bolster their case.
First, he said, the federal act under which the parish sued preempts state laws, giving the parish the authority to sue under federal law. In addition, legislators debating the bill this session made clear they did not intend to interfere with claims arising from the Deepwater Horizon spill.
Those debates can be used to establish legislative intent, which courts can use to determine how to interpret laws that are in dispute.
“Based on our counsel’s review of the memo and their analysis, we’ve been advised by our legal counsel that all the parish’s rights have been preserved under 469,” Young said. “Fully preserved.”
Proponents of the SLFPA-E suit also have argued that SB469 could imperil federal funding for coastal restoration, citing regulations that require changes to the state’s coastal management laws to be pre-screened by the National Oceanic and Atmospheric Administration.
Jindal said Monday that was not the case.
Officials with NOAA’s office in Washington, D.C., did not respond to requests for comment on what impact the bill might have.
Just after legislators officially ended this year’s session, proponents of the lawsuit took a new tack: arguing that, whatever its other effects, SB469 won’t actually affect the levee authority’s suit.
SB469 would prevent “local governments” from suing over oil and gas activities, but the state law the bill would alter defines such “local governments” as parish governments, the proponents said. That could allow the levee authority’s suit to go forward.
In addition, lawmakers included an exemption in the bill to allow a wide swath of entities to continue pursuing claims against oil and gas companies, including suits now being pursued by Jefferson and Plaquemines parishes for damages to coastal areas and wetlands.
While that exemption does not apply to flood protection authorities, it does not appear to preclude suits brought by levee districts, and the SLFPA-E serves as an umbrella for three separate levee districts — covering the east bank of Jefferson, Orleans and St. Bernard parishes — that remain as entities within the overall organization. Both the authority itself and those districts are named as plaintiffs in the suit.
“Bottom line: SB469 fails to kill the claims raised by SLFPA-E and distinctly by the levee districts,” Gladstone Jones, lead attorney for the authority’s lawsuit, said in a statement. “But it may very well put at risk more than $10 billion in legitimate claims against BP for damages and economic losses as a direct result of BP’s negligence.”
Follow Jeff Adelson on Twitter @jadelson.