Rules for environmental damage lawsuits studied

04 26, 2012 by The Times-Picayune

The Louisiana House of Representatives voted overwhelmingly Wednesday for changes to lawsuit rules sought by oil and gas producers who say they are victims of overly litigious property owners seeking damages for environmental effects of energy exploration on leased land. Despite an 83-18 vote, House Bill 618 by Rep. Neil Abramson, D-New Orleans, faces an uncertain path as it moves to the Senate amid continued wrangling, with the energy sector and business lobby on one side and major landowners and their attorneys on the other.

The dispute marks the latest in a decade's worth of legislative attempts to settle the framework for so-called legacy lawsuits.

Abramson's bill would have the state Department of Natural Resources step in to develop restoration plans whenever an energy firm claims responsibility for certain damages caused by exploration and production. That mitigation plan, including the cost, would be admitted as evidence in any subsequent civil lawsuit filed by the landowners who leased their property to an energy firm.

That represents a significant shift from existing law, which leaves it to a jury in district court to decide responsibility for what are called regulatory damages (effects, such as open waste pits, that are subject to state environmental regulations) and private damages, which refer to claims that fall outside state environmental regulations.

Private damages might include crop damage or lost economic opportunity attributed to the environmental damage. Only after a settlement or verdict in such a case do state regulators step in and help develop a mitigation plan for the regulatory damages. Even then, final approval for such a plan rests with the judge.

Lawyers for landowners have said throughout the session, as did a handful of attorneys in the House on Wednesday, that involving the state before litigation begins risks prejudicing a jury as it considers the merits of private damages that go beyond considerations subject to state regulation. They also say that Abramson's industry-backed approach shifts primary jurisdiction.

Abramson said he simply wants to increase the frequency and speed of cleanups. Too many old oilfields, he said, sit idle through protracted litigation. Before the final vote, Abramson won approval for an amendment that makes the admissibility of the cleanup plan conform to state rules of civil procedure on expert witnesses. Authorities from the state regulatory agency would be expected to meet that burden, but Abramson said it adds another assurance of fairness.

He dismissed concerns about inappropriately influencing a jury. He noted that plaintiffs and defendants are always free to cross-examine expert witnesses and bring in their own witnesses to question evidence. As for landowner concerns that DNR is too close to the industry, he said that could just as easily switch over time, depending on who occupies the governor's chair and the Natural Resources secretary's office.

Abramson said he is willing to consider amendments in the Senate that might add specific jury instructions, with trial court judges charged with explaining the distinction between regulatory damages involved in a state-approved cleanup plan and private damages that are beyond the scope of state interest.

The dispute has pitted Gov. Bobby Jindal against U.S. Sen. David Vitter. Jindal, whose former executive counsel, Jimmy Faircloth, represents some of the leading landowners in the matter, has tasked DNR Secretary Scott Angelle with attempting to craft a compromise. Vitter has accused Jindal of coddling plaintiffs' lawyers at the expense of an industry responsible for tens of thousands of jobs in the state.

Abramson said no one from the Jindal administration has approached him about his bill.

A key question in the remaining weeks of the session is which Senate committee will hear the measure.