Since oil was struck near the town of Jennings in 1901, the energy industry has transformed and defined Louisiana environmentally, geographically, and politically. It has drilled some 220,000 wells, built 600 producing oil fields, and constructed 8,000 miles of access canals and pipelines, most of which run through wetlands.
Hundreds of Louisiana landowners have sued oil companies they leased their land to for vast damages, alleging that their properties were badly polluted. As I write in this month’s issue of Harper’s Magazine, these “legacy lawsuits” are a hot political issue, and in recent years the energy industry has been furiously lobbying the state legislature — with a good deal of success — to pass legislation restricting the ability of landowners to go to court.
One of the biggest and bitterest cases involved the Broussard family, which in the late 1990s filed lawsuits against Chevron and other energy-industry defendants. The Broussards’ experts estimated that the cost of fully cleaning up an eighty-acre property the family owned would be $300 million.
To learn more about the case I traveled one morning last March to Abbeville — eighty miles from Baton Rouge and THE MOST CAJUN PLACE ON EARTH, according to a billboard I saw en route. At 11:15 A.M., I found myself waiting impatiently beneath a live oak in front of the white brick courthouse to meet a man named Ron Miguez.
An employee of Warren Perrin, an attorney and the lead plaintiff in the case, Miguez was taking me to see the property the company had allegedly polluted. He was fifteen minutes late, so I called him and asked what the delay was. “I’m supposed to get you at eleven,” he said in a thick drawl. “By my watch, it’s a little after ten.” Daylight saving time had taken place two days earlier, and he’d forgotten to spring forward.
It was the perfect introduction to Miguez, a delightfully loopy character, who soon drove up in a pickup truck. Six feet tall and white-mustachioed, he was wearing a cowboy hat, a leather jacket, and a checkered shirt. I’d attended a court hearing that morning for the case, which pitted Chevron against nearly a hundred heirs of Aristide Broussard, who was Perrin’s great-grandfather. Broussard first leased his land to Chevron (then Texaco) in 1942, to build a gas-processing plant that would make airplane fuel for the war effort. Chevron also produced oil at the site and eventually piped in gas from offshore. The plaintiffs alleged that Chevron and its subtenants had systematically damaged the property.
“Aristide started out with a horse and a saddle. He was a cattleman and raised pigs,” Miguez remarked as I filled him in on the hearing. “But he owned the land that Texaco needed. He only got a small share of the royalties but it was a lot of money back then. The checks he got, it was hard to find a bank to cash them.”
The Broussard heirs also had a second case going against Chevron, this one with national implications. Though Chevron’s processing plant and other operations shut down long ago, it still uses the property and maintains equipment there for moving gas to and from the so-called Henry Hub, which sits on neighboring land.
The Hub, which is operated by a Chevron subsidiary, sits at the intersection of various oil and natural gas pipeline systems. So much natural gas moves through the area that the Hub plays a key role in setting spot and future prices. Chevron has sued to expropriate it under eminent domain, citing the Hub’s importance to national energy and security concerns. That case has gone to the U.S. Fifth Circuit Court of Appeals in New Orleans, which was expected to issue a ruling later this year.
A 2011 New York Times story about the lawsuit noted that disputes between pipeline operators and property owners are common, but added that the eminent-domain lawyers it spoke with had never heard of a comparable situation. Gideon Kanner, a professor emeritus at Loyola Law School in Los Angeles described Chevron’s efforts to seize the land on national-security grounds as “a sui generis case.”
Smith Stag, a New Orleans firm, represents the Broussard heirs. Attorney Mike Stag hadn’t appeared in court on the day I was in Abbeville because he was recovering from pneumonia, but he provided me with a stack of documents about the Broussard case. They included a deposition from a former Texaco employee, Randall Landry, who said it was company policy to dump oil waste in pits on the property; reports of a 1985 fire and explosion that forced the evacuation of the plant; and allegations that cooling-tower water contaminated with chromium had leached into the Boston Canal, a drainage bayou that runs through plant land and empties into Vermilion Bay.
Miguez, the son of cotton sharecroppers, gave me a rapid-fire tour of Abbeville. We passed Depuy’s Oyster Shop (“The same family’s owned it since 1869; it’s the best restaurant in town.”); Planters Mill (“They make the best rice you’ll ever eat and ship it all over the world.”), Steen’s Syrup Mill (“They make A-1 molasses. It’s the main ingredient in Bullseye Masterpiece barbeque sauce, which is the best there is.”), then drove out of town, past farms and rice fields that were covered in a foot of water for raising crawfish, it being off-season for rice.
Miguez chatted all along the way, about hunting muskrat and alligator, about his preferred method of cooking gumbo, about long-hauling whiskey. “I’d pick it up in Bowling Green, Kentucky, in bulk, uncut,” he said. “It was 190 proof and hotter than gasoline. You could light wet logs with it. Then I’d take it to Los Angeles, California, to be distilled to 80 percent. I picked it up from Jack Daniels in Kentucky and when it came out in a bottle in California it was Old Grand-Dad.”
He drove me around the perimeter of the Broussard family property, a perfect square in the neighboring town of Erath. On it were rusty abandoned buildings, including the old gas plant, storage tanks, and a thin pipeline that brought natural gas from the Henry Hub to a rail rack three miles away, where it shipped out by train. “There used to be wells all over here,” Miguez said as he pointed out the window. “I found some of the waste pits that contaminated the property, but they’re all buried now.”
At first glance, and some might say a second, it was hard to understand how the Broussards could have been asking for so much money from Chevron. Save for the rusted-out buildings, the setting looked bucolic, with cows lazing in a pasture and ducks swimming on ponds next door to the property. But unlike the damage done by spills — with oil washing ashore, blackening beaches and killing fish and seabirds — harm caused by drilling byproducts was largely below ground and invisible, and became apparent only years later with “exhaustive scientific inquiry,” as a state report put it.
Furthermore, the Louisiana Supreme Court had established in a key case called Corbello v. Shell that punitive damages in legacy lawsuits could exceed the fair market value of a polluted property, which meant there was essentially no cap on how much plaintiffs could win. The court said that this was necessary because limiting damage to market value “would give license to oil companies to perform [their] operations in any manner, with indifference as to the aftermath of its operations because of the assurance that it would not be responsible for the full cost of restoration.”
From the family property, we drove to Erath’s three-room Acadian Museum, which Perrin founded, runs, and uses as his office when he’s not working in Lafayette. The museum’s eclectic collection includes a Sears, Roebuck catalog from 1900, a painting of the Marquis de Lafayette, a few stuffed animals, and an old wall-mounted hand-crank telephone. Perrin, age sixty-six, led me to a framed facsimile of an apology issued in 2003 by Queen Elizabeth II for the British expulsion of Acadians from present-day eastern Canada during the French and Indian War. Some of them settled in Louisiana, where they became known as Cajuns. “In 1990 I heard about the U.S. government offering an apology to Japanese-Americans interned during World War II,” he said. “That led me to sue the Queen. Thirteen years later we worked out a deal and she issued this apology.”
We sat down in his small, cluttered office, where campaign posters for Huey Long and Jimmy Carter shared wall space with the flags of New Brunswick and Nova Scotia. Aristide Broussard, he explained, had originally leased the eighty acres to Texaco for seventy-five years at $1,600 a year, far less than the prevailing rate at the time. The middlemen who acquired the lease for Texaco also fleeced Aristide on royalty payments for oil and gas production. Typically landowners received a rate of one-eighth the value of the energy produced, but the middlemen convinced him to sell them seven-eighths of his share, leaving him with only a sixty-fourth of the total. They paid him $30,000 up front, which was a lot of money in 1942, but the deal cost Aristide and his heirs millions in future royalties. Perrin renegotiated the lease after he graduated from law school; it still expires in 2018, but now, he told me, it pays his family about $100,000 annually, in line with typical rates.
[*] Hilcorp settled with the Broussards last November.
Perrin learned of the damages to his family’s property when he read in a legal publication that Texaco and Hilcorp,[*] which ran the gas plant, were accusing each other in a lawsuit of misdeeds on his family’s property. “I got a copy of the lawsuit, and they were destroying the place,” he told me.
Sabine, the Chevron subsidiary that operates Henry Hub, offered to buy the property for $1 million. When Aristide’s heirs rejected the offer, the company shifted to try eminent domain. “Aristide wanted that land maintained as a unit because he and his wife struggled so hard to get it, and he wanted his family to stay together,” said Perrin. “How many people know their fifth cousins?”
“Seizing private land is a serious matter,” he added. “It’s not supposed to be done to put an end to a $300 million lawsuit against you.”
Chevron has always denied having polluted Perrin’s land, but in late May, just as the legacy-lawsuit trial was about to begin, it made a settlement offer. Perrin told me that the Broussard family had tentatively accepted, but that negotiations, which are confidential, were ongoing. The two sides are also seeking to negotiate an end to the eminent-domain case. “We’re not anti-oil,” he said. “We’re against companies that don’t clean up their shit.”