As the U.S. Supreme Court weighs whether Louisiana’s coastal lawsuits against oil and gas companies can be moved from state to federal court, Pelican Institute CEO Daniel Erspamer says the venue question carries big consequences for energy investment in Louisiana and for the state’s broader economic trajectory.
The case before the Supreme Court, Chevron v. Plaquemines, sits at the center of a sprawling web of litigation. Local officials in Louisiana have filed more than 40 lawsuits accusing oil companies of illegal drilling, dredging and waste disposal that contributed to coastal land loss, seeking potentially billions of dollars in damages.
The Supreme Court isn’t weighing in on the alleged coastal damage. Instead, the justices heard arguments Monday on a much narrower question: whether oil companies can remove the cases from state to federal court, a venue thought to be friendlier to corporate interests.
Erspamer argues the Supreme Court’s opinion in Chevron v. Plaquemines will be hugely consequential for corporate decision-makers because where the cases are heard has significant implications for investment predictability and risk. In his view, keeping the cases in state court would preserve what he describes as a litigation tactic designed to pressure large settlements, one that is already discouraging new energy investment in Louisiana.
“If the state and the local parishes prevail and the cases stay in state court,” Erspamer says, “it’s easier to predict what will happen because we’ve already seen some of the outcomes.”
Erspamer points to recent Pelican Institute research showing offshore production and energy employment in Louisiana have dropped sharply since the suits began, while federal offshore output increased over the same period. He says that trend reflects capital shifting away from Louisiana and toward jurisdictions viewed as less risky from a legal perspective.
“Our estimate is somewhere upward of $100 million a year, at least, in lost economic activity with oil and gas companies going elsewhere,” Erspamer says.
For Erspamer, Chevron v. Plaquemines is ultimately about whether oil companies can escape the built-in advantage plaintiffs have in parish-by-parish litigation, where juries are more likely to be biased against major corporations they might feel have eroded their local ecosystems.
That framing also surfaced during Monday’s oral arguments. Justice Brett Kavanaugh raised concerns about the fairness of state courts in politically charged, high-dollar litigation, and Chevron’s attorney said a federal decision would be more likely to be viewed as legitimate rather than driven by “local prejudice.”
The legal mechanism at play in the Supreme Court case is the “federal officer removal statute,” a law meant to ensure federal contractors and those acting under federal direction can move cases to federal court. In this dispute, oil companies argue extraction and refining work tied to wartime contracts during World War II is sufficient to justify removal. A lower court agreed federal direction existed but ruled the alleged coastal damage was not proven to be tied directly enough to the federal work.
The Supreme Court’s decision is expected this spring. The Trump administration has now joined the case in support of the oil companies, but Gov. Jeff Landry, a staunch ally of the president, has broken with the White House on the issue, backing efforts to keep the cases in state court.
While the Pelican Institute’s primary concern is legal venue, Erspamer also questions whether major settlements would reliably translate into restoration projects. He cites past settlement designs as examples of how dollars can be distributed without firm requirements that they be spent on coastal work or without transparency.
The lead attorney in Plaquemines Parish’s lawsuit against Chevron, however, said in October that “every dollar” of the more than $740 million Chevron was ordered to pay by a Plaquemines jury in April would go toward restoration and that “not $1” of that sum would end up in attorneys’ pockets.
Erspamer also emphasizes that the Pelican Institute’s position is not that oil companies should be immune from accountability if they broke the rules. Louisiana already has a bevy of enforcement tools at its disposal, he says; the debate is whether enforcement should be carried out through parish-level litigation and by trial attorneys with deep ties to local and state politicians.
“The state has every right and ability and tool in the toolbox to enforce these coastal use permits,” Erspamer says. “Where there have been violations of permits and where there has been damage, companies should be held accountable.”
The Pelican Institute for Public Policy is a Louisiana-based free-market think tank that advocates for limited government and business-friendly policy reform.
