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A Lasting Legacy

The coming debate over "legacy site" litigation will require an unlikely pact between trial lawyers, landowners and oil companies.

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William Dore has turned a nice profit leasing his 9,000 acres of marshland in Cameron Parish to oil and gas prospectors, but it has come at a hefty price.

His green expanse resembles a museum of abandoned oil work. Saltwater brine tanks sit leaking on several acres, the holes patched with nothing more than cotton gloves and broom handles. Pools of oil are as common as clover.

The oil companies Dore has dealt with since he bought the land have left their marks, as have those who worked it previously, going back to 1933. Dore has taken many of them to court, wanting restitution for environmental damages. Such "legacy site" litigation has become so common that some refer to it as the new tobacco or asbestos -- a boon for trial lawyers.

The litigation prompted state lawmakers to get involved in 2003, after the state Supreme Court affirmed a $33 million property damage award in the case of Corbello v. Iowa Production. Some legislators saw a disturbing trend in the judgment: Landowners were not required to use the money to clean up their land, and juries were creating a hostile business climate by sticking oil companies with huge judgments.

As a result, lawmakers adopted the "Corbello bill," which requires feuding parties to work out their differences with the state Office of Conservation. Once a plan and damage award are brokered, funds are placed in a court registry and used solely for clean-up work. Anything left over goes back to the oil company. More importantly, the law can apply retroactively to older cases, says Rep. William Daniel, a Baton Rouge Republican and author of the law.

But the law had problems. For starters, it only addressed groundwater -- prompting plaintiff lawyers to exclude groundwater claims in their suits. Additionally, courts have been reluctant to apply the law retroactively.

Now Daniel, along with Sen. Robert Adley, a Democrat from Benton, is back with "Corbello II" -- a bill that aims to pick up the pieces during the current regular session. Copies of the bill were not available at press time, but Daniel says it will track the original law and include all matters of contamination. It's being characterized as a vehicle for independent oil, but Daniel argues that landowners have sway in the bill.

"Plaintiffs would still be able to pursue other civil action under the legislation," he says. "We want to make sure that we preserve the right of individuals to access the court system."

Still, divisions run deep. Independent oil would rather roll the dice with the Office of Conservation, where delays will be long and faces friendly. Landowners want to make sure they can go to court to enforce contracts. Lawyers on both sides are concerned about smaller judgments and fewer billable hours.

The coming debate has become so heated that a group of landowners have combined forces -- under the name of Property Owners for Louisiana Land and Water Restoration -- to run a TV commercial statewide. The ad depicts a man on his front porch in a swing, questioning the integrity of oil companies in the state. "We want large oil companies to come here, but they have an obligation to restore the land and water they harm," says Ken Killen, a self-proclaimed businessman, property owner, and narrator of the 60-second spot.Ê

Gov. Kathleen Blanco surprised many when she announced in her session-opening speech that she would take on the issue -- less than a month after speaking at the annual meeting of the Louisiana Independent Oil and Gas Association (LIOGA). Blanco told lawmakers that huge awards in legacy litigation had "chilled oil and gas exploration."

After her remarks, LIOGA president Don Briggs described the bill as a winner for oil and landowners. He says the economy is suffering because of the lawsuit frenzy and something has to be done soon. "It's a compromise and an important step for the state," he says.

If Daniel's bill is a compromise, not everyone is confident the truce will last. Sen. Butch Gautreaux, a Morgan City Democrat, filed legislation last year that would have forced oil companies to take responsibility for damages and demanded that landowners use their judgments for cleanups. It also encouraged mediation. But after one volatile hearing, the bill was dead. This year, he fears the oil lobby might get heavy-handed.

"Whatever the oil companies want us to do, we do," Gautreaux says. "Louisiana doesn't get any respect from other states because of it. People tell oil companies if they want to be abusive, go to Louisiana, because other states won't let them get away with it."

Jeremy Alford can be reached at jeremy@jeremyalford.com.

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