Nuisance jackpot justice suits finally may disappear
Finally, the tunnel has light at the end, regarding the nuisance suit attempted by a once-rogue state subdivision that sought jackpot justice to fund coastal protection.
A panel of the U.S Fifth Circuit Court of Appeals agreed with a lower district court that the Southeast Louisiana Flood Protection Authority-East lacked standing to bring suit against nearly 100 energy firms for alleged environmental damage they caused. A few years ago the agency, a subdivision of the state, hired lawyers on contingency to try to collect possibly billions of dollars with a poison pill in that contract stating if its board dropped the suit it owed expenses that could reach into the eight figures.
Prior members of the SLPAE-E board, despite disputes over whether companies had acted illegally or negligently, whether the state had felt they had acted illegally or negligently in the past, or how much, if any, damage the energy extractors actually caused, saw these entities as piñatas ready to bust to fund agency activities. After they brought suit, Republican former Gov. Bobby Jindal when their terms expired began replacing members supportive of the action with others who took a more circumspect approach to government activism. Eventually, lawmakers enacted a measure to moot the suit, giving the state control over any such maneuvers.
Faced with the possibility of a huge payout with no payoff by withdrawal, the board – even as a majority now likely would not approve of the suit, with enough of the renegade members (and their questionable hidden agendas) off the panel – kept up the legal actions, trying to steer the matter into state court but finding it properly headed into the federal judiciary. With the same dilemma at hand, the board likely will either ask the entire Fifth Circuit to hear the case or have it head to the Supreme Court, where it probably would end up anyway after the full bench heard it. By then, the Court likely will have a full complement with Judge Neil Gorsuch joining it from the Tenth Circuit, and his history suggests he would make a majority looking dimly at the agency’s case.
For that reason, counsel might throw in the towel knowing it can’t win, ending this nightmare distraction and eating its costs regardless. The main former board member instigator of the suits, the long-deposed John Barry, signaled throwing in the towel on his hopes by commenting he saw value in the publicity his wasteful scheme generated.
Yet even if this happens, a number of suits still remain, filed by parishes in state courts, an allowed practice under state law. The specter of jackpot justice also haunts here, in the form of Democrat Gov. John Bel Edwards, who as state legislator proved one of trial lawyers’ staunchest allies and prior to ascending to the state’s highest office implied the state should pursue vigorously suits blaming energy extraction firms for environmental damage as a way of attracting federal funding for coastal restoration. He has had his office join these suits
Fortunately, the Louisiana Constitution provides a check here in the form of the Attorney General, Republican Jeff Landry. It allows him to intervene and take control of cases such as these, and he has. Landry brings a much different mentality to the job, a balanced view that seeks to hold companies accountable if they clearly broke the law and subverted agreements with the state and local governments (although even this may not end up as a sufficient reason to award damages, as in some cases government may have failed to enforce the law and thereby made itself as liable) but rejects the notion that the energy industry waits like fatted calf ready for slaughter to finance state objectives.
At this point, if Landry’s office proceeds with this mindset, few if any of these suits should pan out. Thus, it looks as if policy-makers’ infatuation with hoping for rainmakers to shower money down on them largely will wear off, and the best agent to direct policy in this area, this state, will face no interference from subgovernments in doing so while oil and gas companies can concentrate on doing what they do best, responsibly enriching Louisiana.
Posted by Jeff Sadow at 11:55