NEW YORK, Jan 13 (Reuters) - In a flurry of court
filings this week, lawyers for claimants before the $20 billion
BP oil spill fund asked a federal judge to reconsider his
December order requiring that six percent of future settlements
be placed in a reserve account.
U.S. District Court judge Carl Barbier in New Orleans
established the account on Dec. 28 to potentially reward lawyers
leading the BP multi-district litigation spawned by the
Deepwater Horizon rig explosion in 2010. Barbier said he had not
decided to award the fees, but he wanted to have the option if
he decided they were deserved. On Jan. 4, Barbier amended his
order to clarify the order would only affect claimants who
hadn't received a determination letter from the BP fund as of
Dec. 31.
That clarification has not appeased lawyers for clients
seeking compensation from the fund, known as the Gulf Coast
Claims Facility, which is being administered by Kenneth
Feinberg. At least seven motions were filed Wednesday and
Thursday asking Barbier to reconsider his order.
Lawyers who are appointed to lead complex litigation often
ask courts to impose a common-benefit fee on resulting
settlements and judgments to compensate them for their work
developing witnesses and evidence.
But Gulf Coast Claims Facility claimants argued that Barbier
cannot force them to contribute to the reserve account because
he does not have the jurisdiction. They also said that the
Plaintiffs Steering Committee, a group of more than a dozen
lawyers Barbier chose two years ago to lead the multi-district
litigation, had not made a sufficient showing that their work
had benefited Gulf Coast Claims Facility claimants.
Daniel Becnel, Jr., an attorney for Gulf Coast Claims
Facility claimants, said that the vast majority of the Steering
Committee's work to date had been to prepare for a three-part
trial to begin on Feb. 27. That trial will be based on maritime
law and will allocate fault among the parties responsible for
the explosion of April 20, 2010. But Barbier has ruled that most
Gulf Coast Claims Facility claimants do not have standing under
maritime law, said Becnel. Instead, they can only make claims
under the Oil Pollution Act against BP through its fund.
"It would be ironic, as well as grossly unfair and contrary
to prior pronouncements of this Court, for claimants whose only
possible recovery for their economic damages is through OPA and
the GCCF to have those recoveries reduced for work that even
this Court has ruled cannot benefit them," he wrote in a filing
made Thursday.
Lawyers for the U.S. Department of Justice, which is a party
to the oil spill litigation, objected to Barbier's order as
well. In a filing made Thursday, the lawyers argued that
holdbacks from Gulf Coast Claims Facility payments would
conflict with the purpose of the Oil Pollution Act, which was
supposed to give parties harmed by an oil spill an alternative
to costly and lengthy litigation.
"By reaching into the claims process and explicitly
diminishing the amount possible to be realized by claimants, the
withholding vitiates a significant benefit of avoiding
litigation," they wrote.
The Plaintiffs Steering Committee responded to some of the
objections to Barbier's holdback order in filings made Wednesday
and Thursday. It said Barbier's jurisdiction over Gulf Coast
Claims Facility claims had already been settled by his previous
order. And it disputed the argument that its preparation for the
February trial had no impact on Gulf Coast Claims Facility
claims, saying that it ignored "the real-world over-arching
dynamics under which a litigant like BP decides whether and how
much it will pay to claimants."
The case is In re: Oil Spill by the Oil Rig "Deepwater
Horizon" in the Gulf of Mexico, on April 20, 2010, U.S.
District Court, Eastern District of Louisiana, No.
10-md-02179.
For Gulf Coast Claims Facility: David Pitofsky of Goodwin
Procter.
(Reporting by Andrew Longstreth)
Follow us on Twitter: @ReutersLegal