The Supreme Court has ruled in favor of the oil and gas industry’s efforts to move a long-standing legal battle over Louisiana’s eroding coastline out of the Bayou State’s courts.
In a 8-0 decision issued Friday, the justices were persuaded by industry lawyers’ position that a raft of lawsuits against oil and gas producers should be heard in federal court because the companies were doing the bidding of the federal government by providing petroleum products to fill World War II-era federal contracts for aviation gas, or avgas.
The oil industry’s win could make it easier for federal contractors and other private parties to move lawsuits against them to federal court, delaying proceedings and securing venues they see as more favorable to their arguments.
During oral arguments in January, the justices appeared wary of making it too easy for companies facing legal action in state court to drag lawsuits into federal courts by relying on the federal officer removal statute.
The Trump administration sided with the oil industry in the case, arguing that the statute protects the federal government from interference by state courts.
The case landed at the Supreme Court after more than a decade of wrangling over which court should decide whether oil majors owe Louisiana damages for not obtaining permits for drilling activities after the state’s Coastal Resources Management Act was enacted in 1980.
Half-a-dozen parishes, led by Plaquemines Parish in southeast Louisiana, have filed 42 lawsuits against the oil industry in state court. The outcome of the Supreme Court case could affect more than a dozen of the suits that remain pending and have not been settled. All damages would go into a fund for coastal restoration efforts, according to attorneys for the challengers.
Supreme Court Justice Samuel Alito had recused himself from the case, citing financial interest in ConocoPhillips, the parent company of Burlington Resources Oil & Gas. The subsidiary withdrew from the dispute before the justices last June agreed to take up the case, but the Supreme Court noted the company remains a defendant in the district court.
