Caldwell, Hood voice gripes in oil spill situation

John O'Brien Jan. 28, 2011, 1:26pm


NEW ORLEANS (Legal Newsline) - Two state attorneys general are complaining about the manner in which victims of the BP oil spill are being compensated.

Monday, Mississippi Attorney General Jim Hood called the Gulf Coast Claims Facility and its $20 billion compensation fund "a surrogate for BP" and urged U.S. District Judge Carl Barbier to take control of the claims process.

And Thursday, after Barbier had made Alabama Attorney General Luther Strange coordinating counsel for state claims, Louisiana Attorney General Buddy Caldwell announced his intention to fight the decision.

"This latest order is a direct denial and abridgement of the constitutional rights of the citizens of the state of Louisiana, including the constitutional right to their own counsel, and is a discriminatory action that transcends the bounds of proper federal/state relations and state sovereignty rights," Caldwell said.

Caldwell had filed a motion asking the court to establish a coordinating committee for state interests with each state's attorney general serving as coordinating counsel for his or her respective states. Sixteen states supported Caldwell's motion, he said.

But Barbier has tasked Strange with scheduling meetings, appearing at court-noticed conferences, acting on behalf of government interests and coordinating discovery with the plaintiffs steering committee. The PSC is made up of private lawyers representing individuals allegedly harmed by the oil spill.

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.

Also this week, Strange fired the private lawyers hired by his predecessor, Troy King, to file suit. King filed two lawsuits in August -- one against the oil company and the other against Transocean, Halliburton and other companies associated with the spill. The suits seek economic and punitive damages, but no amount was specified.

King described the spill as "the largest legal disaster ever encountered," and contended the state would be working for years to rebuild its economy.

Strange told Reuters Legal that the outside counsel was unnecessary and too costly for the state.

"I'm not going to give any law firm 15 to 20 percent of the money due the people of the state of Alabama," he said in the interview. "Any money received will go directly to citizens, not to lawyers."

Caldwell is upset that Strange was appointed coordinating counsel without a hearing. He says Barbier has allowed the corporate defendants to form a steering committee and permitted each defendant to appoint its own coordinating counsel.

Caldwell said he will ask Barbier to vacate his order appointing Strange "shortly."

Meanwhile, Hood says Barbier needs to "correct the deficiencies in the GCCF as outline in the PSC's motion and in this statement of interest, in order to facilitate the timely and just processing of claims."

With his statement, Hood filed pages of correspondence between attorneys general and fund administrator Kenneth Feinberg. In the statement, he says, "These good-faith discussions have unfortunately met with only limited success."

"I want Mr. Feinberg to continue paying claims, but I want the process to be transparent, fair and fast," Hood said. "If the court does not take control, we will be sending Mr. Feinberg a civil investigative demand which will inevitably lead to needless litigation and expense."

Recent figures released by Feinberg during a Congressional hearing show that more than 7,000 of the 481,000 applications made against BP have been deemed suspicious and some have been referred to the police.

From Legal Newsline: Reach John O'Brien by e-mail at

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