Oct. 21, 2016 02:40 PM

The marathon 8.5-hour meeting Rep. Stuart Bishop’s House Committee on Natural Resources and the Environment on Wednesday revealed the oil and gas industry’s emerging lines of attack on the Edwards administration’s attempt to use litigation to prompt industry to help fund the state’s Coastal Master Plan.

Bishop convened the hearing to allow members of his committee to learn more about the suits, the legal contracts and the history of the Department of Natural Resources’ supervision of the Coastal Zone Management Plan. In a telephone interview with The IND on Thursday, Bishop promised he would convene more hearings on the matter in the future.

The decision by the Edwards administration to join five parishes in suing oil and gas companies for violations of the Coastal Zone Management Act irks Bishop and most of his committee. The questioning in the hearing revealed three lines of attack on the lawsuits.

The basic question among committee members was why litigate? Bishop had the staff produce four thick white binders of what he said were 2,807 violations of the Coastal Zone Act that were handled by DNR without resorting to litigation since 1980. He said that 1,303 of those violations occurred when no Coastal Use Permit had been in place.

Bishop said that those 2,807 instances showed to him that DNR had done its job, that its administrative process worked and that litigation was not necessary to get a resolution of violations.

Blake Canfield, an attorney for DNR, told the committee that there have been 58,000 permits issued in the Coastal Zone since the 1980s. Ultimately, all the permits are the responsibility of the state, Canfield said, under federal legislation.

DNR Secretary Thomas Harris told the committee that the department has six inspectors who are responsible for checking compliance with permits. He said those inspectors resolve about 100 cases per year. He said that litigation by Jefferson, Plaquemines, Cameron, St. Bernard and Vermilion parishes had revealed possible violations of which DNR had not been aware

Harris defended litigation as a more efficient way of dealing with a broad set of claims across the 20-parish Coastal Zone.

Rep. Ray Garofalo of St. Bernard (who is not listed as a committee member but took an active role in the meeting) said representatives of major oil and gas companies had told him that they were open to contributing to coastal restoration, but that they could not do so now because they felt settlements now would imply liability.

Donald Price, executive counsel for DNR, said settlements are routinely reached that do not involve admissions of liability.

Some committee members were not aware of the spring meeting between Gov. John Bel Edwards and leaders of the oil and gas industry in which he invited them to engage in discussions on a global coastal settlement. Matthew Block, the governor’s executive counsel, recounted the meeting and the industry’s declaration (issued through LOGA and LMOGA) that they had no interest in a settlement.

Block said that the carrot at the end of Edwards’ lawsuit stick is the elimination of all oil and gas liability for coastal damage inflicted prior to the settlement.

Rep. Blake Miguez, who operates Miguez Fuels & Lubricants in New Iberia, raised the second line of attack. Miguez asked if suing was a good way to treat a business partner and if the department was aware of the message it was sending.

DNR’s Price said the state had been involved with litigation for many years against oil and gas companies over issues involving royalties and severance taxes and that those companies had continued to do business in the state.

The third line of attack centered on Edwards’ contracts with the lawyers to handle the suits. Block explained that the contracts set an hourly rate for payment for the attorneys. They get paid only if they win. Attorney fees would be set by the court in the event of a win or a settlement. Payment of attorney fees would require legislative approval. Block declared that attorney fees would not be deducted from any coastal restoration funds won.

John Barry, who instigated the 2013 Southeast Louisiana Flood Protection Authority-East’s lawsuit against 90+ oil and gas companies for coastal damages, spoke in support of the state lawsuits.

Barry said the emphasis on the contracts is a distraction from the larger issue of the fact that the state does not have money to fund the Coastal Master Plan. Barry said no one is asking oil and gas to pay for all for coastal restoration. “The governor thinks they should pay for their share. I agree,” Barry said.

As in the SLFPA-E lawsuit, the industry is searching for a legislative means to keep these cases out of court. But, the fundamental difference is that in that fight, the industry had Gov. Bobby Jindal as its ally. Today, it views Edwards as its enemy.

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