US Panel Asked to Consolidate Oil Spill Lawsuits

July 29, 2010 - 4:58 PM
A federal judicial panel wrestled Thursday with perceptions of bias and conflict among both judges and geography in figuring out where to consolidate more than 300 lawsuits filed against BP PLC and other companies in the wake of the Gulf of Mexico oil spill.

A group of attorneys walks to the James A. McClure Federal Building on Thursday, July 29, 2010 in Boise, Idaho. A federal judicial panel in Idaho is being asked to consolidate more than 300 spill-related lawsuits against BP and other companies before a single court. (AP Photo/Charlie Litchfield)

Boise, Idaho (AP) - A federal judicial panel wrestled Thursday with perceptions of bias and conflict among both judges and geography in figuring out where to consolidate more than 300 lawsuits filed against BP PLC and other companies in the wake of the Gulf of Mexico oil spill.
 
Some of the 23 attorneys who appeared before the seven-member U.S. Judicial Panel on Multidistrict Litigation suggested that sending the cases to the oil-and-gas hub of Houston, favored by BP, might appear unfair to the Gulf fishermen, property owners, restaurateurs and others suing for spill-related economic losses.
 
The clear favorite among plaintiffs and the U.S. Justice Department is New Orleans federal court, which is closest to the disaster and has the most pending cases. The judicial panel is expected to announce its decision in August.
 
Some attorneys questioned whether New Orleans was a good choice, considering only four of New Orleans-based judges would be available to hear the case, in part because of recusals due to their oil and gas industry investments. In addition, many people in Louisiana could ultimately benefit from a major oil spill settlement.
 
"The highest-profile litigation that has ever been in this country will require a jurist above reproach," said Elizabeth Cabraser, a California plaintiffs' attorney who favors Gulfport, Miss. as the locale.
 
The chief of the multidistrict panel, U.S. District Judge John G. Heyburn II of Kentucky, asked several questions about the impact of oil-related investments held by his colleague, Judge Carl Barbier in New Orleans. Barbier has sold those investments and declined to recuse himself from the oil cases - and clearly wants the larger group of cases sent to his court.
 
Ultimately, though, Heyburn expressed faith that a judge's location would not exert undue influence on rulings.
 
"Time after time they have proven they can do that in a fair way. Whatever judge we choose is going to face those pressures. Fortunately we have a lot of good judges," Heyburn said.
 
Outside the federal courthouse, a small group staged a protest to urge the panel choose a judge without ties to the energy industry.
 
"This disaster is on a large enough scale that the whole of America is going to feel the effects. We want the judges to know that we support the victims and the families and we want them to get a fair day in court," said Daniel Casper, 26.
 
The lawsuits claiming economic damages from shrimpers, commercial fishermen, charter captains, property owners, environmental groups, restaurants, hotels and others began appearing only days after the Deepwater Horizon exploded and sank in April, killing 11 workers. Filed in at least 12 states, they mostly name as defendants BP, rig owner Transocean Ltd., well contractor Halliburton Co. and Cameron International, maker of the well's failed blowout preventer.
 
Some family members of the 11 men who died, as well as rig workers who survived, have also filed lawsuits, mainly in state court. One key question for the judicial panel is whether to keep those separate or consolidate them with the economic cases. There are also separate lawsuits filed by BP shareholders over stock losses.
 
It's difficult to predict how much the lawsuits will ultimately cost BP and the others, but most attorneys say it's likely to reach many billions of dollars. One wild card is how many people will decide not to sue in favor of filing a claim directly with BP, which has set aside at least $20 billion for oil spill cost. The company reported Wednesday it has paid more than $256 million so far.
 
More than 100 lawyers crowded into a sixth-floor courtroom in Boise's downtown courtroom, jockeying amongst themselves for the limited speaking slots in a hearing that lasted about 1 1/2 hours. Although some 2,000 miles from the Gulf, Boise was the scheduled stop for the roving seven-judge panel.
 
Most lawyers only got to talk for a few minutes, and there were a few moments of levity.
 
After Miami attorney Ervin Gonzalez extolled the virtues of South Florida and its chief federal judge, Federico Moreno, Heyburn cracked that Miami also has "a great NBA basketball team, right?" - a reference to the Miami Heat's recent signings of stars LeBron James, Dwyane Wade and Chris Bosh.
 
Assuming the cases are centralized as expected, the judge or judges chosen to hear them will have to decide key issues such as whether they are dismissed or allowed to continue, and whether to certify one or more class actions for people and businesses in similar situations. If the cases are not dismissed and unless there is an early settlement, a handful are usually chosen to go to trial first as "bellwhethers" that can determine the ultimate outcome of all lawsuits.
 
Such trials are usually held in the states where the lawsuit was originally filed.
 
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Associated Press writer Rebecca Boone contributed to this story.