Bailing Out of Deepwater MDL
Miriam Rozen, Texas Lawyer
With the Deepwater Horizon oil spill approaching its four-year anniversary in April, the multidistrict litigation stemming from the disaster appears to have no end in sight. [See timeline chart.] After a series of disappointing rulings, Texas plaintiffs lawyer Brent Coon is organizing a meeting with fellow plaintiffs counsel in an effort to extract some of their cases from what he said is a slow-moving MDL. Coon, founder of Brent Coon & Associates, said he would like to move about three-fourths of his clients’ 10,000 cases “back to their home courts.”
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Louisiana Attorney General James D. “Buddy” Caldwell also has launched efforts to remove his clients’ cases from the MDL, which is pending before U.S. District Judge Carl Barbier in the Eastern District of Louisiana.
The plaintiffs lawyers’ desire to depart persists, although their attempts at leaving have not succeeded so far. On Jan. 13, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit rejected Caldwell’s Dec. 31 petition for a writ of mandamus.
In the petition, the A.G. had asked the Fifth Circuit to compel Barbier to “allow the state’s economic loss claims to move forward before another judge in the Eastern District so that the state … [may] avoid the undue delays imposed by the district court.”
Because of Barbier’s rulings, the A.G. claimed that Louisiana “has consistently been denied the opportunity to prosecute any of its claims or to participate in critical aspects of its case in violation of fundamental principles of state sovereignty and the United States Constitution.”
Further, the A.G. said, “It will be difficult for Judge Barbier and the undersigned to attempt to stretch limited judicial resources to supervise discovery concerning Louisiana’s economic claims.”
BP Exploration & Production Inc., a defendant in the litigation and the only one to have entered a settlement agreement with the Plaintiffs Steering Committee, filed an objection to the A.G.’s writ petition on Jan. 10, arguing that the A.G. was trying to “micromanage” the MDL docketing and have the state’s claims heard before others.
Claims against BP Exploration & Production, which operated the drilling rig that caught on fire, and other defendants have been consolidated in the MDL, In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010.
Laura Colligan, a spokeswoman for Caldwell’s office, wrote in an email: “We are extremely disappointed with the ruling, but can offer no further comment at this time.”
But Coon said he expects the A.G. to appeal the ruling. He said he and other lawyers who represent plaintiffs who have opted out of, and objected to, a proposed class settlement also plan to pursue exit paths from Barbier’s court.
In light of the setbacks, Coon said he has scheduled a meeting of like-minded plaintiffs’ counsel for mid-February in New Orleans so they can chart an alternative course then the one set by the Plaintiffs’ Steering Committee.
His new efforts reflect his disappointment with the committee.
“The Plaintiffs Steering Committee has been nonresponsive to the lawyers representing individual clients,” said Coon, who compared the committee members’ actions to those of “clear cutters” in an East Texas lumber operation: leveling everything in a field, bringing it all in for processing, but knowing some of the haul will simply be shredded into pulp.
Class Certification, Settlement Approval
The call for a new tack follows disappointments. On Jan. 10, a three-judge panel of the Fifth Circuit rejected objections raised about Barbier’s certification of a class and approval of a settlement between that class and BP.
According to the Fifth Circuit opinion, Coon’s clients had argued that the class certification and settlement approval didn’t comply with Federal Rule of Civil Procedure 23. The same opinion said that BP originally supported both the class certification and the settlement but then asked the Fifth Circuit to vacate Barbier’s orders. BP identified its own set of arguments under Rule 23, questioning standing of certain class members, but allowing that the settlement could be salvaged if “properly construed and implemented,” the opinion stated. In its Jan. 10 ruling, the Fifth Circuit also rejected BP’s arguments to revise the settlement.
Coon said he will seek an en banc rehearing of his clients’ objections to the class certification and settlement approval.
He also labeled the A.G.’s writ petition as “the first leak in the dam,” and he expects a flood of requests from plaintiffs for release from the MDL proceedings.
“An MDL is good in that it helps keep everybody in the same holding pen. The problem is when it becomes a big bottleneck,” Coon said.
Coon’s client roster includes Stephen Stone, an oil rig worker injured in the blast. After the disaster, Stone testified before the House Judiciary Committee but has not reached a resolution with BP.
Barbier has not yet set a trial date for Stone and two-thirds of the rest of clients suing BP and other defendants, Coon said.
The delays in the MDL proceedings offer advantages to defendants, Coon said. Specifically, defendants postpone the payout of money and therefore keep the cash while they wait—a meaningful gain with the kind of monies involved in the total potential settlements.
BP’s counsel, Richard Godfrey, a partner in Kirkland & Ellis in Chicago, referred all questions to the company’s outside spokeswoman, Ellen Moskowitz, who did not return a call for comment.
Stephen Herman, a partner in Herman, Herman & Katz in New Orleans and counsel for the Plaintiffs Steering Committee, did not return a call for comment.
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