Oil spill claimants who avoided litigation won't have to pay attorneys

By John O'Brien | Jan 18, 2012


NEW ORLEANS (Legal Newsline) - Plaintiffs attorneys will not receive 6 percent of settlements from those claimants who settled their oil spill claims without resorting to litigation.

Objections from parties like the U.S. Department of Justice and Florida Attorney General Pam Bondi were taken into consideration by U.S. District Judge Carl Barbier, who on Wednesday clarified a previous order that said plaintiffs attorneys would receive 6 percent of settlements as fees.

Alabama Attorney General Luther Strange had also asked Barbier to not apply the "hold back" to settlements reached by private citizens and the Gulf Coast Claims Facility. Barbier is presiding over the multidistrict litigation proceeding that houses lawsuits brought over 2010's Gulf oil spill.

"I am extremely pleased with the district court's order, which ensures that Alabamians who endorsed the GCCF process will receive 100 percent of their settlements," Strange said.

The order will cost the members of the Plaintiff Steering Committee millions. The GCCF began with a $20 billion fund with which to pay claims and has paid approximately $6 billion. Six percent of $6 billion is $360 million.

BP had filed a motion for clarification and reconsideration of the fees order.

"(T)his hold back requirement applies to all actions filed in or removed to federal court that have been or become a part of the MDL, whether or not a motion to remand has been filed, and to state court plaintiffs represented by counsel who have participated in or had access to the discovery conducted in this MDL," Barbier wrote in Wednesday's order.

"Exempt from the current hold back requirement are settlements or other payments by the Gulf Coast Claims Facility, another claims processor, or any defendants to claimants who have never had, do not currently have, nor hereinafter have, actions of claims-in-limitation pending in the MDL."

The order requires the defendants to deposit 4 percent of settlements to and judgments in favor of the states of Alabama and Louisiana or any of their local governmental entities. From that fund "common benefit litigation fees and expenses may be paid, if and as awarded by the court, at an appropriate time," Barbier wrote.

Barbier, who picked the members of the PSC, is planning a fault allocation trial to start on Feb. 27. He has given the PSC much of the credit for the facility's accomplishments.

"The PSC has strongly advocated on behalf of persons submitting claims to the GCCF, continuing to apply public and private pressure to improve the GCCF claims handling operations," he previously wrote.

Barbier wrote that the committee made translators available to Vietnamese claimants.

He wrote that they advocated a full audit of the facility now in progress and for a more liberal causation standard.

"Considering the unique circumstances of this case, it would be unfair to allow parties to benefit from these activities of the PSC, but avoid contributing to the common benefit fund simply because they are able to settle directly with the GCCF and avoid filing a claim in the MDL," he wrote.

Barbier awarded no fees, writing that he simply established a fund from which common benefit fees might later be disbursed.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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