It's unclear if the 'poison pill' would take effect if the lawsuit is dismissed by the court because of Act 544.
Levee board asks federal judge to rule Act 544 unconstitutional
NEW ORLEANS In a pre-emptive strike Tuesday, the New Orleans area levee board is asking a federal judge to declare a new state law unconstitutional and bar 97 oil and gas companies from using it to kill the controversial coastal erosion lawsuit the levee board filed against them.
The Southeast Louisiana Flood Protection Authority East filed the lawsuit in July 2013 with high-priced trial lawyers working on contingency. It claims that oil and gas companies caused major land loss by dredging canals and laying pipelines and then added to the flood authority's costs by never restoring the land that traditionally protects Greater New Orleans from storm surge.
The industry moved quickly to block the lawsuit, but Attorney General Buddy Caldwell upheld the suit and and the hiring of Glad Jones and his partners as attorneys on contingency. Gov. Bobby Jindal and the state Legislature followed that with a bill to retroactively kill the lawsuit by stripping the levee board of any authority to file such a suit.
The bill passed and, after dismissing concerns that the new law would inadvertently destroy local government claims against BP for damages caused by its massive 2010 oil spill, was signed by Jindal as Act 544.
The filing Tuesday by the levee authority asks U.S. District Judge Nannette Jolivette Brown to block any of the oil companies from using Act 544 as a defense against the levee board's claims. Jones' motion gives three reasons Act 544 can't be used as a defense, all of which imply that the legislation was sloppily written:
1. While intended specifically to kill the levee board lawsuit, it actually targets 'local governmental entities,' which Jones says the levee board is not;
2. The act is unconstitutional;
3. The levee authority's claims against the oil and gas companies are not actually prohibited by Act 544.
Greg Beuerman, a spokesman for Shell, BP and Chevron, said the motion is outside the usual court procedures.
'Since this motion is both procedurally defective and premature, it's apparently just an attempt to circumvent the proper motion to dismiss process,' Beuerman said. 'This matter should be briefed at the same time as other threshold legal issues which we anticipate will dispose of this poorly conceived suit entirely.'
And Jindal, whose stand against trial lawyers and for civil lawsuit reform is seen as an important calling card among national conservatives, also attacked Jones' motion with this statement from his deputy communications director late Tuesday:
'It's no surprise that trial lawyers would try to block this law,' Shannon Bates said. 'They fought the legislation during the legislative session because they knew their frivolous lawsuit was at risk of being thrown out. This is their latest attempt to keep a frivolous lawsuit alive.'
The fact that the levee authority made the first move is somewhat surprising because it potentially speeds up a decision that could kill the lawsuit one that promised to be extremely lucrative for Jones' firm. But the law firm is also racking up huge costs up-front, and if Act 544 is successful, Jones' firm may not be able to recover anything.
On the other hand, there is a provision in the law firm's contract with the levee board called the 'poison pill,' a promise from the levee authority to cover the firm's costs if, rather than losing the case in court, the board or a third party pulls the plug on the lawsuit.
That provision was included to protect against what has already begun happening: Jindal has been replacing members of the board who supported the suit with those who do not, making it very likely that the board will have enough votes by the end of this year to withdraw the suit.
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