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FIRST ON FOX: A landmark Supreme Court case set to decide whether Big Oil entities can move coastal erosion suits out of local and state courts and cement them in federal courts, as localities continue to seek billions from domestic oil companies, will have far-reaching repercussions, experts said.
Last year, a jury in coastal Plaquemines Parish, Louisiana, ordered Chevron to pay more than $740 million for wetlands damage linked to operations by its former subsidiary Texaco in the mid-20th century.
While the Supreme Court case does not seek to overturn the fine and was filed before the Louisiana ruling, a decision by the high court could carry multibillion-dollar implications, several legal experts said.
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As Chevron argues the suits it is facing in certain Gulf Coast communities — where critics claim some local and state officials are in cahoots against them and aligned with friendly attorneys for the municipalities – many damage claims stem from World War II-era fuel production carried out under federal contract. The companies say that the link to the federal government, along with alleged local bias, means future cases must be heard at the federal level.
Plaquemines Parish argued the claims involve environmental harm that is beyond the control of Washington – meaning that the high court’s decision could reshape where massive suits against Big Oil can be heard; as many companies also seek to ramp up production in line with President Donald Trump’s “energy dominance agenda.”
“There is thus no denying that these petitioners are being sued in state court for production activities undertaken to fulfill their federal refining contracts,” a brief filed by Chevron and ExxonMobil said, in part.
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Prominent NYU law professor Richard Epstein said Wednesday that Plaquemines Parish has pointed to massive erosion dating back to the 1920s amid increased wartime operations, while also citing hurricanes’ devastating impact on the bayou’s already fragile landscape.
Companies used the area to produce “AvGas” for wartime aircraft, and that Louisiana officials calculated the erosion in the billions of gallons, but added that comparisons made to the BP Oil Spill were different because “pollution is very different than erosion.”
“Nobody wishes to deny it, but it had nothing to do with it. So what you do is you have the Supreme Court dealing with a very technical question,” he said.
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“Local bias issue is extremely powerful, which is why you have that statute. It’s the same reason why we have diversity jurisdiction; the home court advantage is really huge and there’s no place where it’s worse than in Louisiana — So you get the bias, you get these jury verdicts, which are completely wacko as far as I can tell,” he said.
He faulted Louisiana officials for siding with plaintiff’s lawyers in the fine-related case to oppose “anything that they bring into court” on such matters, calling it an “outright mischarge of duty” that requires high court intervention.
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Epstein said he is “reasonably confident” that the court will reverse a lower court’s ruling that the parish is the proper legal jurisdiction, warning that if not “it’s a bigger scandal than I think we’ve ever seen in terms of the litigation system.”
Mike Fragoso, an attorney at former Attorney General Bill Barr’s firm Torridon Law, said that there are more than 40 cases filed that allege oil and gas companies have caused erosion through exploration activities in the Gulf; totaling billions of dollars in claims.
Those hefty figures should be a warning against so-called “hometowning” – or the dynamic in which local juries tend to side with their neighbor plaintiffs and against “outsider” companies – Fragoso said.
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“The idea is to prevent local judges and juries from hometowning federal officials as they’re doing the work of the federal government,” he said.
“And Chevron’s view is that because they were in the AvGas business, at the direction of the federal government in World War II, they belong in federal court. The state of Louisiana and the plaintiffs disagree.”
While a supporter of U.S. energy development, Louisiana Gov. Jeff Landry sided with Plaquemines as attorney general when the saga began.
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Current AG Liz Murrill said in a statement that “virtually every federal court has rejected Chevron’s attempt to avoid liability for knowingly and intentionally violating state law.”
“I’ll fight Chevron in state or federal court—either way, they will not win,” she added.
John Carmouche, an attorney behind the Chevron case and other pending suits, said the appeal to the high bench doesn’t focus on the merits of the dispute itself.
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“It’s more delay, they’re going to fight till the end, and we’re going to continue to fight as well,” he told the Associated Press.
The Associated Press contributed to this report.
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