First Louisiana Flood Board Oil Suit Settlement Earmarked for Coast

By KEVIN McGILL | November 24, 2014

Money from the first and only settlement so far in a Louisiana flood board’s lawsuit against dozens of energy companies will be placed in a special account dedicated to coastal restoration.

The Southeast Louisiana Flood Protection Authority-East voted Thursday to establish the dedicated account for any funds received as a result of the controversial lawsuit it filed in 2013 against dozens of oil, gas and pipeline companies. The suit blames drilling activity and canal dredging done by the companies for the degradation of wetlands that protect New Orleans from hurricanes.

Major energy companies are fighting the lawsuit, but two small companies recently agreed to a settlement with the flood authority last month. The settlement is estimated at $50,000. Much larger amounts – estimates range from hundreds of millions to billions of dollars – are at stake in a suit that could last for years, although oil and gas industry supporters, including Gov. Bobby Jindal, are trying to kill the suit.

Jindal says it is a needless attack on a vital Louisiana industry. There was unanimous support on the nine-member flood protection board for filing the suit, but Jindal has succeeded in replacing four of the supporters with members who, so far, have backed efforts to rescind it. Lawmakers voted for legislation to kill the suit retroactively this year, but that law is being challenged in state and federal court.

Backers of the suit say the state has done too little to hold energy companies accountable for decades of coastal damage.

Lawyers handling the lawsuit for the board stand to be compensated with about 22 percent to 32 percent of the damages if they win or successfully settle the case. Under the contingency contract they would get nothing if they lose, but would be due payment for the work they have done if the suit were to be withdrawn.

Flood protection board president Stephen Estopinal said the attorneys elected not to take any compensation from the recent $50,000 settlement.

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