Louisiana and the federal government have been engaged in a decades-long contentious debate over who shares royalty payments from the mineral-rich submerged lands of the Gulf of Mexico.
by Leslie Alexander
Editor’s Note: Offshore oil and gas extraction remains one of the largest sources of revenue—and rancor—in Louisiana. In 1938, as drilling rigs began to appear off the state’s coastline, the Louisiana legislature passed a bill asserting dominion over submerged lands extending well into the Outer Continental Shelf. This sovereignty was abrogated following a U.S. Supreme Court decision in 1948 that placed control with the federal government. Decades of legal battles and legislative actions have followed. In 2006, in the wake of devastation from Hurricanes Katrina and Rita, U.S. Senator Mary Landrieu garnered congressional and presidential support for a bill that increased the share of monies allocated to Gulf Coast states. Portions of Louisiana’s share are earmarked to help stave coastal erosion and restore wetlands. In January 2015 the Obama administration announced plans to divert more of that promised share into the federal treasury. Congressional representatives and senators of affected states have vowed to counteract.
Historically, the jurisdiction of the states over the area adjoining their coasts was unquestioned. The United States Department of the Interior routinely referred lease applications and inquiries to the states, but in 1945, the federal government recognized the commercial potential of coastal resources and began to exert control. In language guaranteed to set Southern tempers boiling, the 1948 lawsuit, United States v. Louisiana, alleged that the federal government had jurisdiction over Louisiana’s coasts. It also asked for an “injunction against trespass,” an absurd proposition to those who viewed the government as the sole trespasser.
In later years, Louisiana Attorney General Jack Gremillion would take particular umbrage at this assertion. He argued fiercely that the state had exercised “continuous, undisturbed, and unchallenged sovereignty over the property in question.”
The high court ruled in favor of the federal government. It decided that “protection and control of the area are indeed functions of national external sovereignty.” But the dispute was not resolved. Property challenges against coastal states continued. What started as a skirmish was shaping up to be an epic battle between state and federal power.
In 1953, new federal legislation was passed that bolstered coastal states’ claims of tidelands ownership. But this positive development was merely a temporary reprieve from hostilities. In 1957, the federal government again sued Louisiana and other states to gain more control of these submerged lands. This new suit specifically challenged Louisiana’s right to three marine leagues (approximately 10.5 geographical miles) of its tidelands. Billions of dollars in oil and gas revenue were at stake.
What many saw as a state’s rights issue—the right of a state to assert its boundaries and commercially profit from them—had become a burr in the government’s saddle. Federal authority was challenged, a challenge that could not stand even if it meant legal war.
As before, the government counted on a quick victory, a painless win. What the government hadn’t counted on was a pugnacious attorney general who saw a war he was born to fight.
Gremillion began his tenure in 1956 and would serve sixteen years. He campaigned on a pledge to fight federal encroachment on Louisiana territory. It became immediately clear he meant to honor that pledge.
Short in stature but possessed of a quick mind and intractable will, Gremillion came up the hard way. He gained admittance to the Louisiana Bar through two years of formal study and an apprenticeship with a highly reputable law firm.
For Gremillion, this was no time for a politician to be hedging his bets. “Our first responsibility,” he said, “is to protect the three million stockholders in the corporation known as the State of Louisiana.” He quickly rallied public sentiment behind the defense of Louisiana’s cause.
Attorneys general from other coastal states seemed hesitant to call out the federal government. Not Gremillion. He wasted no time blasting the “grabbing” of Louisiana’s tidelands that produced revenue “essential to the operation of our state.” He pledged the use of every “sensible and legal maneuver by this office to retain ownership to these properties and prevent their confiscation.”
To rebut the federal case, Gremillion needed a sharp legal team on a limited budget. He appointed respected legal administrator Carroll Buck to head the attorney general’s office. Buck performed with methodical purpose and technical mastery. Unafraid of conflict, he had a direct, no-nonsense manner that would ensure an efficient operation.
Louisiana State University professor of law Fred Ellis did the bulk of the tidelands research. Gregarious by nature, he was also a consummate intellectual who combed the law with a fine-tooth comb. His laborious study, unaided by technology, was old-school lawyering. Dusty legal tomes had to be plowed through one at a time.
Recently retired, Ken DeJean was a distinguished special assistant to four Louisiana attorneys general. In the mid-1950s, he was a young, fresh-faced law clerk who was asked by Gremillion to join the team and to work alongside respected minerals expert John Madden, who was on loan from the Mineral Board.
|Former Louisiana Attorney General Jack Gremillion discussed his role in the Tidelands Dispute in an interview with Mary Hebert on January 31, 1996. This excerpt from an audio file is archived as the Jack Paul Faustin Gremillion Oral History Interview, Mss. 4700.0532, Louisiana and Lower Mississippi Valley Collections, LSU Libraries, Baton Rouge, La. A transcript and additional interviews with Gremillion can be found at the website for LSU Libraries.
“Mr. Gremillion made me an offer I couldn’t refuse,” DeJean remembers. “This was a case that had never been decided by the courts before.”
Gremillion’s other secret weapon was William G “Bud” Helis, the wealthy chairman of the Louisiana Mineral Board. Known as the “Golden Greek,” Helis was six feet four and projected an immutable confidence. He provided invaluable staff and resources to buttress Louisiana’s defense of its mineral rights.
Esteemed Louisiana State University law school dean Paul Hebert offered the use of his legal assistant free of charge. Finally, Eddie Carmouche, who first served as the attorney for the Mineral Board, was tapped by Gremillion to be an assistant to the attorney general. Carmouche, a debonair former war hero, would fill this role for the duration of the Gremillion administration.
This illustrious team was charged with preparing Louisiana’s defense. They would assemble the legal arguments to be used by the attorney general and several prestigious law firms. “We had strong leadership and some of the brightest legal minds anywhere working on this case,” said DeJean.
They would be sorely needed. The government had thrown the first punch, but Gremillion hit back, petitioning the Supreme Court to dismiss the suit on several grounds.
First, the attorney general argued, the court’s inquiry into foreign policy regarding the tidelands was unconstitutional. Second, the Supreme Court “is not authorized by the Constitution to entertain an original suit between the United States and a state.” Finally, Gremillion asserted, “Louisiana has sovereign immunity from suit unless it gives its consent, and the state has not consented to be sued by the United States.”
It was a three-pronged declaration of reason and solid constitutional law. There was a sense of optimism that good judgment would prevail.
The petition was denied.
Schemes and Conspiracies
Until the Supreme Court ruled, there was nothing to prevent the federal government from leasing in the disputed areas. In the meantime, Louisiana could lose untold revenue to the federal government without hope of recovery. The state needed to make a move.
Gremillion went on the offensive.
On May 11, 1956, Louisiana District Court Judge Mark Pickrel granted a restraining order brought by Louisiana’s attorney general against the federal government. “The state,” the order read, “claims a conspiracy between the Bureau of Land Management and oil companies to usurp and illegally ‘grab’ lands and revenues belonging to the state” while awaiting a Supreme Court decision.
The restraining order temporarily halted federal leasing within the 10.5 mile boundary that Louisiana claimed.
This action was necessary, Gremillion explained, “to put a stop to schemes and conspiracies to deprive this state of its property rights and revenues.” Further, he said, it would “prevent bureaucrats and title jumpers from trampling on our rights.” The injunction effectively shut down the federal government.
The gloves were off.
If Gremillion’s strategy to protect Louisiana’s interests earned him respect in the state, it was insufferable to the Washington political elite who wondered how a little Cajun upstart and his team could be causing them so much trouble.
Annoyed, the Department of Justice asked United States Attorney General Herbert Brownell to squash this inconvenient uprising by any means necessary. He subsequently motioned the Supreme Court to intervene and remove all barriers to federal leasing.
Brownell also asked the court to deny Louisiana its rightful 20 days to respond to the motion and to allow only seven days. This compromise of civil procedure did not go unnoticed by Gremillion, who responded sharply: “I shall not yield to this undue advantage, short of a fight to prevent it.”
This comment was reported in newspapers across the nation, signifying that Louisiana was prepared for a prolonged fight.
Ultimately, Brownell’s antics were irrelevant. The Department of the Interior and the State of Louisiana reached a temporary agreement regarding leasing in four operational zones. Until the Supreme Court ruled, all monies would be held in escrow.
“This case must be fought and won, if it is to be won, in the Supreme Court,” Gremillion told a sympathetic Louisiana press.
But that sentiment did not stop the attorney general and his team from also trying to win in the court of public opinion. An educational booklet was published to clarify Louisiana’s position: “Louisiana Tidelands: A Comprehensive Study” was circulated throughout the country.
“We were robbed”
In October of 1959, arguments were heard to determine if Louisiana would be awarded the territory it sought. On a crisp, autumn day, the storied and stately halls of the highest court in the land echoed with the voices of Louisiana sons defending home and property.
Again, the court ruled that history and tradition didn’t matter. Precedent didn’t matter. Louisiana (along with Mississippi and Alabama) was granted only three geographical miles, while Texas and Florida were granted three marine leagues.
Most galling, Louisiana was ordered to account for every dollar in revenue it had accrued since 1950. Overall, it was a bitter pill to swallow. “We were just shaking our heads,” said DeJean. “It was a largely political decision.”
DeJean believes Louisiana’s reputation on racial matters hurt the state significantly. “Louisiana had been a bad boy after the Civil War,“ he said. “This was, in effect, punishment. We should have gotten a much larger piece of the pie.”
In a notable dissent, Supreme Court Justice Hugo Black wrote that the court should apply “broad principles of equity” and award all of the Gulf states three marine leagues. He did not accept the majority opinion, but sided with Louisiana.
And there was still the matter of the money held in escrow. “Louisiana needed that money,” recalled DeJean. “The feds weren’t going to build our roads for us.”
Although Louisiana did not win title to the territory it claimed, there was still hope the state would be awarded a fair apportionment of escrow dollars.
It was a hope that would be dashed beyond recognition.
In 1965, a supplemental decree awarded the federal government $308 million in escrow royalty payments. Louisiana was awarded a paltry $34 million. “We were robbed,” Gremillion said succinctly.
The high court’s decision also failed to determine the coastal mark from which to measure the three geographical miles Louisiana controlled. Due to coastal erosion, this marking point would make a critical difference.
Willie Maynor was a young law clerk at the Louisiana Supreme Court when he got the call. He was tapped by Gremillion be a special assistant in the attorney general’s office under the supervision of noted litigator Victor Sachse.
The mission was clear, said Maynor. “We had to show that the coastline is constantly changing. That had to be factored in. We needed to get our due, but we knew it was going to be a dogfight.”
The attorney general made it clear the case was a hill to die on. “Mr. Gremillion told Victor and me, ‘We’re gonna fight this thing ‘til hell freezes over,’ ” said Maynor. “We understood what was at stake.”
But again, Louisiana lost. The Supreme Court ruled that an ambulatory, not a permanent, coastline belonged to Louisiana. And the line would not be considered with regard to coastal erosion. Future revenues were still in doubt, since there was no established measurement procedure.
One significant victory: Louisiana was awarded an additional $136 million the state felt it was owed in past earnings. “The government finally delivered,” said Maynor.
The attorney general’s office was elated, but an important question still lingered: If Louisiana had been owed money held in escrow, wasn’t the state entitled to the interest on that same money?
Time for a quick, last stand. Like everything else, there proved to be nothing quick about it.
A Pivotal Moment
Jack Gremillion’s tenure as Louisiana attorney general ended in 1972. But the resolve to secure Louisiana’s mineral rights continued. And so did the federal government’s determination to resist it.
William J. “Billy” Guste’s election as Louisiana attorney general marked the final oversight of the case. His office argued strenuously that the federal government owed the state substantial interest money.
The Supreme Court didn’t see it that way. In 1980 the court ruled that although Louisiana had been the rightful owner of revenue held in escrow, Louisiana was not the owner of interest accrued on that same revenue. “Another decision that didn’t make any sense to us,” said DeJean.
Gary Keyser was chief of the attorney general’s Tidelands Division during the Guste Administration. For years, his office pored over legal arguments and case law that could bolster the fight for Louisiana’s offshore minerals. “We were still studying the issues and looking for a new approach,” he said. “The question was still, ‘Where is the coastline, and how do you measure it?’ ”
One day, Keyser was perusing the federal codes and noticed something. One section stated that the states should receive “a fair and equitable” division of the proceeds from oil and gas production on public lands. He was stunned. “I showed the statute to Fred Ellis and we just looked at each other and said, ‘What the heck?’ It had never been used in the tidelands case, but we thought it applied to offshore minerals, too,” Keyser said. In 1979, Guste’s office filed a new lawsuit to get Louisiana’s share of federal royalties.
Although Louisiana’s tidelands boundary was still unclear, now there was a whole new angle.
But before that suit could be decided, a congressional amendment was passed that dictated the state’s coastline “shall remain immobilized and shall not be ambulatory.” This meant that royalties from the tidelands under state jurisdiction would remain consistent. “A pivotal moment,” said Keyser.
More good news: The separate 1979 lawsuit to get Louisiana’s share of federal proceeds was eventually settled out of court. In 1986, the state of Louisiana was awarded $540 million “in reparation for past actions by the fed,” said John Broussard, assistant state treasurer and chief investment officer. “The state’s 8(g) fund receives yearly royalty payments between 10 and 36 million dollars. In total, the educational fund has received about 1.5 billion dollars.”
Not a bad haul for a Southern state that began the battle on a wing and a prayer.
However, if Louisiana had been awarded the tidelands territory it originally claimed, its total revenues would be significantly more. In retrospect, there was probably no legal argument that would have made a difference to an ideologically-fixed high court.
And so it was done, and history was written. The long fight for Louisiana’s tidelands yielded a lasting legacy: funding for the state through federal offshore royalties. To this end, the Louisiana Educational Trust Fund was created to help fund secondary and higher education. Through it, education—the great equalizer— remains accessible. Whatever their socioeconomic status, young people can still imagine a future that gives voice to their dreams.
Yes, the fight was long. There can be little doubt it was a fight worth having.
Decades ago, the federal government’s challenge to state authority over the tidelands was seen as an audacious move. Now, federal interference in state matters is routine. Some believe judicial activism is so prevalent that duly-enacted law has little chance of standing. They argue the Supreme Court has enlarged the federal government’s constitutional power far beyond what the founders intended.
Sixty years ago, Louisiana Attorney General Jack Gremillion presciently described the qualities required to resist the assault on state sovereignty: “Courage, fearlessness, and aggressiveness must be the order of the day,” he warned.
Today, the nation is divided with vastly different views of the role of government. Time will tell which view will prevail.
Leslie Alexander is a freelance journalist from Lafayette.