Mayhall Fondren Blaize

Early oil and gas law decision favors energy companies

Municipalities in Louisiana and other states have resorted to public nuisance litigation against oil and gas companies as a way to address the worldwide climate change problem. Such claims have been filed in numerous courts throughout the country. In one of the first decisions, oil and gas law attorneys appear to have pulled off a victory.  A federal court judge ruled that the companies were not solely at fault and that they were responding to market demand for energy to fuel our progress when they sold the product over the years.

The federal district court trial judge stressed that the problem was a global one and that the oil companies were only one part of society and the economy. Government and consumer demand drove the market, according to the judge, and that absolves the companies from this kind of liability. Similar cases against utility companies that used nuisance legal theories have also been rejected by federal courts. Oil and gas law interests have thus held up well against such attempts to attribute monetary liability to these companies.   

The recent decision involved a lawsuit by San Francisco, Oakland and other municipalities against certain oil and gas companies for creating a public nuisance in the form of climate change. That kind of legal claim is based on a state's common law. In this case, the plaintiffs filed in state court, but the defendant companies had the case removed to federal court where an outcome for the defense was more predictable.

A variety of similar litigation involving oil and gas companies is pending in the Louisiana courts, both state and federal. Some of those cases may involve different claims or issues, including off-shore drilling and erosion of the land mass of the state's considerable beaches. The cities will go into consultation with their oil and gas law attorneys and decide whether the case is strong enough to appeal.

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