Paul Barrett at Bloomberg BusinessWeek:
Judge Edith Brown Clement is waving her arms, jumping up and down —- heck, doing everything but setting her office furniture on fire —- to draw the attention of the U.S. Supreme Court to the zany goings on in New Orleans concerning BP (BP) and its oil spill liability. … She probably won’t succeed, but her exertions are both colorful and edifying. …
“The class of people who will recover from this settlement continues to include significant numbers of people whose losses, if any, were not caused by BP,” Clement wrote [in her dissent from an en banc Fifth Circuit rebuff of the oil company]. “Our courts’ decisions would allow payments to ‘victims’ such as a wireless phone company store that burned down and a RV park owner that was foreclosed on before the spill.” Those are real examples she’s pointing to, not law school exam hypotheticals.
“These are certainly absurd results,” Clement continued. “And despite our colleagues’ continued efforts to shift the blame for these absurdities to BP’s lawyers, it remains the fact that we are party to this fraud.” Clement is willing to acknowledge that in its desperation to avoid a trial, the company’s attorneys agreed to a loosey-goosey, uncapped settlement. Maybe those lawyers deserve to be fired. But having created an opportunity for a plaintiffs’ bar feeding frenzy, BP should not be punished by having its corporate treasury ransacked with the approval of the federal judiciary, she added.
Whole thing here.
Nick Gillespie reviews the new book by the author of The Death of Common Sense:
The Rule of Nobody updates and expands Howard’s original brief, and it helps to explain why government at all levels not only is on autopilot but on a flight path that can only end in disaster.
Every Philip Howard book is notable for its horror stories of regulation and systemic dysfunction, and reviewer Kyle Smith in the New York Post relates one I hadn’t heard, about the mammoth Deepwater Horizon spill:
When the oil rig started leaking mud and gas, the crew should have simply directed the flow over the side. Dumped it in the gulf. That would have been a small oil spill, of course, and no oil spill is a good thing. But in trying to avoid that, the crew caused a gigantic oil spill. Eleven lives were lost.
Safety protocol called for the men to aim the flow into a safety gizmo called an oil and gas separator, but that became backed up and made matters worse. Explosive gas filled the air around the rig, which finally exploded.
Then some workers who escaped in a raft almost died. Why? They were tied to the burning rig, and regulations forbade them to carry knives so they couldn’t cut themselves free.
More on the book here. Another review: Jesse Singal, Boston Globe.
A big win for the oil company before a Fifth Circuit panel, fighting what it says is systematic large-scale fraud in the Gulf Coast spill economic-damage settlement. [Bloomberg News, earlier here, here, etc.]
The New York Times columnist responds to critics of his coverage (earlier here, here, etc.) of the BP Gulf spill claims bonanza:
Until that story [on the silicone breast implant episode], I’d always taken the liberal view of plaintiffs’ lawyers as avenging angels, righting wrongs and helping wrest compensation for people who had been harmed by greedy corporations. …
[Since then] I’ve seen mass torts where the actual plaintiffs get coupons while the lawyers reap millions. Mass torts where the connection between the product and the harm is illusory. Mass torts built on fraud (silicosis). Complex litigation settled for billions even when the government implies that consumers are responsible (Toyota sudden acceleration). I’ve also seen cases where some victims hit the jackpot with a giant jury verdict and other victims come up empty. Or where a corporation really has done harm but pays off the lawyers instead of the victims. Over the years, I’ve thought: There’s got to be a better way.
Read the whole thing [via Ted at Point of Law]
A hearing in a New Orleans courtroom gives off a tantalizing aroma of Louisiana home cooking. “But what do I know? I’m from New York.” [New York Times, earlier here and here]
“Then the lawyers pounced.” [Joe Nocera, "Justice, Louisiana Style," New York Times, earlier]
A “staff attorney at the Deepwater Horizon Court Supervised Settlement Program… was suspended after being accused of accepting fees from law firms while processing their clients’ claims from the 2010 Gulf of Mexico oil spill.” [Bloomberg] And that’s just the start of what may be much wider problems, according to a cover story by Paul Barrett at Bloomberg Business Week. “The craziest thing about the settlement,” one lawyer wrote in a client-solicitation letter, “is that you can be compensated for losses that are UNRELATED to the spill.” [Bloomberg Business Week] Barrett’s account tells, in his own words, “how the private-claims process following BP’s (BP) 2010 Gulf of Mexico oil spill devolved into a plaintiffs’-lawyer feeding frenzy.” [BBW]
The cozy dealings between the state of Mississippi and well-connected private lawyers — especially the way the state comes to hire those lawyers on contingency fee to pursue high-ticket suits against outside defendants — have long furnished grist for this site. Now, opening a new chapter, Mississippi AG Jim Hood has hired former AG Michael Moore, like Hood a longtime Overlawyered favorite, to sue BP over the effects of the Transocean oil spill on the state. [AP, YallPolitics] Per YallPolitics, “Interestingly, there is no specific financial arrangement. Moore and Hood contractually agree to work it out later and have fees paid directly by BP to the as yet to be named legal team led by Moore.” When Moore hired later-disgraced Dickie Scruggs to represent Mississippi what was to develop into the most profitable litigation in history — the multistate tobacco caper — the financial details were likewise shrouded in secrecy, and it was later claimed that there was no written agreement.
“Oil giant BP’s $20bn (£13bn) fund to compensate those hit by the Gulf of Mexico spill has been frozen, following a court order that all claimants must share the cost of the legal team leading the action over the disaster – whether or not they pursued their claim through the courts.” [Telegraph]
Campbell Robertson and John Schwartz of the New York Times find that many Vietnamese-Americans who are listed as law firm clients in the BP Transocean spill proceedings would rather not be law firm clients. “Like [Tim] Nguyen, some maintain that they never signed up with lawyers, but found that claims had been filed on their behalf (about 50 people have made formal complaints to the claims facility along these lines).” Nguyen found himself a client of lawyer Mikal Watts, “and to his further surprise, as a Louisiana shrimper rather than a Mississippi shipyard worker.” Watts, a big-league Texas tort lawyer, has reported having 43,000 spill clients, many mass-recruited from minority and poorer communities; he says he has a “signed contingency-fee contract with every client,” and that he has released clients who changed their mind about representation. “People familiar with the claims process [of one 26,000-claimant subgroup] said nearly every submission was listed as a deckhand with identical earnings.” Watts says the claims fund, administered by Kenneth Feinberg, has kept changing the documentation it asks for.
Lawyers advertise for recreational, not just commercial, fisherfolk to file claims against the Gulf spill fund. [WSJ Law Blog]
“The amount of oil spilled into the Gulf of Mexico from the Deepwater Horizon rig blowout will be determined by protracted court proceedings rather than purely scientific calculations, the nation’s top environmental enforcement officer said Thursday.” [Houston Chronicle]