Louisiana flood control board won't kill suit against big oil yet

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wwltv.com

Posted on June 19, 2014 at 2:42 PM

Updated Friday, Jun 20 at 3:19 PM

David Hammer / Eyewitness News
Email: dhammer@wwltv.com | Twitter: @davidhammerWWL

CHALMETTE, La. – Members of the New Orleans area levee authority who were on the board last year when it filed a bold lawsuit against 97 oil and gas companies held firm against mounting opposition Thursday and narrowly defeated an effort to withdraw the litigation.

The nine-member board, with Louis Wittie absent, voted 4-4 on a motion that would have ordered its expensive contract attorneys to dismiss the lawsuit. Five votes are needed to pass, and it’s believed that Wittie, who was on the board when the suit was promulgated last July, is still in favor of keeping the suit going.

But the board’s embattled effort to hold the oil and gas industry accountable for its role in damaging Louisiana’s coastal marshes has been staggered and may not survive much longer.

Joe Hassinger, the new vice president of the Southeast Louisiana Flood Protection Authority – East and one of the board members appointed since the lawsuit was filed last July, offered the motion to kill the lawsuit. He noted that pro-lawsuit member Paul Kemp's term expires this summer and it's possible that he could be replaced. He said the board will definitely vote on the issue again before the end of the year.

It seems a 5-4 swing to the anti-lawsuit side is only a matter of time.

Still, Thursday’s debate was significant because it was the first time that many issues have been aired publicly, especially the sky-high legal fees the board may owe if it pulls the plug on the litigation. It’s also the first public debate by the board since the state Legislature, urged on by a cadre of oil and gas lobbyists and led by a former oilman lawmaker, passed a law intended to forcibly kill the lawsuit.

About 60 people came to the meeting in the St. Bernard Parish Council chambers in Chalmette, and some, like Hurricane Katrina hero retired Lt. Gen. Russel Honore, were emphatic in their support for the lawsuit.

“Industry has hijacked our democracy,” he said, referring to Sen. Robert Adley, R-Benton, the former gas company owner who led the charge against the lawsuit. “Hopefully it doesn’t happen with this board.”

Glad Jones, the lead attorney in the case, talked about what led the board to take the unprecedented action in the first place.

“Courage and conscience drove the decision to say what others wouldn’t – that the oil and gas industry caused massive damage of the Louisiana coast,” Jones said.

He also said the new law signed by Gov. Bobby Jindal almost two weeks ago may not have the proper legal language to actually kill the lawsuit as it intended.

But Hassinger and his other recent appointees to the board are not happy with a provision of the board’s contingency-fee contract with Jones’ firm and two others. It’s called the “poison pill provision,” requiring the board to pay hourly legal fees if it or a third party forces them to drop the lawsuit.

If the lawsuit goes forward and is negotiated or adjudicated in court, Jones and the other contract lawyers get 32.5 percent of the award and bear all the costs of the litigation up front. But if it’s withdrawn, the poison pill takes effect.

To date, the lawyers are claiming 14,000 hours at $200 to $800 an hour. That’s a running bill of between $2.8 million and $11.2 million so far, and it only grows if a vote to withdraw the lawsuit later in the year is successful.

Former board Vice President John Barry said it was supposed to be a poison pill to the Legislature, to keep them from killing the lawsuit.

That didn’t work, and new board members like Kelly McHugh are angry.

“That poison pill is a poison pill to this board,” he said. “The past board members, y’all made that decision to do that to us.”

Hassinger said the board doesn’t have the money to pay Jones and the other attorneys millions of dollars, anyway. He urged other members to see the importance of ending the lawsuit now, even with the fees as high as they would be, rather than waiting until Kemp is replaced and Jindal has five new appointees in place.

“If we stop now, we owe the lawyers a zillion dollars,” he said. “But if we keep going and next month Mr. Kemp is replaced, we have incurred additional fees and costs.”

Hassinger says the levee authority never had the authority to file the lawsuit in the first place. He also contends that the suit was approved by the old board members in secret session, against the state open meetings law. Barry, a former journalist, says he was assured by the board’s attorneys that they complied with that law.

Tyrone Ben, the newest member of the board sworn in Thursday, said he was initially going to abstain from the vote, but when he heard about the mounting legal fees, he was convinced to vote to end the lawsuit now.

The pro-lawsuit camp won out, though, with Paul Tilly arguing that the lawsuit had the oil and gas companies on the ropes and ready to negotiate, at least until the Legislature and Jindal came to their defense.

“If we cancel this lawsuit there will be no pressure, no reason for them to come in and negotiate with us,” Tilly said.

But Greg Beuerman, a spokesman for BP, Chevron and Shell in the litigation, said that’s not true.

“The reality is the companies have been involved all along (in coastal restoration), but it’s very difficult to sit down and talk about a collaborative solution when people are suing you,” he said.

 

Editor's note: An earlier version of this story stated that Joe Hassinger said at the meeting that board member Paul Kemp would be replaced this summer. He actually said that it was a possibility that Kemp would be replaced because his terms was expiring, but clarified that he did not know one way or the other if or when Kemp would be replaced.

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