BP and Plaintiffs Jockey for Edge Ahead of Key Ruling

(July 28) -- The seven federal judges who will meet Thursday in Boise to select a judge to oversee the scores of lawsuits filed in the wake of the Gulf Coast oil disaster will be making a choice fraught with unprecedented political and legal ramifications.

"This is one of the more complex selection processes that will ever have taken place," said Benjamin Cardozo School of Law professor Lester Brickman, an expert in mass torts. "Given the magnitude of the losses, this has the potential of becoming a three-ring circus. The judge who is selected will have his or her hands full in trying to avoid that kind of a spectacle."

But first, it's the Boise seven -- officially known as the U.S. Judicial Panel on Multidistrict Litigation, the body that routinely consolidates complex lawsuits filed in multiple states -- who face the balancing act. Its choice of judge is key, as it's worth potentially millions of dollars in how much BP will ultimately have to pay to the fishermen, shrimpers and property owners who have collectively brought more than 250 suits in 8 states. And in the case of the Deepwater Horizon disaster, the selection has been further complicated by the fact that many federal judges in the Gulf Coast region have financial or personal ties to the oil and gas industry.

The panel will announce its choice within days of Thursday's hearing. Richard Nagareda, a law professor at Vanderbilt University, said its members know full well the stakes. "They are very aware of these issues, and have no interest in sending these cases to a judge about whom there would be any question at all."

The parties set to square off in the coming legal battles aren't waiting idly for the panel's decision. For weeks, attorneys for both BP and the plaintiffs have been engaged in highly unusual jockeying, arguing in court filings for appointment of a judge they think will be sympathetic to their side. In court filings, the plaintiffs' attorneys have listed a handful of judges in Florida, Alabama and Mississippi. But the majority want the case assigned to a judge in New Orleans, where most of the suits have been filed.

BP, meanwhile, prefers Houston. The company has not only argued for its favorite candidate -- U.S. District Court Judge Lynn Hughes -- but asked a federal appeals court to disqualify the New Orleans federal judge who is handling most of the suits so far. Last week, a three-judge panel of the U.S. court of Appeals for the Fifth Circuit refused to order U.S. District Court Judge Carl Barbier to recuse himself from the case even though he owned debt instruments issued by Halliburton and Transocean. Barbier announced June 2 that he had instructed his broker to sell the bonds and argued that his ownership of the debt instruments had not given him a direct financial interest in the companies.

"Why did BP challenge him?" asked Mike Papantonio, who has brought several suits against BP on behalf of property owners. "They're trying to narrow the field and push everything toward Hughes."

Barbier is handing so many cases because six of the 12 federal judges in New Orleans have had to take a pass on the case. Among those who have stepped down, according to court records, are Judges Mary Ann Lemmon (who reported that she owns BP stock) and Eldon Fallon (who withdrew because his son-in-law, an attorney, has clients who are suing BP).

Beyond New Orleans, the Associated Press found that 37 of 64 active or senior judges in Gulf Coast states have ties to oil, gas or related energy interests.

Both federal law and the judicial code of conduct require federal judges to disqualify themselves in cases where their impartiality might reasonably be questioned, said James Alfini, a professor and former dean of the South Texas College of Law in Houston, who specializes in judicial ethics. But not every situation is clear-cut.

"The gray area," said Dick Carelli, spokesman for the federal court system, "is when you own an industry-related stock, but the company is not involved in the litigation and it's far from clear whether the outcome would have an impact on it."

In court papers, both sides have also emphasized more mundane, practical considerations -- such as convenience for witnesses who may have to travel to testify.

BP argued in court papers that "key witnesses and documents" are all located in or near Houston, and added that its two airports serve "almost every domestic airline."

"The majority of the hometown venues lack infrastructure and present significant inconvenience..." BP said.

Attorneys for the fishermen and property owners, for their part, touted New Orleans international airport's plentiful flights from Houston and the over "100 hotels within one mile of the federal courthouse."

This much seems certain: Considering the armies of attorneys who will be involved in the case, whichever jurisdiction gets the nod may need all the rooms it can spare.