Will Carmouche's "Coastal Lawsuits" Even Help the Coast?

A Peek Into the Proposed Freeport-McMoran Settlement Raises Doubts

Trial-lawyer John Carmouche's new ads are heavy on messaging about how his lawsuits against oil and gas companies are intended to make them "pay to clean up the environmental mess they left along our coast and marshes", in a clear effort to convince the public that it's not just a way to enrich himself and other attorneys involved in the cases.

However, a look into the one case he's been able to reach a settlement in, the $100 million Freeport-McMoran settlement, casts doubt that the coast would see much benefit. While Attorney General Jeff Landry has already signed on to this settlement, it cannot become reality until legislation is passed setting up the means for distribution of the $100 million.

The terms of the settlement are lengthy, and full of complicated stipulations. Freeport would be expected to pay $100 million from 2023-2042, with the payment broken up into a yearly payment schedule. They would pay $15 million upfront in year 1 of the deal, and from then on, a yearly payment of $4.25 million through 2042.

After the initial payment of $15 million by Freeport, the company would be dismissed with prejudice from the litigation. The settlement also insulates and protects Freeport by giving them “favored party” status, protecting them from liability for future private landowners’ claims for damage to property and natural resources, gives them preferential payment from the sale of “environmental credits”, and keeps them from being responsible for the payment of the trial-lawyers – sticking the taxpayers with the bill- as they've already made clear. That payout? Decided by the same Judges who have taken hundreds of thousands of dollars from Carmouche and his firm.

In 2021, two pieces of legislation to enable this settlement gave Louisianans a peek at how those funds would be divvied up- and it wasn't pretty for the coast. Those bills, SB 233 and HB 569, created the framework for a Coastal Zone Restoration Fund and the Coastal Zone Recovery Authority (CZRA), which would have authority over setting up the "environmental credit" scheme.

These pieces of legislation were criticized for not doing enough to ensure the funds from the settlement would support coastal restoration- and for good reason. For starters, the legislation would only guarantee 60% of the funds being used for projects within the "Coastal Master Plan", leaving the other 40% to the parishes involved- with no stipulations requiring them to be spent on the coast, and not the pet projects of parish officials. Additionally, the legislation would change existing law, allowing funds to be diverted away from restoration projects.

It should also be noted that in other states, where similar credit schemes have been implemented, the top-line number, in this case $100 million, rarely materializes. A similar credit scheme in California resulted in just $8.2 million in additional revenue- well short of the $600 million it was supposed to. If the proposed credit scheme performed similarly in Louisiana, this settlement would bring in just over $1 million additional dollars, with 40% of that not even being dedicated to the coast.

Despite his ads claiming to care about the coast and investing in restoration, Carmouche fought hard for these flawed pieces of legislation and his flawed settlement, citing it as a "template" for future cases, despite evidence that very little, if any, new funding would materialize for coastal restoration.

If Carmouche truly cared about the coast, wouldn't he have negotiated a settlement that guaranteed new funds would be invested in the coast? Wouldn't he have fought legislation that allows funds to be diverted from the coast to local pet projects? His ads may say it's all about fixing the environment, but Louisianans have already seen this for what it is: a way for him to get a quick win, and a big payout at the taxpayers expense.

You can read all of our previous stories on Louisiana's job-killing trial-lawyers here.

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