Oil and Gas

New lawsuits have oil fighting two fronts

by Jeremy Alford, LaPolitics

The latest lawsuits could reignite interest by lawmakers to try and tackle the issue of suing oil companies over allegedly violating coastal zone regulations, after such an effort failed in last year’s regular session.

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In a move that builds off the lawsuits filed by the parish councils in Jefferson and Plaquemines in 2013 against several oil companies, the Jones Swanson law firm quietly filed similar lawsuits in November that share practically the same objectives but have landowners as the plaintiffs. All of the suits claim the oil companies violated the terms of their leases and drilling permits, thus causing land loss and saltwater intrusion.

The latest lawsuits, likewise based in Jefferson and Plaquemines, could reignite interest by lawmakers to try and tackle the issue of suing oil companies over allegedly violating coastal zone regulations, after such an effort failed in last year’s regular session.

One source said, “Everyone I know is assuming we’ll face those same questions in the Legislature this year. We’d be surprised if not.” Another source added, “They may not take it up. Maybe we’ll see some legacy issues, but they’ll be busy enough with the budget and everything else.”

The Jones Swanson strategy also has lawsuit abuse advocates weaving a new “litigation racket” narrative for the coming months.

What legal observers really want to know, however, is whether the Jones Swanson lawsuits, being directed by founding partner Gladstone Jones with the landowners as plaintiffs, will compete with or complement the earlier suits using the parish governments as plaintiffs, as filed by Talbot, Carmouche and Marcello, led by partner Vic Marcello.

Jones’ lawsuits target about 20 different oil companies, plus a few more when subsidiaries are included, for damages related to contamination and land loss. They are in state court. Marcello’s suits have about 27 defendant oil companies. They’re on the federal level, although one case has been remanded to state court.

Observers are already questioning whether landowners can bring these suits, since the law states only four parties can trigger legal action: the secretary of the Department of Natural Resources, the attorney general, the appropriate district attorney or local governments with coastal zone programs. But landowners are framing themselves as beneficiaries, and there are hopes that one strategy will aid the other.

If either approach is poised to spread, it may be the Marcello strategy. Sources say cases are still being built by the parish governments in Cameron and St. Bernard, and that defendant oil companies have already been identified. There have been some hiccups, though, and both parishes have had to put their filings on pause. But that could change in 2015.

Regardless, it’s another big step in this field of law for Jones, who is representing the Southeast Louisiana Flood Protection Authority-East in its suit against more than 80 oil and gas companies. District Judge Janice Clark has declared a law passed by the Legislature last year intended to stop the suit as unconstitutional. Jimmy Faircloth, representing Gov. Bobby Jindal and the state, has appealed to the Supreme Court.