Barbier grants lawyers 6 percent charge on future settlements; Sides with Jindal over Caldwell

U.S. District Judge Carl Barbier exiled Louisiana Attorney General Buddy Caldwell from Deepwater Horizon litigation and granted plaintiff lawyers a six percent charge on $14 billion in future settlements at BP's Gulf Coast Claims Facility.

On Dec. 28, Barbier established a reserve fund at the request of a plaintiff steering committee preparing for a fault allocation trial starting next month.

The reserve fund will hold six percent of settlements between private parties, whether in his court or at the claims facility.

That would equal about $850 million on the amount remaining from BP's $20 billion commitment to the claims facility.

As of Dec. 31, the facility had paid $2.3 billion to about 160,000 individuals, and $3.5 billion to about 60,000 businesses.

Although the plaintiff steering committee holds no official role in the facility, Barbier gave its members much of the credit for the facility's accomplishments.

"The PSC has strongly advocated on behalf of persons submitting claims to the GCCF, continuing to apply public and private pressure to improve the GCCF claims handling operations," he wrote.

The reserve fund will draw a reduced rate of four percent on settlements between private parties and states or local governments.

Barbier awarded no fees, writing that his order would "rather simply establish a fund from which common benefit fees, if any, might later be disbursed."

The committee's proposal upset plaintiff lawyers who don't belong to the committee.

They expressed satisfaction with claims facility administrator Kenneth Feinberg, and argued they derived no benefit from the committee's work.

Defendants protested too, complaining that the committee's plan for direct deductions against them would force them to finance their opposition.

Committee lawyers retreated, writing that they wouldn't compel defendants to hold back a reserve fund over and above a plaintiff's recovery.

They wrote that the order would afford parties the flexibility to negotiate a resolution.

They wrote that defendants could fund the reserve over and above a settlement amount or hold the reserve out of the settlement amount.

"Nothing in the order, as proposed, would require a defendant to pay attorneys' fees," they wrote.

Caldwell, who had favored a reserve fund, turned against it.

He wrote that the order did not contemplate a deduction from state recoveries.

He wrote that the committee set forth "a rather novel interpretation" of the order.

"The state should not be required to respond to an interpretation of a submitted order, especially where the interpretation proposes alternative deposits: first by the defendants and, failing that, deposits out of state recoveries," Caldwell wrote.

Alabama Attorney General Luther Strange, the only steering committee member representing state and local governments, continued to support the proposal.

Suddenly, Louisiana Governor Bobby Jindal seized the situation to isolate Caldwell.

Jindal endorsed the proposal, after persuading the steering committee to exempt certain categories of recovery from the four percent charge.

In the collision between Caldwell and Jindal, Barbier found fault with Caldwell.

"The court has on multiple occasions encouraged the state of Louisiana to cooperate with the PSC and the state of Alabama insofar as their interests are aligned versus the defendants in this complex MDL," he wrote.

"Rather than cooperate or attempt to work collaboratively, the state of Louisiana, through its retained private counsel, has instead often obstructed and frustrated the progress of the litigation," he wrote.

Caldwell's briefs identify Allan Kanner, Elizabeth Petersen, David Pote, Douglas Kraus, and Allen Usry, all of New Orleans, as special counsel, along with Henry Dart and Grady Flattmann of Covington.

Barbier wrote that when it became clear that the state couldn't meet production obligations, the committee offered to help.

"Notably, it apparently required the intervention of the governor of Louisiana for this to occur," he wrote.

"In fact, the governor's office and the PSC have reached an agreement to work collaboratively to pursue their common interests."

His approval of charges on BP's claims facility marked the second time he exercised jurisdiction over administrator Kenneth Feinberg.

Last February, Barbier adopted rules for Feinberg's communications with claimants.

This time, he found unique circumstances in favor of the plaintiff committee.

He wrote that they arranged to make translators available to Vietnamese claimants.

He wrote that they advocated a full audit of the facility now in progress.

He wrote that they advocated for the facility to employ a more liberal causation standard.

"Considering the unique circumstances of this case, it would be unfair to allow parties to benefit from these activities of the PSC, but avoid contributing to the common benefit fund simply because they are able to settle directly with the GCCF and avoid filing a claim in the MDL," he wrote.

He made the charges retroactive to Nov. 7, the date of the committee's proposal.

By Steve Korris

Source: The Louisiana Record