Judges Asked to Consolidate Oil Spill Cases

(CN) - A federal panel of judges met with attorneys in Boise, Idaho on Thursday to consider how to consolidate more than 300 lawsuits against BP and other companies following the Gulf of Mexico oil spill.

The seven-member U.S. Judicial Panel on Multidistrict Litigation listened to arguments from 23 attorneys wishing to put in a favorable word for the city they think would best handle the lawsuits. The judicial panel is expected to announce its decision in August.

BP and the other oil spill defendants would like the cases to go to Houston.

Attorneys critical of the idea say it would be unfair to make those suing for economic hardship, such as Gulf fishermen, restaurateurs and seafood company owners, travel so far from the area of the Gulf impacted by the disaster.

Allan Kanner, a New Orleans lawyer arguing for Louisiana, said New Orleans is "the geographical center of gravity."

The U.S. Justice Department is rooting for the cases to land in New Orleans Federal Court, arguing the money brought in to the city by what could be years worth of litigation would help make up for losses to Louisiana's economy spurred by the oil spill.

Kentucky Federal District Court Judge John G. Heyburn II, the head of the panel, minimized argument that the location of a judge would influence the judge's decisions. "Time after time they've proven they can do that in a fair way," he said.

Some attorneys said New Orleans might not be the best choice, as many people in Louisiana could end up benefitting from a large settlement, and because only four local judges out of 12 will be available to hear the cases. Most of the unavailable judges recused themselves due to having oil and gas industry investments.

One judge who sold his energy holdings in order to possibly handle the consolidated cases is New Orleans Federal Judge Carl Barbier, who discovered after the oil spill that he owned bonds and other "debt instruments" issued by rig owner Transocean and cement contractor Halliburton.

Even though Barbier told his broker to sell the bonds on June 2, before much of the oil spill litigation began, and explained he was unaware he owned them, Halliburton and BP sought to have him removed from the case.

Barbier refused to remove 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 last week declined.

"We see no error in his reasoning for denying the motion to recuse," the judges ruled.

If the judicial panel decides there are not enough New Orleans-based federal judges without oil interests to handle the cases, 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.

Perry Weitz, a lawyer from New York, argued in favor of recruiting Manhattan Federal District Court Judge Shira A. Scheindlin, who has experience in complex litigation, to New Orleans.

The oil spill lawsuits 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.

A small group of protesters congregated outside the federal courthouse Thursday to urge the panel to choose a judge without ties to the oil industry.

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