Tuesday, 10 June 2014 13:33

In Spite of Warnings, Jindal Signs Bill Killing Lawsuits against Oil Industry

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Jindal-Meet-the-pressOn June 6, Governor Bobby Jindal signed SB 469, a bill that stops the lawsuit filed by the Southeast Louisiana Flood Protection Authority – East (SLFPA-E) against oil and gas companies for the coastline damage they have caused. Jindal was supposed to sign the bill on Monday, June 2, but decided to wait until State Attorney General Buddy Caldwell reviewed it. In spite of Caldwell's advice to veto the bill, Jindal went ahead and signed it Friday morning.

 SLFPA-E wants the oil companies to repair the damage caused by their canal dredging, channel pipelining, and other activities that have harmed the coastline. The lawsuit is controversial. Its supporters believe that the oil and gas industry ought to pay for the damage they have done, while its critics argue that it is “an unfair attack on an industry that is vital to Louisiana.” 

Further controversy arose when the wording of SB 469 became known. Critics of the bill are now not only worried about the future of SLFPA-E's lawsuit, but also about current and future lawsuit against oil and gas companies, for example BP. Atty. Gen. Caldwell, along with law professors, other legal experts, and environmentalists, warned Jindal about the possible consequences for future litigation. Michael Hiltzik of the Los Angeles Times writes: “[The bill] authorizes only the state Dept. of Natural Resources and parish governments to bring lawsuits over coastal damage. It's also a blow against efforts to restore the coastline, the degradation of which has made New Orleans and other local communities more vulnerable to storm damage.” Jindal decided to ignore the warnings, including Caldwell's. In a statement Friday, he declared: “This bill will help stop frivolous lawsuits and create a more fair and predictable legal environment, and I am proud to sign it into law. It further improves Louisiana’s legal environment by reducing unnecessary claims that burden businesses so that we can bring even more jobs to our state.” 

Even though many opponents told Jindal to veto the bill, the Governor also has his supporters. The bill's sponsor, Sen. Robert Adley, asserted that he thinks it's absurd to say that the oil and gas industry has damaged the coast: “They did what they were told to do, and a lot of what they have done has helped us, not hurt us.” Adley also said that the bill “keeps a rogue agency from misrepresenting this State and trying to raise money through illegal actions.” Furthermore, Adley and Sen. Bret Allain, who wrote the bill, argued that it will help avoid “enriching lawyers and certain individuals” through “frivolous lawsuits.”

Naturally, the Louisiana Oil and Gas Association (LOGA) is also pleased with Jindal's decision. President Don Briggs said:  “The signing of SB 469 is a huge victory for the oil and gas industry as well as the economy for the state of Louisiana. While there is still much work to be done, this piece of legislation is a big step in the right direction.” Louisiana Association of Business and Industry also expressed their satisfaction. A LABI news release read: “This law will help restore order and coordination to Louisiana’s approach on how best to tackle our coastal challenge.”

One of the major concerns of the critics is the long time consequences SB 469 will have for BP-related and other oil/gas-related lawsuits in the future. In his review, Atty. Gen. Caldwell raised this concern, but Jindal's legal team disagreed with his analysis. According to Jindal's communication team, Thomas Enright, Jindal's executive counsel, reviewed the bill himself to ensure that it wouldn't cause problems for BP lawsuits. LOGA also attempted to calm down the critics. President Briggs stated: “This bill is focused on activities in the Coastal Zone, which only goes out 3 miles. BP happened 50 miles off the shores of Louisiana. So you’re not even talking about in the relative vicinity of each other. It was always the intent of the legislation to specifically go after the Flood Protection Authority lawsuit, not impact the parish claims, not impact BP and I believe at the end of the day, that's what the legislation did.”

The critics' concern is partly based on an analysis written by Robert R.M. Verchick, a former policy administrator in the Environmental Protection Agency in the Obama administration who now teaches at Loyola University of New Orleans College of Law. In the analysis, he argues that the bill “threatens claims the state and various local, coastal Louisiana governments have made against BP under the federal Oil Pollution Act.” Enright, on the other hand, claims that the Oil Pollution Act would make the oil company responsible for damage costs after oil discharge and that the state and local government lawsuits will not be affected by the bill because federal law pre-empts state law. He also points out, like Briggs, that the bill only “relates to activity within the state's coastal zone, while the BP oil spill took place 50 miles off the coast, well outside the state coastal zone.” However, Verchick's analysis emphasizes that even though the BP oil spill began outside the state coastal zone, the oil entered that zone later, and the bill could therefore affect BP claims. Furthermore, he also said that even though federal law pre-empts state law, “there are wuestions about whether the pre-emption would trump a state law that limits which government agencies can pursue an action.”

In addition to Verchick, other critics who are not soothed by statements from Jindal, Enright, and LOGA, include Jefferson Parish President John Young and St. Bernard Parish President Dave Peralta. Peralta stated: “After carefully reading the bill and consulting with various attorneys, we determined that this could not only affect our lawsuit already filed against BP, but also could hinder our citizens' individual lawsuits and possible future class-action lawsuits.”

Another person who expressed his disappointment was John Barry, the former vice chairman of SLFPA-E. He is not only worried that the bill threatens state and local government's future lawsuits, BP-related on not, but also that the bill “could fail to scuttle the lawsuit because the Lake Borgne, Orleans and Jefferson levee districts are also plaintiffs, and they were not specified in the bill.” Barry said: “Of the four plaintiffs, three of them remain untouched, which makes it even more irrational that the governor would sign a bill into law which threatens BP claims around the state; which cuts off, without any doubt, future claims that happen inside the Coastal Zone; and at the same time very possibly does not do what the bill was intended to do, which is kill the lawsuit filed by the flood authority.”

People have also been critical of  the connection between the oil and gas industry and the bill's supporters and sponsors. Alan Neuhauser writes that oil and gas donations make up the largest chunk of campaign donations to Jindal, Allain, and Adley. Zygmunt Plater, a professor at Boston College of Law who specializes in environmental law, asserts that the government is clearly under the influence of the oil and gas industry: “Clearly they're jumping at the snap of the fingers of the [Louisiana] Oil and Gas Association. LOGA is powerful. BP has some of the cleverest lawyers in the world. It’s altogether likely that this would be a major constraint immunizing a bunch of BP claims.”

According to an RT.com article, Adley, the owner of Pelican Gas Management Co. since 1993, was president of ABCO Petroleum 1972-1993, and he is also affiliated with LOGA. He has received $597,950 in campaign contributions from “companies, political action committees and individuals affiliated with, or controlled by, oil and gas interests.” Jindal has also received oil and gas money. Last year, environmental groups put the number at $1,019,777 in campaign money flowing from oil and gas companies to Jindal between 2003 and 2013.

According to David Hammer, the lawsuit's supporters are not giving up simply because Jindal signed the bill. More than likely, the new law will be challenged in court. Glad Jones, the levee authority's attorney, said that they are moving to the judicial branch to “sort this out.”


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