Thursday, January 26, 2012

Court orders GCCF to withhold 6% of some payments

Any oil spill claimant who joined the legal action against Transocean -- pending in a New Orleans federal court -- will have six percent of his payment withheld by the Gulf Coast Claims Facility (GCCF).

The current rule, ordered January 18, which does not subject a claimant to the holdback if she never filed suit or joined the MDL litigation, comes after the court reversed its own earlier ruling, issued January 4. The earlier ruling, on January 4, had subjected all GCCF claimants to the 6% holdback, even if they never hired a lawyer and never filed suit or joined the MDL. The January 4 order amended and clarified a December 28, 2011, order, which originally established the MDL escrow account and reserve.

Judge Barbier ordered the 6% "holdback" on to cover whatever fees the court might later authorize to pay lawyers representing plaintiffs in the multi-district litigation (MDL) that encompasses the numerous civil cases arising from the Deepwater Horizon oil spill.

The lawyers working for plaintiffs in an MDL typically produce results that benefit all plaintiffs, even those who do not have a lawyer and those whose lawyers are not actively assisting the MDL Plaintiffs' Steering Committee (PSC). For this reason, courts generally award some funds to the MDL PSC, out of jury awards and settlement amounts, to pay litigation fees and expenses.

In the Deepwater Horizon MDL, the court initially ordered holdback of such funds from all GCCF claimants, in the Dec. 28, 2011, order (clarified and amended in the Jan. 4 order). This was unlike the typical MDL situation, in which such an order would only affect parties who had filed lawsuits. In the BP oil spill scenario, GCCF claimants were affected, and many of those individuals and businesses have not filed a lawsuit. Several parties criticized and questioned the court's order to withhold funds from non-litigating parties, appealing to Judge Barbier to alter the ruling, which he did, in the January 18 order.

"The Court has received and considered responses from a number of parties," Judge Barbier explained in his January 18 order, "including the PSC, the United States, the Attorney General for the State of Alabama, and also from a number of interested non-parties, including the Attorneys General for the States of Mississippi and Florida, as well as several non-PSC attorneys."

Some of those responses addressed other issues, beyond the holdback fee. Judge Barbier addressed one of those issues in a separate January 18 order, appointing Louisiana Attorney General James D. “Buddy” Caldwell as Co-Coordinating Counsel for the State Interests. Caldwell had previously been excluded from a role in the MDL, but will now be working alongside Alabama Attorney General Luther Strange.

Because the court has not yet made any rulings on exactly how much the fees will be, it is possible that some of that money might someday be paid back to the GCCF claimants.