Much to BP’s chagrin, oil-spill-related lawsuits will be tried in Louisiana

Brett Michael Dykes

Last night a judicial panel ruled that litigation stemming from the BP oil disaster will be tried in a New Orleans federal court, a move the oil giant lobbied heavily against for weeks. Plaintiffs' attorneys and possible litigants, meanwhile, are applauding the decision — even though the federal judge scheduled to preside over the case has had financial ties to the oil and gas industry. The suits in question will likely total more than 300.

"Upon careful consideration, we have settled upon the Eastern District of Louisiana as the most appropriate district for this litigation," the seven-judge Judicial Panel on Multidistrict Litigation wrote Tuesday. "Without discounting the spill's effects on other states, if there is a geographic and psychological 'center of gravity' in this docket, then the Eastern District of Louisiana is closest to it."

As Rebecca Mowbray of the Times-Picayune notes, the ruling means that "all economic damage and natural resource damage claims under the Oil Pollution Act of 1990, all personal injury and wrongful death actions, and questions of racketeering charges will take place in New Orleans."

BP attorneys had been trying to get the cases heard in Houston, where the company is headquartered, together with many other oil and gas concerns.

The presiding jurist will be Judge Carl J. Barbier, a Clinton appointee who has already overseen several lawsuits involving oil and gas companies. According to his most recent financial disclosure forms, Barbier has financial ties to Transocean — the company that owned the doomed Deepwater Horizon rig — and Halliburton, the oilfield contractor BP hired to do the cementing of the well that started leaking into the Gulf this spring.

A number of judges working out of the federal judicial district based in New Orleans have recused themselves because their financial portfolios included oil and gas investments that fuel perceived conflicts of interest. And some plaintiffs' attorneys working in Louisiana were hoping that a judge from another region of the country — with fewer ties to the oil and gas industry — would be selected to take the cases.

However, most plaintiffs' attorneys seem pleased that Barbier has caught the New Orleans cases.

"Nobody wanted to go argue their cases in the oil industry's backyard, which is Houston," attorney Jeffrey Breit, who currently represents 622 out-of-work fishermen, told The Upshot. "It's considered to be an oil town."

Breit — who is based out of Virginia — says he's looking forward to bringing his suits before Barbier.

"The damage center for the Gulf is really Louisiana," Breit said. "New Orleans is the best [federal] court to handle it. They've got the most experience in disasters and complex litigation, and Judge Barbier is an excellent judge. He's very fair, he's very even. It's a good place to be because it will move the cases along with some efficiency, without anybody worrying that they're being 'home-courted'. It's a courthouse that's familiar with complex cases. They just know how to do this."

Breit says that one key concern going forward is to prevent the cases stemming from the BP disaster from taking the same course that the cases originating from the 1989 Exxon Valdez spill did. Many of those actions took two decades to settle. Breit said that shouldn't be the case in Barbier's New Orleans court.

"The biggest fear we've all had is that the Exxon Valdez cases took forever," Breit told us. "Now that was a long time ago, when they didn't have the proper procedures set up to handle complex litigation, but it also was evidence of a judge who didn't take charge, who didn't move the case along. And that's what you can't have happen."

The decision to conduct the BP-disaster-related litigation should also have a positive impact on the Louisiana economy, which is reeling pretty hard from the fallout of the oil spill and the recent decision by a New Orleans-area shipbuilder to relocate. The cases will likely give rise to something of a legal cottage industry, filling unoccupied office spaces and hotel rooms and pouring money into much of the regional economy.

Meanwhile, Breit is feeling confident. He told us that regardless of the trial's venue, he believes that BP is the sole responsible party for the wrongs done to his clients.

"There's basically a strict rule of liability under the Oil Pollution Act," Breit said. "BP had oil escape from their rig on their watch. They are responsible under the law. So there's not going to be this big fight over who's responsible under the law. The question will be, 'How bad was their behavior?' Did it rise to the level of punitive damages. Quite frankly, everything I've seen so far would suggest that punitive damages are likely against BP. I characterize it as you driving down the road, with smoke coming from underneath your hood. And then you start to get pieces of the engine coming through the air-conditioning vent, and you decide to keep on driving. That's what happened."

(Photo: AP/Patrick Semansky)