A federal appeals court has ruled in favor of almost 100 multinational energy-extraction companies, sued by a Louisiana levee board blaming major erosion of the state's wetlands on decades of oil and gas development.
A three-judge panel with the 5th US Circuit Court of Appeals ruled Friday to uphold a 2015 federal court decision on a lawsuit filed by the New Orleans-based Southeast Louisiana Flood Protection Authority-East (SLFPA-E) in 2013. Shell, Chevron and BP are among the major industry defendants named in the suit, along with 94 other oil and gas companies the SLFPA-E blames for widespread destruction of the state's coastal wetlands through the construction of exploration and production canals.
According to the US Geological Survey, Louisiana’s coastal wetlands are in danger of disappearing within the next two centuries. The state has seen its sea level rise about twice as fast as the global rate in the last 50 years, according to the US Environmental Protection Agency.
The federal appeals panel said that the SLFPA-E, which has oversight of levees and general flood protection in the New Orleans area, does not have the legal standing to bring damage claims, nor does it have a valid argument for returning the lawsuit to state court, where it was originally filed.
The appeals court also agreed with US District Court Judge Nannette Jolivette Brown's 2015 ruling that the SLFPA-E failed to prove the companies had a duty under federal law to address damage from their operations, according to the New Orleans Times-Picayune. Brown also ruled that the SLFPA-E's levees were located too far away from industry damage done by drilling.
"The District Court was correct that neither federal law nor Louisiana law creates a duty that binds defendants to protect the board from increased flood protection costs that arise out of the coastal erosion allegedly caused by defendants' dredging activities," the appeals court said in a decision written by Judge Priscilla Owen.
Attorneys for the authority said the industry should pay its "fair share" for coastal deterioration. The authority claims industry activity has left the area more susceptible to flooding and hurricane damage based on weakened levees.
"Coastal land loss is not just an urgent problem; it's a disaster for the people of our state," said attorney James Swanson. "Oil and gas companies have admitted that they've contributed to this problem."
The lawsuit sought $50 billion in restoration compensation. The oil and gas industry has admitted to 36 percent of wetland erosion, while the US Department of Interior previously said the industry is to blame for anywhere from 15-59 percent of the damage.
Louisiana's oil and gas industry, a major source of power in the much-drilled state, has fought the suit with claims of frivolity and malice.
"Our position remains validated by yet another court decision, further proving these allegations are baseless and without merit," said Chris John, president of the Louisiana Mid-Continent Oil & Gas Association, said in a statement.
"This ruling is a step in the right direction, but we have many more miles to cover,” said Don Briggs, president of the Louisiana Oil and Gas Association.
A number of similar lawsuits against the industry are still outstanding. Parishes that have sued over coastland destruction include Cameron, Jefferson, Plaquemines, St. Bernard and Vermilion, according to the Times-Picayune. Democratic Governor John Bel Edwards has promised to file more lawsuits as well.
"Divisive and unnecessary lawsuits, like the Southeast Louisiana Flood Protection Authority-East's and a multitude of other coastal lawsuits, are creating an unstable legal environment for the state and driving new oil and gas investments, jobs, and tax revenue into neighboring states," Briggs said in the joint statement. "I applaud the court of appeals' decision, and we will fight to see that similar coastal lawsuits follow the same course of action."
Louisiana officials said the appeals court ruling will likely not affect various parish lawsuits against the industry, the Times-Picayune reported, which are based on provisions of the state Coastal Resources Management Act and not federal law.
Former Louisiana Governor Bobby Jindal, a Republican, led the fight against the SLFPA-E lawsuit, encouraging and signing a legislation in 2014 that aimed to block oil and gas lawsuits. That legislation was later ruled unconstitutional in state court.