Oil and gas association challenges AG’s approval of contract for coastal lawsuit

Suit: Board can’t hire outside counsel

The Louisiana Oil and Gas Association has sued Attorney General Buddy Caldwell, arguing he should not have approved a New Orleans-area levee board’s contract with the lawyers representing it in a coastal erosion lawsuit against 97 oil and gas companies.

The association, known as LOGA, demanded months ago that Caldwell rescind his approval for the contract between the Southeast Louisiana Flood Protection Authority — East and the law firms hired to pursue claims against energy companies that are potentially worth billions. Since then, Caldwell and opponents of the suit, including LOGA, have sparred over whether the contract should have been approved and whether the flood protection authority could legally hire the outside lawyers.

“We wanted to give the attorney general an opportunity to respond on his own, which is why we didn’t file the petition right away,” LOGA Vice President Gifford Briggs said.

LOGA’s suit, filed in the state district court in Baton Rouge, lays out three arguments against approval of the lawyers’ contract: that Caldwell’s office can’t approve any outside counsel for the authority because his office should represent the board itself; that even if the attorney general can authorize outside lawyers, issues with the contract should have prevented its approval; and that the suit usurps the state’s role in coastal restoration.

The Legislative Auditor’s Office raised questions about some of the same issues last week in declining to conduct its own review of the contract.

A spokeswoman for Caldwell refused to respond to the association’s suit in detail Monday.

“We will have to save our statements for expected briefs and court appearances,” spokeswoman Laura Gerdes Colligan said in an email.

Since the flood protection authority’s suit was filed in July, opponents have focused much of their criticism on the terms of the contract between the board and the Jones Swanson law firm and other attorneys representing the board in the case. LOGA’s lawsuit closely mirrors criticisms made by Coastal Protection and Restoration Authority Chairman Garret Graves and state Sen. Robert Adley, R-Benton.

The Attorney General’s Office signed off on the hiring of the lawyers in July, following a standard procedure used when levee districts seek outside representation. It certified the outside lawyers were in good standing, their fees were reasonable and other aspects of contract were appropriate.

LOGA’s suit alleges Caldwell could not approve the outside counsel because a provision in the law creating the flood protection authority designates the attorney general as its legal counsel. “The lawsuit is invalid because the hiring of the special counsel is invalid,” Briggs said.

Caldwell has publicly defended his decisions. In columns published by LaPolitics, Caldwell has pointed to a phrase in that provision that says his office should represent the board “when called upon to do so.”

The flood protection authority has contracts with several law firms dealing with a range of issues unrelated to the suit seeking to recover damages for coastal erosion. Authority attorney Bob Lacour, who also works on contract with the board, said each of those contracts was approved through the same procedure used in this case.

Putting all the board’s legal work on the Attorney General’s Office wouldn’t be practical, Lacour said.

“If the ruling is the attorney general has to do all of the flood authority’s work, then the Legislature has to appropriate a lot more money for him,” he said.

LOGA’s suit also alleges that the resolution approving the hiring of the outside firms was vague about its purpose and the amount the firms would be paid. It criticizes both the size of the fees the firms would receive if the suit is successful — between 22.5 percent and 32.5 of the proceeds — and a so-called “poison pill” provision requiring the lawyers to be paid for their time and expenses if the Legislature votes to cancel the suit.

Should LOGA win the case and get the contract declared invalid, that provision would likely be nullified as well.

A final allegation in the suit claims the size of the contingency fees would violate the state constitution by potentially giving the law firms money that should go to the state treasury. The potential for the flood authority to decide the details of coastal restoration work that would be paid for as a result of the suit is also criticized as usurping the authority of the Legislature.

Members of the flood protection authority have said any restoration projects funded as a result of the suit would be in accordance with the state’s Coastal Master Plan.