This update from the BP Oil Spill attorney criminal prosecution. In response to some of his co-defendants’ motion for continuance, on Friday Texas attorney Mikal Watts filed this response.

From the response:

Mikal Watts objects to a delay in the trial. Mr. Watts is ready to go to trial, answer the allegations, and prove his innocence to a jury of his fellow citizens…

Watts demands his speedy trial.

The response, filed by Watts’ attorney Rob McDuff, also states that the investigation has lasted four years.

Sounds like this will be a hard fought trial that may occur as soon as February.

As expected, Texas lawyer Mikal Watts and others were indicted by a federal grand jury on charges for fraud related to alleged shenanigans in the BP Oil Spill litigation. Here is the Indictment.

Essentially, the indictment alleges that Watts and his confederates did a bunch of sleazy stuff to jack up their take in the BP litigation. Think: going through the phone book and writing down everyone’s names and claiming to represent them. Purported clients included dogs and dead people.

Apparently an unnamed Jackson attorney was involved. Sounds like he is cooperating since he wasn’t named in the indictment. I talked to someone who has a good theory on who it is, but we’ll have to wait and see if he’s right.

Watts took the unusual step of issuing his own press release via his attorney (Rob McDuff) following the unsealing of the indictment. Here it is: Watts’ response to indictment.

Watts claims to be a serious lawyer whose work on the oil spill litigation was significant and legitimate.

Assistant U.S. Attorneys John Dowdy and Jerry Rushing are prosecuting the case.

My Take:

That’s going to be a tough out for McDuff. Dowdy has been in the U.S. Attorney’s office for 25-plus years and has lost maybe one trial. I have a lot of respect for both and will have to view some of the trial if it makes it that far.

I read the indictment from my perspective as a lawyer. My most prominent thought is: Jesus, is that what the big dogs in MDL cases really do? And the same ones get appointed to steering committees repeatedly? Good lord. A better precedent would be to never appoint the same lawyer to a steering committee twice.

The big question at this point is whether Watts is posturing for a better deal or seriously planning to go to trial. Either is possible.

If he goes to trial, he should use some of his millions to conduct a bunch of focus groups. One possible interpretation of his defense is that a lot of sleazy stuff goes on in mass tort cases, but you can’t pin it on the lawyers. I don’t know how that would play. I know I wouldn’t want to bet my freedom on finding out without doing a bunch of testing before-hand.

Can you really get in bed with a bunch of sleaze balls and walk by claiming you were duped too? Rumor is it’s worked before in mass tort, so we’ll have to see.

A federal court grand jury in Mississippi indicted Texas lawyer Mikal Watts for conduct related to the BP oil spill litigation.Watts is familiar to Mississippi lawyers who worked on the silica MDL in Corpus Christi back in the early 2000’s.

From the My San Antonia article:

The charges stem from allegations that Watts fraudulently bolstered the number of clients he had with claims against BP to get a seat on a steering committee, an elite group of lawyers appointed to manage the plaintiff’s side of the litigation.

Lawyers on such committees typically reap a financial bonanza for their efforts. Watts helped negotiate a $2.3 billion settlement against BP, a chunk of that for fishermen and deckhands that he purported to represent.

At one point, Watts claimed to represent more than 44,000 clients.

The indictment has not been unsealed. Watts is scheduled to appear in court next week and the indictment will presumably be unsealed at that time. Jackson attorney Rob McDuff represents Watts.

Here is my 2010 post on the BP steering committee and here is the order appointing the steering committee. As I pointed out in 2010, the steering committee was dominated by large national plaintiff law firms.

This is not unique to the BP litigation. The evolution of multi-district litigation has turned big time plaintiff litigation into an oligarchy. It’s very difficult to get a seat at that table. It’s a club. A small club. You aren’t invited. I suspect wheels have been greased to gain admittance. Read the applications to get appointed to the steering committees and you will see that there is a lot of puffing. So these allegations are not surprising.

This is not the federal judiciary’s best work, which is largely responsible for creating the problem by appointing the same lawyers and firms to steering committees over and over.

It also ties into the decline of litigation in Mississippi that I’ve written about in posts under the Tort Reform Topic.

And I could make a case that it’s had a bigger adverse impact on defense lawyers in Mississippi than plaintiff lawyers.

I will post the Watts indictment once it is unsealed.

As if getting crushed in the BP Oil Spill litigation wasn’t enough, District Judge Carl Barbier is calling out BP’s lawyers for cheating by sneakily exceeding the Court’s 35-page brief limit. My favorite article on the ruling is from the Christian Science Monitor. From the article:

The BP legal team had tried to reduce the line spacing in a brief to sneak six extra pages in without exceeding the page limit. US District Court Judge Carl Barbier (a double-spacing purist? a stickler for formatting?) was unimpressed.

“Counsel’s tactic would not be appropriate for a college term paper,” Judge Barbier wrote in a ruling Monday. “It certainly is not appropriate here.”

****

“BP’s counsel filed a brief that, at first blush, appeared just within the 35-page limit. A closer study reveals that BP’s counsel abused the page limit by reducing the line spacing to slightly less than double-spaced,” Judge Barbier wrote. “As a result, BP exceeded the (already enlarged) page limit by roughly six pages.”

My Take:

I’d love to have a video of the BP lawyers high-fiving when they came up with the crafty ploy to sneak in a few extra pages.

“Hey S. Steven the 3rd, look at this, reducing the spacing to 1.75 gets us an extra six pages.” “Wow, that’s awesome R. Biff! Judge Barbier is sure to buy our aurguments when we overwhelm him with six extra pages of brilliant legal writing.”

“Yea, we’re awesome. That’s why we make the big bucks and work on the 53rd floor of a big city office building. Let’s go tell the other forty-six lawyers in the firm billing on the case how smart we are.”

Nearly two years after the BP Gulf Oil Spill—and BP funded tourism commercials to the contrary—life is not back to normal for the Gulf of Mexico and Gulf Coast residents.

Food Safety News reports on the lack of recovery in the oyster industry. The article reports:

Two years later, fourth generation oysterman Nick Collins said there is nothing but dead shells in the Louisiana oyster beds that produced 60 to 80 sacks of oysters a day before the BP spill.

“Has anyone found a successful spring spat set on their leases yet?” asks Mississippi-based oyster expert Ed Cake. “Is there any evidence that the long-awaited oyster industry recovery has begun east of the (Mississippi) River or in the Barataria Bay area?”

The herring fishery in Prince William Sound is only now beginning to recover, 22 year after the 1989 Exxon Valdez oil spill in Alaska, and the oyster fishery in Mexico’s Terminos Lagoon has not fully recovered 32 year after the 1979 Ixtoc-1 oil spill, says Cake.

They found that the tar balls — which oil executives and government officials have said are little more than a nuisance — are teeming with bacteria, including Vibrio vulnificus, the leading cause of death from eating bad oysters. In fact, they discovered that the balls had up to 100 times more of that particular bacteria than the water they floated in and 10 times more than the sand they rested on.

“The spill affected everything from tourism to canceled conferences to a decrease in land value to the national perception,” Zuber said. “You still have a problem with people in the other parts of the country believing that the seafood that comes out of the Gulf of Mexico is unsafe. That’s going to take a lot of marketing to overcome, and for that, we need money.”

Zuber said, too, the state should be compensated for permanent damage to the environment and efforts to heal the region’s wildlife.

“It’s extremely important to the state to get an equitable settlement,” he said.

General Hood and Republican leadership need to continue to work together to make sure BP is held fully accountable for the damage done to Mississippi’s economy and eco-system.

The New York Times reports that the Department of Justice has charged eight people with filing fraudulent damages claims related to the BP Oil Spill. The article describes some of the indictments:

Among those charged were Cam T. Hang of Louisiana, who, according to the Justice Department, demanded $42,000 for business losses related to a restaurant that does not exist. A Michigan man, Kevin Hall, claimed he lost $9,000 at an ice cream stand in Pensacola, Fla., that, according to his indictment, is similarly mythical.

Good for DOJ. The fact that some people made false claims is perhaps the least surprising development of the entire saga. The same thing happened after Katrina.

Some of these claims sound like plot lines out of a Tim Dorsey novel. Doesn’t Serge A. Storms have to be in the middle of the oil spill grift?

It’s looking more and more like the big winners in the BP Oil Spill Litigation will be Ken Feinberg’s law firm Feinberg Rozen and defense lawyers.

The WSJ Law Blog reported Monday that Plaintiff lawyers are heading for the exits:

Plaintiffs’ attorneys who put money up front to hire experts are fretting about their investments, and some are trying to find a way to bow out of the litigation gracefully. Of course, there are plenty of complaints to be had about the pace of the Feinberg payouts so it’s too early to predict the success of the litigation.

I still think that there will be wars in court between resort properties and other businesses and their insurance companies and/or BP over lost revenue this past Summer. People didn’t go to the beach due to the threat of oil. There was a definite loss of revenue even in places miles from the beach and where the oil never reached. Those victims are likely to sue.

The plaintiff lawyers who may be out of luck are the ones who went out and signed up fisherman, crabbers, shrimpers, etc. BP hired those guys to look for oil, birds with oil on them etc. Many made good money.

Meanwhile, Bloomberg reports that Ken Feinberg’s firm has been paid $2.5 million so far and is getting paid $850,000 per month:

The London-based oil company agreed to pay Feinberg Rozen LLP in Washington a fee of $850,000 a month from mid-June, when Feinberg agreed to run the claims facility, through Oct. 1, according to a report today on the compensation by former U.S. Attorney General Michael Mukasey.

As for what this money covers, the article states:

The payments from BP help offset the “significant distortion” the project is causing to the Feinberg firm’s business, Mukasey said in the report today. Feinberg Rozen has turned away three mediation requests since June, according to the report.

Four attorneys spent 2,777 hours from June 16 to Oct. 4 working on the claims fund, according to the report. The firm hired two attorneys to help handle the work.

By my calculation that means Feinberg Rozen lawyers are averaging about $900.00 per hour for their work. I can’t criticize Feinberg Rozen’s pay for two reasons. First, I’ve heard that there are already lawyers in top law firms in New York, Washington and other East Coast cities who charge over $900 per hour. I suspect that BP has lawyers on its payroll who charge over $900 per hour.

Second, Feinberg Rozen has a specialty niche as resolution counsel that has no major competitor in the nation that I’m aware of. Ken Feinberg earned national fame running the settlement fund for 9/11 victims. His firm is hired by major corporations to settle mass tort and similar cases.

People might be surprised to know how many lawyers in Mississippi have dealt with Feinberg’s partner Mike Rozen in negotiating settlements in large cases. I had never heard of them until Rozen showed up in a case that I worked on. I asked around and learned that many Mississippi lawyers have dealt with Rozen.

While Feinberg Rozen’s compensation is large, my guess is that it is in line with what the firm charges other clients.

Want to be on an exclusive MDL plaintiffs’ steering committee? Then you need to be an attorney in a large plaintiffs firm—the type that generally does not exist in Mississippi. That’s my take away from reviewing the list of attorneys on the Plaintiffs’ steering committee in the BP Oil Spill MDL.

Here is Judge Barbier’s Order rendered Friday with the names of the fifteen lawyers on the plaintiffs’ steering committee. Most of the lawyers appointed to the committee practice with large plaintiff firms. The even more exclusive executive committee is composed of four lawyers: James Roy, Russ Herman, Brian Barr and Scott Summy.

My interpretation of the Order is that the steering committee will run the entire litigation. Lawyers who represent victims—but who are not on the steering committee—appear to be getting squeezed out of the litigation.

The only Mississippi lawyer on the steering committee is former congressman and Secretary of Agriculture Mike Espy, who practices with national plaintiffs firm Morgan & Morgan. Here is Espy’s application for the committee, which emphasizes his political background and firm size, as opposed to achievements as a trial attorney. Being African-American probably helped Espy make the cut. But being a former politician and a member of a large national firm could have been more important factors.

Numerous other Mississippi lawyers applied for a slot on the committee and were not appointed. I can’t help but wonder if the small size of plaintiff firms in Mississippi was a hindrance in lawyers making the committee.

Most plaintiff operations in Mississippi are small as far as the number of lawyers. A large plaintiff firm in Mississippi is a firm with 4 or more lawyers. Many Mississippi plaintiff lawyers are solos, but still find a way to work mostly on big cases. It is common in Mississippi for plaintiff lawyers from different firms to team up for big litigation.

It is a model that I use in my practice all the time. But is it the best model for litigating big cases? Most of the MDL steering committee lawyers are in big plaintiff firms such as Baron and Budd and Beasley Allen.

In the late 1990’s regional defense firms formed and moved into Mississippi. But plaintiff firms remained small and localized. Perhaps more large plaintiff firms would have established a presence in Mississippi in the 2000’s if not for tort reform and the era of the ultra-conservative Mississippi Supreme Court.

It will be interesting to see how plaintiff firms in Mississippi will look 10–15 years from now. My guess is that we are getting close to an era where plaintiff firms in Mississippi get larger. And while this would cause plaintiff lawyers to lose some of their autonomy, it would put them in a better position to compete for leadership slots in national litigation.

A Monday article in the Wall Street Journal takes a look at the MDL process. The article noted that in MDL actions, plaintiff lawyers have to compete for the work:

For plaintiffs’ attorneys the streamlining can be brutal.

While hundreds of attorneys may be representing clients in the cases, judges typically pick only a handful to handle the day-to-day workload. The sidelined attorneys must pay the lead lawyers a fee and often say they feel shut out from key decisions.

“Lawyers fight, hog work, are overloaded and squeeze out others,” said Joseph F. Rice, a South Carolina plaintiffs’ attorney who has been involved in cases filed by asbestos victims and families of victims of the terrorist attacks of Sept. 11, 2001.

Lawyers hogging work and squeezing out other lawyers is usually found on the defense side where lawyers are getting paid by the hour. Lawyers want to do some of the work, but other lawyers will not share. National counsel hogs work and squeezes out local counsel. The problem also happens within a firm if there is not enough work to go around. It was going on in Mississippi firms before the litigation boom in the late 90’s and has probably resumed in some firms.

In contrast, on the plaintiff side it is sometimes hard to get co-counsel to do any work. Some plaintiff lawyers will sit back and wait for co-counsel to do the work. If two lawyers with that work ethic are co-counsel, the case can grind to a complete halt.

There are some defense lawyers who have the reputation that they will work up a case, but will not try it unless they believe that it is a slam-dunk.

There are some plaintiff lawyers who have the reputation that they will not work up a case. If the case ever gets to trial, they will usually lose due to the lack of preparation.

The best lawyers on both sides work very hard to prepare their cases and are not afraid to lose at trial.

But the MDL appears to turn the plaintiff lawyers into defense lawyers, where they have to compete for work. Pretty funny if you ask me.