Governor Jindal Announces Support for Legacy Lawsuit Legislation

03 27, 2014 by Governor's Office PHOTO credit: Mike Lyon, LMOGA

BATON ROUGE – Today, Governor Jindal announced support for proposed legislation that will promote the fair resolution of “legacy claims” and the remediation of property, while discouraging the exploitation of lawsuits for money. Legacy claims are known as disputes between landowners and oil and gas companies related to impacts to property and resources as a result of exploration and production activities. The legislation will be filed by Senator Robert Adley.

Governor Jindal said, “A sensible, fair, and predictable legal system is critical to protecting the rights of our citizens who have legitimate claims, as well as the rights of those who are accused of wrongdoing. Exploitation of the legal system destroys its legitimacy and discourages investment in an industry that has been the cornerstone of our economy for the past century – an environment that is critical to our way of life. It is time we all work together to develop a consensus approach – and I’m proud to announce the legislation we’re announcing today to do just that. “There have been efforts over the years to address this issue either through the Legislature or the courts. The Legislature has made several attempts to find a balance to these interests, and some progress has been made. Unfortunately, however, progress has been hampered by exploitive lawsuits, or “legacy lawsuits,” that do more to enrich lawyers than to resolve disputes or protect the rights of the parties. We can no longer let these lawsuits needlessly delay cleanup, investment and timely resolution to disputes, which is why I’m proud to support this legislation.”

The Governor said the proposed legislation will do four key things:
First, this legislation provides that, if a responsible party admits liability for a regulatory cleanup, there will be a rebuttable presumption that the cleanup plan approved or structured by DNR is the most feasible plan to evaluate or remediate environmental damage under the applicable regulatory standards. And this presumption will be charged to the jury. This provision fortifies the “limited admission process” created in 2012 and will encourage more operators to make admissions, which will result in more regulatory cleanups prior to protracted and very expensive litigation.

Second, the legislation clarifies the types of damages that may be recovered in a legacy lawsuit and the standards for recovering those damages. This eliminates gamesmanship and provides predictability to the oil and gas companies while also protecting landowners so they are able to collect actual damages to which they are entitled.

Third, the legislation will allow for attorney fees in favor of a party who is dismissed on a motion for preliminary dismissal. The right to file a motion for preliminary dismissal was created in 2012 in order to give defendants an early path out of the case when there is no evidence that a defendant has any responsibility. This process was created to remedy scattershot lawsuits where the plaintiff names every person and company in the chain of title. This new provision will discourage these types of claims in the first place, by making the plaintiff responsible for paying the cost of attorney fees incurred by the defendant to obtain a preliminary dismissal.

Fourth, the legislation will define “contamination” to mean the introduction or presence of substances or contaminants into a usable groundwater aquifer, a USDW (an underground aquifer used for drinking water) or soil in such quantities as to render them unsuitable for their reasonably intended purposes.

Currently, “environmental damage” is defined in the law, but the definition uses the word “contamination”, which is not defined. Providing a common sense definition for “contamination” will make clear that environmental damage means something more than the mere presence of ANY constituent in the soil or groundwater. In other words, it must rise to some level that is unsafe or unsuitable before it can support a claim for environmental damage.

Senator Robert Adley said, “By resolving conflicts resulting from judicial decisions in 2010 and 2013, this is a huge step in the process of ensuring land is protected while giving predictability to businesses activity in Louisiana. All parties should be congratulated for putting Louisiana first.”

Roy Martin, President of RoyOMartin companies said, “James Justiss and I are happy that the landowners of Louisiana and the oil and gas industry have come to an agreement to help end needless litigation and clear the way for more responsible onshore oil and gas exploration without compromising environmental standards. Many oil companies would not do business in Louisiana due to the fear of unfair and preposterous claims made by plaintiff attorneys. This legislation should pave the way for faster and complete cleanup of contaminated areas and more leasing of prospective lands."