NEW ORLEANS (Legal Newsline) - U.S. District Judge Carl Barbier, responsible for 77 suits from five states over the Deepwater Horizon oil rig explosion, plans a Sept. 16 hearing on his own investments in defendants Halliburton and Transocean.
He denied a motion to recuse himself in June, but defendants can bring another motion depending on what they learn at the hearing.
Barbier presided over 33 cases when he denied recusal, and he currently presides over 44 more by appointment of the U.S. Judicial Panel on Multi District Litigation.
Panel judges knew when they picked him that his recusal remained in dispute.
On April 20, when the rig exploded, Barbier held at least $30,000 in Transocean and Halliburton bonds.
His financial disclosure report for 2008 showed both investments in a range from $15,000 to $50,000, with income from each between $1,000 and $2,500.
He sold the bonds on June 3, after Bloomberg news service spotted them on the Judicial Watch website and reported on them.
"So there is no perception of a conflict in these cases, yesterday I instructed my broker to sell the few Transocean and Halliburton bonds in my account," he wrote.
Defendant Cameron International moved for recusal anyway, on June 15, claiming circumstances dictated mandatory disqualification.
Phillip Wittmann of New Orleans wrote that federal law disqualifies a judge who knows he has a financial interest in a party to the proceeding.
Defendants Halliburton and BP joined the motion.
Barbier denied it on June 17, finding the law applied to stocks but not bonds because bonds don't constitute ownership.
U.S. Fifth Circuit appeals judges in New Orleans denied a writ of mandamus on July 22, agreeing on the distinction between stocks and bonds.
"This conclusion, however, does not put the matter completely to rest for two reasons," wrote judges Grady Jolly of Jackson, Miss., Emilio Garza of San Antonio, Texas, and Carl Stewart of Shreveport.
"The statute speaks of a financial interest in the subject matter in controversy or in a party to the proceeding," they wrote.
Even if debt instruments don't convey ownership interest, they wrote, they could qualify as financial interests in the subject matter.
They found another basis for disqualification in a portion of the law on "any other interest that could be substantially affected by the proceeding."
They wrote that the current record said virtually nothing about the potential impact of the litigation on the bonds.
"Thus, we would be forced to speculate," they wrote.
"We note that if the district court concludes that the debt instruments could be substantially affected, then recusal would be mandatory," they wrote.
Having provided the defense with a pair of potential weapons, the Fifth Circuit added a disclaimer that, "We express no opinion as to the merits of either ground."
Cameron International moved for judicial disclosure on Aug. 2, respectfully inquiring into Barbier's holdings as of April 30.
Barbier set a hearing for Aug. 18.
On Aug. 10, the multi district panel consolidated cases in Louisiana, Texas, Alabama, Mississippi and Florida, and assigned them to Barbier.
"Some parties have expressed concern that recusals among Eastern District of Louisiana judges unduly limit our choices, and that even Judge Barbier may be subject to recusal," the consolidation order stated.
"Notwithstanding these concerns, the Panel is quite comfortable with its choice," they wrote.
"Judge Barbier is an exceptional jurist, who would be a wise selection for this assignment even had those other judges in the district been available," they wrote.
After his appointment, Barbier adjusted his schedule and set Cameron's disclosure motion for Sept. 16.
Bloomberg reported in June that six of 12 active federal judges in New Orleans removed themselves from spill damage lawsuits.
Other federal judges in Louisiana, Alabama and Florida also disqualified themselves, Bloomberg reported.
BP operated the rig, Transocean owned it, Halliburton supplied cement, and Cameron provided blowout prevention services.