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Wednesday, May 29, 2024 | Back issues
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BP Cannot Fire Oil Spill Claims Administrator

NEW ORLEANS (CN) - BP's motion to fire the claims administrator handing the Deepwater Horizon oil spill case was denied by a federal judge who also scolded the energy company for attempting to "flout" the court's briefing orders.

U.S. District Judge Carl Barbier said BP's arguments for why special master Patrick Juneau should be disqualified hinge on Juneau's alleged violation of Rule 53, which governs federal judges.

"This is not persuasive," Barbier said, "Mr. Juneau's appointment was not made pursuant to Rule 53. Instead, he was appointed as a claims administrator in accordance with a privately negotiated Settlement Agreement. ... Notably, in an earlier memorandum filed in this case, BP itself pointed out why Mr. Juneau is not a special master under Rule 53."

The judge also pointed out that BP had argued that Juneau should be disqualified because of previous consulting work he did on behalf of the state of Louisiana, even though BP knew of this consulting work before it chose Juneau to be claims administrator.

"Mr. Juneau himself disclosed this information to BP and at least six of its attorneys or representatives before he was selected by the parties," Barbier's ruling says. "BP's own submissions evince that this information was discussed during one or more of the vetting sessions that Mr. Juneau underwent before he was selected by the parties."

Finally, Barbier said, BP's motion to remove Juneau is simply untimely.

Citing the 5th Circuit, Barbier said a motion for recusal must be filed as soon as a party has knowledge of facts that could cause disqualification. "A party cannot wait until after an adverse decision has been made by the judge before raising the issue of recusal," Barbier said.

BP alleged Juneau had made false statements, but Barbier's order says the statement BP relied upon in making that claim was taken out of context.

He found that BP's claims against Juneau were old and had been previously addressed, with the exception of one new claim: that Juneau had improperly expedited oil spill claims put forth by plaintiff attorneys in the oil spill litigation.

"It is true that, as the parties were approaching the final fairness hearing in November 2012, there was a concerted effort by the parties and claims facility to process a substantial number of high value claims in order to demonstrate that the settlement program was working as intended," Barbier said.

He said that according to Juneau, 60 percent of the claims paid then were not for clients of the attorneys involved in the settlement agreement.

"While the Settlement Agreement in general terms provides that claims will be processed in the order in which they are received, there are many circumstances which require exceptions, and there is no evidence that the Claims Administrator acted improperly in this regard," Barbier said.

Finally, Barbier addressed BP's failure to follow court imposed guidelines for filing motions. Despite court guidelines that required BP to meet an October 29 supplemental evidence deadline during which no new evidence was to be submitted, Barbier's ruling said BP filed more than 200 pages of new exhibits, none of which changed his mind.

"Regrettably, this is not the first time that BP has attempted to flout this Court's briefing orders," Barbier said. "There is no reason why BP could not have obtained its 'new' evidence before filing its Motion to Remove the Claims Administrator. Further, the alleged 'new' evidence does nothing to change the essential facts set forth above that lead the Court to deny BP's Motion to Remove."

BP has expressed unhappiness with Juneau and the oil spill claims process many times, despite that the settlement agreement and Juneau's participation were selected as a joint effort by BP and plaintiff attorneys.

"I will continue to process claims in a fair and consistent manner while following the court's direction," Juneau said in an emailed statement.

"BP strongly disagrees with the District Court's ruling and is considering its appellate options," BP said in an emailed statement. "BP will also continue its efforts to restore needed and promised integrity and transparency to the Gulf claims program. Simply put, it is unacceptable for the claims program to continue operating as it has been - inefficiently, secretively, and marred by corruption, fraud, and conflicts of interest."

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