Earlier this year, a national drama played out over offshore wind developments. The federal government pulled out all the stops to try to halt wind projects. Developers sued and won injunctions only to have the government turn around and try new procedural tricks. Fed up with the ongoing game of “whack-a-mole,” the government made some wind developers an offer they couldn’t refuse: stop pursuing wind energy and get their investments back. All on the condition that they would reinvest that money into fossil fuel projects instead. Ultimately, TotalEnergies and Bluepoint capitulated and took the deal. Now eight states are looking to add a third act to this drama, one that could block offshore wind settlements. A recent case filed in the Eastern District of New York challenges the validity of the Bluepoint settlement, stating in the Complaint:
“The States seek an order: (1) declaring that the Lease cancellation and Settlement Agreement violate the APA, NEPA, OCSLA, the Judgment Fund Act, the Antideficiency Act, the Purpose Statute, and the Miscellaneous Receipts Act; (2) compelling compliance with OCSLA; (3) vacating and setting aside the Lease cancellation and Settlement Agreement; (4) enjoining Federal Defendants from taking further action with respect to the Lease cancellation and Settlement Agreement; and (5) granting such further relief as the Court deems just and proper, including, but not limited to, attorneys’ fees and costs.”
It seems that the fight over wind development isn’t over yet. Bluepoint’s deal may not be honored after all. Ultimately, the company may spend more time in court fighting for the settlement than they spent fighting against the lease cancellation. There’s a lesson here for other companies in highly regulated industries. At a time when the federal government is taking unprecedented retaliatory action against companies, there is great pressure to concede and seek appeasement. However, presidential administrations only last four years. Whereas multimillion (or sometimes billion) dollar investments and developments often require a longer-term timeline. If the New York court finds against the federal government, then other energy companies that took the deal may face similar lawsuits. Ultimately, it serves companies better in the long run to stand by solid legal footing, rather than those currently holding executive power.
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