LITIGATION CLIMATE IN OTHER STATES CURBS REGIONAL INVESTMENT, HURTS TEXAS-GROWN COMPANIES
-- Texans Against Lawsuit Abuse points to Louisiana legal abuse affecting Texas company – fairer legal climate would help Texas businesses and regional economy --
HOUSTON – Texans Against Lawsuit Abuse (TALA) today joined business leaders in Texas and across the country in urging Louisiana lawmakers to pass common-sense legal reforms to end legacy lawsuits there that are hurting Texas-based employers.
“Here at TALA, we are often quick to note how fortunate we are to live in Texas, where the message and policies of legal reform have taken strong root over the last decade,” said Court Koenning, with Texans Against Lawsuit Abuse (TALA). “However, across the country, there are still regional pockets where lawsuit abuse is so pervasive that its existence has become almost institutionalized. Such is the case in southern Louisiana, where frivolous and predatory ‘legacy lawsuits’ regularly stifle economic development and hamper the region’s energy sector. And, now, we are learning that those lawsuits are hurting companies born and raised right here in the Lone Star State.”
Legacy lawsuits are lawsuits in which plaintiffs can sue energy companies for alleged environmental damage that occurred decades ago and may be naturally occurring. In Texas, according to TALA, legacy lawsuit payouts are tied to the value of the property in question, but the Louisiana Supreme Court has placed no limits on the amount of damages a legacy lawsuit lawyer can sue for in Louisiana – and the lawyer and plaintiff can then pocket settlement money without cleaning up the alleged environmental damage.
Koenning, who lives in Houston, referred to a public letter delivered this week from a Texas businessman to a legislative committee in Louisiana that outlined the problems the Texas-based company was facing in the Bayou State.
The letter, authored by Jeffrey Hildebrand, CEO of Hilcorp Energy Company in Houston, warned “The consequences of inaction (on this issue) are dire for our business and for the industry as a whole.”
Hildebrand noted that because of excessive lawsuits seeking “absurd damage awards” Louisiana is a “less attractive place for Hilcorp to invest.”
Hildebrand noted that Hilcorp’s presence and work in Louisiana has been a financial benefit to the state. Since 2007, Hilcorp has directly paid more than $1 billion in severance taxes and royalties to the state and injected another $4 billion to the Louisiana economy in the form of payroll, capital investment and landowner royalties.
Hilcorp is one of the largest privately held independent oil and gas exploration companies in the United States, and the largest producer of crude in Louisiana. The company is based in Houston and has grown from three people when it was formed in 1989 and has grown now to nearly 1,000 employees.
“While folks in Louisiana have felt the harmful effects of legacy lawsuits for years, their cause is finally getting some attention from research groups and the national media, and Texans should watch problem areas such as this very closely as they can have an impact on growth in the region,” Koenning noted. “One recent study published by Louisiana State University’s Center for Energy Studies found that abusive legacy lawsuits cost the Louisiana economy over $10 billion and more than 30,000 jobs -- giving further support to our continuing argument that lawsuit abuse costs jobs and hurts families.”
Koenning added that Texans should care about this issue affecting a sister state.
“That frivolous lawsuits inhibit regional economic growth and harm business is beyond dispute,” Koenning concluded. “I’d say Louisiana’s leaders would do well to follow Texas’ path of enacting strong legal reforms, which has led to greater freedom for Lone Star business owners to hire more employees and bring more prosperity to our entire state. Let’s call this a little neighborly advice.”