BP says claims administrator is biased, seeks his removal

NEW ORLEANS (Legal Newsline) – Oil giant BP PLC has filed a motion to have Patrick Juneau removed as claims administrator in the Deepwater Horizon oil spill litigation, arguing that he is biased and has not been forthcoming about potential conflicts of interest.

The sharply worded 35-page motion filed by BP on Tuesday afternoon caps months of rancor between Juneau, who was appointed in 2012 to oversee the oil spill settlement, and the oil company, which has paid out tens of billions of dollars in damages.

The motion accuses Juneau of several breaches of duty including representing related parties in the suit prior to being named claims administrator, expediting the claims of friendly lawyers and overseeing a claims facility that has seen five senior-level departures in the past year that have been linked to misconduct or corruption. BP claims the bias exhibited by Juneau is longstanding and cannot be extricated from the ongoing claims program.

“With billions of dollars at stake, the Court, the parties, and the public rightly expected that the Claims Administrator would be a neutral, not a partisan,” the motion reads. “Fairness, and the appearance of fairness, required that he be a neutral. Because he is Court-appointed and functions as an arm of the Court, he must be a neutral, free of a disqualifying conflict of interest. Mr. Juneau, however, was not a neutral when the Court appointed him.”

Much of BP’s motion focuses on a 2010 contract that Juneau personally signed with the State of Louisiana to represent the state’s interests in regard to the 2010 oil spill.

According to state records, Lafayette-based Juneau David law firm was first contracted by the state on July 2, 2010 for $175,000 to “provide advice and counsel” when the settlement facility was operated under Juneau’s predecessor, Kenneth Feinberg. The contract later grew to $275,000, state records show, and ended abruptly on July 21, 2011 – only four days before plaintiffs lawyers in the BP case filed a motion to have the court appoint a special master.

Juneau was ultimately later hired to fill the special master position.

When asked about the contract in a recent interview, Juneau said the work he performed under the state contract was not as an adversary to BP.

“I wasn’t representing the state to prosecute, but to give them advice and input into the procedures and the protocols that were being utilized and developed through the Feinberg process," Juneau said. “And I did that for a period of time. I was advising them on what that was and that is all information that everybody in this case – I disclosed all of that to the parties in advance. I wasn’t prosecuting anything, it was strictly in an advisory capacity.”

BP disagrees with Juneau’s assessment of his work with the state. In its motion, BP said Juneau’s state work involved trying to get Feinberg to relax standards of proof needed to file oil spill damage claims.

“Meanwhile, [Juneau’s] former client Louisiana continues to be adverse to BP in this multidistrict litigation and seeks billions of dollars based on claims that, it now seems, are consistent with, and possibly based on, legal work performed by the Claims Administrator as counsel for the State,” BP’s motion says.

The BP motion also notes a sworn deposition that Juneau gave to fraud investigator Louis Freeh on Aug. 1, 2013. In the deposition, which was filed into the court record in January, Juneau told Freeh that he had no connection to the Deepwater case prior to his appointment as claims administrator in late 2012.

“Now, I knew, from reading the newspaper — I didn’t have any involvement in anything in the spill. I didn’t represent any claimants in the spill, wasn’t representing any defendants in the spill, had really had no connection with the spill per se,” Juneau said in the deposition.

Juneau later said he did not feel a need to disclose his state contract when he gave his sworn statement to Freeh, because all parties, including Freeh, already knew about it.

“The Freeh Group has done an extensive [evaluation],’’ Juneau said. “They went through this whole thing with me, they know everything I’ve done.”

In addition, Juneau said he did not feel he was deceiving anyone and added that both BP and the Plaintiffs’ Steering Committee knew about the contract when they agreed that he should be the new claims administrator.

“I can tell you the parties knew about it. I disclosed that to the parties and the court in advance. There was no question about it, that wasn’t even an issue. I disclosed it anyway,” he said.

In its motion, BP said it had been given only the barest of information about Juneau’s contract with the state, in the form of a note, from one of its lawyers.

“Consulted with La. (State) about whole Feinberg process,” the note reads.

BP said in its motion that the note grossly understates Juneau’s prior role in the case. Juneau’s sworn statement remains at odds with the facts, according to BP’s motion.

“Certainly any individual reading from the publicly available portion of the Claims Administrator’s sworn statement would conclude that he knew about the oil spill only from information that he had learned by reading the newspaper – and not that he personally had signed a contract for his law firm to receive hundreds of thousands of dollars for representing a party adverse to BP on oil-spill matters, which had terminated only six months before,” the BP motion reads.

Geoff Morrell, BP senior vice president, U.S. communications and external affairs, said said Juneau obviously did not provide enough information regarding the contract between his law firm and the state.

“He purported to make disclosures over time that were ambiguous and incomplete, and are epitomized by his statement in August 2013 to Judge Freeh that he ‘didn’t have any involvement in anything in the spill [and] didn’t represent any claimants in the spill,’” he said.

Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch, said BP’s latest motion is indicative of deep problems with Juneau’s oversight of the Deepwater Horizon claims process.

“The questions raised in this motion about the overall integrity of the claims process that is currently underway are deeply disturbing,” she said. “For some time, we have known about the systemic payment of questionable claims and the many senior officials operating under Mr. Juneau that were forced to resign amid serious allegations of money laundering and other unethical behavior.

“The most troubling of all, however, is the information about Mr. Juneau’s apparent conflict of interest. The court should act quickly to ensure that the rule of law is being followed and that the system is fair for all the remaining claimants who were truly harmed by this tragic industrial accident.”