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The state of Louisiana is off the hook. The Louisiana Supreme Court has ruled that it does not have to pay a $1.3 billion verdict to the oyster industry for allegedly ruining its livelihood. State officials—who had feared the verdict would cripple Louisiana’s bond rating and jeopardize its environmental plan to preserve its coast—are now breathing a sigh of relief. The court’s recent unanimous decision in Avenal v. State, No. 2001-CA-0843, overturned a 1994 Plaquemines Parish jury award to a class of oyster fisherman who claimed their leases had been illegally taken by a state environmental project to protect the marshes. The project diverted freshwater, changing the salinity of the water, allegedly to the detriment of the oyster trade. The decision also casts doubt on a companion case that resulted in a $661 million bench award to plaintiffs who opted out of Avenal or were situated in an adjacent area. Alonzo v. State, nos. 2003-CA-553 and 2002-CA-527. “It was a politically charged issue,” said the state’s attorney, Andrew Wilson of Burke & Wilson in New Orleans, who added that the justices had made a “brave” choice. He noted that the court could have cut the damages and kept the plaintiffs’ bar happy, but instead, it sent a clear victory to the state in support of its environmental plan. “These are elected officials and their constituency is largely the plaintiffs’ bar which contributes the most to their campaigns.” Paramount pressure The pressure on the high court was paramount. The award was the largest ever in a takings case, according to the plaintiffs’ lawyers. The fishermen had statutory lease agreements with the state for $2 per acre, and if the verdict had stood, they would have recovered $21,345 per acre. The lead plaintiffs’ lawyer, Scott LaBarre of Gauthier Downing LaBarre Dean & Sulzer in Metairie, La., did not return calls. Nor did David Vidrine, a solo practitioner in Chalmette, La., who represents the plaintiffs in Alonzo. In fiscal terms, the court’s decision was critical for Louisiana. The state’s bond rating is already suffering and the payout, with judicial interest, could have climbed to $3 billion, lawyers noted. It would have been fatal to the state’s environmental projects and would have impaired Louisiana’s ability to secure matching federal funds, according to Professor John Echeverria, with the Georgetown Environmental Law and Policy Institute. Echeverria filed an amicus brief on behalf of the nonprofit environmental groups working to restore the shoreline. “It would be impossible to persuade Congress to send millions to Louisiana for coastal restoration if those dollars would end up in the pockets of trial lawyers and oyster fisherman,” said Echeverria. He noted that the concurring amicus briefs in Avenal included environmental groups and the oil and gas industries who do not usually line up on the same side. For all the political pressure on the court, lawyers say the decision was straight on the law and left no wiggle room for plaintiffs to bring similar claims against the state in future. “I don’t think anyone expected the damages to hold,” said Professor Oliver Houck of Tulane University Law School. “The surprise of the decision was how far the court went.” The court ruled that the fisherman’s leases, although arguably damaged, had not been taken by the state. The hold-harmless clauses written into the fisherman’s leases barred compensation for damages claims, said the court. To the 12 plaintiffs whose leases did not contain hold-harmless clauses, the court said a two-year statute of limitations barred their claims. But even more important, asserted lawyers, is the court’s language in Avenal that paves the way for the state to take proactive steps to protect its coast, without the threat of future lawsuits. The court went so far as to say that even if the fisherman’s leases had been taken in a regulatory sense, the state had the authority under the public trust doctrine and the environmental provisions of the Louisiana Constitution. Houck noted that coastal erosion is a serious threat with huge economic and social stakes that put enormous indirect pressure on the court. “The pressure on the court was like that on the U.S. Supreme Court after 9/11,” he said.

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