Report: Caldwell has paid more than $15M to outside lawyers on BP case

BATON ROUGE, La. (Legal Newsline) -- Louisiana Attorney General Buddy Caldwell has paid more than $15 million to outside lawyers for work on the state's case against oil giant BP over the 2010 Gulf oil spill, according to a report earlier this week.

The Associated Press reported Monday that figures it requested show Caldwell has spent more than $20 million on the case, with two-thirds of it going to private law firms he hired to handle the legal work -- many of which have contributed to his campaigns.

The AP compared those numbers to the amount spent by neighboring Alabama Attorney General Luther Strange.

Data provided by Strange, who has his own staff working on the state's case, showed a total far below what Caldwell has spent -- less than $200,000 so far.

According to the AP, Louisiana lawmakers have OKed the payments.

In fact, none of the money has come from state taxpayers; of the $24 million the Caldwell's office has spent, $10 million came from a grant from BP. The rest came from a fund paid by the oil industry, set up in case of spills like the April 20, 2010 explosion and fire that occurred on Transocean's drilling rig Deepwater Horizon, which was licensed to BP.

The accident killed 11 workers and resulted in the largest offshore spill in U.S. history -- an estimated 210 million gallons of oil.

Still, the AP reported Monday that Caldwell plans to ask lawmakers for the go-ahead to spend more money. That money would come from the spill fund until it is emptied; then it could come from state taxes.

Caldwell, in an email to the AP, defended the hefty payments to outside lawyers, noting that the BP case is one of the most involved and complex.

"Properly handling this case requires expertise and experience in areas of mass tort and complex litigation, as well as class action and environmental law," he wrote.

"Few attorneys have this experience, and we have no staff attorneys who could fulfill this role without contract counsel."

According to the AP's survey of Gulf Coast states, Mississippi Attorney General Jim Hood has paid more than $700,000 to outside lawyers and $240,000 to an economic damage expert as of October.

In March, Hood confirmed he hired Mike Moore, a Democrat who served as state attorney general from 1988 to 2004, and Reuben Anderson, the first African-American justice to serve on the state's high court.

At the time, the attorney general also confirmed he hired Legier and Co., a New Orleans-based forensic accounting firm, to help the state develop its "economic damage model."

Moore, who now heads the Mike Moore Law Firm LLC in Flowood, was the first to file a lawsuit against a group of tobacco companies in 1994, insisting they should reimburse the state for the costs of treating those with smoking-related illnesses.

Moore eventually was named the lead negotiator of the Master Settlement Agreement, reached in 1998 by a total of 46 states and the four largest tobacco companies at the time.

The deal was worth $246 billion, including $4.1 billion for Mississippi, which was represented by now-jailed attorney Richard "Dickie" Scruggs.

Anderson, who served on the state's high court from 1985 to 1991, is now a senior partner at the law firm of Phelps Dunbar LLP in Jackson.

Meanwhile, Florida Attorney General Pam Bondi told the AP this week that her office hasn't spent any money on outside counsel in the BP case.

Instead, she said she has asked for help from private firms in exchange for a portion of any future damages.

Texas Attorney General Greg Abbott told the AP he, too, hasn't hired any private law firms to work on the state's case.

Of the money paid to private firms Caldwell has hired, the AP found the largest portion -- $7 million -- has been given to New Orleans firm Kanner and Whiteley. The firm has not donated to the attorney general's campaign, the AP noted.

However, of the 11 firms he has hired, eight have, the AP found.

In his email to the AP, Caldwell said he didn't see anything wrong with hiring firms or lawyers who donated to his campaigns.

"The fact that they may have participated in the election process should not result in depriving Louisiana of the best legal talent available," he wrote.

Last year, BP reached an agreement with hundreds of thousands of private individuals and businesses affected by the spill worth an estimated $7.8 billion.

BP said the money will be paid to the plaintiffs from a $20 billion trust fund set up by the company.

Under the proposed settlement, BP would be released from claims by eligible members of the class action who were affected by the explosion and fire that occurred on Deepwater Horizon.

Louisiana is not a party to the settlement. However, it, along with the other Gulf Coast states, are pursuing their own lawsuits.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.