Two privately held Texas oil companies that were among nearly 90 defendants named in the Southeast Louisiana Flood Protection Authority-East’s (SLFPA-E) landmark environmental lawsuit have settled with the flood authority for a combined total of $50,000 in damages, according to documents filed in federal court and statements by the attorneys involved.
The terms of the settlement were announced a few hours after attorneys for SLFPA-E, White Oak Operating Co., L.L.C. and Chroma Operating, Inc. filed a “Joint Motion for Order of Dismissal With Prejudice” in federal court on Thursday. Parties typically file joint motions to dismiss when they have reached an out-of-court settlement. Because the SLFPA-E is a public entity, the terms of the settlement had to be made public.
While the dollar amount of the settlement seems small at first glance, the fact that two oil companies have agreed to pay damages for increased public exposure to hurricane-related flooding due to their operations in coastal wetlands is huge, even if they don't expressly admit responsibility. The settlement marks the first time an admission of this kind, along with payment of damages, has ever been made by energy companies.
White Oak and Chroma, a pair of related companies based in Houston, are among the smallest operators in the area that is the subject of the lawsuit. Their operations were limited to less than 100 linear feet of a single spoil bank, among nearly 700 miles of pipeline and access canals that are the subject of the litigation, and they operated there for only two years, according to documents attached to the original lawsuit. That makes them among the smallest players involved in the suit, not only financially but also in terms of actual damages caused by their activities.
Two energy companies that were among 97 defendants named in the Southeast Louisiana Flood Protection Authority-East’s (SLFPA-E) landmark environmental lawsuit have settled with the flood authority, according to documents filed in federal court. Terms of the settlement were not immediately disclosed, but they will be disclosed soon, according to one attorney on the case. (This story previously stated, erroneously, that a confidentiality provision applied.)
Attorneys for the levee authority and for the two settling defendants filed a “Joint Motion for Order of Dismissal With Prejudice,” which parties typically file when they have reached an out-of-court settlement.
Only a few weeks ago, supporters of the Southeast Louisiana Flood Protection Authority-East’s (SLFPA-E) environmental lawsuit against 97 energy companies were mired in despair. Gov. Bobby Jindal and SLFPA-E nominating committee chair Jay Lapeyre were poised to tip the balance on the authority’s board against the lawsuit and kill it.
Then, to the surprise of many — and over the objections of Jindal and Lapeyre — the nominating committee up and did the right thing by re-nominating coastal scientist Paul Kemp for another term on the board. Kemp supports the lawsuit, and his reappointment preserves a 5-4 majority on the board in favor of the suit. For now.
That was just the beginning of an amazing turn of events against Big Oil.
On Monday, Oct. 6, state District Court Judge Janice Clark of Baton Rouge ruled that Act 544 of 2014 (filed as Senate Bill 469) does not apply to the SLFPA-E lawsuit. SB 469 was specifically (though not very artfully) crafted to kill the lawsuit retroactively. The suit is currently pending in federal court in New Orleans.
SB 469 was literally thrown together overnight when the original anti-lawsuit bill was poised to die in a Senate committee. Through a ham-fisted bit of legislative legerdemain, lawsuit opponents hijacked a bill in a friendlier committee, completely gutted and rewrote it, and then passed it with relatively little opportunity for debate — and, Judge Clark ruled, other fatal defects.
Were this rate of land loss applied to New York, Central Park would disappear in a month. Manhattan would vanish within a year and a half. The last of Brooklyn would dissolve four years later. New Yorkers would notice this kind of land loss. The world would notice this kind of land loss. But the hemorrhaging of Louisiana’s coastal wetlands has gone largely unremarked upon beyond state borders.Following the suit, Barry was not nominated for another term on the board, and Gov. Bobby Jindal led legislation to kill the lawsuit. Jindal declined comment on the New York Times story. Barry — as Clancy DuBos had predicted — spoke freely with Rich about the genesis of the lawsuit during his time on the board and Jindal's plan to ensure the lawsuit's (and Barry's) failure:
During [the 2014 Louisiana Legislative session], about 70 lobbyists from the oil and gas industry were in the legislative chambers. They worked in concert with the governor’s staff to secure support for a bill that would void the lawsuit. “They turned on the fire hose,” one veteran energy lobbyist said. “It was the best organized effort I have ever seen,” another said.Rich also asked state Sen. Robert Adley, a longtime oil and gas employee who opposed the lawsuit, whether his position was a conflict of interest, and Adley put that on his voters: "They know what industry I’m in. They choose to send me there." He later added that the lawsuit and Barry's fight are merely for Barry's upcoming book.
When Louisiana voters overwhelmingly supported a 2006 constitutional amendment intended to depoliticize area levee boards, they had in mind something very different than what’s been going on lately with the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) nominating process.
Under the old regime, area state senators nominated their political pals for levee board seats, and board members did not have to meet any professional standards. The 2006 amendment regionalized levee boards in southeast Louisiana and required most board members to have specific professional qualifications.
Prospective board members also must be vetted now by a “blue ribbon” nominating committee of business, civic, academic and professional leaders. Nominating committee members are presumed to be above politics.
Apparently they were only kidding about that part.
Ever since SLFPA-E members voted unanimously in July 2013 to sue 97 oil, gas and pipeline companies for destroying coastal wetlands and increasing the risk of flooding, the so-called “independent” nominating committee has been steeped in politics, conflicts of interest and official arrogance. Plus ça change.
The politicization started right after the suit was filed. Gov. Bobby Jindal vowed to kill the suit by any means necessary. He supported a half-baked state law designed to retroactively kill the lawsuit, but that law was so hastily written that it may not accomplish its stated purpose. The federal judge who is hearing the SLFPA-E lawsuit has been asked to rule on the law’s constitutionality and applicability.
Jindal also has pressured the nominating committee, which was created to remove politics from the nominating process, into sending him nominees who promise to withdraw the lawsuit as soon as possible. Until the committee's latest meeting on Sept. 18, the committee obliged Jindal at every turn.
This afternoon, Gov. Bobby Jindal signed into law Senate Bill 469, which will kill the Southeast Louisiana Flood Protection Authority-East's (SLFPA-E) lawsuit against 97 oil, gas and pipeline companies for for their role in coastal damage.
Earlier this week, attorney general Buddy Caldwell asked Jindal to veto the measure. Yesterday, New Orleans City Council also sent a letter to Jindal asking for a veto.)
In a statement, Jindal said, "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. The bill will also send future recovered dollars from CZMA litigation to coastal projects, allowing us to ensure Louisiana coastal lands are preserved and that our communities are protected.”
NOTE: This post, originally titled "The Dirty Dozen," has been updated to include the names of ALL area lawmakers who voted for Senate Bill 469, which is designed to kill the regional flood authority's environmental lawsuit against 97 oil, gas and pipeline companies. In this update report, I include all metro area lawmakers, not just those whose districts lie in the geographic boundaries of the flood protection authority.
LATER UPDATE: After playing phone tag for more than a day, state Sen. JP Morrell and I spoke and he explained that he was always AGAINST SB 469. He voted against it the first time it was considered by the full Senate. When it returned from the House for concurrence in the House amendment, Morrell said, he was not in the Senate Chamber. However, someone voted his machine in his absence, casting a vote FOR the bill. "I went to the mic to speak against the bill when it came up the first time," Morrell said. "Had I been in the Senate when it came back, I would have voted against it again." It is not unusual for lawmakers' machines to be "voted" for them in their absence, and occasionally it leads to mistaken votes such as Morrell's on SB 469. The story below has been revised to account for Morrell's explanation of his second vote.
Twenty-one state lawmakers from flood-prone southeast Louisiana parishes (Orleans, Jefferson, St. Bernard, Plaquemines, St. Charles, St. John, Tangipahoa and St. Tammany) voted for a bill to retroactively kill a lawsuit filed by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) against 97 oil, gas and pipeline companies. Voters in those areas overwhelmingly oppose legislative attempts to kill the lawsuit, which means those local lawmakers put the interests of Big Oil ahead of their constituents’ interests.
Eighteen area legislators voted against the bill to kill the lawsuit, and four area House members were absent for the final vote. Being absent for a floor vote is equivalent to voting "no" because bills require 20 "yes" votes in the Senate and 53 "yes" votes in the House regardless of how many lawmakers are present.
Worst of all, the area lawmakers who voted for the bill more than made the difference in its passage in both the Senate and the House. Seven area state senators voted for the bill, which passed by a margin 25-11. In the House, 15 area representatives voted for the bill, which passed by a margin of 59-39.
The current geographic boundaries of SLFPA-E's jurisdiction include the East Bank of Orleans and Jefferson parishes, plus St. Bernard, St. Tammany and Tangipahoa. Lawmakers recently passed, and Gov. Bobby Jindal signed, a bill creating a separate St. Tammany Levee District outside the jurisdiction of SLFPA-E, but hurricanes and storm surges don't respect political boundaries or acts of the Louisiana Legislature.
The SLFPA-E lawsuit seeks to hold the named energy defendants responsible for their share of damages to coastal wetlands. Contrary to the meme put forth by Big Oil and its political lackeys (Gov. Jindal chief among them), the suit was never intended to make the energy industry solely accountable for coastal land loss. From Day One, supporters of the lawsuit and attorneys for SLFPA-E stated that several factors contributed to coastal erosion. The lawsuit was simply aimed at getting the energy industry to pay its fair share.
Thanks to a slick procedural maneuver in the state Senate — and support from some local lawmakers — that lawsuit now appears doomed, unless a constitutional challenge can restore some sense of fairness and equity to Louisiana’s judicial system. The maneuver was a bait-and-switch that allowed the original version of Senate Bill 469, by Sen. Robert Adley, a Republican from the north Louisiana town of Benton, to be gutted in a Senate committee and reconstituted as a bill to kill the lawsuit. Adley, who is an oil-and-gas businessman, ranks among the leading opponents of the floor authority lawsuit.
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