Jurisdictional question revived in suits over coastal loss

NEW ORLEANS (AP) — The question of whether lawsuits blaming big oil companies for loss of vulnerable Louisiana coastal wetlands will be tried in state courts, as local parish governments want, or in federal courts, as the oil companies want, has been revived by a federal appeals panel.

Thursday's ruling at the 5th U.S. Circuit Court of Appeals in New Orleans was a partial victory for the oil companies and a partial reversal of a decision the same court made a year ago. But a lead attorney for parishes suing the oil companies claimed victory, too, saying the decision effectively means at least 15 of the 42 lawsuits still face state trials — and the remainder could, too, pending more federal court review.

“The decision is in our favor,” lawyer John Carmouche said.

In August 2020, a panel of three 5th Circuit judges upheld federal district judges' rulings keeping the issue in state court, where coastal parishes' attorneys want them tried. But the oil companies pressed for reconsideration. Arguments were heard in October, and Judge James Ho, author of the 2020 opinion, wrote Thursday that the district courts should take another look.

Thursday's new ruling came in lawsuits filed by Cameron and Plaquemines parishes against oil companies including BP America, Chevron USA, Exxon-Mobil and Shell. But it has implications for all of the more than 40 lawsuits brought by six parishes and New Orleans. The overarching issue in the suits is whether the oil companies can be held responsible for allegedly contributing to decades of coastal erosion and the loss of wetlands.

But the cases, some of which date to 2013, have bogged down in jurisdictional questions. Oil companies want the cases in federal court. Attorneys for the parishes say the disputes are over state regulations. Carmouche has called the effort to have the suits moved to federal court a delaying tactic.

The latest jurisdiction question turns largely on whether a report filed by one of the parishes in the case contained what the oil companies said was new information that might warrant removal to federal court. The report said some of the wells involved in the lawsuits were drilled during World War II while the companies were acting under the authority of a federal wartime agency.

Ho’s Thursday opinion noted oil company arguments that some of the state’s drilling regulations conflicted with federal drilling rules in place during the war.

Carmouche, reached by phone Thursday, said more than 15 of the lawsuits don't involve wartime activities and, under previous rulings that still stand, are ripe for trial in state courts. "The operations in those cases all began after World War II," Carmouche said.

He added that the other cases go back to two federal district judges who have already ruled that the cases don't belong in federal court.

A request for comment from a Louisiana oil industry group was not immediately returned Thursday.

The wetlands in question are not only ecologically important to wildlife and fisheries but they also act as a kind of natural hurricane buffer to inland communities, including New Orleans. The companies' dredging of coastal canals, use of earthen pits instead of steel tanks at well heads, and drilling methods are among the issues in the lawsuits.

Oil companies have repeatedly called the suits frivolous, and an attack by money-seeking lawyers on an industry vital to Louisiana's economy.