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Saturday, April 17, 2021

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Litigiousness Offshore

Posted to Workboat Watch (by on August 28, 2009

La. Parish Files Suits For Alleged Underreporting By Oil Companies

First, Happy 150 Birthday to the modern oil industry – it was Aug.  27, 1859 that the first commercial oil well in the United States struck black gold in rural Pennsylvania. Since then, well you know the rest…

Secondly, a south Louisiana parish (county) filed lawsuits against 29 oil companies this week, alleging “fraudulent non-payment of property taxes.”

Terrebonne Parish, which is located about an hour south of New Orleans on the coastline, is no stranger to the oil and gas industry. Its economy is based on oil and gas support service companies and its landscape is dotted with fabrication facilities, shipyards, drill pipe yards and offshore supply vessels. However, the parish’s long-time assessor – Gene P. Bonvillain – said he noted discrepancies in the oil companies’ reporting of their tax obligations and hired a firm to inspect all properties.

“These 29 lawsuits are part of our ongoing efforts to recoup money that is owed to the parish by oil companies and operators on the parish’s land,” said Don Richard, an attorney for the plaintiff.

Maybe water-bottoms is a more appropriate description for the “land” of southern Terrebonne, as the parish is at the epicenter of Louisiana’s coastal land loss and its once lush cypress swamps and marshlands are now open water in many instances. The bottom line is the lawsuits request jury trials to recover more than $100 million in alleged back taxes from these oil companies – the same that have supported Terrebonne’s tax rolls for decades and the same some environmentalist blame for causing the parish’s coastal erosion problems.

“We’re already in bad enough times and to have these lawsuits hit us now is not good,” said Don Briggs, president of the Louisiana Oil and Gas Association, which represents many of the companies.

Drilling is down along the Gulf Coast and especially in Louisiana. One reason - other than the economy and global recession - is the litigiousness of the Bayou State.

“The president of one company being sued told me this is the nail in the coffin,” Briggs said. “He will not drill another well in the state of Louisiana again. That hurts my heart because I know the value of the industry.”

Industry watchers believe elected officials could go about challenging tax collections in a different manner, such as appealing to the state tax commission or engaging companies directly.

“(Louisiana) is one of the most litigious states in the U.S. and it’s a crying shame,” Briggs said.

And more could be on the way.

Richard, senior partner with Chehardy, Sherman, Ellis, Murray, Recile, Griffith, Stakelum & Hayes LLP, said the firm also represents St. Mary and Iberia parishes, both coastal areas with similar landscapes and dependence on oil and gas revenues.

“There are investigations ongoing in those areas and we could take action within the next two months,” Richard said.

The firm also designed a web site to highlight its effort called Coastal Parishes V. Bog Oil. It can be found at www.paytaxesoil.com.