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CPR's Verchick in Times-Picayune: Governor Jindal, don't sign away our legal claims against BP

Today, Center for Progressive Reform Member Scholar Robert Verchick published an op-ed in New Orleans' Times-Picayune entitled, "Gov. Jindal, don't sign away our legal claims against BP."

The piece notes:

Governor Jindal will probably sign SB469, a bill designed to neutralize the Southeast Louisiana Flood Protection Authority – East's lawsuit against oil and gas companies. But does our governor realize that, if he signs this bill, he may also be killing scores of claims that his own his own state and associated local governments have brought against  BP for the Macondo oil spill?                                                                                       

For, whatever the governor or state lawmakers may believe, that is precisely what SB469 might do.

SB469 clearly lists not only who can bring claims in Louisiana's coastal zone, but what kind of claims they can bring. Notably missing from its list are claims for economic losses and claims for natural resource damages under the Oil Pollution Act of 1990 (OPA) – the very basis for pending claims against BP. 

It continues:

But the state, as well as several parishes, have already brought economic claims under OPA...So have coastal cities...And fire districts...And airports...And school districts...And SLFPAE itself, which presented a claim against BP for more than $79 million, mostly to recover tax revenues it lost because of the oil spill.

These OPA claims are not frivolous or opportunistic. Indeed, Governor Jindal has said for months that one of the reasons he opposed the SLFPAE lawsuit is that he thought it threatened state and local governments’ OPA claims against BP. communities that are bringing these claims were hit hard by the Macondo oil spill. They're trying to recover just some of what they lost.  

For example, in its OPA suit against BP, Jefferson Parish has alleged that it suffered:

1.Ecological damage

2.Damage to the quality of life of its citizens

3.Loss of sales tax revenues, use tax revenues, Parish tax revenues, inventory tax revenues, hotel and motel tax revenues, reverence tax revenues, royalties, rents and fees

4.Increased costs of providing services to the citizens of the Parish of Jefferson

5.Damage to the natural resources of the Parish of Jefferson

6.Increased costs for the monitoring of the health of its citizens and the treatment of physical and emotional problems related to the oil spill

7.Costs for educating and retraining employees

8.Increased promotional costs

9.Increased costs to borrow money

10.Increased costs for debt service

11.Loss of fees for permits and licenses

12.Loss of fines and forfeitures income

13.Increased administrative costs

14.Damages to the reputation and image of claimants in the business and tourism communities

Because SB469 works retroactively, it could undo all of these claims.  Did Governor Jindal know that, when he pushed SB469 in the legislature?

To read the entire piece click here.

Professor Verchick also drafted a memo with fellow CPR Member Scholars and law professors Christine Klein and William Andreen on the consequences of SB469's passage and they urge the Louisiana legislature to vote against the bill.

To read the memo click here.

June 3 update, Jindal Blinks: According to a June 3 story in the Baton Rouge Advocate, Governor Jindal backed off of plans to sign the bill at a news conference called for the purpose:

Jindal had planned to sign SB469 at a news conference Monday afternoon, but he left the bill untouched after Attorney General Buddy Caldwell asked for time to look into a claim it could be used by lawyers for BP to scuttle suits brought for economic damages during the 2010 oil spill. That claim, put forward by law professors, first arose over the weekend.

“We’re not signing the bill today,” Jindal said Monday. “The attorney general asked for some additional time to look at it, and out of an abundance of caution, we’ll give the attorney general time to do that,” he said.

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Conflict Disclosures for Regulatory Science: Slow but Steady Progress at Last

Basic disclosures of conflicts of interest have been required by the top science journals for decades. Yet most regulatory agencies – despite strong urging from a variety of bipartisan sources – have failed to require these disclosures for private research submitted to inform regulatory decisions.  This omission is particularly alarming since, unlike journals, agencies used this research to determine the appropriate standards for protection of public health and welfare.  If anything, one would expect the agencies to apply higher scientific standards and insist on greater transparency for privately submitted research as compared to journal editors.

The failure of agencies to meet these bare minimum standards of science has not gone unnoticed.  Recently, the Administrative Conference of the U.S. recommended that agencies should, where possible, require these basic disclosures of conflicts, including “whether the experimenter or author had the legal right without approval of the sponsor of the research to: design the research; collect the data; interpret the data; and author, publish or otherwise disseminate the resulting report or full dataset.”   See Recommendation #11.  Both the Bipartisan Policy Center (p.42) and the Keystone Center (p.20,24) preceded the ACUS recommendation with similar calls for basic conflict disclosures for private research that informs regulation. An editor of Nature recently called for such disclosures, noting:  

It was the 1976 film All the President’s Men, about the uncovering of the Watergate political scandal by two Washington Post reporters, that popularized the phrase: “Follow the money.” He who pays the piper calls the tune. Science combats the undue influence of commercial interests — or at least tries to — by using a different guideline, illustrated by a popular catchphrase from another film: “Show me the money.” Give us transparency.

Even members of Congress recognize the need for basic conflict disclosures in environmental in reform legislation (see § 4(b)) that is otherwise considered by environmentalists to be far too lax.  

At last, one federal agency has begun to show leadership on this issue.  Last November, in a proposed rule that would set standards for silica exposure, OSHA requested that commenters voluntarily disclose funding sources in the course of submitting their comments.  While this is simply a voluntary request by OSHA (and compliance with this request may prove disappointing), it is still a step in the right direction.  Hopefully other agencies and Congress will follow suit and make the disclosure requirements mandatory for new research submissions that inform public and environmental regulation, holding this regulatory science to at least the minimum standards of the scientific community. 

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EPA Declares BP a 'Responsible Contractor' Makes It Eligible Again for Federal Contracts in the Gulf

A scant five days before the Department of Interior opens a new round of bids for oil leases in the Gulf of Mexico, the EPA has blinked, pronouncing BP, the incorrigible corporate scofflaw of the new millennium, once again fit to do business with the government.

To get right to the point, the federal government’s decision that BP has somehow paid its debt and should once again be eligible for federal contracts is a disgrace. Not only does it let BP off the hook, it sends an unmistakable signal to the rest of the energy industry: That no matter how much harm you do, no matter how horrid your safety record, the feds will cut you some slack.

Back in 2012, the agency’s intrepid staff had finally gotten permission to pull the trigger on the company, de-barring it from holding any new U.S. contracts on the grounds that it was not running its business in a “responsible” way. Undoubtedly under pressure by the Cameron government and the U.S. Defense Logistics Agency, BP’s most loyal customer, the EPA settled its debarment suit for a sweet little consent decree that will try to improve the company’s sense of ethics by having “independent” auditors come visit once a year. 

To review the grim record: BP, now the third-largest energy company in the world, is the first among the roster of companies that have caused the most memorable industrial fiascos in the post-modern age. 

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The Obama legacy: will West Virginia toxic spill join the queue of episodes showing that “government”—and whatever it means to the President—broke on his watch?

As people across the country and around the world watched the tableau of 300,000 West Virginians give up their drinking, cooking and bath water for days on end because an untested toxic chemical was spilled by a company that was co-founded by a twice-convicted felon, the ever-present John Boehner (R-Ohio) had pungent advice for President Barack Obama.  “We have enough regulations on the books.  And what the administration ought to be doing is actually doing their jobs.  Why wasn't this plant inspected since 1991?” he declared.   “I am entirely confident that there are ample regulations already on the books to protect the health and safety of the American people.  Someone ought to be held accountable here.”

Consistency, of course, is the hobgoblin of small minds and, unfortunately, no member of the media thought to ask Speaker Boehner whether sequestration and other merciless budget cuts might have something to do with the lack of inspections.  Or, to put the issue more bluntly: Why won’t anyone in the press ask the Speaker and his ilk whether we get the government we pay for and whether, these days, we aren’t paying—or getting—enough?  But fair is fair: John Boehner isn’t the president, and this latest catastrophe happened on President Obama’s watch, along with a string of other, disturbingly similar episodes. 

 
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The age of greed: Mitch McConnell goes to bat for Big Coal after West Virginia catastrophe

For the past week, 300,000 people in and around Charleston, West Virginia, have been unable to drink the water that came from their taps, because of the toxic byproduct of feeble regulation and non-existent enforcement. Thousands of gallons of a coal-cleaning agent seeped into the local water supply after it oozed out of an antiquated storage tank and then overflowed a surrounding containment area just a mile upriver from the local water plant. Significantly, inspectors had not visited the facility in more than a decade, except by a smattering of state officials focused on air pollution, who walked on by the corroded tank and the bird's eye view of the river.

Disturbingly, we know very little about the effects of the chemical on humans. The weak federal Toxic Substance Control Act and the diminished enforcement power of the EPA and state officials in West Virginia have left local residents and citizens across the country wondering how their government came to be so powerless to stop this obvious hazard, made worse by the keystone-cop ineptitude of West Virginia’s Governor Tomblin in the days after the spill.

The search for an answer to that question leads right to the doorstep of anti-regulation politicians like Sen. Mitch McConnell from Kentucky. Decades of coal mining in the region have taken a profound toll on mountains, valleys, streams, and rivers, throughout Appalachia. And as Charleston takes its place in the history of regulatory disasters alongside the West Texas chemical plant disaster and the BP spill in the Gulf, what is the Senate Minority Leader's priority this week? Not examining how to repair the shredded regulatory infrastructure that left West Virginians without clean water. To the contrary, he's focused on cutting back further on attempts to rein in the pollution caused by coal production. 

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Making private companies pay their share for climate change: a new study could revive climate change litigation

Efforts to hold private companies responsible for their contribution to climate change just took a big step forward, thanks to researcher Rick Heede.  For the past eight years, Heede has painstakingly compiled the historical contribution of fossil fuel companies to today’s concentrations of greenhouse gases.  According to Heede’s study ”Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854–2010,” which was published in Climatic Change, just 90 enterprises have accounted for over sixty percent of total industrial carbon dioxide and methane emissions.  And just five private oil companies-- ChevronTexaco, ExxonMobil, BP, Shell and ConocoPhillips—have accounted for more than 12 percent of such emissions.

This data is a potential game-changer in how we think of responsibility for climate change.  The fossil fuel industry would like us to believe that we are all equally culpable every time we turn on an ignition or a light bulb.  But we are not all equally responsible for decisions that have led to climate change—and we certainly have not all benefited from climate change the same way that the five oil companies have.  In addition, several of the top emissions contributors actively promoted climate change denial campaigns.

This data is legally significant as well because it gives courts a fair and defensible way for allocating responsibility for damages caused by climate change.  Courts need no longer fear that it would be impossible to untangle the private sector’s historical contributions to climate change or unfair to make oil companies, for example, pay for all climate-related damages.  A clear formula now exists for allocating at least a significant percentage of the costs of climate change to those companies that benefited most from the public nuisance created by their emissions. Take, for example, the costs of moving the Inuit village of Kivalina, which attempted to sue several of the top polluters for the anticipated costs of relocating their village as a result of climate change.  Those costs could now be allocated to the major fossil fuel companies based on their historical contributions to the problem.   

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The SBA’s Office of Advocacy Criticism of Its ‘Crain and Crain’ Report: A Dollar Short and A Day Late

Call it buyer’s remorse. The Office of Advocacy of the Small Business Administration (SBA) is publicly—albeit meekly—tiptoeing away from a now-infamous report that it commissioned, in which economists Nicole Crain and Mark Crain purported to find that federal regulations cost the economy $1.75 trillion in 2008. After being roundly criticized by CPR, the Congressional Research Service, and others, SBA’s Office of Advocacy now explains, referring apparently to the $1.75 trillion figure that “the findings of the study have been taken out of context and certain theoretical estimates of costs have been presented publicly as verifiable facts.” While this admission is welcome, it does not go nearly far enough in light of the antiregulatory crusade this misleading, taxpayer-supported report fueled.

Soon after the Crain and Crain report was released in 2010, CPR published a White Paper that demonstrated the unreliability and implausibility of the Crain and Crain report’s methodologies and findings.  A few months later, the nonpartisan Congressional Research Service (CRS) released its own analysis of the Crain and Crain report, and its findings were equally damning. Then the Economic Policy Institute (EPI) separately analyzed the Crain and Crain report, and concluded the Crain and Crain report was based on a “flawed economic model and faulty data.” All of this caused then Administrator of the Office of Information and Regulatory Affairs (OIRA) to describe the study as “deeply flawed” and an “urban legend” in congressional testimony. And in addition to employing indefensible methodologies to support their calculations for costs, the Crain and Crain report’s authors ignored regulatory benefits, a move that ensured that the report’s findings would be ripe for precisely the kind of abuse and misuse by anti-regulatory forces that SBA’s Office of Advocacy is now trying to walk away from.

Sure enough, the fantastical $1.75 trillion dollar estimate has been cited time and time again by industry lobbyists and regulatory criticsin Congress, even after the report itself had been debunked, to support troubling anti-regulatory legislation, such as the REINS Act. After handing this Christmas gift to the anti-regulatory forces, SBA’s Office of Advocacy owes the public something more than burying a begrudging acknowledgment of the report’s weakness on an obscure webpage.

When I wrote Dr. Winslow Sargeant, the head of the SBA Office of Advocacy, asking that his agency completely disavow the Crain and Crain report, he offered a disappointing response that attempted to rehabilitate the Crain and Crain report’s findings and methodology. So, it is encouraging that the SBA Office is now being a little more forthright in its criticisms of the report. Yet, the Crain and Crain report has so polluted the public debate over regulatory policy that this half step by SBA’s Office of Advocacy is plainly inadequate. It is time for the agency to disavow the report completely, remove any vestige of it from its website, and adopt procedures to ensure that it does not pay for and publicize similarly misleading research again.  As a fiduciary of the public’s money, it owes nothing less. 

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Transparency Withdrawn: A New Tactic for Shielding OIRA’s Regulatory Review Activities?

Yesterday, the Environmental Protection Agency (EPA) announced that it was “withdrawing” from White House review its draft final guidance that sought to clarify the scope of the Clean Water Act.  The guidance had been languishing at the Office of Information and Regulatory Affairs (OIRA), which oversees the White House regulatory review process, for 575 days, even though Executive Order 12866, the document that governs OIRA review of regulations, caps the length of reviews at 90 days plus a limited, one-time extension of 30 days.  This is just the latest episode in what now appears to be a new disturbing trend:  The Obama Administration seems to be increasingly relying on a relatively uncommon practice known as a “withdrawal” to unceremoniously dispose of long-overdue OIRA reviews involving important safeguards that are vigorously opposed by industry. 

Over the last few months, several other industry-opposed rules have met a similar fate of being withdrawn after sitting at OIRA for well beyond the time limit permitted by Executive Order 12866:

·The National Highway Traffic Safety Administration’s (NHTSA) draft final rule mandating rearview cameras to prevent back-over accidents involving children:  “Withdrawn” from regulatory review on June 20, 2013, after collecting dust at the OIRA for 583 days.

·The EPA’s draft proposed Chemicals of Concern list—an absurdly modest regulatory “action” that would have merely identified a handful of potentially harmful chemicals as worthy of additional agency scrutiny:  “Withdrawn” from OIRA review on September 6, 2013, after an astonishing delay of 1214 days.

· The EPA’s draft proposal to limit the chemical industry’s specious “confidential business information” claims to shield crucial health and safety data on their new chemicals from public disclosure:  “Withdrawn” from OIRA review on September 6, 2013 after 620 days.

Before delving into why this apparent uptick in withdrawals is cause for concern, some background may be in order.   A “withdrawal” occurs when an agency voluntarily chooses to “withdraw” a draft proposed or final rule from the regulatory review process before OIRA, as the regulatory gatekeeper, has either formally approved the draft—clearing it for publication in the Federal Register—or denied it, through a “return letter,” sending the draft back to the agency for more work.  At least, that’s the theory of how withdrawals work.  In some cases, the circumstances suggest that OIRA or other White House officials have pressured the agency into withdrawing a rule.

The Executive Order does impose on OIRA important disclosure requirements that if followed, would help to bring needed transparency to the withdrawal process.  Under the Order, these obligations are very broad, requiring OIRA to “make available to the public all documents exchanged between OIRA and the agency during the review by OIRA.”  (Emphasis mine.)  See for yourself at section 6(b)(4)(D).  Presumably, included in “all” these “documents” would be evidence of flaws or policy disagreements that led the agency to withdraw the rule.  It would also shed some light on whether this withdrawal was in fact voluntary or under pressure from the White House—and thus just a return letter by another name.

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House Republicans to hold hearing on climate change, can I get a witness?

Everything’s upside down. Last week a Democratic president urged a military strike in the Middle East while Republicans dithered about quagmires. Tomorrow, a subpanel of the House Energy and Commerce Committee will launch its first climate change hearing in years and hardly any Obama administration official is willing to show up.  Representative Ed Whitfield (R-Ky), who chairs the Committee’s Energy and Power subpanel, says the committee requested presentations from 13 federal agencies. But as of this post only EPA Administrator Gina McCarthy and Energy Secretary Ernest Moniz have promised to testify.

Normally, of course, you can’t stop us progressives from talking about climate change. We talk smack about Canadian tar sands, press universities to rethink their carbon investments, and name hurricanes after Marco Rubio. (The last was really funny, but perhaps not fair.) The President’s all in too. Last August, when he denounced, “the limitless dumping of carbon pollution from our power plants,” I couldn’t get enough.

So, what leaves Whitfield singing, “Can I Get A Witness?”  

The thing to know is that tomorrow’s major hearing on climate change is not really a major hearing. It is not even one of those Potemkin major hearings where the participants sit like plyboard cut-outs and pretend to be interested in the topic.

No, this is an ambush. And even the Democrats have figured it out.

So, please, do not expect the panel’s vice chairman, Representative Steve Scalise (R-La) to express concern that because of warming and subsidence, Louisiana is experiencing the fastest rate of sea-level rise on the planet. And, no, Representative Cory Gardner (R-Co) is not going to waste time explaining that his state’s water conservation board worries that Colorado may soon lack water to support its cities, farms, and fish runs. Nor will Representative John Barrow (D-Ga) complain that the Peach State lacks any plan to prepare for such climate shockers as heat waves, vector-borne illness, and increased smog?

You see, the real concern of those in charge of this hearing is not that the climate is changing, but that the government might try to do something about it.

Thus Chairman Whitfield’s invitation letter requests that witnesses come prepared to discuss all upcoming “regulations or guidelines” that would make it harder to pump greenhouse gases into the air, and explain how any “agency funds” have been used to reduce or prepare for climate impacts. As Whitfield explained later to press: "It’s important that we be aware of what unilateral action through regulation and executive orders the administration is looking at.”

One of those “unilateral actions” that Whitfield, no doubt, has in mind is EPA’s upcoming proposal to limit greenhouse gas emissions from new fossil fuel power plants. Let’s ignore for the moment how a rule embraced by an elected president, impelled by a Supreme Court decision (Massachusetts v. EPA), and authorized by an act of Congress (the Clean Air Act) can be characterized as “unilateral.” I need to save something for my law students’ final exam.

The coal industry is extremely worried about this because coal is exactly the fossil fuel that President Obama had in mind when he complained about all that “limitless dumping” from “power plants.” And some Beltway experts are predicting that EPA’s new rules may require new coal-fired power plants to adopt expensive technologies like “carbon capture and storage” (CCS) in order to qualify for permits.

Fancy this, for years the coal industry has been telling us about all its clean coal technology.  They said over, and over again that clean coal technology allowed power plants to capture greenhouse gases and pump them underground. We were assured such advancements “aren’t just predictions,” but reality.

Remember the image of the orange extension cord plugged into that polished lump of coal--the one paraded during NASCAR rallies and in between segments of Sunday morning political talk shows?

Remember those television ads with a rainbow coalition of goggled lab and plant workers imploring you to “Believe!”? (Shout it with me: “BELIEVE!”)

And now they say they don’t have it? Let’s have a hearing on that!

 

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BP Flouts the Rule of Law (Yet Again)

Like no other mammoth corporation that did very bad things—not Enron, not WorldCom, not Exxon, and not even HSBC (which, after all, laundered money for the Mexican drug cartel and was allowed to pay a fine without pleading guilty!)—BP has not lost its arrogant swagger.  In a fit of high dudgeon it filed a lawsuit last week challenging the one step the federal government has taken that could actually hurt the company over the long run: the long-overdue debarment of this chronic scofflaw from receiving contracts to supply fuel to the U.S. military. 

Despite the semi-hysterical, every-argument-known-to-humans tone of its 127-page legal filing, Bob Dudley, BP’s chief executive officer, has been blithe about the effect of the debarment on its bottom line: “We have largest acreage position in Gulf of Mexico, more than 700 blocks…that’s plenty, we have a lot (sic),” he told the Telegraph, a British newspaper, a few weeks ago.  “We have been debarred from supplying fuel to the U.S. military going forward but quite frankly we have a very big business in the U.S. and this is not distracting us from what we do.”

The Clean Water Act authorizes the Environmental Protection Agency (EPA) to debar companies that are not “responsible” from doing business with the government.  Other provisions of federal law give the Pentagon the same authority but it could not be bothered to find a different fuel supplier even after the Deepwater Horizon explosion killed 11 and devastated the Gulf of Mexico.   Showing itself once again to be one of the last feisty entities left in government, and after contemplating just such an action since 2005, EPA debarred BP in November 2012, just a few short months before the company pled guilty to manslaughter, a slew of environmental crimes, and—just for good measure--lying to Congress.  It paid a $4 billion fine—the largest in history but Dudley is apparently still smiling. 

The term “scofflaw” should not, of course, be used lightly.  For those who need a little boning up on BP’s recidivist history, consider the following and let’s ask ourselves whether we might have avoided the entire Deepwater Horizon horror had EPA been allowed to debar the company back in 2005. 

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