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More on 2006 Louisiana environmental law's jackpot justice

We wrote in May about what have since become called "legacy lawsuits":

A 2006 Louisiana law allows conventional tort litigation by landlords who leased to oil companies to supplant state regulatory efforts at remediation and cleanup. Oil companies express concern that they're now drawn into expensive litigation that delays the cleanup process for several years, but one suspects that they're even more concerned that entrepreneurial trial lawyers have figured out that impoverished remote-county juries and judges plus deep-pocketed defendants presents desirable rent-seeking. One verdict awarded $54 million for environmental damage to a piece of land that was never worth more than $108,000. Business is asking the legislature for relief, and there has since been a feeding frenzy of suits over decades-old leases; meanwhile, Louisiana's attempt to sue itself into prosperity has hurt job growth.

Nothing's gotten any better in the last year, says a recent LSU study on legacy lawsuits, which calculates the loss to the Louisiana economy at "1,200 new wells, translating into a total statewide reduction of about $6.7 billion dollars in lost Louisiana drilling investment. The estimate is likely conservative since it excludes the impacts these reduced drilling activities would have on oil and natural gas production, and the mineral revenues generated by this foregone production," as well as 30,000 jobs. But trial lawyers are making money, so who cares about the other 99%, or the skyrocketing price of gas? [ATRA; Fox News]

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.