Louisiana State Court Declares Unconstitutional New Bill Passed to Prohibit Coastal Erosion Lawsuit

Case: The Louisiana Oil & Gas Assoc., Inc. v. Hon. James D. Buddy Caldwell
19th Judicial District Court, East Baton Rouge Parish, Louisiana

As reported in an earlier edition of the newsletter, in July 2013, the Southeast Louisiana Flood Protection Authority – East filed a Petition in state court in the Civil District Court for the Parish of Orleans, which was ultimately removed and remains pending in federal court for the Eastern District of Louisiana in New Orleans, against 97 energy company defendants, claiming hundreds of thousands of acres of the coastal lands that once protected south Louisiana are now gone as a result of oil and gas industry activities. The suit proclaimed, unless immediate action is taken to reverse the land losses and restore the region's natural defense, many of Louisiana's coastal communities will “vanish into the sea.” The suit demanded the defendants repair the damage done from decades of digging, dredging and drilling in the coastal marshes that form the New Orleans region’s first line of defense against hurricanes, pay damages and fund future storm surge protection projects.

Louisiana’s Governor, Bobby Jindal, immediately expressed outrage over the lawsuit, threatening to replace the Board’s members who had voted to file the suit. Indeed, in 2013, Jindal replaced 4 of the Board’s members whose terms were up. Additional hurdles were presented to halt the progress of the lawsuit when Louisiana’s general legislative session began on March 10, 2014. Senate Bill 469 was ultimately passed by both chambers of the Louisiana legislature and was signed into law by Governor Jindal on June 6, 2014, becoming Act No. 544. Act 544 prohibits state governmental entities, purportedly including the Southeast Louisiana Flood Protection Authority, from filing lawsuits to enforce environmental protection laws by declaring such actions as officially “contrary to the public policy of this state.” Violations of the Coastal Zone Management Program, the Clean Water Act, or the River and Harbors Act would be actionable only by the Attorney General, the Department of Natural Resources or the Coastal Protection and Restoration Authority.

Act 544 included an express provision noting the law is applicable to all claims existing or actions pending on the effective date and all claims arising or actions filed on or after that date. Thus, commentators agreed passage of the bill would essentially end the Southeast Louisiana Flood Litigation, though a constitutional challenge to the new law was expected.

Indeed, in addition to claims in the federal court litigation that Act 544 as drafted, does not apply to the Flood Authority, because the Levee District and/or the Flood Authority are allegedly political subdivisions outside the scope of “local governmental entities” under Coastal Zone Management Laws, the Flood Authority has challenged the constitutionality of Act 544 in two proceedings.

First, the Flood Authority filed a Motion for Partial Summary Judgment in the litigation in New Orleans, urging federal Judge Nannette Jolivette Brown to find Act 544 unconstitutional. Oral argument was heard on the motion earlier this month, and the motion was taken under advisement.

Second, Act 544 has been found unconstitutional in separately pending state court litigation. The separate suit was previously filed by the Louisiana Oil and Gas Association (“LOGA”) in East Baton Rouge Parish against Louisiana Attorney General Buddy Caldwell, which claimed the Attorney General violated the Louisiana Constitution and improperly approved the Southeast Louisiana Flood Protection Authority-East’s 2013 resolution that allowed the underlying litigation to be filed. In short, the LOGA suit was another effort to end the Southeast Flood Authority litigation. State Judge Janice Clark previously ruled that the Attorney General’s Office had the requisite authority under the Louisiana Constitution to approve resolutions for lawsuits brought by state agencies. Judge Clark dismissed LOGA’s suit, calling it “frivolous” and stating that Attorney General Caldwell did indeed follow Louisiana law in approving the resolution. Judge Clark, however, refused to issue a final judgment, preventing LOGA from appealing the ruling. LOGA eventually filed a Writ for Mandamus with the appellate court, which ultimately ordered Judge Clark to enter a final order.

In the meantime, however, the Flood Authority used the favorable forum to bring a constitutional challenge to Act 544, once it was passed by the Legislature. The Flood Authority, which had intervened in the suit, filed a Motion seeking to have Judge Clark find that Act 544 did not impact her prior rulings dismissing LOGA’s suit since (1) Act 544 was inapplicable on its face (the same argument made in federal court, i.e., the Levee Districts are political subdivisions outside the scope of “local governmental entities” under Coastal Zone Management Laws) and (2) since the Act was unconstitutional.

In September, Judge Clark ruled that Act 544 did not apply to the Southeast Louisiana Flood Protection Authority-East because it is neither a state agency nor a local government; however, Judge Clark said she was still going to consider the constitutionality of the Act. In late October Judge Clark entered a second order finding Act 544 unconstitutional on the following grounds: “it is an unconstitutional violation of the separation of powers under Article II, Section 2 of the Louisiana Constitution because it seeks retroactively to abrogate this Court’s previous determination of SLFPA-E's unambiguous status as an independent political subdivision and treads upon the province and duty of the judiciary to interpret the law. The Court being firmly of the opinion that no other branch of government can exercise power reserved to another branch. The Court also finds that the public trust doctrine under Louisiana Constitution Article IX, Section 1 pursuant to which the state may not take away claims from governmental entities that enable them to redress issues with coastal restoration particularly insofar as those are related to hurricane protections. Moreover, it is repugnant to constitutional requirement under Article III, Section 13A to properly advertise permissible moreover special laws prior to consideration by the legislature as required by the constitution.” Once Judge Clark issues a final judgment, it will be appealable directly to the Louisiana Supreme Court.

The question remains whether federal Judge Brown will await a final determination by the state Supreme Court on the constitutionality of Act 544 before issuing her own ruling in the underlying litigation.