Deepwater Horizon - PSC Fee Update

[QUOTE=Infomania;60725]Plaintiffs attorneys going after BP’s $20 billion fund - LA Biz Observed
Mark Lacter. January 10, 2012

Nearly 200,000 claimants have received $6.3 billion - part of the $20 billion that the oil giant committed to make good on damage from the Deepwater Horizon accident. It’s called the Gulf Coast Claims Facility, and by many accounts it’s working just fine - an efficient way to disperse money to victims of the spill without going to court (BP has conceded liability). But the system squeezes out plaintiffs attorneys - more to the point, plaintiff attorneys’ fees. NYT columnist Joe Nocera picks it up from there:

They went to the federal judge handling the BP litigation and asked him to establish a “reserve” that would be made up of 6 percent of any future claims settled by [Claims Facility head Ken] Feinberg. (They also want 4 percent from any damages Alabama and Louisiana get.) The judge, Carl Barbier – a former plaintiffs’ lawyer himself – agreed to do so without even holding a hearing. Eventually, some or all of that reserve would be used to pay the lawyers. That’s right: They are trying to grab fees from clients they’ve never represented. Amazing. (Judge Barbier recently backed away a bit from his ruling and is allowing both sides to file briefs that are due on Thursday.) When I asked how they could possibly justify this fee grab, I was told that their lawsuit was the main reason Feinberg was willing to be so generous with BP’s money.

But Tony Buzbee, another lawyer who has settled many claims through the fund, blew a gasket when I told him that. “They have not done one thing so far that has benefited my clients,” he said.[/QUOTE]

The Plaintiffs’ attorneys that settled their claims early advised their clients to do so for various reasons. Some did so because they felt it was a good result; some did so because they wanted to avoid paying the PSC; some did so because their clients told them to close out their case. It is impossible for an attorney to engender any real concern for an Order such as this because, as it is ordered, the money is taken from the attorneys and not the client.Now, I understand that if someone actually filed for affirmative relief in the Federal Court action, they might benefit from the work of the PSC depending upon the outcome of the trials that are upcoming; but what is a deviation from the law, as it applies to Texas fee contracts in a personal injury action, is where someone was ordered to file in an action to preserve their right to file elsewhere and that action is later dissolved. I realize this all sounds a bit complicated so let me break it down for you.

The Limitation of Liability [LOL (not trying to be funny here)] action was filed by Transocean in Houston Federal Court. When this was filed it placed an automatic stay on all “pending” cases filed in any state court or federal court.Then the LOL was transferred to New Orleans by the Multi-District Panel in Idaho. Please understand this is not a class action but just an attempt to keep all claims in one court for the purposes of making rulings, conducting discovery, narrowing legal issues etc. But, it is important to point out that a Seaman has a constitutional right under the Savings to Suitors Clause in the Constitution to maintain their cause of action in either state court or federal court. This is not just some little body of law or some court case or even a statute that gives them this legal right, it is the supreme law of the United States Constitution. So, for those injured Seamen or those families of dead Seaman that had filed their claims in state court before the LOL, their claims were “stayed”. There were various motions filed by them with Judge Barbier to lift that stay and he did not rule on them and deferred ruling upon them until later. So, that meant they could not prosecute their claims in state court at that moment…

Then Judge Barbier ruled that ALL claimants must file their claim in the New Orleans federal court LOL on or before April 20, 2011. Once again, this is a normal thing to do. The reasoning is that the ship owner [TO] is legally entitled to know all the various claims that could be asserted against it as the very nature of a LOL is to try to limit the ship owners liability to the value of the vessel, together with its cargo and appurtenences as it sits on the ocean’s floor.[I] i.e.,[/I] salvage value at best, so it can limit ALL claims to that amount. In this case, it came to $27 million and change. BUT, when making the decision to file in a LOL, the attorney/claimant has a decision to make: The decision to either assert a claim in the LOL against the shipowner or to say, in essence, “I am a claimant and I want to preserve my constitutional right to maintain my claim in state court where I filed before the LOL was filed”. Now, let’s ask ourselves, does anyone really believe that the LOL will be granted? Of course not. The legal test is did Transocean’s upper management and/or the master of the [I]Deepwater Horizon[/I] have “privity of knowlege” to the negligent causes that would give rise to this event. Now we can say LOL!!! Before the PSC was ever formed there was so much evidence already amassed by Congress and by the Joint Investigation Taskforce to answer these questions favorably for a claimant or against the granting of an LOL in Transocean’s favor. So, even Transocean knew it would never be entitled to such a limitation but it was never the less filed as a legal tool to try to consolidate the many actions around the country. They are entitled to do this no matter how ludicrous it really is.

Back to the PSC fee issue.

So, here you have Seamen claimants that have filed their claim legitimately under the US Constitution in a state court and they want to proceed but cannot as they must wait for the LOL action to be dispensed with. Then they file their “here I am claim” in the LOL after being ordered to do so. After that, they will be sent back to their state court to prosecute their claims as they see fit. Right???

In that state court claim, they could use some of the work of the PSC or not. If they do, they arguably should pay for that work. If they don’t, then they should not pay for that work.

I personally believe that these folks, more than any other claimants were the most seriously affected from this horrific event. They are, in my opinion, the front line defenders of this event and they, more than any other claimant or pelican, shrimp or oyster, should not suffer again through legal shenaningans and lawyers that do nothing specifically for them trying to take money as a result of their claim. If the court does not “let them go” back to their state court action after he finds that Transocean is not legally entitled to a LOL, then what you have is a situation where an attorney that has:

(1) Never met a client;
(2) Never spoken with a client;
(3) Never reviewed their medical bills or records[I] in toto[/I];
(4) Never met with their treating physicians;
(5) Never had a signed Contract with them [which by the way is a Texas statutory requirement and makes it an illegal act to collect fees without a written contract signed by the parties]; and
(6) Got their constitutional rights stepped on as if they never existed;

Now, I have advised my clients that if a lawyer takes a fee from them then there must be some type of attorney client relationship and, if so, they they have the right to question the expenses, the hours worked, the quality of the lawyer that they are paying for, the maritime experience that lawyer has or does not have, the quality of the legal work, whether the facts were already disclosed somewhere else and why a certain amount of money was spent to “discover” facts that already were known and, if they are not happy with those expenses, then they should ask they not pay for them and if they are not successful in that request, there are entities that govern lawyer behavior and they should ask those entities to review those expenses and hours. Of course, the lawyers will try to say that they are just acting under a federal court order but I do not believe any ruling from Judge Barbier could ever be argued to say that it was his intent to shield improper behavior on the part of any lawyer.

Now, to be clear, ALL of the above has not occurred yet as all the court has ordered is that a certain amount of money be placed into a fund where all these issues and more will be determined. So, the story, really, in my opinion, is just beginning…