Measure would give state regulators, not courts, first crack at developing restoration plans for certain damages caused by exploration and production
BATON ROUGE -- On Monday, one joint legislative committee essentially begged the energy industry and major landowners to spare lawmakers an uncomfortable vote by settling their dispute over the rules for lawsuits concerning environmental damage to leased oilfields. A day later, a separate committee charged full steam ahead, siding with the oil and gas producers -- from the publicly traded giants to Louisiana-based independents -- over the landowners, whose top lobbyist cried foul.
Rep. Neil Abramson, D-New OrleansThe House Civil Law and Procedure Committee voted 10-2 on Tuesday for House Bill 618, authored by its Chairman Neil Abramson, D-New Orleans, to have the state Department of Natural Resources step in to develop restoration plans whenever an energy firm claims responsibility for certain damages caused by exploration and production. Then, that mitigation plan, including the cost, would be admitted as evidence in any subsequent civil lawsuit filed by the landowners who leased the land.
That's a significant shift from current law, which leaves it to a district court -- meaning a jury -- to decide responsibility for what are called "regulatory damages," meaning effects such as an open waste pit that is subject to state environmental regulations, and "private damages" for claims that fall outside state environmental regulations.
Private damages might include crop damage or lost economic opportunity due to the status of a parcel.
Executive action
Only after a settlement in such a case or a finding of responsibility by a jury do state regulators step in and help develop a plan to mitigate the regulatory damages. Even then, final approval for such a plan rests with the judge.
Jimmy Faircloth, an Alexandria attorney who represents Weyerhauser Corp., along with private landowner Roy O. Martin, told Abramson's committee that compelling state involvement on the front end, before two parties have even gone to court, would allow a powerful industry to pressure an executive agency and potentially manipulate its findings. A resulting lowballed restoration plan, Faircloth said, could then prejudice a jury charged with considering private damages outside the scope of the regulatory damages that warrant state input.
"This is taking original jurisdiction from the court" and handing it to the executive branch, he said.
Gifford Briggs of the Louisiana Oil and Gas Association told the panel that the current landscape allows protracted litigation, delays cleanups and hampers business.
"The way the courts are handling these claims today, they are handling damages first and the environment second. We need to take care of the environment," he said.
Abramson, an attorney, echoed that reasoning. "My intent is simply to allow the responsible party to step up and clean up the land," he said, adding that he does not believe involving state regulators before a trial threatens landowners' opportunities for a fair judgment from a jury. "What we have now is you have litigants who have decided, strategically, to deny access to the land to have it cleaned up so that the damage is still there through a trial."
'A line in the sand'
The measure is one of more than a dozen bills aimed at addressing concerns over "legacy lawsuits" filed by landowners against producers that leased their land over previous decades. The Legislature adopted the current relevant law, Act 312, in 2006 in response to an outcry from the oil and gas industry over Louisiana Supreme Court precedents. But the oil and gas industry maintains that Act 312 isn't good enough.
Faircloth said his clients are willing to make adjustments to the law, but he said shifting original jurisdiction from the court system to the executive branch is a "line in the sand." The issue has made many lawmakers uncomfortable, given the wealth and clout on both sides of the question.
While Abramson moved ahead with his bills, the Legislature's two Natural Resources Committees have delayed action on the matter, urging Faircloth and industry representatives to come to a compromise. Gov. Bobby Jindal also is on the sidelines, tasking his Natural Resources Secretary Scott Angelle to mediate. Faircloth is Jindal's former executive counsel.
Jindal takes no position
Jindal, usually a close ally of the oil and gas lobby, has said he wants a change that yields more rapid cleanups and insulates independent firms from unfair verdicts. Faircloth argued that Abramson's bill accomplishes neither goal.
Jindal's position has drawn public rebuke from U.S. Sen. David Vitter, Jindal's intraparty rival, who has framed the governor as coddling plaintiffs attorneys.
Bill Barrow can be reached at bbarrow@timespicayune.com or 504.826.3452.