Louisiana AG Backs $100M Deal in Freeport McMoRan Coastal Damage Suit
Attorney General Jeff Landry has said he’s backing a $100 million settlement between a dozen coastal parishes and mining corporation Freeport McMoRan to end a lawsuit over damage to Louisiana’s coastal wetlands, in what could become a landmark agreement.
The Republican attorney general’s decision to sign off on a deal immediately provoked swift criticism from organizations representing the oil and gas industry and some of his fellow Republicans who worry the agreement could set a precedent affecting dozens of other pending coastal lawsuits involving 12 coastal parishes and New Orleans against major oil companies. (New Orleans was not part of the Freeport McMoRan settlement.)
The settlement already had the backing of Democratic Gov. John Bel Edwards’ administration.
The lawsuits, some of them dating to 2013, charge that oil and gas firms failed to follow state law when they drilled wells, built canals, disposed of waste and carried out other activities that contributed to coastal wetlands loss. Industry representatives cast the suits as an unjust attack — led by trial lawyers — on a vital industry and employer.
Landry approved the settlement with Freeport McMoRan, which has sold off many oil and gas assets in recent years, while sticking to his position that the lawsuits against the oil and gas industry for coastal damage are “counter-productive to job creation in the energy industry.” And he echoed industry contentions that the U.S. Army Corps of Engineers’ levee and flood protection system is a “significant contributor” to Louisiana’s disappearing coastline.
But he also said, “When a party to litigation comes to the table with a request to resolve the matter apart from that litigation, as a lawyer, I have a duty to listen.
“Let me be clear,” he added, “my actions today should not in any way be construed as pressuring any of the parties still in litigation to resolve these matters outside the litigation.”
Edwards’ office, however, in a statement praising the settlement, said “the Governor is hopeful that this settlement can act as a framework for how other similar actions might be handled.”
And John Carmouche, one of the lawyers representing coastal parishes, said he hopes the settlement will encourage other companies to seek a settlement. “I hope, since they see now that the attorney general and the governor have united and will endorse companies that come to the table and they will get a better deal, I’m optimistic we will see some very soon.”
The Freeport McMoRan settlement was announced in 2019, a possible landmark agreement in lawsuits by coastal parishes that accuse energy companies of damaging the coast with drilling and dredging activities.
Defendants include BP America Production Company, Chevron, ConocoPhillips, ExxonMobil Pipeline Company and Shell.
The attorney general described the terms of the deal in a brief news conference and follow-up statement, later releasing a document outlining terms.
Landry said Freeport McMoRan would be freed from liability from the ongoing coastal lawsuits. In exchange, the company would deposit $15 million into an escrow account and then make additional payments of $4.25 million annually over two decades, he said.
The money wouldn’t be distributed until lawmakers set the terms for a board to oversee and manage the spending — and the money must be used on coastal restoration and hurricane protection projects consistent with the state’s Coastal Master Plan, Landry said. Sixty percent would be dedicated to state projects and 40% to local projects, according to Landry’s office.
The oil and gas industry disagreed with Landry’s assessment of the deal, saying the money could be used for projects unrelated to the coast and criticizing the “secretive manner” in which it was developed.
“It is disappointing that some elected officials have sided with plaintiffs’ attorneys in support of job-killing lawsuits and a flawed settlement scheme,” Tyler Gray, president of the Louisiana Mid-Continent Oil and Gas Association, and Mike Moncla, president of the Louisiana Oil and Gas Association, said in a joint statement.
The organizations vowed to keep fighting the coastal lawsuits and to oppose legislation to implement the deal — setting up a fight that appears headed for the upcoming legislative session that begins in mid-April.
“This complete lack of transparency and oversight has allowed private plaintiffs’ attorneys to act with unbridled discretion over government-sponsored lawsuits, which have the potential to impact coastal, economic and environmental policy in the state for generations,” Gray and Moncla said in their statement.
State Senate Republican leader Sharon Hewitt, of Slidell, trashed the settlement and said she would work against it in the Legislature.
“This secret settlement begins a dangerous path that leads to false promises, bankruptcies and job losses,” Hewitt said.
McGill reported from New Orleans.
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