Analysis: 'Big Oil' Suit Survives, So Far
NEW ORLEANS (AP) — Facing opposition from a powerful industry, the governor and many in the Legislature, a New Orleans-area flood board's lawsuit against dozens of oil, gas and pipeline companies seemed doomed early on.
But that was roughly 15,000 billable hours ago.
That ever-growing number means ever-increasing pressure on opponents of the lawsuit, filed in the summer of 2013, to let it run its expensive course and hope that the energy companies win.
The Southeast Louisiana Flood Protection Authority-East filed the lawsuit seeking damages over damage done by dredging and drilling to the coastal wetlands that protect New Orleans from hurricanes. Lawyers who took the case on the board's behalf signed a contingency contract under which they collect big — from 22 to 32 percent — if they win in a case that could mean hundreds of millions, even billions of dollars for coastal restoration efforts.
They collect nothing if they lose.
But there is also a so-called "poison pill" in the contract. If the lawsuit is halted prematurely, the lawyers get paid for their time and expenses. Former SLFPA board member John Barry has defended that provision not only as a means of isolating the suit from political and industry pressures but also to make sure attorneys working on the case are treated fairly by the board that hired them.
A halt to the lawsuit remains a possibility.
Gov. Bobby Jindal, who fiercely opposes the lawsuit, has been able to replace four of the nine-members on a SLPFA-E board that once was solidly behind the suit. Barry, a historian and author of a book on the great Mississippi river flood of 1927, was one of the first to go. More lawsuit supporters' terms will expire next year.
Another threat to the suit is a law the Legislature passed this year aimed at killing the lawsuit retroactively. That law's constitutionality is in question, with the state Supreme Court and the federal judge in charge of the SLPFA-E suit expected to weigh in at some point.
Meanwhile, the legal fee meter keeps ticking.
At a question-and-answer session in New Orleans last week, sponsored by The Lens, an independent news organization, a leader of attorneys pursing the suit for the board estimated that expenses now total around $2 million.
Gladstone Jones said billable hours, as of September, were close to 15,000. He said rates vary among the various lawyers and staff working on the lawsuit from a low-end of $200-$300 an hour to the high-end $700-$800 per hour.
Throw in the $2 million in expenses and that means killing the lawsuit would cost the SLPFA-E somewhere between $5 million and $14 million. For now.
Jeff Angers, one of the more recent Jindal appointees, is sticking to his opposition to the lawsuit and says he will vote to kill it if the opposition arises. "It think it's bad public policy," Angers said last week during a meeting of the board. He revisited a litany of complaints lawsuit opponents have lodged since the lawsuit was announced, including the lack of public notice before the suit was filed. "It's not what this authority is supposed to be about," he said.
Another Jindal appointee, Tyrone Ben, has voted to rescind the suit in the past. However, with the cost of the poison pill growing, he acknowledged in a Thursday interview that he was more amenable now to letting the suit continue, especially if courts reject the Legislature's law aimed at killing it.
"Heavily," he said when asked if the growing cost of the lawsuit would weigh on his decision.
"Fundamentally, I'm against it," he said. "But, I mean, hey, if there's benefit for us and it's legal to proceed, then if we benefit the whole state benefits. I'm not going to be stubborn about it."
– by AP Reporter Kevin McGill