July 22–A black-headed gull stood atop an abandoned oil wellhead on a recent afternoon in a waterway known locally as Pencil Canal. Nearby, a rusted oil pipe and valve protruded from the briny water. A sign warned against dropping anchor or dredging because of submerged pipelines.
What for decades was an oil field in Plaquemines Parish is now the subject of a titanic and potentially consequential legal battle over accusations that oil drilling over decades destroyed and polluted this area of coastal marsh.
Scheduled for trial in March, but likely to be delayed, the case titled Parish of Plaquemines v. Rozel Operating Co., et al., is expected to serve as a bellwether case, setting the stage for what happens next with a raft of other cases filed by coastal parishes against the oil and gas companies. So far, six parishes have filed a total of 42 cases against 202 oil and gas companies. A dozen other coastal parishes could file even more lawsuits if the companies lose the Rozel case.
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Parishes and state governments could potentially recover billions of dollars in court, or, more likely perhaps, through a broader settlement. The money would cover part of the massive cost of restoring the eroding coast. The trial lawyers who have filed the cases for the six parish governments stand to earn a big payday apart from any payouts to parishes. How much they would receive would depend on a judge’s ruling, as there is no set contingency fee.
Representatives of the oil companies — and their political allies — decry the lawsuits, saying they have been improperly filed and are discouraging investment and costing jobs in south Louisiana.
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Gifford Briggs, president of the Louisiana Oil and Gas Association, notes that the “inland water rig count,” which is the number of rigs operating in coastal waters, stands at five currently, according to Baker Hughes. In three recent months when the price of oil was comparable to the current $60 to $70 per barrel — December 2014, June 2009 and November 2008 — the inland rig count was 13, 7 and 21, respectively.
Briggs and others attribute the loss of coastal wetlands and marsh to a host of factors, especially the construction of Mississippi River levees that no longer allow sediment-rich flooding to replenish the coastal areas. They also say anyone accusing the oil and gas companies of violations should file complaints with the state Department of Natural Resources, which oversees the permitting process, and not lawsuits.
“You can’t just take one industry and single them out. It’s unfair and unnecessary,” said state Rep. Stuart Bishop, R-Lafayette, who chairs the House committee that oversees oil and gas regulation.
Of course, oil and gas are not just any industry in Louisiana. Energy production has been a central part of the state’s economy for decades, especially in many coastal parishes, and employs tens of thousands of people.
“It is the engine that drives our economy,” said Chris John, a former Democratic congressman who now heads the Louisiana Mid-Continent Oil and Gas Association. “A governor who would not recognize that, I think, is doing a disservice to Louisiana.”
So it should come as no surprise that Gov. John Bel Edwards, previously an attorney in Tangipahoa Parish, has won the enmity of oil and gas companies by siding decisively with those filing the lawsuits. The big oil companies in John’s group — and perhaps the smaller companies and independents in the Louisiana Oil and Gas Association as well — want to see Edwards defeated in next year’s governor’s race.
The two trade groups held separate fundraisers for Edwards shortly after he took office in January 2016 as a goodwill gesture.
But John, when asked recently whether his group’s political action committee might contribute to the governor’s re-election effort, said he didn’t foresee that, “given all the facts and what has happened.”
It’s too early to know what the Louisiana Oil and Gas Association’s PACs might do, said Briggs.
Two months ago, attorneys for the oil companies moved the Rozel suit from state court in Plaquemines Parish to federal court in New Orleans before Judge Lance Africk, and they are seeking to consolidate all of the related cases in the coastal parishes under a single federal judge. Bringing the Rozel case to trial in March now seems unlikely, and it could be delayed long enough to 2020 when Edwards might no longer be in office.
“It’s a legal move to delay the inevitable — judgment day,” said John Carmouche, the lead trial attorney filing the lawsuits. He and the other law firms working with him have challenged the oil companies’ moves. By law, any party to a lawsuit can “remove” it to federal court, but then other parties can ask the judge to whom it’s assigned to send it back to state court.
“In my opinion, they are playing politics,” Carmouche said of the oil companies. “There will be local elections, and we have a governor’s race coming up. They’ve beaten the system for years through politics. They hire lobbyists to change the laws. They ask politicians to not enforce the law, to not clean it up.”
To be sure, Carmouche is no slouch at playing politics himself. His Baton Rouge-based law firm — Talbot Carmouche & Marcello — has a long history of suing oil companies and spending heavily to elect friendly Louisiana Supreme Court justices, local judges and state lawmakers. They typically battle business groups that are trying to elect pro-business candidates.
The Carmouche firm has one of the state’s top political consultants, Roy Fletcher, on retainer. In 2015, the firm spent $2 million airing three television ads during the gubernatorial primary that attacked then-U.S. Sen. David Vitter, the Republican front-runner and an avowed opponent of the trial lawyers. The firm didn’t support Edwards directly, but the attacks weakened Vitter, and Edwards went on to handily defeat him in the runoff election.
The oil companies’ attorneys moved the various cases to federal court beginning on May 23, three weeks after the Carmouche firm produced a 162-page report in the Rozel case providing evidence of damage caused by oil exploration in the area where the company and other companies drilled.
According to the report, the Rozel case involves four different oil fields that together are known as the Bayou Gentilly oil field. The drilling there began in 1941 and ended in 2012. Over those 71 years, the nine oil companies produced about 24.4 million barrels of oil from the fields. Meanwhile, by 2010, the amount of marsh in the Bayou Gentilly oil field had dropped from 21,000 to 8,000 acres, a 62 percent reduction, according to the report.
“A major contributing cause for the conversion of healthy marsh to open water is the massive presence of canals associated with the exploration and production of oil and gas,” according to the report, which doesn’t apportion a specific amount of blame to the energy producers.
The report also found that the oil companies generated 117 million barrels of “produced water” — polluted water that the drilling also brought to the surface — and that they discharged almost all of it either into the marsh or into unlined earthen pits in the marsh, and from there it ended up in the water and mud. A preliminary analysis showed that at least 88 acres of sediment contain dangerous toxins, the report found.
George Ricks, who was recently hired by The Advocate to take a reporter and photographer out to the Bayou Gentilly oil field in his charter boat, launched a drone over a small marsh island that the Carmouche law firm says was an unlined pit that stored produced water.
“I’m seeing sludge, that’s what it looks like to me,” Ricks said as he maneuvered the drone.
“They dumped millions and millions and millions of gallons of toxic waste into the marsh,” Carmouche said. “The toxic chemicals are still left behind, where people fish and harvest oysters. Who is supposed to pay for the oil companies’ destruction? It’s either going to be the oil companies or the taxpayers. Given the state’s budget problems, we need people who violated the law to step forward, take responsibility and pay for their actions.”
The nine oil companies being sued have yet to contest the report’s specific findings. Instead, they moved the Rozel case to federal court, arguing in a 44-page brief that much of the drilling and exploration occurred when federal rules governing energy production during World War II were in effect, long before the state coastal permits law went into effect in 1980.
“Many of the activities now at issue were authorized only by federal permits or governed only by federal standards,” the oil attorneys argued in their May 23 brief. “They were conducted when Louisiana had not even conceived of its coastal management laws.”
The trial lawyers responded on June 11 with a 56-page report arguing why federal judges should return the cases to state court.
Louisiana trial lawyers typically prefer to have their cases heard in state court, often before judges they helped elect. Leaders of business groups like to note that Louisiana ranks eighth of 50 on the list of “Judicial Hell Holes,” an annual list created by the pro-business American Tort Reform Foundation. Meanwhile, cases heard in federal court that are appealed go to the New Orleans-based 5th U.S. Circuit Court of Appeals, perhaps the most pro-business of the 13 federal appellate courts in the country.
Asked several questions about the case by The Advocate, lawyers for Chevron, which is taking the lead in Rozel, restated several of the arguments in the brief. They added, “Chevron continues to believe that our state’s coastal issues are best addressed by all stakeholders working collaboratively to design and implement solutions and that lawsuits are counterproductive to efforts to take meaningful action to address wetlands loss.”
No one questions the importance of restoring the coast, which serves as a buffer against damaging storms and as crucial habitat for fish and shellfish. A 2017 report by the U.S. Geological Survey found that Louisiana has lost approximately 2,000 square miles of land, nearly the size of Delaware, since 1932, the first year that reliable photographic images exist.
To coastal advocates, making the oil companies pay for their role is vital to the state’s future.
“The key, if Louisiana is to survive, is to bring enough pressure on the industry that they’ll meet their moral and legal obligation: to contribute to the solution in a manner commensurate with the damage they did,” said John Barry, the author of the acclaimed 1997 book “Rising Tide.” Barry helped launch a separate lawsuit against oil companies filed by the Southeast Louisiana Flood Protection Authority-East, which he served on at the time. A federal judge ultimately dismissed the case in 2015 on grounds not related to the parish lawsuits.
In general, the 42 cases filed by Plaquemines and five other parishes argue that the oil and companies failed to seek the necessary state permits to drill in some cases and in others failed to return the wetlands or marsh to its original state, as required under Louisiana law, once they had finished their work.
The other parishes filing suit thus far are Jefferson, St. Bernard, Vermilion, Cameron and St. John.
In 2016, Edwards told elected officials in about a dozen other coastal parishes that they should file suit as well. If they didn’t, he said, the state would do so on their behalf.
The elected officials empowered to make the decision in those parishes — depending on the parish government, they might be parish councils, police juries or district attorneys — were unmoved. So far, the Edwards administration has chosen not to file any of its own lawsuits.
Donald Price, the top in-house counsel for the administration on these cases, says that’s because the relevant authorities in those parishes “proposed an alternative to filing suit — they would begin investigating their claims and gather information on whatever damages they might have, in lieu of filing lawsuits.” He added: “The governor agreed to that rather than filing suits without them.”
Edwards’ decision meant that the outside trial lawyers he had picked to represent the state — led by Taylor Townsend, a former state House member from Natchitoches — never got the work.
Meanwhile, the Edwards administration and the office of Attorney General Jeff Landry both intervened in the parish lawsuits, meaning they have provided legal assistance when needed. This is one of the few instances where Edwards and Landry seem to be on the same page, at least for now.
Plaquemines Parish is at the center of the fray. Not only does the first case set for a hearing involve an oil field in the parish; fully half of the 42 cases filed so far are located there.
One reason is that a powerhouse trial law firm in Belle Chasse — Cossich Sumich Parsiola & Taylor — has partnered with the Carmouche firm. Another is that no parish has as much exposed coastline.
The Plaquemines nexus might lead the oil and gas companies — and their supplier companies — to try to overturn the Parish Council’s decision to file the lawsuits. The council has already voted once to dismiss the lawsuits before reversing itself again in 2016 to reinstate them on a 6-1 vote.
It has not escaped notice by either side in the legal battle that all nine seats on the Plaquemines Parish Council are up for election in November.
Councilman John Barthelemy was among the six who voted to reinstate the lawsuits, and he remains committed to it.
“The documentation shows the evidence is there for the damage caused by the oil companies,” said Barthelemy, who is running unopposed for re-election.
Councilman Kirk Lepine also voted to reinstate them, but now has changed his mind.
“I think we need to dismiss the lawsuits, move on and welcome the oil and gas industry back to Plaquemines,” said Lepine, who is termed out of his seat and is challenging the re-election bid by Parish President Amos Cormier.
Asked why he has reversed his position, Lepine cited a February speech in the parish given by Loren Scott, a retired LSU economics professor who now consults for private clients, including the oil, gas and chemical industry trade groups. Scott is not a fan of the suits, although he acknowledged he has no specific evidence that they are stifling investment.
“I would say the parish needs to drop out,” Scott told The Advocate. “It’s the case of the dog biting the hand that feeds them. The lifeblood of the parish is not fruit trees. It’s the oil and gas industry.”
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