Legislatively Capping an Energy Lawsuit: Problems Posed by Stripping a Pending Suit Against Ninety-Seven Oil and Gas Companies

Legislatively Capping an Energy Lawsuit: Problems Posed by Stripping a Pending Suit Against Ninety-Seven Oil and Gas Companies TABLE OF CONTENTS Introduction .................................................................................. 959 I. History of Action and Reaction .................................................... 963 A. Legislative Inducement: The Causes of Act 544 ................... 963 B. Legislative Adjustment: The Legislature’s Response ............ 967 II. The Constitutionality of Act 544 .................................................. 969 A. The Supreme Court’s Precedent in Morial Supports Act 544’s Constitutionality .................................................... 971 1. Act 544 May be Applied Retroactively ........................... 972 a. Contracts and Due Process Protections are Not Pertinent to Act 544’s Intended Subject .................... 972 b. Act 544 Does Not Infringe Upon the Judiciary’s Independence ............................................................ 976 2. Act 544 Does Not Qualify as a Prohibited Local or Special Law ..................................................................... 979 B. The Levee Authority’s Constitutional Origins Do Not Provide Immunity .................................................................. 983 III. Act 544 Is a Necessary Solution to a Complex Problem .............. 984 A. How Does the Lawsuit Fit into the Framework of Coastal Regulation? ............................................................................ 985 B. Act 544 is the Preferred Solution ........................................... 988 Conclusion .................................................................................... 992 INTRODUCTION “Coastal Louisiana is vanishing,” 1 and the state’s citizens are becoming aware of that reality. 2 From 1932 to 2010, the state of Louisiana has Copyright 2016, by TAYLOR BOUDREAUX. 1. DAVID M. BURLEY, LOSING GROUND: IDENTITY AND LAND LOSS IN COASTAL LOUISIANA 5 (2010). 2. Poll Shows that Louisiana Residents Want Oil Companies to Pay for Damage Done to the Coast , RESTORE LA. NOW (Nov. 22, 2013), http://restorelouisiananow .org/poll_shows [perma.cc/H6YA-5EYG] [hereinafter Poll Results ] (poll showing 960 LOUISIANA LAW REVIEW [Vol. 76 diminished by 1,883 square miles. 3 Many Louisianans may not have known much about wetlands in years past, but disasters like Hurricanes Katrina and Rita, concerns over rising sea levels, and the BP oil spill in the Gulf of Mexico have brought the coast’s problems to the public’s attention. One cannot realistically attach such an extreme loss—spanning over a majority of the past century—to any one cause because the loss is the result of a number of factors. 4 The most prominent suspects are the Mississippi River Delta’s “sedimen[t] deprivation,” 5 sea level rise, 6 and commercial development of coastal wetlands. 7 Crude oil and natural gas production has drastically increased in Louisiana over much of the last century, 8 and the petroleum industry’s economic impact on the state has grown accordingly. 9 That development has not been without negative side effects, however; studies connecting the energy industry’s coastal operations to the dramatic land loss have put these that citizens have substantial concern over protecting the wetlands from coastal erosion and improving flood protection in their parish). 3. BRADY R. COUVILLION ET AL., LAND AREA CHANGE IN COASTAL LOUISIANA FROM 1932 TO 2010, at 1 (2011), available at http://pubs.usgs.gov/sim/3164/down loads/SIM3164_Pamphlet.pdf [perma.cc/6K7W-F8NW] (“Trend analyses from 1985 to 2010 show a wetland loss rate of 16.57 square miles per year. If this loss were to occur at a constant rate, it would equate to Louisiana losing an area the size of one football field per hour.”). 4. See Mark Schleifstein, Louisiana is Losing a Football Field of Wetlands an Hour, New U.S. Geological Survey Study Says , NOLA.COM (June 2, 2011, 9:37 PM), http://www.nola.com/environment/index.ssf/2011/06/louisiana_is_losing_a_football .html [perma.cc/R8A4-E65J] (quoting a USGS geographer, David M. Burley, Brady Couvillion, and the director of the USGS National Wetlands Research Center in Lafayette, Phil Turnipseed). 5. Id. 6. Saskia De Melker, Native Lands Wash Away as Sea Levels Rise , PBS (June 1, 2012, 10:43 AM), http://www.pbs.org/newshour/updates/climate-change-jan-june12-louisianacoast_05-30/ [perma.cc/263S-YZVS]. 7. Bob Marshall, Science to be Key Factor in Lawsuit Against Oil and Gas Companies for Coastal Loss , LENS (July 23, 2013, 8:51 PM), http://thelensnola.org /2013/07/23/science-to-be-key-factor-in-lawsuit-against-oil-and-gas-companies-for-coastal-loss/ [perma.cc/53BY-A2PC]. 8. See Louisiana Energy Facts and Figures , LA. DEP’T OF NATURAL RES., http: //dnr.louisiana.gov/index.cfm?md=pagebuilder&tmp=home&pid=208 [perma.cc/2S K4-6ADT] (last visited Oct. 22, 2015). 9. Renita D. Young, Oil and Gas Industry Continues to Strongly Support Louisiana, Study Shows , NOLA.COM (July 11, 2014, 2:33 AM), http://www.nola .com/business/baton-rouge/index.ssf/2014/07/oil_and_gas_industry_continues.html [perma.cc/THG7-969J]. 2016] COMMENT 961 companies at the center of governmental and public scrutiny. 10 The board of commissioners for the Southeast Louisiana Flood Protection Authority-East (“SLFPA-E”) was well aware of these studies’ findings. 11 Armed with those findings, 12 the board filed suit against almost 100 oil, gas, and pipeline companies 13 that have operated in the southeast portion of the state, specifically in the “Buffer Zone.” 14 The SLFPA-E, tasked with the construction and maintenance of flood prevention systems in the New Orleans and Lake Pontchartrain areas, 15 argued that the defendants’ production operation negatively affected the wetlands that act as a preventative barrier or initial line of flood defense, 16 which made the board’s ability to carry out its duties more burdensome. 17 The lawsuit prayed for injunctive relief and damages, asserting negligence, strict liability, natural servitude of drainage, public nuisance, private nuisance, and breach of contract. 18 10. See Alisha A. Renfro, New Study Examines Oil and Gas Production’s Increased Effects on Louisiana Coastal Land Loss , RESTORE MISS. RIVER DELTA (Jan. 11, 2012), http://www.mississippiriverdelta.org/blog/2012/01/11/new-study-examines-oil-and-gas-production%E2%80%99s-increased-effects-on-louisiana -coastal-land-loss/ [perma.cc/YT3S-LPJ3]. 11. Marshall, supra note 7. 12. Melker, supra note 6; Marshall, supra note 7. 13. Mark Schleiftstein, Historic Lawsuit Seeks Billons in Damages from Oil, Gas, Pipeline Industries for Wetlands Losses , NOLA.COM (July 24, 2013, 9:30 AM), http://www.nola.com/environment/index.ssf/2013/07/historic_east_bank_levee_au tho.html [perma.cc/E5KB-UQYT]. 14. Petition for Damages and Injunctive Relief at 7, Bd. of Comm’rs of the Se. La. Flood Prot. Auth. v. Tenn. Gas Pipeline Co., No. 13-6911 (La. Dist. Ct. July 24, 2013). The “Buffer Zone” is described as extending “from East of the Mississippi River through the Breton Sound Basin, the Biloxi Marsh, and the coastal wetlands of eastern New Orleans and up to Lake St. Catherine.” Id. 15. LA. REV. STAT. ANN. § 38:330.2(2) (Supp. 2015). 16. Petition for Damages and Injunctive Relief, supra note 14, at 8–10. 17. Id. at 3. 18. Id. at 17–23. Months after removal, the federal district court dismissed SLFPA-E’s suit for failure to state a claim. See Mark Schleifstein, Federal Judge Dismisses Levee Authority’s Wetlands Damage Lawsuit Against Oil, Gas Companies , NOLA.COM (Feb. 13, 2015, 7:52 PM), http://www.nola.com/environ ment/index.ssf/2015/02/federal_judge_dismisses_east_b.html [perma.cc/KZ4G-KW EL]. This dismissal order did not address Act 544 and its proposed effect on SLFPAE. See id. Additionally, the decision will inevitably be appealed. See Mark Schleifstein, Appeal of Wetlands Damage Suit Against Energy Companies Will Continue , NOLA.COM (March 2, 2015, 6:45 PM), http://www.nola.com/environment /index.ssf/2015/03/continue_the_appeal_of_wetland.html [perma.cc/H4W3-8V28]. Because the dismissal order did not discuss Act 544’s application or legality, the issue 962 LOUISIANA LAW REVIEW [Vol. 76 The oil and gas industry, as well as the Louisiana governor, adamantly opposed the lawsuit. 19 Whether or not the industry’s political influence prompted the legislative action, the legislature also expressed its disapproval with the suit and acted accordingly—the 2014 legislative session saw 18 bills that related to the litigation. 20 Ultimately, the legislature passed Senate Bill 469, which the governor eventually signed into law as Act 544 (“the Act”). Among other things, this law provides that “no state or local governmental entity” has a cause of action related to any coastal activity, commercial or otherwise, subject to regulation under particular state and federal law. 21 Interestingly, to achieve the conspicuous aim of the legislators’ efforts, the law provides that its effects shall apply to all “claims existing or actions pending on the Act’s effective date” as well as those filed after that date. 22 Legislators, commentators, and those potentially subject to the new law made clear that the Act’s legality and actual application are far from settled. 23 The law removed the board of commissioners’ legal standing and stripped a significant slice of authority from that constitutionally established governmental body. 24 With such drastic consequences, constitutional arguments unsurprisingly followed the governor’s signature. Further, with only a cursory view of media headlines, Louisiana citizens are understandably concerned about whether the bill was in their best interest; the law precluded a local-area board from filing suit—an apparent attempt to hold the oil and gas industry accountable—against almost 100 companies in that industry. 25 A more tempered analysis of the situation, however, reveals the...