Florida Appeals Court Rejects Takings Claim
TALLAHASSEE, Florida, December 3, 2003 (ENS) - Environmentalists hailed today's ruling by a Florida District Court of Appeals to reject a
corporate claim that denial of an offshore drilling permit entitled the
company to a takings claim.
The ruling is the culmination of more than seven years
of litigation by
environmental groups aimed at preventing the Coastal Petroleum Company
from drilling off the coast of Florida.
The case began when the Florida Department of Environmental
granted Coastal Petroleum an oil drilling permit in 1996.
Earthjustice initiated a lawsuit on behalf of the Florida
Federation, the Sierra Club and the Florida Audubon Society to have the
permit invalidated on the ground that it violated oil and gas permitting
The plaintiffs repeatedly argued that Coastal Petroleum
was seeking a
permit solely for the purpose setting up a "takings claim." Such a claim
would allow the company to claim billions of dollars in just
compensation from the state if the permit were denied.
The environmental lawyers said that although it claims
to be an oil
company, Coastal Petroleum has never produced a drop of oil from its
offshore oil leases and has never made a profit in its 50 year existence.
The oil drilling permit was denied on environmental grounds, as the
court agreed with plaintiffs that on balance the slim prospects of
finding any recoverable oil were outweighed by the environmental risks
Coastal then filed a lawsuit claiming that the lawful
denial of the
permit entitled it to hundreds of millions of dollars for the "taking"
of its offshore lease.
Under the takings law, companies or individuals may
claim that they
deserve financial compensation if the government takes or renders
useless private property.
Today's decision upheld the ruling from the bench that
threw out this
claim on the grounds that Coastal Petroleum was not guaranteed a permit
for drilling under their oil and gas lease.
"The trial court got it absolutely right,"
said Earthjustice attorney David Guest. "Coastal
Petroleum is not really an oil company and there
never really was an oil and gas prospect. All they wanted was to get
their permit was denied so they could get hundreds of millions of
dollars from the state. It did not work."