SADOW: Has Lafourche Parish Killed The Freeport McMoRan Coastal Deal?

The smash-and-grab attempt by environmental leftists and trial lawyers using Louisiana parishes as useful, if not greedy, idiots hit another roadblock as one of the parishes continues its refusal to play along.

The saga started many years ago in the wake of the hurricane disasters of 2005, when the left and its trial lawyer enablers hit upon trying to entice governments into using energy companies as piñatas to achieve their agendas, acting on contingency for these agencies to sue corporations over alleged environmental damage – even though some of the activities involved that supposedly did this were duly authorized under state and federal government auspices, others weren’t even covered, and didn’t in the main cause coastal erosion. After an attempt failed to use newly-established flood protection agencies as vehicles to accomplish this, eventually trial lawyers behind that turned their attention to coastal parishes.

After years of pressure, as it went out the door leaving the state where it was founded Freeport-McMoRan became the first and to date only of over 200 firms sued to buckle, offering a settlement of $100 million to the state and a dozen parishes, only seven of which actively took part in the case. On behalf of the state, Republican Atty. Gen. Jeff Landry intervened, joining  the state’s Department of Natural Resources as another party. Earlier this year, Landry approved the framework.

That might have seemed odd, for Landry all along expressed deep skepticism at the wisdom of the suits. The deal calls for the firm to pay $15 million, then $4.5 million twice, over the first three years of the 20-year settlement period to a fund set up by the Legislature. The money would go toward coastal restoration projects and generate environmental credits that then could be sold to offset Freeport’s remaining $76.5 million obligation.

However, the state and all named parishes have to approve of the memorandum of understanding acceding to the deal. Lafourche Parish authorities, after two years of debate without that, have declared the deal dead. By doing so, they likely kill the whole thing, although whether the DNR, whose head is appointed by Democrat Gov. John Bel Edwards who favors the suits and originally pushed the state into the deal as an ally of the trial lawyers involved, can accept on behalf of a parish is an ambiguous legal question. (Terrebonne Parish actively opposes the deal as well, but the area’s district attorney went rogue and alleges he could sign on behalf of the parish, which has landed the matter in court.)

Yet even if legal machinations could force acceptance by all parties involved, having the Legislature create a complicated environmental credit scheme, similar to cap-and-trade programs, and the envisioned Coastal Zone Recovery Fund might serve as a poison pill to this or any future settlements, for which this framework supposedly serves as model although with one important catch: while the trial lawyers involved could see hundreds of millions of dollars in fees, this initial settlement they claim they are doing for free. So, for that jackpot to come to fruition, not only must the Legislature pass a law mirroring the intent of the deal – a 60/40 split between the state and parishes with the latter having great latitude to spend their largesse – but also something must pass the Legislature to begin with.

And the Legislature has shown, which perhaps Landry anticipated, it wants to forge its own path in any deal that focuses primarily on state needs, not parish whim and trial lawyer greed, or nothing will happen. It repeatedly has ignored bills that try to enacts the plaintiffs’ optimal desire and instead has advanced alternatives that have left those lawyers frustrated. The latest effort last session, which made it through the Senate and out of House committee, would have dedicated 75 percent of the money to the Louisiana Coastal Protection and Restoration Authority while the other 25 percent would have gone to local governments where the activity occurred, with the stipulation the money be spent in ways that are consistent with CPRA’s coastal master plan.

In essence, the law would require for any suit of this nature compared to the deal a greatly diminished parish discretion for the dough, where it only could be used for mitigation according to the master plan. This provides little incentive for parishes to sue, and were this framework to become law, visions of a huge cash payday by settlements for the trial lawyers involved would disappear – or perhaps any remuneration at all.

Not having this the law of the land leaves plaintiffs in little better shape. Some legislative efforts have tried to cancel such suits, but if nothing happens, for the most part the deal falls through because the settlements insists on legislation largely consistent with its structure. If that kind of legislation doesn’t appear by 2024, the parishes keep only the initial $15 million – maybe, as apparently private landowners in them get first crack at that.

That presupposes the legislation to remove jurisdiction for such suits doesn’t become law and that ongoing litigation deciding the appropriate standing for such matters doesn’t moot the matter completely, or that this puts the issue in federal court that would make the possibility of such suits winning less likely. This or the deal mostly falling through, or both, other defendant companies would perceive as making their cases if going to court rather than settling stronger, discouraging such suits and settlements.

Thus, while Lafourche’s rejection might scuttle the whole arrangement, even if it stays alive a legislative majority committed to seeing state needs take precedence over parish fantasies of free money and trial lawyers’ wish to hit a huge rainmaker will ensure these kinds of suits – which have little merit and act primarily as shakedowns of businesses important to Louisiana’s economic fortunes – will have little to zero impact. Lafourche’s action is good news, but the Legislature must continue to stand resolute on the matter.

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