Jindal demands East Bank levee authority drop lawsuit against oil, gas, pipelines
BY MARK SCHLEIFSTEIN, NOLA.com/The Times-Picayune
NEW ORLEANS -- Saying it had overstepped its authority, Gov. Bobby Jindal is demanding that the East Bank levee authority drop a lawsuit filed Wednesday that would require oil, gas and pipeline companies restore damaged wetlands and pay damages for the effects of the lost wetlands on levees.
Jindal also demanded that the Southeast Louisiana Flood Protection Authority-East fire the attorneys who filed the suit, saying they were hired in violation of state law that requires their hiring be approved by the governor.
“We’re not going to allow a single levee board that has been hijacked by a group of trial lawyers to determine flood protection, coastal restoration and economic repercussions for the entire State of Louisiana," Jindal said in a news release Wednesday. "This suit takes a myopic view of coastal Louisiana that actually jeopardizes and undermines our ability to implement the Master Plan."
The state's $50-billion, 50-year coastal protection and restoration Master Plan outlines how the state and localities will restore wetlands and improve flood protection in the New Orleans area and elsewhere along the state's coast.
In interviews and a news conference announcing the lawsuit, authority Vice President John Barry and attorney Gladstone Jones said whatever restoration and improvements result from the lawsuit would have to comply with the Master Plan.
Jindal’s press release said the Legislature established the Coastal Protection and Restoration Authority as the entity responsible for setting state policy on coastal issues.
"By filing this suit against nearly 100 companies, the SLFPAE has effectively taken on the role of the governor, the attorney general, the Department of Natural Resources and the CPRA in determining the state's policy on coastal issues," the release said.
The release also said state law requires any special attorney or counsel representing a state board or commission to be paid "solely on written approval of the governor and the Attorney General and pay only such compensation as the governor and the Attorney General may designate in the written approval."
"The governor did not approve this contract -- nor would he have approved this contract," the release said.
In a statement responding to Jindal, Barry defended the authority's action in filing the lawsuit and challenged the governor's allegation that it had been improperly influenced by trial lawyers.
"No one hijacked this board." said Barry, who on Tuesday said the original idea for the lawsuit was his. "Before anyone ever approached a lawyer, the board discussed whether we wanted to do this. We agreed -- and we were unanimous -- that we did. We couldn't afford to finance the lawsuit. I asked a couple of major environmental groups to do it pro bono. They couldn't. Gladstone Jones was recommended to me."
Jones has significant experience in lawsuits involving environmental issues, including class actions suits.
Barry said the authority's reasons for filing the lawsuit are based on its responsibility for the levee system.
"The board takes its responsibility to protect the lives and property of those within our jurisdiction very seriously," he said. "To continue to ignore an obvious cause of damage to the coast would, in our board's opinion, be a dereliction of our duties.
"Laws that created our board after Katrina insured us of insulation of political pressure," he said. "We respect the governor and the chair of CPRA. We take this independent action to fulfill our responsibility."
He said that at the very least, the suit would start a conversation "and perhaps begin the needed coastal healing process."
Barry said in an interview Tuesday that the authority had obtained permission from Louisiana Attorney General Buddy Caldwell to hire the law firms of Jones, Swanson, Huddell & Garrison LLC of New Orleans; Fishman Haygood Phelps Walmsley Willis & Swanson L.L.P. of New Orleans; and Veron, Bice, Palmero & Wilson L.L.C. of Lake Charles to file the suit. The companies’ hiring also was approved by a unanimous vote of the authority board.
In his Wednesday statement, Barry said the governor, in saying the hiring needed his permission, was relying on the wrong state law -- one that applies to state boards and commissions, rather than the specific legislation that created the authority.
The law firms were hired for a contingency fee of 32.5% of the first $100 million paid by the companies if the authority wins, with the firms receiving a smaller percentage of amounts above $100 million, and nothing if the case is lost.
The agreement also contained what Barry called a "poison pill" provision requiring the authority to pay the expenses of the firms if it unilaterally pulled out of the suit.
“This is nothing but a windfall for a handful of trial lawyers," Jindal said. "It boils down to trial lawyers who see dollar signs in their future and who are taking advantage of people who want to restore Louisiana’s coast. These trial lawyers are taking this action at the expense of our coast and thousands of hardworking Louisianians who help fuel America by working in the energy industry."
But Barry said that the lawsuit decision and the decision to hire trial lawyers was properly vetted.
"We investigated the issue of whether the contract was legal with attorneys other than those who actually filed the lawsuit, and those attorneys concluded we had the authority to file," Barry said. "Attorney General Caldwell obviously also reached that conclusion and approved the contract, and I might point out that (the Gladstone Jones law firm) Jones Swanson never gave one penny in political contributions to him.
"Obviously the attorneys who did file (the lawsuit) looked at the same issue and came to the same conclusion," Barry said. "They only get paid if they win. Before they win, they will have to put at risk not only tens of thousands of hours of legal work but millions and millions of dollars funding the scientific research to back up our filing. They could win big. They could also go bankrupt if they lose."
Jindal said a better approach to restoring the state's coast includes "holding the Army Corps of Engineers accountable, pushing for more offshore revenue sharing and holding BP accountable for the damage their spill is doing to our coast."
Jindal also defended the state's actions in support of restoration, and the halt of additional wetland erosion, including improved coastal zone regulations and a requirement that those seeking dredging permits beneficially use material that is dredged and mitigate any damage.
He also cited his administration's record in providing millions of dollars for coastal restoration projects, while at the same time urging federal agencies to do the same.
“We have repeatedly pushed the Department of the Interior to evaluate and mitigate for the cumulative impacts of offshore energy production in our state," Jindal said. "While the U.S. Treasury has pocketed nearly $200 billion from offshore energy production, a fraction of one percent has been returned to our state for restoration and protection projects. Meanwhile, up to 90 percent of revenues from energy production onshore is re-invested in the states that host such production. This disparity in federal laws needs to end."
“Instead of tying up the future of Louisiana’s coast in court with the benefits only to be reaped by a group of trial lawyers, we believe the better way to direct offshore energy company revenues into Louisiana’s coast is through revenue sharing from offshore energy production," he said. "In fact, Louisiana voters overwhelmingly decided this issue years ago by approving a constitutional amendment that would dedicate all future offshore energy revenues to coastal restoration and hurricane protection projects in Louisiana’s master plan. The recent efforts in Congress to increase Gulf of Mexico Energy Security Act funds are encouraging, but more needs to be done.”
Barry, meanwhile, said he regretted that the governor is opposing the lawsuit, and also praised the governor and his coastal adviser, Garret Graves, who also chairs the CPRA, for their leadership on coastal issues.
"It pains me personally to be at odds with them over this," Barry said. "But our board is independent, and arrived at its position based on its collective scientific and policy judgment."
Meanwhile, Graves said late Wednesday that he and other Jindal administration officials will sit down with authority members to explain how the lawsuit doesn't fit into the state's larger restoration strategy, "and explain how this infringes upon the roles of other levee districts, parishes, state agencies and stakeholders."
The state also is concerned that the arguments used in the levee authority's lawsuit could conflict with the state's arguments in legal actions involving the BP oil spill.
"Their objective was arguably to help the coast, but it actually undermines those efforts," Graves said. The state has been intensely lobbying both the Army Corps of Engineers and Congress to get the agency to begin mitigating for its ongoing actions that affect wetlands, including its management of the Mississippi River and its sediment resources.
"We estimate that just to mitigate for the corps' ongoing actions, it will cost approximately $2 billion a year (in 2013 dollars) -- just to mitigate for losses caused by the corps annually," Graves said.
"No one is saying that historic oil and gas activities did not leave scars," Graves said. "What I am saying is that it is only a piece of the larger picture and you need to be very thoughtful and strategic as to how these issues are address in concert."