THE FAIRCLOTH LAW GROUP, LLC

1412 Centre Court • Suite 203 • Alexandria, Louisiana 71301 Phone: (318) 619-7755 • Fax: (318) 619-7744
*LL.M. in Litigation Board Certified - Civil Trial Advocacy, National Board of Trial Adoocacu Also Admitted in Georgia

Jimmy R. Faircloth, [r." jfaircloth@fairclothlaw.com

March 19, 2012

Members of Senate Committee on Natural Resources Members of House Committee on Natural Resources and the Environment Re: SB 528 (Long) and Status of "Legacy" Litigation Reform On behalf of our clients, Roy O. Martin Lumber Company, LLC, Martin Timber Company, LLC, and the Louisiana Landowners Association, we respectfully request your favorable consideration of SB 528 by Chairman Long and your continued patience as we work toward legislation that accomplishes the goals identified in the House Committee hearing last session. SB 528 is the product of many months of meetings with stakeholders and careful consideration of the language of R.S. 30:29 ("Act 312") that has proven to be the source of persistent litigation. It dramatically improves the legal process for resolving cases in a but without jeopardizing the established rights of landowners to We have invited and thoughtfully considered input manner that will reduce litigation and encourage the parties who actually caused "legacy" conditions to commence long-overdue remediation, adjudicate legitimate claims in the judicial system.

from all stakeholders expressing an interest, including large and small landowners, LOGA, LABI, plaintiff lawyers, defense lawyers, forestry, agriculture, sugar cane, major oil and gas companies and independent operators. For the past several weeks, we have been engaged in negotiations with representatives of the oil and gas industry in an effort to find acceptable language for a compromise bill, with SB 528 as a framework. Though some progress has been made, reaching a final compromise will be difficult, and may prove to be impossible. Ordinarily, we would not discuss the status of negotiations; however, because this matter has been widely reported and openly advocated by LOGA during the process, and because so many of you have stressed the importance of our persistence in reaching a compromise, we are compelled to respond to Mr. Briggs's claim that the oil and gas industry has "compromised everything," as reported in the Baton Rouge Advocate on March 18. Regrettably, the industry's propaganda is now threatening the reality of this process and, consequently, the public'S confidence in the integrity of the decisions you will have to make.
In truth and fact, the industry has not compromised a single issue and seems determined to use this process

to achieve an objective it was denied in the passage of Act 312 - using the executive authority of LDNR to

Page 2 March 19, 2012 manipulate the outcome of private litigation in the judiciary. No matter how industry phrases their argument, this debate centers on the industry's effort to erode the primary jurisdiction of the courts. The attached Memorandum explains this reality and the actual status of the negotiations. the extent of the pro-industry changes we have offered and the why industry'S ability to use LDNR in litigation is so

It is important to understand

tentative concessions we are prepared to support, contrasted with the complete lack of concessions made by industry.
It is also important that you understand

potentially threatening to landowners. related economic opportunities.

Simply put, oil and gas companies have considerable influence over

the ability of DNR to fulfill its mission of promoting the development of our state's natural resources and The potential conflict posed by DNR having to simultaneously promote and police the same industry is obvious. R.S. 30:806 creates a "firewall" between the Secretary and the Commissioner of Conservation to buffer the conflict, but many advocates in the landowner community argue that this protection is an illusion. To this point, our clients have not taken a side in that debate, but the potential for a conflict cannot be denied. Within legal limits it is permissible for any person or industry to attempt to influence executive and legislative decisions. But it is never permissible for anyone to exert influence over a judicial proceeding, directly or indirectly. The credibility of the judiciary is anchored in that premise. Allowing the oil and gas industry to force the employees of the department to screen cleanup plans and to testify before a jury in all legacy cases will unfairly insert the industry'S lobbying influence into judicial proceedings. understand and agree that in all cases the department's recommendations To be clear, we for a regulatory cleanup should

be provided to the judge who must formulate a regulatory cleanup (as provided by SB 528). However, while there may be circumstances that warrant the department participating in the jury portion of a trial, the decision as to whether the public interest justifies putting agency employees through the rigors of cross examination in private litigation should be made by the agency that is obligated to protect the public interest, not by the industry that spends enormous resources pressuring those same public servants. SB 528 strikes an appropriate balance. We remain hopeful that a compromise will be reached. Act 312 to respond to industry's promoted concerns. Our clients are endorsing major changes in

We are hopeful that the industry advocates will

respect the boundaries of landowner rights that must be preserved.

Page 3 March 19, 2012 With best regards, I am Sincerely,

JRF/ab Enclosure cc: Mr. Roy O. Martin, III Mr. Paul Frey, Executive Director, Louisiana Landowners Association Senator John A. Alario, Jr., Senate President Representative Charles E. "Chuck" Kleckley, Speaker of the House Representative Neil C. Abramson, Chairman House Committee on Civil Law and Procedure Senator Robert Adley Senator Jean-Paul J. Morrell Representative Robert A. Johnson Senator Edwin R. Murray Ms. Elizabeth B. Murrill, Executive Counsel to Governor Bobby Jindal Mr. Scott Angelle, Secretary, Department of Natural Resources

MEMORANDUM (3-19-12) Summary of Negotiation Points on LegacyLitigation Reform following negotiations between RoyOMartin, the Louisiana Landowner's Association (collectively "Landowners"), Exxon,LMOGAand LOGA(collectively "Industry").

Common Initiatives (currently in bills offered by both sides) 1. Pretrial admission of responsibility for regulatory compliance for only a portion of the allegedly impacted property. Pretrial review of proposed regulatory cleanup plans by the department. Expressauthority for admitting defendants to commence regulatory cleanups during litigation.

2. 3.

Additional Pro-industry Provisions Offered by Landowners in SB528 1. Allow a defendant to request a preliminary dismissal to challenge the allegations of contamination and the reason for including the defendant in the litigation. Allow the department to either initiate a compliance proceeding during the litigation or to intervene in the litigation and support a plan to remediate to regulatory standards. Require a losing plaintiff to pay the expensesof the department's involvement (current law requires a losing defendant to pay).

2.

3.

Tentative Pro-industry Concessionsby Landowners 1. Authority to request exception/variance to regulatory standards as a condition of the limited admission of regulatory responsibility. More time to decide whether to make a limited admission. A public hearing before the department concerning the scope of the defendant's admission if necessary. Languagemaking explicit that the "obligation to remediate to regulatory standards" may be enforced only by the department and does not create a right of action in favor of any private person. Languagemaking clear that a finding of "good cause" at a preliminary hearing does not constitute a finding on the merits of any claim. Allowing a defendant to introduce evidence of its limited admission of responsibility and evidence of any cleanup activities following that admission, regardless of whether the department intervenes.

2. 3.

4.

5.

6.

7.

De novo standard of review on all appeals.

Pro-landowner NONE

Concessions by Industry

"Deal Killer" Issue - Whether the activities before the department and the department's recommendations following a limited admission should be admissible before the jury in all cases (as sought by Industry) or only when the department intervenes to protect the public's interests (as sought by Landowners). Industry Position - The department will avoid interventions and thus prevent the jury from considering the administrative findings related to the limited admission of responsibility when it awards damages.

(Note: Under the Landowner's proposal, the department's recommendation must be considered by the judge when formulating a regulatory cleanup plan after a verdict, and the judge must reconcile the verdict and the plan. Thus in a/l instances, the department's recommendations must be considered when formulating a cleanup plan, even if the department does not intervene and the jury is unaware of the department's recommendation).
Landowner position - Industry wants to use its relationship with and influence over the department not to clean property to regulatory standards, but instead to secure pre-trial variancesfrom regulatory standards, and then to stand behind the department at trial to defend why the strict parameters of the regulations are not being followed. Given the relationship between Industry and the department, this simply cannot be allowed. If LDNR is put in a position where Industry can drag it into ID! legacy cases with the weight of Industry's exposure riding on its (the department's) shoulders, the legitimacy ofthe department as an enforcement agency over the Industry will be jeopardized. The better solution is to provide that the actions ofthe agency are admissible to the jury only if the department (NOT INDUSTRY) decides that the public interest justifies the department's involvement in the jury portion of the trial, while in all cases the agency's recommendations go to the judge after the trial when the cleanup plan is formulated. Clearly, there will be occasions when the circumstances of the case warrant the department's intervention before the jury. And when that happens, the public's interest presumably justifies putting the department and its employees through the rigors of cross examination. But it is terrible public policy to mandate that the department and its employees be put in a position where they will be lobbied to block for Industry in every case. It is time to discuss dismantling the "firewall" between the Secretary and the Commissioner of Conservation - which some argue serves as a barrier to both transparency and accountability. In addition, if industries persist on its hardline, it may be time to talk about moving the Office of Conservation out of LDNR and into LDEQ.

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