Historic lawsuit coming against Big Oil

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The state board that oversees flood protection for southeast Louisiana will file a massive, historic lawsuit on Wednesday against several hundred oil and gas companies, seeking to make them pay the costs of restoring coastal wetlands that have been lost as a result of energy exploration and development in southeast Louisiana.

Gambit was given an advance copy of the suit, which alleges that a vast network of oil and gas canals carved out of southeast Louisiana’s marshes exposed all of southeast Louisiana to additional flood risks — and much higher costs of flood protection — because the canals, along with related oil and gas activities, caused or accelerated coastal land loss.

The suit will be brought in Civil District Court by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E). It will name more than 100 oil and gas companies as defendants and bring scores of lawyers to the table in an epic legal battle that could go on for years. Among the first anticipated moves by Big Oil will be a motion to “remove” the suit to federal court, where judges and juries are believed by many in the legal community to be more conservative and thus friendlier to Big Oil’s anticipated defenses and procedural moves to quash the suit.

If the suit is even moderately successful in the early procedural stages, the list of plaintiffs — currently there is only one, the local flood protection authority — could grow substantially.

Lead plaintiff’s counsel Glad Jones, who has successfully brought environmental lawsuits against Big Oil and others in the past, told Gambit that the suit has the potential to be bigger than the ongoing BP litigation. The lawsuit focuses on oil and gas exploration and development east of the Mississippi River below Orleans Parish, but if the list of plaintiffs grows, the scope of the lawsuit could also grow.

The case ultimately could seek environmental recovery for all oil and gas activity along Louisiana’s coast. If that happens, this case will be to Big Oil what the Tobacco Litigation was to that industry: a game-changer.

Jones has assembled a team of more than a dozen top-drawer lawyers to bring the case, and Louisiana Attorney General Buddy Caldwell has authorized SLFPA-E to proceed against Big Oil.

The flood protection authority was created by the state Legislature after Hurricane Katrina as part of levee board consolidation in southeast Louisiana. SLFPA-E comprises the Orleans Levee District, the Lake Borgne Basin Levee District (in St. Bernard Parish) and the East Jefferson Levee District.

“If they believe the expert scientific testimony given by our witnesses, then we win the lawsuit,” Jones told writer Bob Marshall of The Lens. “That’s what this will all come down to — the science.” (Note: Marshall has an excellent story on the lawsuit HERE.)

Jones worked closely with SLFPA-E vice chair and historian John Barry to draft the suit. The opening pages read like a chapter of Barry’s award-winning book, Rising Tide, which chronicled the catastrophic 1927 flood. A few excerpts:

• “Coastal lands are the natural protective buffer without which the levees that protect the cities and towns of southern Louisiana are left exposed to unabated destructive forces. This protective buffer took 6,000 years to form. Yet … it has been brought to the brink of destruction over the course of a single human lifetime. Hundreds of thousands of acres of the coastal lands that once offered protection to south Louisiana are now gone as a result of oil and gas industry activities.”

• “For nearly a century, the oil and gas industry has continuously and relentlessly traversed, dredged, drilled and extracted in coastal Louisiana. It reaps enormous financial gain by exploiting the resources found there, sharing some of that bounty with the many residents whom it employs. Yet it also ravages Louisiana’s coastal landscape. An extensive network of oil and gas access and pipeline canals slashes the coastline at every angle, functioning as a mercilessly efficient, continuously expanding system of ecological destruction. This canal network injects corrosive saltwater into interior coastal lands, killing vegetation and carrying away mountains of soil. What remains of these coastal lands is so seriously diseased that if nothing is done, it will slip into the Gulf of Mexico by the end of this century, if not sooner.”

The suit also notes the more than 200 miles of levees, hundreds of floodwalls and floodgates, and other flood control structures operated and maintained by the three area levee districts. It then goes on to describe “the crisis” presented by coastal wetland destruction:

“Coastal lands, including wetlands and marshes, are an integral natural complement to the Authority’s man-made flood protection system. Coastal lands are the first line of defense for south Louisiana’s communities against the destructive force of hurricanes.

“Those lands form a buffer that reduces the height and energy of hurricane 
storm surge and waves, thereby aiding the Authority in its mission to protect 
south Louisiana. Hurricanes lose intensity as they travel over land. Hence, the more land that a given hurricane must traverse before reaching Louisiana’s coastal cities, the weaker that hurricane’s impact on those communities, and, concomitantly, the more effective the levee system.

“The coastal landscapes and levee systems thus work in harmony, with the former acting as a natural first line of defense in abating the flood threat, and the latter serving as the last line of defense against the widespread inundation of inhabited areas.”

The suit goes on to allege, as a prelude to accusing Big Oil of being at fault for much of the land loss, that the land loss “has raced on unabated since the early 1930’s, averaging thousands of acres lost per year … and is anticipated to grow at an aggressive pace. … The coastal lands that remain have been left severely diseased by the constant
intrusion of corrosive saltwater, leaving them highly susceptible to being washed away by the next storm. This consequence was demonstrated by the tremendous excavation of wetlands caused by Hurricane Isaac in August 2012.”

The suit then zeroes in on Big Oil under a heading that reads, “The Cause.” Noting that oil and gas exploration and development in Louisiana’s coastal zone began in the early 1900s and brought a century of profit to Big Oil, the suit contends that oil and gas production and pipeline companies “together dredged a network of canals to access oil and gas wells and to transport the many products and by-products of oil and gas production.

“Nearly 100 years of continuous and ongoing oil and gas activity has scarred Louisiana’s coast with an extensive network of thousands of miles of oil and gas access and pipeline canals,” the suit continues. “This canal network intersects with pre-existing natural channels and water bodies, chopping the once thriving and cohesive coastal ecosystem into thousands of smaller, decaying patches.”

The suit claims that the network of canals and channels have killed off vegetation, inhibited sedimentation, eroded coastal lands, and generally caused or accelerated coastal land loss.

“Oil and gas activities have transformed and continue to transform what was once a stable ecosystem of naturally occurring bayous, small canals and ditches into an extensive — and expanding — network of large and deep canals that continues to widen due to Defendants’ ongoing failure to maintain this network or restore the ecosystem to its natural state,” the suit alleges. “That canal network continues to introduce increasingly larger volumes of damaging saltwater, at increasingly greater velocity, ever deeper into Louisiana’s coastal landscape and interior wetlands.

“The increasing intrusion of saltwater stresses the vegetation that holds wetlands together, weakening — and ultimately killing — that vegetation. Thus weakened, the remaining soil is washed away even by minor storms.”

The suit also alleges that “additional, ongoing oil and gas activities” continue to contribute to coastal land loss. Those activities include road dumps, ring levees, drilling activities, fluid withdrawal, seismic surveys, the use of marsh buggies, spoil disposal and dispersal, watercraft navigation, impoundments and propwashing/maintenance dredging.

The suit claims that those additional oil and gas activities “drastically inhibit the natural 
hydrological patterns and processes of the coastal lands, contributing to vegetation die-off, sedimentation inhibition, erosion, submergence, and the ultimate destruction of the coastal landscape. Indeed, the removal of fluid from beneath coastal lands is causing subsidence of those lands, contributing to a rate of relative sea level rise in coastal Louisiana that is staggeringly higher than other places in the country.”

The suit further alleges that Big Oil has exacerbated direct land loss “by failing to maintain the canal network and banks of the canals that defendants have dredged, used, or otherwise overseen. Those acts and omissions, which continue through today, have caused both the erosion of the canal banks and the expansion beyond their originally permitted widths and depths of the canals comprising that network, resulting in the steady infiltration of saltwater into the coastal lands described above. The consequent ecological degradation to these areas has produced weakened coastal lands and extensive land loss. This in turn has created markedly increased storm surge risk, attendant flood protection costs, and, thus, damages” to the flood protection authority and to residents and businesses in southeast Louisiana.

The suit next identifies specific “costs” to the flood protection authority as a result of oil and gas activities. Those costs, which are not enumerated specifically, include abatement and restoration of coastal wetlands (including backfilling and revegetating all canals); paying for the hurricane and storm damage risk reduction system put in place by the U.S. Army Corps of Engineers (including the local share of maintaining levees — estimated to be many millions); levee certification costs (including extensive engineering studies); and “additional costs associated with flood protection, including, but not limited 
to, more and stronger safe houses.”

The legal framework for the suit is grounded in both state and federal law.

Among the federal laws that the suit claims Big Oil failed to follow over the years are the Rivers and Harbors Act of 1899, which gave the Corps authority to allow alterations to navigable waterways, but which also “prohibits the unauthorized alteration of or injury to levee systems and other flood control measures built by the United States.” The suit also cites the federal Clean Water Act of 1972 and the state Coastal Zone Management Act of 1972.

“This regulatory framework establishes a standard of care under Louisiana law that Defendants owed and knowingly undertook when they engaged in oil and gas activities as described herein, and which Defendants have breached,” the suit states.

The suit concludes by citing six theories of recovery — each set forth in a specific “count” against Big Oil. They include:

• Negligence, for “defendants’ continuing acts and/or omissions” in building and using the canals.

• Strict Liability, because the defendants “failed to exercise reasonable care” in the construction and use of the canals.

• Natural Servitude of Drainage, a concept unique to Louisiana’s Civil Code that prohibits one property owner from taking action — or failing to take action — that causes adjoining or nearby property owners to flood. In this case, the suit alleges that destruction of the wetlands has changed the natural hydrology of southeast Louisiana such that the natural higher ground in and around New Orleans now floods because of Big Oil’s activities in the natural drainage areas below the city.

• Public Nuisance, a claim that Big Oil’s activities constitute and/or cause “unreasonable interference with the health, safety, peace, and/or comfort of southeast Louisiana communities.”

• Private Nuisance, which includes a claim that Big Oil knew or should have known that its acts and/or omissions would have caused the alleged damages outlined in the suit.

• Breach of Contract, specifically that Big Oil breached a contractual duty owed to the flood authority as a third-party beneficiary. Under Louisiana law, a contract may impose a duty for the benefit of a third party; in this case, the flood protection authority alleges that it is a third-party beneficiary of Big Oil’s contractual obligations (under federal and state permits) to maintain the canals and to use them without harming the surrounding wetlands.

In each “count” and again at the end of the pleading, the suit seeks as damages the following: “abatement and restoration of the coastal land loss at 
issue, including, but not limited to, the backfilling and revegetating of each and every canal Defendants dredged, used, and/or for which they bear responsibility, as well as … wetlands creation, reef creation, land bridge construction, hydrologic restoration, shoreline protection, structural protection, bank stabilization, and ridge restoration.” The suit also seeks costs, expenses, attorneys’ fees and other damages.

Barry, the flood authority’s vice chair, told Marshall of The Lens that the authority has to spend more to protect people and property in the metro area because of the coastal land loss.

“No one denies — not even the oil industry — that the canals they dredged helped cause this problem,” says Barry. “Now, people will say there are other causes, and we’re not denying that. The levees on the river, obviously, are a major cause. But the federal government built those levees, and they’ve been spending billions of dollars on better flood protection and coastal restoration projects in this area.

“What we’re saying to the oil companies is, ‘It’s time for you to step up now for the damage you did.’”

The flood authority and its legal team will hold a news conference at 10:30 a.m. Wednesday to announce the suit. The oil and gas industry no doubt will deny all allegations and point to the many economic benefits that flowed from oil and gas development in south Louisiana.

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