Pelican Institute CEO Daniel Erspamer
WASHINGTON — Chevron U.S.A. and several other major oil companies have petitioned the U.S. Supreme Court to overturn a lower court ruling that allowed Plaquemines Parish’s coastal erosion lawsuit against energy giants to be tried in Louisiana courts.
In its Sept. 4 petition, Chevron argues that such parish lawsuits seeking to make energy companies liable for oil production activities dating back to World War II should be removed to federal court. Chevron says the Fifth Circuit Court of Appeals’ decision to allow the litigation to be tried in state courts used the wrong standard with regard to what’s called the federal-officer removal statute.
That law has allowed federal contractors to remove lawsuits from state to federal courts provided they show that the government directed the contractors to engage in the conduct or activities in question. Chevron argues that the petitioners were under contract to provide aircraft fuel for the war effort at the time, leading the companies to ramp up crude oil production in a number of Louisiana parishes.
“The oil-production practices at issue in this litigation were integral to the petitioners’ fulfillment of federal contacts, and all the other requirements for removal are likewise satisfied,” Chevron said in its petition.
The Fifth Circuit, however, said the petitioners’ predecessors deviated from “prudent industry practices” when they produced the crude oil in the parishes, leading to environmental damage in the state’s coastal zone. In short, there was no explicit “federal directive” that led to the companies’ conduct during the oil-extraction activities in the parishes, the Fifth Circuit said.
But in its petition, Chevron argues the lower court used the wrong standard in interpreting the federal-officer removal statute.
“Petitioners’ federal avgas contracts necessarily required them to obtain unprecedented amounts of crude oil, and they fulfilled those contracts using crude that they produced in the relevant Louisiana oil fields, using methods that respondents now claim (more than 80 years after the fact) were contrary to state law,” the petition says.
The New Orleans-based Pelican Institute for Public Policy filed an amicus brief with the court supporting Chevron’s position and also criticizing the state’s use of private attorneys to advance the coastal erosion lawsuits.
“Louisiana has privatized sovereign enforcement of its coastal statute by ceding core decisions to private lawyers operating under fee-shifting arrangements, who steer suits into locally elected courts while state officials agree not to endorse defendants’ substantive defenses,” the amicus brief states. “That model erodes due process, undermines legislative control over public funds, and invites local partiality. …”
Under this arrangement, the private lawyers assume investigative and prosecutorial control for the parishes.
“That structure raises profound due-process concerns when the same lawyers also fund judicial campaigns and stand to collect hundreds of millions in fees,” the brief says.
In a statement emailed to the Louisiana Record, Pelican Institute CEO Daniel Erspamer said the case impacts the integrity of the nation’s constitutional legal system.
““In the end, it is American families and workers who pay the price when trial lawyers seize the power of the state seemingly for personal gain,” Erspamer said. “The Supreme Court has an opportunity to restore accountability and protect both our energy future and our rule of law.”
Such high-stakes litigation can reduce offshore drilling activity in the state, eliminate thousands of jobs and lead to “stealth settlements” that do little to address environmental issues along the coast, the amicus brief states.
“The result is wasteful government spending, diminished revenue, and a persistent ‘Judicial Hellhole’ reputation that drives investment and jobs out of the state,” the brief says.
