NEW ORLEANS (Legal Newsline) – The New Orleans Lawyers Chapter of The Federalist Society held an event at Galatoire's in New Orleans on March 8 to discuss litigation undertaken by municipalities and other governmental units.
The title of the event was "Municipalities and Class Action Litigation: Comparing California to Louisiana," with Louisiana State University School of Law Professor Emeritus John Baker and Louisiana Chief Deputy Attorney General Bill Stiles facilitating the discussion.
More and more often local governments in Louisiana are getting involved in litigation with large corporations. The most noteworthy examples of this trend are several lawsuits filed against oil companies by coastal communities claiming oil exploration activities have led to land loss and erosion.
According to Stiles, a complex issue like coastal land loss may be better handled by regulatory actions enacted by the legislature rather than a hodgepodge of lawsuits filed by high-profile plaintiff's attorneys representing local governments.
"Kind of like in California with global warming - we have a lawsuit to try and fix a problem that would be better suited for the state legislature and public policy deciders in Louisiana," Stiles said.
The trend of municipalities, parishes and other governmental units in Louisiana filing lawsuits against oil companies over coastal land loss, oftentimes seeking damages in the hundreds of millions of dollars, has been evolving over the past decade.
"They basically laid the whole kit and kaboodle out into the oil and gas industry," Stiles said. "They had a difficult time finding potential claimants because a lot of the land near the coastline is actually owned by the oil and gas companies."
Stiles said a lot of private landowners have active wells on their property and are making money from them, and they don't want to be in a position of suing the person producing oil on their property.
"Those types of cases weren't going well and they couldn't find the right plaintiffs, so they dove into Title 49 of the Louisiana Revised Statute that deals with the Coastal Protection and Restoration Authority," Stiles said.
Stiles said in that statute there is a small segment that allows parishes and authorized district attorneys to file lawsuits to enforce the regulatory regime.
"The Louisiana lawsuits are not based on actual damages but that you violated these regulatory actions by not getting to proper permits," Stiles said. "One of the big questions that came up was whether or not those municipalities would have authority to file those types of lawsuits."
Stiles said those issues are still before the court.
Similar lawsuits on behalf of private landowners have been largely been abandoned in Texas, but are still being pursued in Louisiana.
"Texas has a law that says you cannot give a damage amount award more than double the price of the property," Stiles said. "That has, in large part, in large measure mitigated these types of lawsuits in Texas, because...the value isn't there. They're not pursuing them there."
In contrast, Louisiana has seen such judgments range from $10 million to $40 million.
"They’ve been very successful in these cases (in Louisiana) in private action by private litigants, and I think the same group of lawyers were looking for some litigation along the coastline," Stiles said.
The result of that search for new litigants appears to be the coastal land loss lawsuits filed on behalf of local government.
Now, a similar pattern is emerging in the opioid litigation where even very small governmental entities, such as the Eunice Police Department, have engaged in litigation against pharmaceutical companies.
Stiles said many have indicated the opioid cases nationwide are going to be bigger than tobacco.
"Many manufacturers are contemplating bankruptcy," Stiles said. "They recognize there's no way out. There is not enough money in the world for a company like Purdue to have to pay the judgment of the claims brought against them."
Stiles said there are somewhere around 1,900 political subdivisions involved in opioid cases nationwide.
"The real question that we have to ask as enforcers in our communities is: Is this good policy and what can we do to make changes?" Stiles said.
Baker said his interest in this topic is broader and involves the potential improper use of the judiciary.
"I'm concerned about what all this is doing to the litigation process," Baker said. "I want to take a snapshot of the view of where we've gone from public interest litigation to public nuisance litigation and how we’ve gotten there without thinking about it too much."
Baker said it was in the 1960s and 1970s that the term "public interest lawyer" was created.
"You've got a lot of litigation against states that have to be defended by (attorneys general)," Baker said.
Baker said then tobacco litigation came around and instead of just defending lawsuits, the attorneys general then were on the plaintiff's side.
"Multi-district litigation is where I think the focus should be - the abuses and jurisdictional questions," Baker said. "Right now, 40 percent of all federal cases are multi-district. Only 3 percent end up going back where they came from."
Baker said oftentimes in such cases judges make the decision to solve a complex problem that may not be best handled by the judiciary.
"In many of these cases, the federal court handling multi-district litigation has no personal jurisdiction over many of the parties," Baker said. "The courts are becoming more like administrative agencies. It's an extension of the administrative state. It's all part of a movement toward nationalizing everything."
Stiles said the real issues are that public policy questions should be decided by public policy makers and not the courts.
"That was not the original intent (of the courts)," Stiles said. "Relative to the opioid cases...the states end up in a lawsuit they aren't actually involved in because they understand there cannot be a settlement without all parties there."