(CN) – The 5th Circuit on Thursday refused to block a federal judge in New Orleans from hearing cases stemming from the Deepwater Horizon oil rig explosion, even though he owned “debt instruments” issued by Halliburton and Transocean, two of the corporate defendants.
After half a dozen federal judges recused themselves from the litigation, more than 40 percent of the lawsuits were assigned to U.S. District Judge Carl Barbier. It was later discovered that Barbier owned bonds and other debt instruments issued by rig owner Transocean and cement contractor Halliburton.
He told his broker to sell the debt instruments on June 2, explaining that he was unaware he owned them until reports surfaced in the media. He said he got rid of them to avoid the appearance of bias.
Despite the divestment, Halliburton and oil giant BP, owner of the busted well, sought to have Barbier removed from the case. Barbier refused to recuse himself, finding that debt instruments and bonds do not qualify as “financial interests” in a company.
The corporations urged the 5th Circuit to force Barbier’s recusal, but the federal appeals court in New Orleans declined.
“We see no error in his reasoning for denying the motion to recuse,” the judges ruled.
The ruling was welcomed by some local attorneys, many of whom hope the hundreds of oil-spill complaints will be heard in New Orleans. With six out of 12 federal judges here having recused themselves from the case, judges without oil investments or other conflicts of interest are in high demand.
The final decision on who will preside, and in what city the hundreds of oil-spill claims will be heard may be decided next week when attorney arguments for venue are given before a panel of federal judges.
The seven-judge panel will meet on July 29 in Boise, Idaho. Dozens of attorneys are scheduled to make arguments before the panel.
The complaints range from federal civil racketeering to environmental claims to personal-injury claims from out-of-work fishermen and owners of coastal hotels and seafood restaurants.
Most of the complaints are federal, brought under the Oil Pollution Act; others fall under general maritime law and can be heard in state court. In the end, the panel may choose several venues for litigation.
Attorneys for the four main corporate defendants want a judge in Houston, a city with amiable relations with Big Oil.
Many local attorneys and plaintiffs want the cases consolidated and heard in New Orleans, claiming New Orleans is closest to the bulk of lawsuits filed and that it would be unfair to expect the hundreds of local plaintiffs to travel out of state for trial.
Members of a jury pool from New Orleans are likely to have been affected by the spill, and could be sympathetic to the plaintiffs.
One solution under consideration is that the oil-spill cases be consolidated and heard in New Orleans before an out-of-state judge who is not affected by the spill.
Two federal judges — one from Houston and one from New York — have been mentioned as candidates by the local rumor mills.
But now that Judge Barbier has been cleared by the 5th Circuit he could be assigned the cases.