Legacy Lawsuit Crisis Continues- Will Our Leaders Act?

An investigative branch of the conservative national think tank the Heritage Foundation issued a damaging report this week – which was also picked up on Washington Times 24/7 – putting the national spotlight back on Louisiana’s legacy lawsuit crisis…

Legacy Lawsuit Strategy: Blame Natural Damages on Oil Companies

The American Tort Reform Foundation’s “Judicial Hellholes”  broke the story nationally with this video in February, observing, “The plaintiff lawyers promoting these lawsuits claim they want environmental clean-up for so-called legacy sites. But the facts show that the only ones cleaning up are a few politically-connected law firms.”

FoxNews picked up the issue last month, noting, “Louisiana oil producers are pointing to a rare breed of legal sludge they say is choking their business, costing the state thousands of jobs and billions of dollars in lost investment.”  FoxNews reported that legacy suits are “legalized extortion” in the eyes of Don Briggs, President, Louisiana Oil and Gas Association.

Meanwhile, HB 618, a proactive legacy lawsuit reform bill that passed with overwhelming support in the LA House of Representatives nearly two weeks ago, still awaits action in the Senate.  With the clock ticking as the Legislative Session nears its June 4th deadline for adjournment, one cannot help but wonder—how much longer before our leaders take action?

Everyday, more and more stakeholders are speaking out for reform.  Last week, Scott Sinclair, President of Tensas Delta Exploration Company, a Louisiana-based independent oil and gas operator, sent a letter urging support for HB 618 as a legislative solution that would address the root of the legacy problem, which he defines as “abusive lawsuits being pursued by a small contingent of plaintiff attorneys who go into courts and tell juries that their clients need ridiculous sums of money to clean up messes (that oftentimes don’t exist.)”

Sinclair adds, “The abusive part of legacy suits is not the regulatory cleanup.  It is the outrageous claims for hundreds of millions (and sometimes billions of dollars) for cleanups in excess of regulatory standards.”

This point was echoed by the Heritage Foundation.  “In one prominent case, plaintiffs demanded $3.7 billion to clean up an underground aquifer they said was contaminated by salt (note the parallels to Griffin’s presentation) due to oil and gas drilling. Ninety-five percent of that award, they claimed, would go towards transporting contaminated water to a waste disposal site.”

“But the plaintiff’s attorney admitted under oath that the contaminated water could be dealt with on site for about $1 million – in other words, that there were available methods for remediation that would reduce the necessary damages by 95%.”

HB 618 could help to resolve this loophole in the law, Sinclair continues, by allowing operators to:

•    Admit regulatory liability (without creating other unintended or unfavorable consequences)—essentially putting the regulatory cleanup before litigation
•    Get a science-focused (not money-focused) plan to deal with real environmental issues; and
•    Inform juries about the cost of regulatory cleanup of properties.

Sinclair is not the only stakeholder calling for action on Louisiana’s legacy lawsuit crisis.  Jeffrey Hildebrand, CEO of the Hilcorp Energy, the largest producer of crude in Louisiana and a company that has put billions into Louisiana’s economy in recent years, wrote to legislators, “Unfortunately, legacy lawsuits appear to be a growth industry in Louisiana with no signs of abating. The consequences of inaction are dire for our business and the industry as a whole.”

Last week, Lisa Rickard, president of U.S. Chamber of Commerce’s Institute for Legal Reform stated:

“These [legacy] lawsuits are simply abusive and being pursued by a handful of plaintiffs’ attorneys seeking to gain a windfall by circumventing established state procedures to fairly address alleged environmental damage claims.”

“[It] is essential for policymakers at all levels of government to remove barriers of domestic energy production.”

These voices provide much-needed perspective on the impact of legacy lawsuits at the national and local level.  No matter how you look at it, the message is clear—Louisiana’s system for handling these abusive suits is broken, and our state leaders need to fix it now.

If drilling has caused damage, it should be cleaned up quickly by the responsible party, but lawsuit scams should not be tolerated. It is so secret that those who profit from legacy lawsuit abuse would prefer to maintain the status quo.  Let’s hope that doesn’t happen.

Melissa Landry is executive director of Louisiana Lawsuit Abuse Watch, a non-partisan grassroots legal watchdog group dedicated to improving the state’s legal environment.

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