Louisiana Attorney General Jeff Landry announced on Thursday, March 4, that he has authorized an agreement to release Freeport-McMoRan Inc. from all claims for past impacts to the Louisiana Coastal Zone.
The agreement will effectively end longtime litigation between the company and coastal parishes in the State.
The Attorney General's Office says that while Freeport chose to resolve its liability by this agreement, the fragmented lawsuits that attack industry and ignore federal responsibility for damages cannot fully restore Louisiana’s coast.
“While I believe these claims are best decided by a full and final adjudication, I will not interfere with a private company seeking relief from the immense uncertainty litigation injects into Louisiana’s energy industry,” Landry said.
During his press conference, Landry said that Freeport's resolution met the criteria his office deemed necessary move forward.
That criteria states that the resolution must be good for Louisiana, productive for the coast, and consistent with the Coastal Master Plan. It must also contain regulatory or credited relief for the industry and must be final and create certainty for the industry moving forward.
According to the AG's Office, the resolution releases Freeport from liability for any current claims, triggering its dismissal from the coastal parish suits.
In exchange, Freeport is required to deposit an initial payment of $50 million into a trust. That initial payment will be followed by several smaller payments of $4.2 million per year over 20 years.
Landry said that payments will not be distributed until the Legislature creates a special fund and new oversight board to hold and manage those funds.
Once created, the board will be tasked with distributing monetary awards toward projects consistent with the Coastal Master Plan.
Landry said that 60 percent will be dedicated to state projects and 40 percent will be dedicated to local projects.
“If accepted by the Legislature, Freeport will contribute up to $100 million toward state and local projects enhancing coastal restoration and hurricane protection,” Landry said. “As the federal government bobs and weaves around its fair share of our coastal losses, Freeport has agreed to put funds in the hands of coastal experts overseeing Coastal Master Plan projects that protect our most vulnerable localities.”
There have been several responses to Landry's announcement of the resolution on Thursday, including many in the oil and gas industry who are in opposition to the settlement.
Landry addressed those responses by saying that if those in the industry want to continue to litigate the matter then he will stand by that decision.
Read those responses below:
The following is a statement from Daniel Erspamer, chief executive officer of the Pelican Institute for Public Policy (Pelican Institute), regarding the proposed agreement seeking to settle coastal land loss claims against a single defendant that no longer operates in Louisiana.
“Frivolous government-sponsored coastal lawsuits have and continue to inflict tremendous pain on Louisiana’s working families without demonstrably having any impact on coastal restoration, the issue which they purport to address. A Pelican Institute study found that the coastal lawsuits had a direct impact on Louisiana’s economy, costing $44 million to $113 million each year since the coastal lawsuits were filed and at least 2,000 jobs over just the first two-year period when the lawsuits were first filed. Our state government shouldn’t be in the business of suing job creators, particularly considering the fact that these lawsuits kill jobs without guaranteeing funding will go towards coastal restoration efforts. Taxpayers and concerned citizens across Louisiana deserve full transparency in the state’s role in driving these job-killing lawsuits, as well as full disclosure on how any dollars collected would be spent.”
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President of the Louisiana Mid-Continent Oil and Gas Association (LMOGA), and Mike Moncla, President of the Louisiana Oil and Gas Association (LOGA):
"It is disappointing that some elected officials have sided with plaintiffs' attorneys in support of job-killing lawsuits and a flawed settlement scheme that could put our coast further at risk.
Through these lawsuits, the government seeks to impose sweeping, retroactive liability on the entire oil and gas industry for activities carried out according to federal laws and regulations decades ago. This misguided attempt to rewrite history and penalize energy producers for legally conducted operations that have been endorsed and incentivized by state and local leaders for nearly a century is a distortion of the law dreamed up and marketed by plaintiffs' attorneys, presumably to serve their own financial gain.
The secretive manner in which the proposed settlement with one defendant is being plotted behind closed doors also raises serious concerns. It's been over a year since this purported 'deal' was announced, and the public has yet to see the details, including the actual terms. 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.
Contrary to recent claims by some elected officials, this proposed settlement is not dedicated to coastal restoration—the supposed reason why these lawsuits were filed. Under this problematic proposal, funds could be used for projects unrelated to coastal restoration and hurricane protection. This convoluted approach is inconsistent with current state law, and it exposes these lawsuits for what they really are—a money grab unconcerned with coastal restoration.
LMOGA, LOGA, and our member companies will continue to fight these meritless coastal lawsuits and oppose the implementation of this untenable settlement scheme. However, we remain committed to developing real solutions that will preserve and protect our coast, and we welcome the opportunity to work with Governor Edwards, Attorney General Landry, and other leaders in undertaking collaborative efforts to achieve this shared goal."
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The following is a statement from Grow Louisiana Coalition Executive Director Marc Ehrhardt:
"Only politicians and lawyers have seen this supposed settlement. It has been done in secret. Whenever a politician or lawyer says 'Trust me. It's good for you,' it doesn't seem to work out too well for the people. How is this secret settlement scheme any different?
With a worldwide pandemic and a moratorium on lease sales in the Gulf of Mexico, our state and parish leaders should do everything they can to support Louisiana's workforce and local businesses. Instead, some are falling for the empty promises of trial lawyers looking for a payday for themselves.
Not one square inch of the coast has been created as a result of these lawsuits in the entire time that these trial lawyers have been wheeling and dealing behind the scenes and out of the public eye.
The fact is that thirty-five cents of every dollar spent by the state on coastal master plan projects is funded directly by the energy industry's activities on and off of Louisiana's shores.
According to the CPRA, the State's Coastal Master Plan forecasts hundreds of millions of dollars in revenue coming directly from the oil and natural gas industry in the next three years. This alone shows that the best hope for protecting and building Louisiana's Working Coast is partnering with an active, safely operating oil and natural gas industry. Louisiana's energy industry is the largest private funder of the world's largest environmental restoration and climate resilience plan, our coast. Lawsuits haven't produced a penny to pay for coastal work.
Drawn out legal moves and empty promises undermine honest, productive efforts to build and protect our coast. Louisiana's energy industry has a working and thriving partnership with parishes, the state and the scientific community. All without lawyers promising big paydays to come."
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Energy Companies Issue Statement
Melissa Landry, a spokesperson on behalf of the legal teams representing BP America Production Company, Chevron, ConocoPhillips, Exxon Mobil Corporation, and Shell, issued the following statement today regarding this development:
"The proposed settlement is not dedicated to Louisiana's coast, and it will not help advance a meaningful resolution to the litigation. These misguided lawsuits challenge decades of operations that were conducted lawfully with the full knowledge and encouragement of state and federal officials. This distortion of state policy was created by private plaintiffs' lawyers who are not accountable to the public and serve their own interests. We hope this circumvention of the law will not be allowed to continue and that all interested parties can work together to support our coast and our communities. The investments and progress we are already making toward a safer, stronger coast have been achieved through collaboration, not litigation."
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Senator Hewitt, Louisiana Senate District 1 issued the statement below:
"This settlement scheme is nothing more than a backroom deal that threatens the future of oil and gas jobs in Louisiana. This critical industry has been the driver of job creation, tax revenue, and economic growth in our state. It has contributed nearly a quarter-billion dollars to saving our coast in the past five years alone. Tax dollars generated by oil and gas provide more than 30 percent of the state's funding for coastal restoration and hurricane protection projects. Oil and gas companies are not the enemies of our state. This secret settlement begins a dangerous path that leads to false promises, bankruptcies, and job losses. I'm certain it's as dead this year in the legislature as it was last. I will work with my colleagues in the legislature to expose this shakedown, save those jobs, and fight for real solutions that restore our coast."
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The following is a statement from District 26 State Senator Bob Hensgens:
“I disagree with Attorney General Landry’s decision to sign the Freeport McMoRan settlement agreement. By doing so, he is legitimizing the idea that these lawsuits can be brought by local governments. Last year, I introduced a bill to clarify that the State of Louisiana is the only party entitled to pursue claims on issues of state concern. While the bill did not pass, the policy considerations are still sound.
I ran for the Senate because I want to ensure good public policy for the people of my district, not policy dictated by someone who thinks they’ve found a loophole in the law. It is our responsibility as elected officials to establish a framework that promotes job growth. This proposed settlement promises the opposite. The settlement is a bad deal for the people of Louisiana.”
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