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Louisiana agency sues big oil firms for hurting wetlands

A motorist fills up her car at an Exxon gas station in Arlington, Virginia, August 10, 2011. REUTERS/Jason Reed
A motorist fills up her car at an Exxon gas station in Arlington, Virginia, August 10, 2011. REUTERS/Jason Reed

NEW ORLEANS (Reuters) - A Louisiana agency sued 97 oil companies - including BP Plc, Exxon Mobil Corp, Chevron Corp and Royal Dutch Shell Plc - in state court on Wednesday for allegedly damaging hundreds of miles of sensitive wetlands by cutting through them with pipelines and transportation canals.

Governor Bobby Jindal quickly accused the agency of overreach and said the filing should be withdrawn.

The suit demands the oil industry pay for or remediate environmental damages stemming from decades of work that allegedly caused erosion and hurt coastal wetlands - which experts say serve as critical buffers during floods and higher ocean swells from hurricanes, like the 2005 Katrina disaster.

John Barry, the vice president of the Southeast Louisiana Flood Protection Authority - East, a state agency, said companies' drilling permits required them to perform remediation work that in most cases was never carried out after digging canals to reach drilling platforms.

Barry said the filing was also based on a federal law that prohibits doing anything that hurts levees, and a Louisiana law from the 1700s that prohibits one person from doing something on his property that sends more water flowing onto someone else's.

"The authority takes its mission to protect the public seriously," Barry told reporters. "Because of that, and recognizing the controversial nature of what we are doing, we have filed a lawsuit."

Jindal, a Republican, demanded the case be dropped and said the agency had overstepped its authority by hiring trial lawyers to file the suit, apparently without permission from him or the state's attorney general.

"A better approach to helping restore Louisiana's coast includes holding the Army Corps of Engineers accountable, pushing for more offshore revenue sharing and holding BP accountable for the damage their spill is doing to our coast," he said in a statement.

The state court filing, if allowed to proceed, could open up another front of litigation against BP, which is still slogging through a massive federal case brought by the U.S. Justice Department and several states, including Louisiana, over the 2010 explosion of the company's Macondo well and the resulting Gulf of Mexico oil spill.

Officials at BP, Shell and Chevron were not immediately available for comment. Exxon Mobil declined immediate comment.

Legal experts said the federal and state drilling permits received by the companies likely will be a key issue.

Because oil companies have been involved in drilling in Louisiana for decades, establishing that the companies are liable for damages "at this late date will require a new look" at the situation, said Edward Sherman, a Tulane University law professor.

"They probably have an uphill battle, but it sounds like they're being creative," he said.

Sherman, who cautioned he had not seen the complaint, added that the lead attorney for the agency, Gladstone Jones, has built a reputation for going against oil companies, particularly in north Louisiana, in cases having to do with storage and waste.

"He's been very effective," Sherman said of Jones.

(Reporting by Kathy Finn; Editing by Terry Wade, Marguerita Choy and Bob Burgdorfer)

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