Q&A: Federal Court Says Lawsuits Against Oil And Gas Companies Should Be Heard In State Court

Aug 11, 2020
Originally published on August 12, 2020 12:36 pm

In the latest development in several parishes’ efforts to sue oil and gas companies over damage to the Louisiana coast, a federal appeals court has said those lawsuits should be heard in state courts.

That could pave the way for the trials to finally begin, several years after the lawsuits were first filed.

To talk about what this means and what happens next, reporter Travis Lux got all the wonky details from Mark Schleifstein, environment reporter for The Times-Picayune | The New Orleans Advocate.

This interview has been edited for length and clarity.

Travis Lux: So these lawsuits have to do with alleged damages to the Louisiana coast. Several coastal parishes have filed similar lawsuits over the last several years saying oil and gas companies have violated their permits and have sped up coastal land loss in the process. None of those suits have actually gone to trial, though. The battle has been which court they should be held in: state court or federal court. Why does it even matter which court holds these trials?

Mark Schleifstein: The oil and gas industry wanted them heard in federal court because they felt that they should be considered under federal environmental laws, rather than state laws. And obviously they believed that they’ll get a better hearing in the federal courts, and that the federal laws will better serve their interests.

The news here is that the 5th Circuit Court of Appeals has ruled that the lawsuits should, in fact, be heard in state court. Is this a big deal? Expected or unexpected?

I’m not sure if the oil and gas industry expected it to occur, but it was pretty clear from the outset based on an earlier, similar ruling by both the 5th Circuit and the local district court judges that had heard similar complaints from the oil and gas industry.

The bottom line here is that these cases will all be heard under state law that is pretty clear. It says that for oil and gas companies to operate in the state, they have permits and they have to follow the regulations that are in place for repairing damages caused during their oil and gas operations. And that’s really what’s at stake.

So what comes next? Is there a timeline when some of these lawsuits will be going to trial? Is that clear yet?

There’s two things here. The first one is that the oil and gas industry could appeal this. It could ask for the full 5th Circuit to review this decision, which was made by a three-judge panel. And then it could actually ask that the case be heard by the Supreme Court. It’s unclear whether that’s going to happen. The oil and gas industry says that they are reviewing their options on that. On the other side, the attorneys representing the parishes say they will move immediately to restart this trial and then begin the other trials [from other coastal parishes] that are involved.

I guess it’s worth noting that last year one of the companies that had lawsuits filed against it, Freeport-McMoRan, reached a settlement with coastal parishes worth $100 million. Do you think this ruling will make it more or less likely that other settlements will happen?

There is that potential but there are other issues involved. The oil and gas industry has attempted over the last six or seven years to get the state legislature to address this issue and attempt to ban the lawsuits, or muck them up in some way. It failed again this year when [the state legislature] ran out of time because of the shorter session because of the coronavirus pandemic. There are lots of things that can occur. It’s going to be an ongoing story for quite some time.

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