Gibson Dunn’s Theodore Olson (Photo: Diego M. Radzinschi / NLJ)
BP PLC has petitioned an en banc panel of a federal appeals court to rehear a three-judge panel’s recent decision upholding the fairness of the Deepwater Horizon oil spill settlement.
In moving for a rehearing by the full court, BP continued to challenge what it calls the “causation” issue—certification of a class that includes claimants asserting damages not caused directly by the 2010 spill. BP has maintained that the settlement administrator’s interpretations and court orders involving the deal have resulted in awards to individuals and businesses with no oil spill damages.
The three-judge panel on Jan. 10 disagreed that the settlement, as administered, violated class action law. In its Tuesday filing, BP called the Fifth Circuit’s ruling an “unprecedented decision by a divided panel of this Court.”
“If the panel’s decision is permitted to stand, it will work a revolution in class-action law in this Circuit, permitting the certification of classes that cannot be certified anywhere else in the country,” BP attorney Theodore Olson, a Washington partner at Los Angeles-based Gibson, Dunn & Crutcher, wrote.
BP also contends that the ruling conflicts with precedent and “is contrary to the language of the settlement,” BP spokesman Geoff Morrell wrote in an emailed statement to The National Law Journal. “BP believes that en banc review is warranted because the panel’s decision conflicts with those holdings.”
Meanwhile, former FBI agent Louis Freeh, who is investigating potential fraud in the settlement process, on Friday accused David Duval, the former appeals coordinator in the claims administration office, of violating conflict of interest policies by mishandling an email concerning a claim. The claim was brought by a law firm in which his uncle and cousin are partners: Duval, Funderburk, Sundbery, Lovell & Watkins of Houma, La. Freeh concluded, however, that Duval, who resigned on Oct. 7, didn’t financially benefit.
Stan Duval, of Duval Funderburk, did not return a call for comment.
Freeh said he found checks in Duval’s bank account from a company owned by Kirk Fisher, another former administration official, associated with visits to a New Orleans bar that received $500,000 in oil spill claims. Fisher and David Odom, the former chief executive officer of the claims administration office, also accused of frequenting the bar, resigned on Dec. 20.
“The actions are inconsistent with development of a proper ethical tone from senior staff,” Freeh wrote. “The actions further create risks for an office entrusted to administer a multi-billion dollar settlement fund, as financial distress can lead to susceptibility to bribery and other vulnerabilities.”
BP, which in newspaper advertisements last month alluded to the resignations and visits to a “New Orleans strip club,” asked Freeh on Tuesday for support documents to determine whether “more drastic action” is required. “Judge Freeh’s reports have uncovered a troubling unprofessional culture at the settlement program, from top management down, that has allowed fraud, misconduct, and unethical behavior to flourish,” Morrell told the NLJ.
Claims administrator Patrick Juneau said in an emailed statement that he was surprised at BP’s request.
“When problems were raised in this program, I have promptly and appropriately addressed those problems,” he said, citing recent changes including expansion of the office’s fraud prevention staff, new audit procedures and setting up a confidential hotline to report potential conflicts or ethical violations.
Contact Amanda Bronstad at email@example.com.