[StBernard] Louisiana's top coastal official may explore lawsuit to block levee board suit against energy companies

[Westley Annis]

Louisiana's top coastal official may explore lawsuit to block levee board
suit against energy companies
Print Mark Schleifstein, NOLA.com | The Times-Picayune By Mark Schleifstein,
NOLA.com | The Times-Picayune 
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on January 15, 2014 at 6:23 PM, updated January 16, 2014 at 1:06 AM

Louisiana's top coastal restoration body on Wednesday gave its chairman the
green light to determine whether the agency can sue to try to derail a
controversial wetlands damages lawsuit filed by the east bank levee
authority against energy companies in July.

At a heated session in which opponents and proponents of the wetlands damage
suit clashed publicly, the Coastal Protection and Restoration Authority gave
Chairman Garret Graves the power to explore a lawsuit to nullify the
contract between the Southeast Louisiana Flood Protection Authority-East and
its attorneys in the wetlands litigation. 

The CPRA also asked the regional levee authority to determine whether it had
the legal power to enter into the contract with the Jones Swanson law firm
of New Orleans or to cancel the contract.

Tuesday's vote followed a contentious four-hour discussion of the levee
authority's suit with the attorneys who filed it, Gladstone Jones and Jim
Swanson.

In the debate, Graves  said that at the same time the levee authority is
suing oil and gas companies, it has asked the state's Mineral and Energy
Board to handle the bidding process for oil and gas leases on properties in
the Bohemia Spillway.

"I asked the Mineral Board what restrictions had been placed on these new
leases that SLFPAE had put out to bid," Graves said. "Nothing! Come on, man!
This is bull****!"

For their part, Jones and Swanson urged CPRA members to support the wetlands
lawsuit and to "cease efforts to protect oil and gas industry."

The levee authority filed the lawsuit seeking to have 97 oil, gas and
pipeline companies that have operated in wetlands adjacent to east bank
levees repair the damage they caused to wetlands or pay damages to the levee
authority. The money would be used to improve flood protection.

The suit was immediately attacked by Graves and Gov. Bobby Jindal, who
argued the levee authority's action disrupted the state's own legal strategy
aimed at getting the U.S. Army Corps of Engineers to shoulder a greater
portion of the cost of rebuilding Louisiana's wetlands. Both Graves and
Jindal have also said the levee authority was not authorized under state law
to file the suit, though Attorney General Buddy Caldwell has disagreed with
that position.

Caldwell's approval of a levee authority's resolution authorizing the
contract with the Jones Swanson law firm has been challenged in state court
in Baton Rouge by the Louisiana Oil and Gas Association, whose members
include many of the companies that were sued.

At the end of Tuesday's tense back-and-forth, Graves said the levee
authority's contract with attorneys "violates the public trust" because the
state might be left paying the cost of a "poison-pill" provision requiring
the levee authority to pay expenses and legal fees if the any agency
unilaterally ends the suit before it goes to court or before a settlement
with the companies.
Jones said three law firms working the case have spent between $500,000 and
$800,000 in expenses and worked between 8,000 and 9,000 billable hours on
the case, with hourly attorney's fees ranging from $200 to $850.

But he also said that if a court found that the contract had been improper,
there likely would be no cost to the levee authority.

Graves contends that if the suit is cancelled and the levee authority is
unable to pay the legal tab, the state would be on the hook because the CPRA
acts as the senior levee agency under state law.

"This is the tail wagging the dog," Graves said. "I've said some emotional
things today because I'm pissed."

Earlier, Jones and Swanson attempted to run through a slide presentation
explaining the reasoning for the levee authority lawsuit. They said the suit
seeks to get the oil and gas industry to acknowledge its responsibility for
their share of wetlands losses, to prompt a discussion about how to address
those losses and to develop a fair solution.
They asked the coastal authority to back a task force that would address
industry responsibility for part of the coastal erosion funding, and to seek
funding from all sources, and not just from taxpayers. The attorneys also
asked the CRPA members to support aggressive enforcement of permits to
energy companies and the regulations governing them.

To illustrate the damage caused by the energy industry, Jones used
historical aerial photographs of wetlands surrounding the Delacroix
community in St. Bernard Parish. He said the photos showed how the dredging
of canals to access oil exploration and development wells by Devon Energy
and Murphy Oil took place in wetlands that later turned largely to open
water.

The Devon Energy permit, issued in 1983, called for spoil banks along the
sides of the canal to be degraded to marsh level with the dredged material
returned to the canal or spread over nearby wetlands to create marsh and
encourage vegetation. The state's Coastal Zone Management Act regulations,
approved in 1980, required mineral exploration and production sites to be
"cleared, revegetated, detoxified and . restored as near as practicable to
their original condition" when the site was terminated. The Devon Energy
well was abandoned in 1994, but no improvements were made to the area,
according to aerial photos dating to 2008.

Jones argued that the lawsuit is based on numerous scientific studies
concluding that oil and gas activities have made a significant contribution
to wetlands loss, including by federal and state agencies, the Louisiana
Mid-Continent Oil and Gas Association and the American Petroleum Institute.

Swanson pointed out that the state's Master Plan for coastal restoration
includes about $8 billion in projects in wetland areas just outside the east
bank levee system, but that there's no money included in the state's
proposed 2015 annual plan to pay for the work.

He also said that the $50 billion, 50-year Master Plan acknowledges that it
doesn't include enough restoration projects to significantly reverse
continuing wetlands loss rates until more than halfway through its life.
Thus, the lawsuit could provide an alternative source of money for the
state, Swanson argued.

Jones also challenged Graves' past comments about the wetlands lawsuit. That
drew the ire of State Rep. Gordon Dove, R-Houma, an ex officio member of the
coastal authority who demanded an end to the attorneys' presentation.

Former St. Bernard Parish President Craig Taffaro, who represents the state
Division of Administration on the coastal authority, criticized the east
bank levee entity's decision to sue the energy companies without first
trying to work with the state and the companies. Taffaro suggested that is
one reason why the energy companies have responded to the suit only in
court.

After the levee authority filed suit, the energy firms immediately removed
the lawsuit from New Orleans Civil District Court to federal court, arguing
that many of the claims made by the authority are based on federal laws.

"I think it's less likely for a company to speak to an attorney when his
agent knocks on the door with a lawsuit, than when he asks first to talk
about what's going on," Taffaro said.

Taffaro also questioned whether the levee authority really planned on using
any money won through the lawsuit to pay for coastal restoration projects,
and whether any money should go to the state or into an escrow account
managed by the court.

The meeting was the first session on the coastal board for Joe Hassinger,
whom Jindal appointed to replace John Barry as the representative of the
regional levee authority. Hassinger said he remains concerned about language
in the levee entity's contract with Jones Swanson that he and Graves say
could allow the law firm to sue fishermen, shipping companies or even the
state, for their own actions damaging wetlands. 

Jones said the lawyers have submitted a letter promising that any expansion
of the wetlands damage suit, or new suits, would only be filed if requested
by the levee authority.