After pursuing critics, an oil group has gone bankrupt

Stories of bullies receiving their bounty offer such visceral pleasures that they have become deeply rooted in our culture, from Angelo in Shakespeare’s “Measure for Measure” to the lascivious Count in Mozart’s “Marriage of Figaro” to to the deplorable Biff in the movie “Back to the Future.”

Here is a real life story.

In this case, the bully is the California Independent Petroleum Assn., Which lobbies for oil drilling companies statewide.

CIPA spent five years suing environmentalists and the city of Los Angeles to block efforts to tighten regulations on drilling in populated areas, especially minority communities, which CIPA members knew would cost them. a lot of money. This is the bullying part.

The legal battle ended in defeat for CIPA and a court ordering the organization to pay the legal bills of its targets. These stood at $ 2.3 million, according to an order made by Los Angeles Superior Court Judge Malcolm Mackey on July 6.

Most of the money went to the city of LA, which owes around $ 1.03 million, and the Center for Biological Diversity, one of the environmental groups targeted by CIPA, which owes more than $ 1, $ 2 million.

CIPA, saying it does not have the money to pay the bills or post the bond that would be required before it can appeal the order, has now filed for bankruptcy. This is the comeuppance part.

You can attribute this harvest to California’s powerful anti-SLAPP law. The acronym stands for “Strategic Lawsuits Against Public Participation”. It refers to litigation brought by powerful interests – the oil and gas industry, for example – not to settle commercial disputes or seek redress for injury, but to intimidate critics exercising their right to freedom of expression or asking the government for regulatory action.

By the way, CIPA has failed to relax or remove the regulations.

“Big Oil has long wanted to ensure that there was no public participation” in the oil drilling authorization process, explains Ashley Hernandez of Youth for Environmental Justice, another of the groups sued by CIPA. “We can see harassment a mile and a half away, and that’s what this trial was about. It is not surprising that after winning a case in court, the oil association tries to shirk its obligation.

CIPA says it hopes to find a way to pay off its creditors over five years. Its CEO, Rock Zierman, said the $ 2.3 million judgment was “larger than CIPA’s annual budget.”

A meeting of CIPA creditors, including the city and the Center for Biological Diversity, is scheduled in bankruptcy court on October 6.

Creditors should argue that CIPA has sufficient resources to pay its bills: “We’re going to ask the toughest questions we can,” LA City Atty. Mike Feuer told me. “We are going to take an aggressive stance to get the legal fees to which the public is entitled. After all, the money at stake is owed to the city’s taxpayers.

Zierman says the group has been misrepresented as a bully.

“How can a small trade association of four employees ‘intimidate’ the city of Los Angeles which has an army of full-time lawyers and billions of dollars in resources?” Zierman asked me by e-mail.

Of course, this is nonsense. CIPA members include Exxon Mobil and Chevron, two of the most powerful companies in the world. In the past four quarters, Exxon Mobil’s revenues have been $ 178.6 billion and Chevron’s $ 116 billion.

As of 2019 alone, Exxon Mobil has spent $ 322,000 lobbying in California, and Chevron, which is headquartered in that state, has spent $ 12.7 million. Chevron has paid CIPA $ 1.75 million for political activities in California since 2014, according to the California Secretary of State.

As for the city’s “army” of full-time lawyers, from 2017 to mid-2019, CIPA paid more than $ 2.6 million in legal fees to at least four law firms in elite, including Los Angeles-based law firms Manatt Phelps & Phillips and Gibson, Dunn & Crutcher. This is according to the organization’s latest public tax returns.

So let’s stop hearing about scarcity and tiny CIPA. He engaged in urban drilling litigation not for himself and his four employees, but on behalf of one of California’s best-funded and powerful industries.

Before moving on to the details of the litigation that led CIPA to such a solution, a few words about the SLAPP lawsuits. Since the 1990s, they have been viewed by policymakers as a threat to the public interest.

Anti-SLAPP laws are on the books of 33 states and enshrined in case law – that is, the decisions of judges – in two others. Efforts are underway to enact a federal anti-SLAPP law, but advocates have already tried to achieve the goal four times, most recently in 2015.

The difficulty has arisen even if anti-SLAPP legislation is favored on the left as well as on the right. This is because SLAPP lawsuits have been filed not only against environmental groups and other activists, but also against businesses and government officials.

Employers have been sued for sanctioning or firing workers, tech companies for challenging the patents of other companies, and better business bureaus for classifying companies with an “F”. Government officials have been prosecuted for enforcing regulations. They have all received the protection of anti-SLAPP statutes.

“The problem brings together strange bedfellows,” says Evan Mascagni, policy director of the Public Participation Project, an anti-SLAPP law advocacy group. “It cuts across party lines.” California has one of the toughest anti-SLAPP laws in the country, as do red states such as Texas and Oklahoma.

“Anyone can get slapped for any reason,” Mascagni says. “Bullies who try to use the legal system to silence anyone who says anything negative about them can be left or right.” The main obstacle to the passage of a federal law appears to be the lawyers of the plaintiffs. “They don’t want to see anything introduced that can help an accused.”

The CIPA case began in 2015, when the Center for Biological Diversity and other environmental groups challenged the city’s lenient policies on drilling permits. “We sued the city to essentially get rubber approval permits for new drilling without complying with California’s Environmental Quality Act,” said Maya Golden-Krasner, senior counsel for the center.

The city was particularly lax about the environmental, health and safety effects of drilling applications in the majority of Latin American and black communities, the plaintiffs said, even though CEQA demanded that these issues be taken into consideration. . This is important, because fumes from oil and gas drilling are associated with a host of health problems, including asthma and cancer, among surrounding residents.

In 2016, the city settled the lawsuit and issued an internal memo asking zoning officials to require environmental assessments and public hearings for all new drilling applications, including requested changes to existing permits.

CIPA then sued the organizations and the city, alleging they had reached a “secret” deal while excluding the oil industry from settlement negotiations. The group requested that the settlement be quashed.

CIPA kept the environmental groups in the case, even though they had settled with the city and dropped their own lawsuit, saying they were acting as agents of the city. The groups disputed this, since they had no authority to force the city to do anything about the drilling permits.

Throughout the litigation, CIPA has described the process as a matter of life and death for its members, and has blamed environmentalists.

“For those people who regularly attack my clients in these lawsuits,” a CIPA lawyer said at a court hearing in 2016, “it equates to holy war.”

The case dragged on until a state appeals court dismissed CIPA’s claims in February 2019 and ordered the trial court to assess attorney fees against CIPA. CIPA appealed to the state Supreme Court, which declined to hear the case.

CIPA’s Zierman bitched to me that the judge’s $ 2.3 million valuation was irrelevant – three times higher, he said, than any other anti-SLAPP valuation in the history of California.

Justice Mackey, however, was explicit on why the city and environmental groups deserved so much. “This case involves complex land use and constitutional law, has been vigorously argued for about 5 years and has involved appeal and Supreme Court proceedings,” he wrote.

Indeed, the judge issued a warning: anyone who tries to increase litigation costs for opponents in a SLAPP lawsuit can see the bill fall back on their own desk, like a boomerang.