Gov. Riley's order limits attorneys fees in Alabama's oil spill suit

Jessica M. Karmasek Aug. 16, 2010, 1:00pm


BIRMINGHAM, Ala. (Legal Newsline) - Alabama Gov. Bob Riley is seeking to limit state Attorney General Troy King's negotiating power in the state's landmark case against oil giant BP and others in the wake of the Gulf oil spill.

Late last week, Riley issued an executive order that restricts King's authority to hire private lawyers to help represent the state.

Meanwhile, King has suggested Riley does not grasp the stakes in the multimillion-dollar case.

Riley's order stipulates that any legal contract that exceeds $195 an hour or that contains a contingency fee agreement must be approved by his office.

The order was signed Thursday -- just hours before King sued BP and its partner companies, accusing them of negligence and reckless behavior in the Gulf of Mexico oil spill. The suits seek economic and punitive damages. No specific amount was listed.

King announced last month he was preparing a lawsuit to make up for lost tax revenue. The attorney general described the spill as "the largest legal disaster ever encountered," and said the state would be working for years to rebuild its economy.

An explosion and fire occurred on Transocean's drilling rig Deepwater Horizon, licensed to BP, on April 20, killing 11 workers and resulting in the largest offshore spill in U.S. history.

King's lawsuit accuses the companies of damaging Alabama's coast and economy through "negligent or wanton failure to adhere to recognized industry standards."

Riley told The Press-Register on Friday he believed King's legal action was premature and could unnecessarily complicate the state's negotiations with BP over the compensation owed to Alabama as a result of the spill.

Riley said he was powerless to stop King from suing, but that he was taking steps to bar private lawyers from taking an exorbitant share of the money owed to the state.

Riley said King offered private law firms a contingency fee of 14 percent of the state's total claim if they would join the case. Under those terms, the governor said, the legal fees could reach $20 million, based on estimates that the state has suffered about $140 million in tax losses and other damages from the spill.

The fees are unwarranted, Riley said, because the state has been working for weeks to prepare its claim -- without the help of outside counsel.

The governor said the executive order "protects taxpayers from getting ripped off by lawyers who expect to make millions of dollars, even when they play no actual role in getting Alabamians the payments they deserve."

King previously tapped the law firm of Balch & Bingham, LLP, to organize and lead a team of the state's best lawyers to sue BP. But the law firm said last week it will no longer take part in the litigation.

A spokesman for the attorney general said Tuesday the law firm would not represent the state in the lawsuit because the Mississippi offices of the firm previously represented Transocean, the owner of the Deepwater Horizon oil rig.

King, who filed the lawsuits Thursday in U.S. District Court in Montgomery, said his office has signed no contracts with any outside counsel.

He told The Press-Register the governor was naive if he thought that cash-strapped Alabama could handle a case as massive and complex as the BP litigation without assistance.

From Legal Newsline: Reach Jessica Karmasek by e-mail at

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