Lawyers lining up for class-action suits over oil spill

Lawyers lining up for class-action suits over oil spill
By Steven Mufson and Juliet Eilperin
Copyright by The Washington Post
Monday, May 17, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/16/AR2010051603254.html?hpid=topnews


On April 21, with the Deepwater Horizon drilling rig still in flames, John W. Degravelles and a group of other lawyers sued for damages. In the first of at least 88 suits filed since the disaster, they were seeking compensation for the widow of a Transocean worker who went missing and is presumed dead.

It marked the beginning of legal action that is spreading as inexorably as the oil that threatens the wildlife and economy of five states along the Gulf of Mexico.

"On Thursday, I could smell the oil and, being a toxic tort lawyer, I realized that the fact that you're smelling something means that you're inhaling something," Stuart Smith, a New Orleans lawyer, said this month when breezes were carrying the scent of the oil slick toward the city. Smith, who has sued major oil companies before, immediately contacted toxicologists and air monitors to start doing tests that could be used as evidence.

The law firms now assembling are members of the all-star team of plaintiffs' attorneys. They have experience suing big companies over asbestos, tobacco, oil company waste, breast implants and Chinese drywall. They have represented Ecuadoran shrimp farmers and New York lobstermen, patients who have swallowed Vioxx and investors who lost money on shares of Enron. And their ranks include the likes of Erin Brockovich, Robert F. Kennedy Jr. and former partners of Johnnie L. Cochran Jr.

"When we put together the team for tobacco . . . it was the A-team of lawyers, and this is the same thing developing here," said Mike Papantonio, who cut his teeth on asbestos litigation and is a partner in Florida-based Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor. The firm says it has won $2.5 billion in jury verdicts, including a dozen of more than $10 million each.

The prospects of getting big dollars in this case are good, too, lawyers say. They are eyeing BP, one of the five biggest publicly owned companies in the world; Transocean, the largest offshore driller in the world; Halliburton, the big oil services firm; and Cameron, maker of the well's failed blowout preventer. Anadarko Petroleum and Mitsui, BP's partners in the offshore lease, also are liable.

Unlike the Exxon Valdez tanker accident, which happened in Alaska's remote Prince William Sound, the current spill could have a much bigger economic impact because the Gulf of Mexico is a busy home to valuable fisheries, tourism and shipping.

Vast potential

Smith, suing on behalf of fishermen, the Louisiana Environmental Action Network and four large hotels, alleges that BP and others were "grossly negligent" in allowing the blowout to occur. Damage includes removal costs, property damage and the loss of income and profits for people and businesses. Because the spill has been lingering offshore, the plaintiffs who can claim damages so far are mostly out-of-work fishermen and tourist resorts that are getting cancellations.

As rich as BP is, "if this well keeps leaking for three or four months, it's Katie bar the door," Smith said. "I don't think they have enough money." He said fishing beds might need one or two generations to recover.

Some lawyers say the case also offers a chance to take on the oil industry's political ties. Papantonio wants to depose the person who ran the Minerals Management Service under President George W. Bush to find out why the agency did not require certain types of safety devices.

"I want to talk about the mindset of this company, because that becomes probative for a company that was so reckless that it becomes manslaughter, and that affects whether there should be punitive damages," Papantonio said.

The first legal battle will be over the location of the trial. A panel will consolidate all the suits in one court for efficiency and to avoid discrepancies in rulings. The plaintiffs' attorneys will choose an executive committee. This approach has been used in 30 to 40 large class-action suits.

BP and Transocean want the case to be heard in Houston, seen as friendly to the oil business. Some plaintiffs want the case heard in Louisiana, while others prefer Mississippi or Florida.

"I've been suing oil companies for pollution almost exclusively for 23 years," Smith said. "And oil companies are the meanest, nastiest defendants in the country. They just don't care; they have so much money."

The plaintiffs' attorneys have a good bit of money, too. In a West Virginia lawsuit against DuPont, plaintiffs' attorneys spent $12 million to prepare and present their case. The initial jury verdict awarded the plaintiffs $500 million; the lawyers typically get about 30 percent.

One firm gearing up to fight BP is Weitz & Luxenberg, which has handled Vioxx and asbestos cases as well as medical malpractice and automobile accidents. Brockovich, whose battle against Pacific Gas & Electric over toxic chromium leaks was dramatized in the 2000 film starring Julia Roberts, is helping drum up clients by headlining events sponsored by the firm in Pensacola, Fla., on Thursday and in Bayou La Batre, La., on Friday.

Longtime adversaries

Many of the firms have sued oil companies for years. Smith successfully sued Chevron two decades ago for not warning workers that they were cleaning pipes clogged with radioactive materials sucked from reservoirs. His firm, Smith Stag, was co-lead counsel in a case that won $300 million from Exxon for damages from radioactive contamination.

Lawyers recruited by Smith to fight BP include Robert McKee, a partner with Fort Lauderdale, Fla.-based Krupnick Campbell Malone Buser Slama Hancock Liberman & McKee.

McKee has a unique résumé: He has spent 16 years litigating over the toxic effect of organic molecules on Ecuadoran farmed shrimp. McKee has sued large banana growers for damage to shrimp farms caused by pesticide runoff from Ecuadoran farms; all but two of the cases have been resolved, with two trials pending against DuPont in South Florida.

One unusual aspect of the case is that the federal government could pay damages, too, especially if plaintiffs show that its oversight was lax. An Oil Spill Liability Trust Fund, established by the 1990 Oil Pollution Act, can pay out as much as $1 billion for each spill.

Although the Oil Pollution Act says that damaged parties must first seek payment from "the responsible party" in a spill, they need to decide within 90 days whether they would rather seek money from the federal trust fund.

Each choice carries a risk. BP's liability is capped at $75 million under the law unless a court finds it guilty of gross negligence, willful misconduct or failure to comply with federal safety standards. BP chief executive Tony Hayward has indicated that his company is willing to pay more than $75 million for "legitimate" claims, and Congress might lift that cap retroactively.

On Saturday, Interior Secretary Ken Salazar and Homeland Security Secretary Janet Napolitano wrote to Hayward saying they expect BP to fully pay claimants without a cap and without seeking reimbursement from U.S. taxpayers or the spill trust fund.

Donald A. Carr, a partner at Pillsbury Winthrop Shaw Pittman who practices environmental law, said state governments also are going to be aggressive in seeking financial compensation, particularly because they are struggling with tight budgets.

"This is an opportunity. You don't have to be cynical to see that," Carr said.

And the case will be a marathon. Papantonio, 56, said he expects to be retired by the time it is over. This might not be the biggest spill ever, but he said the location means that "this will dwarf anything we've seen."