Flood authority discusses appeal of judge’s smackdown to its oil and gas lawsuit

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 Give up, or fight all the way to the U.S. Supreme Court if necessary?

That’s the question the east bank levee authority discussed Thursday after its historic lawsuit against oil and gas companies for wetlands damage suffered a resounding defeat on procedural grounds in a ruling by U.S. District Judge Nannette Jolivette Brown last week.

Brown slapped down the Southeast Louisiana Flood Protection Authority-East late Friday, saying they didn’t have standing to sue.

Yet it might be cheaper for the authority not to take “No” for an answer and appeal her ruling.

That’s because of a standard feature in the type of contingency contract the board signed with the three law firms pressing its case. If they win, the lawyers get a fat percentage of any award – but nothing if they lose.

However, if the flood authority decides to kill the effort when the lawyers still want to pursue the case, then the public board must pay all fees and costs. That’s because such a decision would prevent the lawyers from recovering their expenses.

That point was the focus of discussion at the authority’s board meeting Thursday. Gladstone Jones, head of Jones Swanson that is leading the three-firm effort for the board, said the team plans to appeal the ruling to the U.S. 5th Circuit Court of Appeal in New Orleans because it believes Brown’s ruling is filled with errors.

But board members appointed by Gov. Bobby Jindal to oppose the suit, such as vice-president Joe Hassinger, a lawyer, questioned the wisdom of that move. Hassinger told the board that reversals by 5th Circuit were rare, and that the higher court might hand down decisions the board isn’t considering. One such surprise, Hassinger said, could be an order requiring the losers to pay the legal fees of the winners.

Hassinger also said he wasn’t convinced that Brown’s decision couldn’t be used to end the lawsuit without owing the firms money.

Kelly McHugh, another of Jindal’s appointees, requested that Jones meet with the board and present the legal expenses before the 30-day deadline for appeal expires.

“I want to know what the bill is before making a decision,” he said.

Jones said the current bill is around $1.7 million, and reiterated the contract with the board would require that payment if it ordered the firm not to appeal.

“If they gave us those instructions – which the client is obviously  entitled to do – it would mean they were terminating the case, and they would owe us fees and costs,” Jones said.

“We can’t force them to agree to an appeal. But it’s our judgment, after careful reading of Judge Brown’s decision, we have a good chance on appeal.”

In fact, Brown didn’t rule on the central issue of the case — whether the energy companies caused significant damage to the wetlands.

Instead she agreed with the defendants on procedural objections:

  • That as a third party, the Southeast Louisiana Flood Protection Authority-East did not have standing to sue for violations of state and federal permits issued for the wetlands activities.
  • That its third-party status removed its standing to seek damages under a federal law prohibiting actions that impair the effectiveness of levees.
  • That the flood authority had not substantiated its claim that the removal of wetlands increased storm surge against the levees.

John Barry, former vice-president of the board who was instrumental in bringing the suit, said Brown’s legal reasoning on the board’s standing would be brought into question.

“She claims we don’t have standing because they are federal levees, but we own the levees now,” he said. “Some of her reasoning is, frankly, bizarre.”

Steve Estopinal, president of the board, left no doubt what his position would be if the issue comes to a vote.

“We have nothing to lose by appealing,” he said, “but we owe a lot of money if we quit.

“We started this fight, and we owe it to the people to continue – even if it goes all the way to the Supreme Court.”

Jones said that was unlikely. Whatever the three-judge panel at Fifth Circuit rules, the losing side will appeal to a hearing before the full court.

“If we lose both, then I think that will be it,” Jones said.

And if he gives the flood authority that advice?

“Then they don’t owe us anything.”

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