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Did Big Oil damage the coasts? The law suits on this topic can begin. Oil says no, pictures show yes.

A federal judge in New Orleans has again ruled that a wetlands damage lawsuit against six oil and gas companies with potentially vast consequences should be heard in state 25th Judicial District Court in Plaquemines Parish, instead of in federal court. In a 29-page ruling issued Tuesday, U.S. District Judge Martin L.C. Feldman of New Orleans said the oil companies failed to prove that the companies’ development of dozens of wells in the Potash oil field being developed by the Humble Oil Co. during World War II was actually overseen by federal agents, which would have represented “federal officer jurisdiction” that would have required the cases to be heard in federal court.  The ruling followed a hearing in federal court in New Orleans, where Plaquemines Parish’s attorneys and attorneys representing the oil companies presented their arguments. “After nine years of Big Oil forum-shopping, the parishes now have the opportunity to demonstrate in state court how real and provable this damage is,” said John Carmouche, lead attorney for the parishes. “The parishes will continue to fight and will not back down until our coast is restored.”

Many politicians may not be happy but the Governor is.

“Once again, the governor is pleased with the judge’s ruling,” said Shauna Sanford, communications director for Gov. John Bel Edwards. “As he has said previously, these Louisiana claims should be heard in a Louisiana court.” “Defendants appreciated the opportunity to present their case to the court yesterday. We were, of course, disappointed with the outcome, and we are planning a prompt appeal,” said Melissa Landry, a spokesperson for the legal teams representing BP America, Chevron, ConocoPhillips, Exxon Mobil Corporation and Shell, in this and other similar wetlands damage cases. In a joint statement on the ruling, the Louisiana Mid-Continent OIl and Gas Association and Louisiana Oil & Gas Association said that even if the cases remain in state court, proving damages is likely to be difficult. “In whichever court these cases proceed, they should face significant challenges,” the statement said. “With these baseless claims, plaintiffs’ lawyers are seeking to reach back in time and impose liability on an entire industry for conducting activities that were conducted lawfully and created countless jobs and other economic benefits for communities across the state and nation.”

This is not the first time this case has been brought to the court.

It’s the third time that this lawsuit has been ordered returned to the Plaquemines court by a federal judge. But, as the attorney for the oil companies confirmed, it’s likely this decision also will be appealed to the U.S. 5th Circuit Court of Appeals, and possibly to the U.S. Supreme Court. In August, the 5th Circuit ordered Feldman to review his earlier decision returning the case to state court over the concerns raised by the oil companies about whether federal officials oversaw the drilling actions in Plaquemines. Feldman was appointed to his judgeship by President Ronald Reagan. This lawsuit is one of 42 being handled by the Carmouche team of lawyers that have been repeatedly “removed” by the oil companies to federal courts. Decisions in New Orleans and Lake Charles on the remaining lawsuits are likely to follow Feldman’s lead in this case. A 43rd suit, filed on behalf or Orleans Parish, also was removed to federal court and could eventually be returned to state court.

The suits were filed in many Parishes over many years.

The lawsuits were originally filed in state courts in Plaquemines, Jefferson, St. Bernard, St. John the Baptist, Vermilion and Cameron parishes between 2012 and 2017. The suits were all filed by the Talbot, Carmouche and Marcello law firm of Baton Rouge on behalf of parish governments. The state and Attorney General Jeff Landry intervened in all the suits to protect the state’s rights.  The suits remain the primary surviving effort to force oil and gas companies to pay for damage they caused to Louisiana’s rapidly eroding coast. A lawsuit filed by the Southeast Louisiana Flood Protection Authority – East in 2013 that charged similar damage threatened area levees was thrown out, after being moved to federal court, because it involved federal regulations.  The parishes narrowly wrote their lawsuits to only challenge the failure of the oil companies to comply with the State and Local Coastal Resources Management Act, a state law which went into effect in 1980. But the suits did include the companies’ failure to bring well operations developed earlier into compliance with that law after 1980. The suits made clear that they were not attempting to find the companies to be in violation of any federal environmental laws.  The suits charge that the companies and their predecessors built service canals, improperly disposed hazardous wastes and saltwater, and conducted other operations that caused damage to wetlands, and asks that they be ordered to either repair the damage or pay the parishes and state for the losses. 

Once removed to Federal Court there were new revelations by the oil companies.

After the suits were removed to federal court and returned to state courts twice, the oil companies found language in a report filed by an expert for the parishes that referred to the development of wells during World War II under the auspices of the “Petroleum Administration for War,” which was responsible for assuring enough oil and gas was being produced for the nation’s military efforts overseas.  The 5th Circuit directed Feldman to review whether the oil companies should thus be found to have been acting under “federal officer jurisdiction” provisions of federal law and recent higher court rulings, which would require the cases to be heard in federal court.  Feldman found that the oil companies did not prove that to be so. “The voluminous record in this case demonstrates that the oil industry in WWII was intensely regulated. It demonstrates that the federal government had a great interest in the success of the oil industry and a significant reliance thereupon,” Feldman said in his decision. “However, while defendants may have shown compliance with federal regulation, they have failed to demonstrate that their compliance entitles them to the removal provisions of this statute.”

Feldman saw an administrative difference.

Feldman drew a distinction between compliance with federal regulations and specific directives that might have been given to the companies by federal officers, finding that the Humble oil field was being handled under the regulations and not under specific officer directives. “Defendants paint a picture of an intensely regulated industry that was regulated even more strictly than usual during a critical period in this nation’s history. Those regulations were designed to quite literally fuel the government’s war effort, and certainly effected great changes in industry behavior, such as cooperation between competitors and massive increases in production,” Feldman said. “Some of those changes may even have otherwise been illegal.” But he said the companies did not demonstrate “that they were doing any more than complying with regulation.” “In none of the many wartime orders entered into evidence is there a direct command by a federal officer that defendants must, for example, use leaking pits rather than steel tanks in the Potash oil field,” he wrote. And even though government regulations at the time limited the use of steel or required permits for its use, they are not evidence that they acted under the orders of a federal officer in creating the pits.

The oil industry does not want to be found to have damaged the land. But in reality, how could the rebuild all that they hurt? That will be the real problem if they are found guilty.

Lawsuits against Big Oil can go on