Trouble in Lawsuit Paradise: ILR Research Documents Damage from Pending Louisiana Settlement

Louisiana might be known as “The Sportsman’s Paradise” but as anyone who’s driven down I-10 and seen those infamous trial lawyer billboards knows, the state’s other reputation is its…

Louisiana might be known as “The Sportsman’s Paradise” but as anyone who’s driven down I-10 and seen those infamous trial lawyer billboards knows, the state’s other reputation is its status as America’s “Lawsuit Paradise.”  

Louisiana’s unbridled love for litigation is well-documented, but as our newest research demonstrates, a recent development in one of Louisiana’s biggest lawsuits threatens to do serious harm – not just to the business community, but to the land itself.

Almost 200 energy companies are facing dozens of lawsuits filed by private lawyers on behalf of local parishes and the city of New Orleans. Those lawsuits have dragged on for nearly eight years in some cases. They allege the energy companies are responsible for the state’s serious coastal land loss problem, and lawyers claim the litigation can fix things—but make no mistake, the only thing these lawsuits will accomplish is making the lawyers rich.

Enter Freeport McMoRan, a mid-sized energy company caught up in the coastal litigation despite the fact that it hasn’t operated in Louisiana for years. The firm reached a $100 million settlement with lawyers representing some of the parishes back in 2019. The details were kept secret from everyone, including the governor and the state attorney general, even though they had both intervened in the case. Secret, that is, until the terms of the settlement finally came to light in March of this year. To put it simply, they’re bad, and here’s why.

First, the plaintiffs’ lawyers structured the settlement in such a way that it can only become a reality if Louisiana’s legislature upends  the state’s coastal restoration policy. In other words, the lawyers negotiated a settlement that would dictate policy to state lawmakers, without bringing any of those lawmakers into the loop. Though apparently that wasn’t a problem for a few trial lawyer allies in the state legislature, who have since scrambled to produce enabling legislation.

Second, and more importantly, the proposed settlement would fundamentally undermine the stated goal of the lawsuit – helping restore Louisiana’s beleaguered coastline. The terms of the settlement enabling bills vary, but what they have in common is that they would create a complex new web of bureaucratic authority, and they would divert funds away from coastal restoration work to other projects, like road maintenance and utility upgrades. They would also direct funding to pay for an entirely separate batch of private landowner lawsuits that aren’t connected to the coastal erosion claims the Freeport settlement is supposed to address – except that some of the lawyers in the Freeport case are also handling those private landowner suits.

Finally, if state lawmakers pass legislation to enable the Freeport settlement, they will have fully earned the “Lawsuit Paradise” nickname. John Carmouche, a leading plaintiffs’ lawyer involved with this settlement, says he hopes it will be a template for the other coastal lawsuits—which of course he’s also involved in. If the legislature signs off on the trial lawyers’ Freeport settlement, Louisiana lawyers looking at future lawsuits will know that they can make money while negotiating secret deals to unilaterally change public policy.

State lawmakers should not fall into this trap. The Freeport settlement might seem like an easy way to rake in big dollars, but if the legislature sets a precedent by making attorney-driven law on this issue, they will not only cede control of a highly sensitive public policy area to the plaintiffs’ bar and greenlight a wave of similar lawsuits against the state’s largest employers – they will undermine the coastal restoration effort.

Louisiana already has a good system in place for channeling coastal relief funds, and the state has engaged in productive partnerships with the energy industry on initiatives that have restored thousands of acres of marshland. Louisiana lawmakers should refuse to pass the 2021 Settlement Bills and send a clear message that the state’s environmental policy should be made in the interest of Louisianans – not plaintiffs’ lawyers.