U.S. District Judge Carl Barbier lashed out at an attorney for BP PLC during a hearing in New Orleans. The company cited alleged corruption in asking to halt the claims process in its $7.8 billion settlement over the Deepwater Horizon oil spill — but where, the judge wanted to know, was the evidence?
"You know, the problem I have here is that you all have made a lot of accusations, put out a lot of innuendo, and I want to know what evidence there is to support this," he said, according to a transcript of the July 19 hearing. "I can't grant an injunction based on suspicion, innuendo, beliefs, somebody who called in some information, we don't even know who they are, until there's some evidence in front of me."
BP, in moving for an emergency injunction, tried to make the case that the recent firing of two staff attorneys to administrator Patrick Juneau corrupted the entire process. Both attorneys are under investigation for having accepted payments from The Andry Law Firm that had filed claims against the settlement fund for oil spill victims.
While conceding the accusations were "troubling," Barbier rejected BP's motion. But not before raising more questions about The Andry Law Firm, especially after lawyers for two firms bearing the Andry name showed up in his courtroom that day. Brothers Jonathan and Gilbert Andry, who once practiced together at The Andry Law Firm, told the judge they now work at separate firms. They insisted that BP has made a mountain out of a molehill — and intentionally misstated the facts to suit its purpose.
"BP confused the Andry entities as part of a deliberate attempt to impugn the Andry Law Firm specifically for the purpose of halting the payment of the Andry Law Firm claim," Jonathan Andry wrote in an email to The National Law Journal. "This entire controversy was manufactured by BP in an attempt to back out of the settlement agreement it approved."
Kyle Schonekas, a lawyer who represents The Andry Law Firm, echoed that assertion during the hearing, saying: "BP, I believe, has deliberately blurred the lines, Judge, so that they can get the stink on everybody's shoes." Schonekas is a founding member of Schonekas, Evans, McGoey & McEachin in New Orleans.
The injunction request represented the latest attempt by BP to halt payments under the settlement, which Barbier approved on December 21. BP has insisted that the method for calculating claim amounts has encouraged some businesses to file for "fictitious losses," resulting in "windfall" payments. Barbier rejected that contention, and BP took its case to the U.S. Court of Appeals for the Fifth Circuit, which heard oral arguments on July 8.
Now BP has submitted an investigative report citing an unnamed "confidential source" who told a member of Juneau's office that one of his staff attorneys, Lionel "Tiger" Sutton III, had been in business with The Andry Law Firm and had originally filed some of the claims.
Juneau's office contacted the FBI's New Orleans office and began going through Sutton's computer, finding numerous emails in which Sutton appeared to ask firm lawyers about payments. Sutton's wife, Christine Reitano, another of Juneau's staff attorneys who previously ran a law firm with her husband, was found to have filed claims on behalf of oil spill victims, one of which was passed along to The Andry Law Firm. The search found evidence that the firm represented 675 oil spill victims and had its own claim for $7.6 million in economic losses.
Juneau placed the firm's claims on hold. Sutton resigned and Reitano was terminated, according to court records. Barbier hired former FBI director Louis Freeh on July 2 to conduct an outside investigation. That didn't placate BP. "During Special Master Freeh's investigation, BP is faced with the prospect of paying out millions of dollars each day based on claims and policy decisions that may be tainted by fraud, corruption or other improprieties," BP said in its motion.
During the July 19 hearing, Barbier appeared unhappy at the amount of evidence offered by BP attorney Jeffrey Clark, a Washington partner at Kirkland & Ellis. "BP has not produced any evidence that would warrant the Court taking the drastic step of shutting down the entire claims payment program," Barbier said, according to the transcript.
In fact, the report on which BP so heavily relied got its facts wrong about The Andry Law Firm, according to the Andry brothers, longtime Louisiana attorneys specializing in personal injury cases. According to a July 18 affidavit by Gilbert Andry, a 1989 graduate of Tulane University Law School, he and his brother were the only two members of The Andry Law Firm but split when Jonathan Andry established his own firm to represent clients affected by the 2010 oil spill. That firm, the Andry Law Group, does mass tort litigation, according to Jonathan Andry's email to the NLJ. A year later, he created Andry Lerner with law school pal Glen Lerner. On its Web site, Andry Lerner advertises for oil spill victims, exclaiming: "Direct proof of attributable loss is not required under the oil spill settlement!"
It was Andry Lerner, not The Andry Law Firm, whose 489 claims were halted as part of Juneau's investigation. That's why James Cobb Jr., a solo practitioner in New Orleans, intervened on Andry Lerner's behalf to oppose BP's motion. He denied that his client had anything to do with the firings but acknowledged that Sutton had "some legitimate business connection" to Andry Lerner — although he couldn't say whether he was an associate or a referral source.
Jonathan Andry, in his email, wrote that he and his firm had "no business relationship" with Sutton or Reitano. "We have never practiced law together in the same firm," he wrote. As for the investigation, the allegations were "baseless," he wrote. "For the record, the primary focus of the pending investigation is the conduct of Sutton and Reitano. I am not under investigation."
In his affidavit, Gilbert Andry wrote that The Andry Law Firm represents no oil spill claimants. The only claim the firm made was for its own spill-related losses — which Juneau put on hold. He also insisted that he and The Andry Law Firm have no financial interest in the Andry Law Group or Andry Lerner. At no time did he or Jonathan Andry "ask Mr. Sutton to do anything improper, illicit, or illegal in processing the…claim filed by The Andry Law Firm LLC." Moreover, "at no time did Mr. Sutton have any involvement in the processing or handling of The Andry Law firm claim."
In the end, Barbier found more fault with BP, admonishing its use of "hyperbole" and "personal attacks" in arguing for an injunction.
Amanda Bronstad can be contacted at firstname.lastname@example.org.