American Oil and Gas Reporter - June 2022 - 45

IssuesUpdate: California Independent Petroleum Association
CIPA: Anti-SLAPP Law Being Misused
BAKERSFIELD, CA.-Thanks to
Lewis Carroll's famous novel, the phrase
" through the looking glass " carries connotations
of a world that is both familiar
and distorted, a setting in which skewed
things operate backwards from normal.
It was in such a backwards situation
that the California Independent Petroleum
Association late last year found itself filing
bankruptcy and, for a time, facing uncertainty
about whether the group could continue
under its existing name and incorporation.
The group will carry on the same as
ever, assures Chairman Steve Layton.
" We are nearly to the end of the bankruptcy
process and CIPA will emerge as the
CIPA we have all known, " describes Layton,
president of E&B Natural Resources
in Bakersfield. " We continue to operate
as before. "
But the bigger picture for both the industry
and the state may be far more
troubling, warns CIPA Chief Executive
Officer Rock Zierman. The events that
forced CIPA to file bankruptcy involved
turning a California law on its head to
achieve an outcome opposite the intention
behind it, he relates. " It is emblematic
for life in the California oil and gas industry,
where a law meant to protect the
little guy was used against us, but everybody
just yawns, " he reflects. " It raises
some troubling questions. "
Regardless, Layton said in mid-May,
a few weeks before CIPA was to hold its
2022 convention, that was scheduled for
June 9-12 in Carlsbad, Ca., the association
will keep on keeping on. " We will have
our 2022 Annual Meeting, " he stated.
" This will be the first time that everything
is back to normal. It is important for the
membership and our sponsors to be able
to get together in person and have conversations
in a relaxed environment. That
is a psychological lift, especially with
the backdrop of very strong oil prices. "
Curiouser And Curiouser
CIPA's journey through the looking
glass began in November 2015, with a
lawsuit three industry opponents-the
Youth for Environmental Justice, Center
for Biological Diversity and South-Central
Youth Leadership Council-filed against
the city of Los Angeles. According to
court documents, the suit claimed the
city was failing to meet its responsibilities
under the California Environmental Quality
Act (CEQA) and state antidiscrimination
law by " rubber stamping " oil drilling applications
without adequate consideration
of environmental, health and safety impacts
and by imposing less protective drilling
requirements in neighborhoods with
greater proportions of minority residents
than in majority-white neighborhoods.
One of the lawsuit's major goals was
to force Los Angeles to implement a proposed
zoning memorandum, Layton notes.
" CIPA was concerned about that suit and
the zoning memorandum overlaying it,
so we filed a motion with the court to intervene, "
Layton recounts. " We wanted a
seat at the table to prevent any kind of
sue-and-settle quid pro quo that would
give the environmental groups what they
sought without the normal process of accounting
for our input. "
CIPA had plenty of cause to take issue
with the memorandum, Layton recalls. " It
prevented oil producers from utilizing certain
provisions allowed under CEQA, and
treated oil producers differently from any
other industry, " he describes. " That is only
one example of why we intervened.
" One day, the city announced it was
instituting the zoning memorandum with
all these unfair provisions, and the next
day, the lawsuit was dropped, " Layton
continues. " The city denied any quid pro
quo, but CIPA deemed it too coincidental,
so we sued the city and environmental
groups for agreeing to a secret settlement
that violated our court-acknowledged
right to participate in any discussions.
From our perspective, it appeared to be a
scheme concocted to get around our intervenor
status. "
The district court was receptive to
CIPA's position, Layton relates. " The
judge made multiple comments questioning
the defendants' veracity, " he details.
" Things started to look bad for the city,
and ultimately, it came clean and admitted
a quid pro quo with this environmental
group regarding the settlement and new
zoning memorandum, but then it filed a
case against us. "
That case employed California's law
about strategic lawsuits against public
participation (SLAPP), Layton observes.
" The district court ruled in our favor that
the anti-SLAPP law did not apply, but
the appellate court overruled that, which
left CIPA in a position where we were
required to pay legal fees as the loser of
an anti-SLAPP case. We had a judgment
for legal fees of almost $3 million and
could not afford to pay. "
And that, Zierman explains, provides
the backdrop against which individuals
and companies increasingly cannot protect
their rights in court. " That is where this
all started, " he summarizes. " We had a
lawsuit and then the city of Los Angeles
was successful in using a tool to avoid
the consequences for its action, which is
ironic, because that anti-SLAPP tool is
designed to protect the little guy. "
And it is not only the city of Los Angeles
that has much deeper pockets than
CIPA, Layton notes. " The Center for Biological
Diversity is a multimillion-dollar
nonprofit organization, " he says. " Wielded
in California's political environment, this
anti-SLAPP suit did not allow us to have
our day in court. It may have turned out
differently if CIPA did not represent oil
companies. It's bizarre to claim we are
'the bully' and a threat to the city of Los
Angeles and the Center for Biological
Diversity, but it worked. "
But it worked only to a point. Attorneys
pushing the anti-SLAPP case went so far
as to claim that CIPA members should
make up the difference that their association
could not afford to pay, Zierman
says, given CIPA's annual budget is less
than the judgement amount. The court
rejected that.
Larger Implications
Nevertheless, Zierman observes, the
state's anti-SLAPP law continues to serve
as a figurative club that some larger
entities are wielding against smaller ones.
Perhaps the most significant additional
example, he suggests, is the anti-SLAPP
suit the state has filed against Kern County
after the county contested the state's
pattern and practice of not issuing oil
and gas permits in a timely manner, which
greatly harms revenues in a county that
contains more than 70% of the state's
production. An April 5 order by Fresno
Superior Court Judge Gabriel L. Brickley
decided Kern County's suit qualified as a
SLAPP, press accounts note.
" Claims that the county is harassing
the state-which has a $97 billion surplus-
are illogical, " Zierman says. " It is one
thing to lose a case. That is hard enough.
SEE ANTI-SLAPP LAW PAGE 89
JUNE 2022 45
American Oil and Gas Reporter - June 2022

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