With administrator Ken Feinberg striving to settle as many as 90 percent of all claims stemming from the BP oil spill in the Gulf of Mexico, an effort that essentially cuts out the court system as well as the lucrative fees plaintiff attorneys can collect, the State of Louisiana is taking steps to prevent those attorneys from encroaching on any money the courts might award to governments.
The U.S. Department of Justice and the State of Louisiana have asked U.S. District Court Judge Carl Barbier to quash an attempt by plaintiff attorneys to force everyone who proceeds with litigation against BP — including federal and state governments — to litigate jointly so that coordinated depositions and discovery can move the case as efficiently as possible to trial. Such a move could force the government to share any winnings it secures on behalf of taxpayers with private plaintiff attorneys.
Federal and state attorneys argue that government claims should proceed separately from the private claims plaintiff attorneys are spearheading. They also argue that their litigation timetable and need for experts will be different, and that by participating in the litigation under the direction of private plaintiff attorneys, they would be abdicating their responsibility to represent the taxpaying public.
“For reasons of sovereignty, as well as the unique nature of certain claims that may be pursued solely by the United States, it is not appropriate for the United States to be represented by a private party’s counsel as liaison or lead counsel,” the U.S. government said in a court filing. “A government’s interest, especially where claims are part of law enforcement, could depart markedly from the interests of private party, tort plaintiffs.”
Louisiana expressed similar concerns. “State sovereignty may be severely compromised if there are not separate tracks, because the states would inevitably be required to defer to private parties’ attorneys as liaison or lead counsel,” Attorney General Buddy Caldwell’s office wrote in a brief. They went on to express concern that if plaintiff attorneys garnered some public winnings as fees, it could put the state in the position of running afoul of a Louisiana law that prohibits the attorney general from hiring outside attorneys on contingency contracts.
Mississippi Attorney General Jim Hood has also joined in the request for a separate government track.
Stephen Herman, plaintiffs co-liaison counsel, said he doesn’t really see the state’s interests as being all that different from those of a shrimper or someone who was injured or killed, in that they all want to find out what went wrong, who is responsible and what the long-term environmental damage will be, and the whole advantage of doing a mass litigation is to coordinate and simplify discovery.
“I personally question whether it makes sense to have separate tracks,” but, he said, “That’s ultimately up to Judge Barbier.”
As for the question of fees, it is normal for anyone who worked for common benefit to share in attorneys fees, Herman said, but the whole idea of worrying about dividing up winnings before the case has even begun is backward.
“It seems to me it’s pretty premature. We don’t have settlement, we don’t have a judgment,” he said.
The Justice Department and State of Louisiana declined to comment, saying their briefs filed in court express their desire for a separate track that any other states that ultimately file suit could join.
“It’s just really not appropriate for us to comment while it’s before a judge,” Trey Phillips, first assistant attorney general for Louisiana said.
Richard Nagareda, an expert in mass litigation at Vanderbilt University Law School in Nashville, said that violating the state ban on attorney contingency fees shouldn’t be a concern as long as private plaintiff attorneys don’t have a contract for service with the state, but the basic concern that plaintiff attorneys could stake a claim to state or federal government winnings in court is real.
Civil fines collected by the state and federal government are generally not shared with anyone else, because they’re on levied on behalf of citizens. In addition, part of any winnings the government could garner would presumably be intended to reimburse the government for its clean-up expenses. But, Nagareda said, if state and federal government interests were placed under the auspices of the plaintiffs’ steering committee, it might be easier for private attorneys to argue that they took steps that ultimately helped the state or the Justice Department win their cases, and should be compensated.
“I think the state and federal government concern of not wanting to be part of that committee are pretty well founded,” Nagareda said. “Even if you have just a plaintiffs committee composed of plaintiffs lawyers, after the litigation is resolved, there is often extremely acrimonious debate about who did the work and how much they should be paid.”
Nagareda thinks it would be a good idea for Barbier to create a separate track for governmental bodies, but lean on the state and federal governments to do as much coordinated discovery as possible with private plaintiff attorneys. He also said it would be a good idea for Barbier to nail down in advance who, if anyone, is eligible to get a cut of government winnings.
“He doesn’t want to be in the position at the end of the line of making these highly discretionary decisions,” Nagareda said.
As the issue over whether to have a government track plays out, dozens of plaintiffs attorneys filed applications with Barbier to serve on the plaintiffs steering committee, a group that will probably be made up of 10 to 15 attorneys who will work closely with Herman and his counterpart, Jim Roy, on devising the strategy for how and when depositions are taken, reviewing evidence and nominating cases for test trial. The list of candidates is essentially a who’s who of the local plaintiffs bar, plus a handful of nationally famous names, such as David Boies, the New York attorney who represented Al Gore in the disputed 2000 presidential election, and Mike Espy, agriculture secretary in the Clinton administration.
Among the applicants for the plaintiffs steering committee, which might be eligible for fees from government winnings if the government track is denied, is Scott Summy, an attorney for Baron & Budd P.C., the Dallas firm hired by Gov. Bobby Jindal to represent the Louisiana Coastal Protection and Restoration Authority for natural resource damage assessments.
The Jindal administration dodged questions over whether they supported Summy’s application, and whether they shared Caldwell’s concerns about fees later in the litigation. “We are exploring all legal options at this time to ensure that all responsible parties pay for 100 percent of the damage sustained in Louisiana. Our focus remains on ensuring that the adverse impacts from the oil spill are fully addressed in an expedited manner,” Garret Graves, chair of the Coastal Protection and Restoration Authority and lead trustee of the damage assessment, said in an e-mail.
If Barbier creates a government track, Caldwell’s office suggests that the United States and each of the five states would each have their own representative on their own steering committee. Louisiana would nominate Allan Kanner, special counsel to Attorney General Caldwell, who is not paid on a contingency basis..
Proposals for how to manage the case are due Wednesday, and the next status conference in the case is Oct. 15.