While oil spreads, lawsuits coming together

Howard M. Erichson in The Houston Chronicle, May 29, 2010

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The horde of lawyers in the mounting lawsuits over the death and destruction from the Deepwater Horizon rig explosion are working to get the cases consolidated in front of a judge they can live with, even if the judge has some oil company stock here and there.

Legal experts said judges often are wealthy enough to have a lot of stock and it's not a big surprise that judges along the Gulf Coast might have oil investments or mineral rights. It'll likely be only judges who have family members who work for the involved companies or who provide them legal counsel who pull themselves out of the running to handle the pretrial consolidation of suits that involve leasee BP, rig owner Transocean and contractors Halliburton and Cameron.

“This is a problem not just in Houston and not just in Louisiana, but along the Gulf Coast,” said plaintiffs lawyer Daniel Becnel about judges having oil company investments. The New Orleans-based attorney said he cares more about whether judges are fair and capable than he does about any oil stocks they might own.

Becnel was the first to ask that the suits be made into a federal Multidistrict Litigation and requested three specific New Orleans judges in the order he wanted most. He said two of his preferences will likely recuse themselves because of relatives who work for a rig contractor or a law firm representing a rig contractor.

The third judge Becnel asked for bought and sold about a dozen oil stocks in 2008, according to the latest financial filings.

BP instead asked the cases be consolidated in Houston and asked specifically for U.S. District Judge Lynn Hughes. Hughes owns some mineral rights and oil company stock and he's given a dozen ethics speeches in U.S. cities and one in South Africa for an oil-related geological society.

The stock issue seems to matter so little that some plaintiffs lawyers with Deepwater Horizon cases plan to ask for Louisiana judges who actually own shares in Transocean, Halliburton or BP.

Requests for case consolidations are not just for Texas and Louisiana court hubs but also for Florida, Alabama and Mississippi. One lawyer even asked that a specific New York judge sit in Louisiana to hear the cases.

“I didn't find it particularly surprising or troubling that parties request a particular judge,” said Howard Erichson, a Fordham Law School professor who writes about these consolidated cases.

Erichson said that when the federal panel picks a judge to oversee the pretrial depositions and exchange of information in cases with dozens if not hundreds of lawsuits, the experience of the judge in complex litigation and in the legal issues in each case is a consideration.

Elizabeth Chamblee Burch, a Florida State University law professor who also specializes in these mass tort cases, agreed. She said lawyers sometimes pick a judge and argue that his or her qualifications fit the bill.

James Alfini, a professor at South Texas College of Law who writes on judicial ethics, said it may not be surprising that many Gulf Coast judges have oil connections but he finds it disappointing that many own stock in companies that could so easily have business before the court.

“Frankly, I think a judge should shy away from having investments in potential litigants like that,” Alfini said.

He said whether these connections matter will depend on how extensive a judge's holdings are and what percentage of his or her wealth they make up. Alfini said the test on whether judges should recuse themselves from cases is reasonability, and it may be that all those in the lawsuit agree the possible conflict isn't a problem.

“If I were a judge I might err on the side of disqualification. This is a highly sensitive matter,” Alfini said.

In Houston in 2001 and 2002, many federal judges disqualified themselves from Enron lawsuits because of stock ownership or connection to law firms that had represented or were representing Enron in the suits.

It likely will be July before the federal courts' Multidistrict Litigation panel assigns one federal judge to oversee the Deepwater Horizon cases. Seven sitting federal judges serve on this congressionally created panel.

It determines which issues have so many lawsuits around the country that the pretrial motions should be consolidated, and it decides which judge will do all that work.