In the late evening of Sunday, Oct. 20th and the early morning of Monday the 21st, a group of lawyers ironed out an agreement that potentially puts an end to a case that has major consequences for one of the most profitable industries in the world. The evidence was overwhelming. They had deceived the public, marketing a product that resulted in crippling dependency, devastating entire communities.
I’m referring, of course, to the tentative $260 million settlement reached in Cleveland between lawyers representing the state government and three manufacturers of opioids.
Because the opioid epidemic has affected small towns and big cities across the entire country, the pharmaceutical companies that manufactured, marketed, and distributed the drugs have been forced to confront their own negligence and held to account by state attorneys general, governors, and plaintiff lawyers throughout the United States. The $260 million settlement in Ohio is one of several cases that have recently resulted in similar, high-profile agreements, including one involving the state of Louisiana and Attorney General Jeff Landry.
A month ago, another nine-figure settlement was reached in another protracted case involving a company accused of violating the law and destroying entire communities, all while making a vast fortune selling their product, and arguably, that case is much more consequential for Louisiana than any share it receives from the opioid litigation.
In late September, the mining conglomerate Freeport-McMoRan agreed to a $100 million settlement with a dozen parishes on the Louisiana Gulf Coast, an implicit recognition of its liability in contributing to the rapid loss of land. There is already a broad scientific consensus that the aggressive drilling by oil and gas companies is partially to blame for the destruction of an area that is now among the most vulnerable in the world, and many of these companies have internally acknowledged that some of their activities in Louisiana were conducted illegally and without acquiring the requisite permits.
Despite this, however, the industry has been reluctant, if not downright hostile, to any attempts to hold companies accountable for their negligence and, in recent years, has spent tens of millions on a multi-pronged campaign to disingenuously convince the public and elected officials that the litigation against them is nothing more than a shakedown by “trial lawyers” and Democrats. The message of denialism has resonated in a conservative-leaning state that produces 7% of the country’s natural gas and 3.3 million barrels of oil every day, and industry lobbyists have been largely successful in obscuring the truth about the astronomical wealth and profitability of the oil and gas companies that dominate Louisiana, attempting, instead, to misrepresent positive economic data (which undermines their specious claims that the mere “threat” of litigation has been ruinous for Louisiana) and completely distorting the truth about their own culpability in the environmental devastation.
No one agrees to pay $100 million unless they believe it’s possible they’ll be found guilty of owing much more, and a mega-billion dollar company like Freeport-McMoRan can’t plausibly claim that they were just pushed around. The law is fairly straightforward.
According to John Carmouche, the lawyer who represented the 12 coastal parishes, $100M represents approximately 4% of the total damages attributable to illegal dredging. That’d mean oil and gas companies are responsible for around $25 billion, one-half of the expected cost of the state’s Coastal Masterplan.
“It’s a big deal because we have been fighting for five years and an oil company has finally validated the claims and is willing to be involved in a business solution to solve the real and provable damages caused by the oil companies,” Carmouche said. “And there’s a lot more to come.” Practically all of the money will be spent on coastal restoration projects.
Still, after news of the settlement broke, industry lobbyists and apologists hewed to the same tired line about being bullied by lawyers. (The President of Freeport-McMoRan, Gerald J. Ford, is an accomplished lawyer himself and one of my law school’s most successful graduates; the football stadium at SMU is named after him, not the other, more famous Gerald Ford).
“This is just the latest chapter in the trial lawyers’ playbook to shake down Louisiana oil and gas companies for legally conducting production activities, which were encouraged by state incentives and carried out under rigorous state and federal regulations many decades ago,” the Louisiana Oil and Gas Association (LOGA) and the Louisiana Mid-Continent Oil and Gas Association (LMOGA) declared, incredulously, in a joint statement. Freeport-McMoRan is an Arizona-based company.
The extent to which Big Oil has attempted to make the dispute about the lawyers and not the lawbreaking is remarkably cynical, though perhaps not as cynical as the ways in which paid lobbyists for the most profitable companies in the history of humankind have attributed decisions motivated by their own greed as financial necessities caused by the threat of being held legally responsible for what amounts to a few days worth of profit. If the global price of oil plummets, it’s somehow due to the specter of coastal lawsuits in Louisiana.
Louisiana has long maintained a dysfunctionally codependent relationship with Big Oil, and the state relies on the jobs the industry provides represents a major component of the state’s economy. But what good are those jobs if the land disappears?
It remains to be seen whether heavy-hitters like Exxon-Mobil, Chevron, and Shell take any of this seriously, but either way, thanks to Gerald Ford for “ponying up.”