Michigan to sue industry that’s provided $1.3B to parks since 1976

The state of Michigan has chosen three law firms to sue an industry that has sent more than $1 billion to parks in all 83 counties since 1976.

The Department of Attorney General selected three outside legal teams to serve as special assistant attorneys general to sue the fossil fuel industry, press secretary Danny Wimmer told Michigan Capitol Confidential in an email. The department alleges that the industry contributes to climate change.

“The team made up of Sher Edling LLP, DiCello Levitt LLP, and Hausfeld LLP brings an exceptional mix of skilled attorneys who have experience successfully representing public entities in specialized litigation involving environmental issues and industry deception.”

Seventeen attorneys from the private law firms signed the contract. None of the lawyers are based in Michigan. Instead, they hail from San Francisco, Chicago and Philadelphia, respectively.

Michigan’s contract with the firms runs from Sept. 26, 2024, through Sept. 30, 2027, and it may be extended with 30 days’ notice, according to the 14-page contract obtained through a Freedom of Information Act request.

For any payout the state receives, up to $150 million, the outside lawyers will receive 10% of that amount before discovery and 16.67% after discovery. They will receive 2.5% of amounts exceeding $150 million before discovery and 7.5% after, according to the contract.

Every year, Michigan reaps millions of dollars in royalties on the sale and lease of state-owned gas and mineral rights. In 2023, that number topped $42 million, according to the House Fiscal Agency.

The Department of Natural Resources lists more than 2,500 projects funded by oil and gas royalties and revenue since the start of the Natural Resource Trust Fund in 1976.

The trust fund provides grants to local governments and the DNR so they may acquire land and develop it. The projects aim to increase recreational opportunities and to protect land based on its environmental importance or scenic beauty. The Michigan Constitution requires that not less than 25% of grants from the fund are used for acquisition, and not more than 25% are used for development.

Revenues the oil and gas industry are now deposited to the Michigan State Parks Endowment Fund until the fund balance reaches $800 million, after which revenues will again be credited to the trust fund. The endowment fund has a balance of $323.5 million, according to the latest available information.

The oil and gas industry provides 229,000 jobs in Michigan, according to a 2023 report from the American Petroleum Institute.

Michigan ranks 18th among the states in crude oil production, 19th in natural gas production, and 27th in total energy production, according to the U.S. Energy Information Administration.

Similar lawsuits have been filed by governments in California, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont and Washington, D.C., according to the Center For Climate Integrity.