OPINION: Finally, an end to legacy-lawsuit abuse

11 14, 2012 by Houma Courier

In Louisiana, we understand the challenge to increase offshore oil and gas production often gets the spotlight in the media. But, there has been another struggle for the oil and gas industry, largely behind the scenes, that is also vital for job creation — cleaning up legacy lawsuit abuse in Louisiana.

Legacy lawsuits are suits that have been brought by the thousands in recent years by aggressive trial lawyers on behalf of certain landowners. They've targeted all companies that have produced oil and gas on the land in question, alleging serious contamination of the land.

Sometimes serious contamination does exist, sometimes not.

Either way, every oil and gas company who ever operated on the property going back decades has been sued, no matter what the facts.

The goal of these suits is simple: to extort settlements even in frivolous cases and, when real damages do exist, to go after exorbitant awards.

In some cases, these awards have amounted to hundreds of times the market value of the land, and very little of the award amounts actually have been used for cleanup.

Because these suits have become such a trial lawyer bonanza, they've served as a major barrier to further developing our energy resources and growing related jobs.

An academic study by LSU's Center for Energy Studies estimates that legacy lawsuits contributed to the loss of almost 1,200 new wells in Louisiana — more than $6 billion in lost investments.

And when drilling decreases, job opportunities decrease with it. With these legacy lawsuits, the LSU study estimates that more than 30,000 jobs have been lost.

To correct the situation, the Louisiana Oil and Gas Association, the Louisiana Association of Business and Industry, and other business groups proposed reforms that were introduced as bills at the start of this past state legislative session. But as the session developed, the proposals stalled.

Some, like the governor, vowed support of a solution only if the two sides could agree on a compromise.

To me, this encouraged intransigence on the trial lawyer side since the legal status quo was fine by them.

That's when I decided to speak out and publicly challenge the governor and Legislature, explaining clearly my reasons why I was doing so.

Jobs were at stake and would continue to be lost unless we acted now. We needed leadership.

Holding back until both sides came to an agreement was a sure recipe for failure since one side — the trial lawyers — didn't need or want any change to the legal status quo.

The message began to resonate. As a result, the House voted overwhelmingly — 82 to 19 — in support of the strong legislation that LOGA and others helped draft. And momentum grew.

Within a few short weeks, this led to a so-called compromise on the issue, which was passed and signed into law. But, it's not just a compromise; it's a solution, because it included all of the major elements of the strong proposed legislation.

This solution allows an energy company to admit responsibility for environmental damage and to clean it up to the regulatory standard set under state law. The state-approved cleanup plan in turn becomes admissible in court to act as a defense against any frivolous or inflated damage claims being advanced by the trial lawyers in the litigation.

I'm glad the governor and his negotiators came around in the end and supported this strong solution. It will do two things: help clean up real contamination relatively quickly, and shut down the trial lawyers' frivolous and inflated claims that have been hurting job creation in our energy sector.

In short, it will ensure that Louisiana remains a leader in responsibly producing great American energy – AND great American energy jobs.

U.S. Sen. David Vitter, R-La., lives in Metairie.