The Supreme Court on Friday delivered a procedural victory to oil and gas companies battling environmental damage claims in Louisiana, voting 8-0 to move litigation back to federal court and potentially derailing one of the most aggressive state-level efforts to hold the industry accountable for coastal erosion.
The ruling overturned a lower appellate decision and reopens the door for companies including Chevron to defend themselves in a forum they argued was more favorable to their interests. At stake are multiple lawsuits seeking billions in damages, including a state jury verdict ordering Chevron to pay more than $740 million for coastal cleanup work.
Oil companies contended that because they began production and refining operations as federal contractors during World War II, their cases should be heard in federal court rather than state court. They further argued they cannot be held liable for coastal damage that occurred before modern state environmental regulations took effect.
Louisiana's coastline has eroded catastrophically over the past century, with more than 2,000 square miles of land lost according to the U.S. Geological Survey. The agency has identified oil and gas infrastructure as a major culprit. State coastal protection officials warn an additional 3,000 square miles could vanish in coming decades without intervention.
The case hinges on allegations that Texaco, acquired by Chevron in 2001, systematically violated state environmental protections by failing to restore wetlands after dredging canals, drilling wells, and discharging billions of gallons of wastewater into marshes. A jury in Plaquemines Parish, the narrow Louisiana parish fronting the Gulf, found the company guilty of these violations.
The high court's decision effectively returns the matter to federal court, where the companies may have better odds of avoiding the steep liability imposed by a sympathetic state jury. Attorneys for Louisiana parish governments characterized the Supreme Court appeal as a stalling tactic designed to outlast local communities' capacity to fight prolonged litigation.
The case is one of dozens filed in 2013 naming Chevron, Exxon, and other oil majors. Republican Governor Jeff Landry supported these lawsuits when serving as attorney general, breaking ranks with his traditional allies in the energy sector.
Justice Samuel Alito recused himself from the case due to financial holdings in ConocoPhillips, continuing a pattern of stepping aside from oil and gas matters based on his stock portfolio.
Author James Rodriguez: "The Supreme Court handed the oil industry exactly what it needed: a reset button and a new courthouse. Louisiana's drowning coast just got a lot lonelier."
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