Louisiana's Grand Bargain?

The recent environmental lawsuits filed by Jefferson and Plaquemines parishes against dozens of energy companies could not come at a better time for supporters of an earlier suit by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E). But that doesn’t mean Gov. Bobby Jindal won’t still try to kill flood authority’s suit.

Lawyers and politicos note that while the suits share some of the same defendants, they are based on different theories of recovery. The parishes’ claims fall under the category of “legacy lawsuits,” which have flummoxed the energy industry in recent years. The flood authority’s suit seeks not only coastal restoration but also billions for enhanced flood protection.

Among those drawing distinctions between the lawsuits is Jindal. He went ballistic over the SLFPA-E suit, but he has taken a kinder, gentler stance on the parishes’ lawsuits. Why? His “coastal czar” Garret Graves talked about the parishes’ suits being filed by elected rather than appointed officials, and noting that they are narrower in focus, but that's what lawyers dismissively call a distinction without a difference. To Big Oil, the suits all look the same: they all potentially end with energy companies paying billions.

It’s quite interesting that Graves now talks about the parishes’ suit bringing Big Oil to the negotiating table. Graves, after all, was the heavy-handed battering ram for Jindal against the SLFPA-E lawsuit. He practically ordered the “independent nominating committee” that vets potential SLFPA-E members not to re-nominate John Barry, the flood board’s former vice chairman and the leading proponent of its suit, after Barry’s term expired. Now, apparently, Graves thinks it’s fine to sue oil companies to get them to negotiate.

Why the about-face?

Gee, I wonder if we’ll see Jindal’s old legal eagle, Jimmy Faircloth, showing up somewhere in the parishes’ lawsuits — or somewhere else in the “grand bargain” that folks are talking about now. This much is sure: Graves and Jindal are coming late to the settlement party. Barry and SLFPA-E have been there from the get-go.

“If enough lawsuits get filed, even without [Jindal’s] leadership, the industry is going to see that it’s in its own best interest to work something out,” Barry said in an emailed statement.

Barry’s right. If more lawsuits get filed — and more are expected from other coastal parishes — the energy industry will have to come to the table. When that happens, Jindal and lawmakers will have a rare opportunity for a grand bargain on coastal restoration and flood protection.

But, if the SLFPA-E suit is pulled before then, there will be nothing in the “grand bargain” for flood protection. At least, not on a scale that’s needed to adequately protect metro New Orleans. It will be interesting to see if the new SLFPA-E members — and the re-nominated board chair, Tim Doody, who initially supported the suit — toe the Jindal line now.

To get an idea of how big this is, consider what’s at stake:

  • The state has a “master plan” for coastal restoration that is a plan in theory only because it has no specific funding sources.
  • The $50 billion price tag that’s often cited for the master plan is bogus. The real cost will likely approach $100 billion.
  • The good news is that the feds could pay for 65 percent of the restoration plan, leaving the state with $35 billion over a 50-year period. That’s a lot of money, but Louisiana has a lot of oil and gas. And Big Oil has a lot of liability.
  • The energy industry desperately wants to put legacy lawsuits to rest once and for all — along with any potential exposure for higher flood protection costs.
  • Above all, industry wants long-term predictability, not a short-term deal.

A global settlement could accomplish all that, albeit at a steep price. Still, a steep price that’s certain — and spread over decades — may be preferable to rolling the dice in court and potentially having to pay a lot more, plus interest.

It will be interesting to see Jindal’s next moves — and to see if Faircloth shows up somewhere.

Meanwhile, any SLFPA-E board member who votes now to kill the authority’s lawsuit will clearly be selling out his community.