Chevron ordered to pay more than $740 million to restore Louisiana coast in landmark trial

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Chevron ordered to pay more than $740 million to restore Louisiana coast in landmark trial

2025-04-05 06:32 Last Updated At：06:41

POINTE À LA HACHE, La. (AP) — Oil company Chevron must pay $744.6 million to restore damage it caused to southeast Louisiana's coastal wetlands, a jury ruled on Friday following a landmark trial more than a decade in the making.

The case was the first of dozens of pending lawsuits to reach trial in Louisiana against the world’s leading oil companies for their role in accelerating land loss along the state’s rapidly disappearing coast. The verdict – which Chevron says it will appeal – could set a precedent leaving other oil and gas firms on the hook for billions of dollars in damages tied to land loss and environmental degradation.

Jurors found that energy giant Texaco, acquired by Chevron in 2001, had for decades violated Louisiana regulations governing coastal resources by failing to restore wetlands impacted by dredging canals, drilling wells and billions of gallons of wastewater dumped into the marsh.

“No company is big enough to ignore the law, no company is big enough to walk away scot-free,” the plaintiff’s lead attorney John Carmouche told jurors during closing arguments.

A 1978 Louisiana coastal management law mandated that sites used by oil companies “be cleared, revegetated, detoxified, and otherwise restored as near as practicable to their original condition” after operations ended. Older operations sites that continued to be used were not exempt and companies were required to apply for permits.

But the oil company did not obtain proper permits and failed to clean up its mess, leading to contamination from wastewater stored unsafely or dumped directly into the marsh, the lawsuit said.

The company also failed to follow known best practices for decades since it began operating in the area in the 1940s, expert witnesses for the plaintiff’s testified. The company “chose profits over the marsh" and allowed the environmental degradation caused by its operations to fester and spread, Carmouche said.

The jury awarded $575 million to compensate for land loss, $161 million to compensate for contamination and $8.6 million for abandoned equipment. The amount earmarked for restoration exceeds $1.1 billion when including interest, according to attorneys for Talbot, Carmouche & Marcello, the firm behind the lawsuit.

Plaquemines Parish, the southeast Louisiana district which brought the lawsuit, had asked for $2.6 billion in damages.

Chevron's lead trial attorney Mike Phillips said in a statement following the verdict that “Chevron is not the cause of the land loss occurring” in Plaquemines Parish and that the law does not apply to “conduct that occurred decades before the law was enacted.”

Phillips called the ruling “unjust” and said there were “numerous legal errors.”

Houston-headquartered Chevron reported more than $3 billion in earnings for the fourth quarter of 2024.

The lawsuit against Chevron was filed in 2013 by Plaquemines Parish, a rural district in Louisiana straddling the final leg of the Mississippi River heading into the Gulf of Mexico, also referred to as the Gulf of America as declared by President Donald Trump.

Louisiana’s coastal parishes have lost more than 2,000 square miles (5,180 square kilometers) of land over the past century, according to the U.S. Geological Survey, which has also identified oil and gas infrastructure as a significant cause. The state could lose another 3,000 square miles (7,770 square kilometers) in the coming decades, its coastal protection agency has warned.

Thousands of miles of canals cut through the wetlands by oil companies weakens them and exacerbates the impacts of sea level rise. Industrial wastewater from oil production degrades the surrounding soil and vegetation. The torn up wetlands leave South Louisiana – home to some of the nation’s biggest ports and key energy sector infrastructure -- more vulnerable to flooding and destruction from extreme weather events like hurricanes.

Phillips, Chevron's attorney, said the company had operated lawfully and blamed land loss in Louisiana on other factors, namely the extensive levee system that blocks the Mississippi River from depositing land regenerating sediment — a widely acknowledged cause of coastal erosion.

The way to solve the land loss problem is “not suing oil companies, it’s reconnecting the Mississippi River with the delta,” Phillips said during closing arguments.

Yet the lawsuit held the company responsible for exacerbating and accelerating land loss in Louisiana, rather than being its sole cause.

Chevron also challenged the costly wetlands restoration project proposed by the parish, which involved removing large amounts of contaminated soil and filling in the swaths fragmented wetlands eroded over the past century. The company said the plan was impractical and designed to inflate the damages rather than lead to real world implementation.

Attorney Jimmy Faircloth, Jr., who represented the state of Louisiana, which has backed Plaquemines and other local governments in their lawsuits against oil companies, told jurors from the parish that Chevron was telling them their community was not worth preserving.

“Our communities are built on coast, our families raised on coast, our children go to school on coast,” Faircloth said. “The state of Louisiana will not surrender the coast, it’s for the good of the state that the coast be maintained.”

Carmouche, a well-connected attorney, and his firm have been responsible for bringing many of the lawsuits against oil companies in the state. Industry groups have accused the firm of seeking big paydays, not coastal restoration.

Louisiana’s economy has long been heavily dependent on the oil and gas industry and the industry holds significant political power. Even so, Louisiana’s staunchly pro-industry Gov. Jeff Landry has supported the lawsuits, including bringing the state on board during his tenure as Attorney General.

Oil companies have fought tooth and nail to quash the litigation, including unsuccessfully lobbying Louisiana’s Legislature to pass a law to invalidate the claims. Chevron and other firms also repeatedly tried to move the lawsuits into federal court where they believed they would find a more sympathetic audience.

But the heavy price Chevron is set to pay could hasten other firms to seek settlements in the dozens of other lawsuits across Louisiana. Plaquemines alone has 20 other cases pending against oil companies.

The state is running out of money to support its ambitious coastal restoration plans, which have been fueled by soon-expiring settlement funds from the Deepwater Horizon oil spill, and supporters of the litigation say payouts could provide a much-needed injection of funds.

Tommy Faucheux, president of the Louisiana Mid-Continent Oil & Gas Association, said the verdict against Chevron “undermines Louisiana’s position as an energy leader” and “threatens our country’s trajectory to America-first energy dominance across the globe.” He warned that “businesses here are at risk of being sued retroactively tomorrow for following the laws of today.”

Attorneys for the parish said they hope that big payout will prompt more oil companies to come to the table to negotiate and channel more funding towards coastal restoration.

“Our energy is focused on securing appropriate verdicts and awards for every parish involved in these actions,” Carmouche said in a statement. “If we continue to be successful in our efforts, these parishes, and Louisiana, will have sent a clear message that Louisiana's future must be built around a new balance between our energy industry and environmental necessities."

Stocks quake after Trump threatens to escalate tariffs despite seeing how much Wall Street hates it

2025-04-08 03:25 Last Updated At：03:30

NEW YORK (AP) — U.S. stocks are careening through a manic Monday after President Donald Trump threatened to crank his tariffs higher, despite a stunning display from Wall Street showing how dearly it wants him to do the opposite.

The S&P 500 was down 0.8% in late trading, but only after a shocking day of heart-racing reversals as battered financial markets try to figure out what Trump’s ultimate goal is for his trade war. If it’s to get other countries to agree to trade deals, he could lower his tariffs and avoid a possible recession. But if it’s to remake the economy and stick with tariffs for the long haul, stock prices may need to fall further.

The Dow Jones Industrial Average was down 563 points, or 1.5%, with a little less than an hour remaining in trading, while the Nasdaq composite was 0.6% lower.

All three indexes started the day sharply lower, and the Dow plunged as many as 1,700 points following even worse losses worldwide on worries that Trump's tariffs could torpedo the global economy. But it suddenly surged to a gain of nearly 900 points. The S&P 500, meanwhile, went from a loss of 4.7% to a leap of 3.4%, which would have been its biggest jump in years.

The sudden rise followed a false rumor that Trump was considering a 90-day pause on his tariffs, one that a White House account on X quickly labeled as “fake news.” Stocks then turned back down. That a rumor could move trillions of dollars' worth of investments shows how much investors are hoping to see signs that Trump may let up on tariffs.

But soon after that, Trump threatened to raise tariffs further against China after the world's second-largest economy retaliated last week with its own set of tariffs on U.S. products.

It’s a slap in the face to Wall Street, not just because of the sharp losses it’s taking, but because it suggests Trump may not be moved by its pain. Many professional investors had long thought that a president who used to crow about records reached under his watch would pull back on policies if they sent the Dow reeling.

On Sunday Trump told reporters aboard Air Force One that he does not want markets to fall. But he also said he wasn’t concerned about a sell-off, saying “sometimes you have to take medicine to fix something.”

Trump has given several reasons for his stiff tariffs, including to bring manufacturing jobs back to the United States, which is a process that could take years. Trump on Sunday said he wanted to bring down the numbers for how much more the United States imports from other countries versus how much it sends to them.

Still, indexes kept swerving between losses and gains Monday, even after Trump threatened to raise his tariffs, because hope still remains in markets that negotiations may still come.

“Could things get worse? Of course they could," said Nate Thooft, a senior portfolio manager at Manulife Investment Management. “We’re not calling the all-clear at all, but when you have this type of volatility in the market, of course you're going to have back and forth” in markets not just day to day but also hour to hour.

“We’re all waiting for the next bit of information,” he said. “Literally a Truth Social tweet or an announcement of some sort about real negotiations could dramatically move this market. This is the world we live in right now.”

All that seems to be certain is that the financial pain hammered investments around the world on Monday, the third straight day of steep losses after Trump announced tariffs in his “Liberation Day.”

Stocks in Hong Kong plunged 13.2% for their worst day since 1997. A barrel of benchmark U.S. crude oil dipped below $60 during the morning for the first time since 2021, hurt by worries that a global economy weakened by trade barriers will burn less fuel. Bitcoin sank below $79,000, down from its record above $100,000 set in January, after holding steadier than other markets last week.

Nike dropped 4% for one of the larger losses on Wall Street. Not only does it sell a lot of shoes and apparel in China, it also makes much of it there. Last fiscal year, factories in China made 18% of its Nike brand footwear. Vietnam made 50%, and Indonesia made 27%.

Trump’s tariffs are an attack on the globalization that’s remade the world’s economy, which helped bring down prices for products on the shelves of U.S. stores but also caused production jobs to leave for other countries.

It also adds pressure on the Federal Reserve. Investors have become nearly conditioned to expect the central bank to swoop in as a hero by slashing interest rates during downturns.

But the Fed may have less freedom to act this time around because the conditions are so much different. That's cheifly because inflation is higher at the moment than the Fed would like. And while lower interest rates can goose the economy, they can also put upward pressure on inflation. Expectations for inflation are already swinging higher because of Trump’s tariffs, which would likely raise prices for anything imported.

“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” JPMorgan CEO Jamie Dimon, one of the most influential executives on Wall Street, wrote in his annual letter to shareholders Monday. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”

In the bond market, Treasury yields rallied Monday to recover some of their sharp drops from earlier weeks. Some of the big move may have been because of reduced expectations for cuts to interest rates by the Fed. Some analysts also said it could be due to investors outside of the United States wanting to pare their U.S. investments.

The yield on the 10-year Treasury jumped to 4.14% from 4.01% late Friday.

Earlier in the day, the S&P 500 briefly fell more than 20% below its record set less than two months ago. If it finishes a day below that bar, it would be a big enough drop that Wall Street has a name for it. A “bear market” signifies a downturn that’s moved beyond a run-of-the-mill 10% drop, which happens every year or so, and has graduated into something more vicious.

The S&P 500, which sits at the heart of many investors’ 401(k) accounts, is coming off its worst week since COVID began crashing the global economy in March 2020.

Kurtenbach reported from Bangkok. McHugh reported from Frankfurt, Germany. Associated Press writers Ayaka McGill, Paul Harloff, Matt Ott and Jiang Junzhe also contributed.