Mikal Watts of Watts Guerra Craft in San Antonio
Mikal Watts of Watts Guerra Craft in San Antonio ()

The British company BP Exploration and Production Company and its U.S. subsidiary filed a lawsuit Tuesday in New Orleans federal court naming plaintiffs lawyer Mikal Watts and his law firm Watts Guerra.

In its complaint, BP alleges that Watts and his firm engaged in “brazen fraud” by claiming to represent more than 40,000 deckhands who allegedly suffered economic injuries due to the company’s massive Deepwater Horizon oil spill in 2010.

“We now know that over half of Watts’ alleged clients were phantoms: individuals never represented by Watts, in a number of cases not even commercial fishermen, and in some instances individuals who are deceased,” the company writes in its complaint, which has sections redacted.

As causes of action, BP cites negligent misrepresentation, unjust enrichment and abuse of process, among others. The complaint seeks an injunction stopping a second distribution of settlement monies, a declaratory judgment entitling BP to return of excess funds and unspecified damages.

Watts’ lawyer, Robert McDuff, a solo and civil rights lawyer from Jackson, Miss., issued a statement which said in part: “In another of a series of efforts to walk away from the settlement to which it agreed, BP has now launched an attack on Mikal Watts … BP’s attack is unfair and unwarranted. Working with other lawyers representing a wide array of oil spill victims, Mr. Watts devoted thousands of hours to uncovering the misdeeds of BP that led the oil spill and that disrupted the lives of many thousands of people who live in the region. BP confessed to felony charges relating to its misdeeds that caused the largest oil spill in the history of the United States. Its felony conduct damaged the lives and livelihoods of hundreds of thousands of people across the Gulf Coast. Mr. Watts never committed identity theft and did not defraud BP or anyone else. He made various filings on behalf of people to preserve their rights to pursue claims. All actions taken were in good faith that legitimate claims were being filed for real people who had been hurt by BP’s gross negligence. With respect to those who applied for the settlement, he forwarded the documentation they provided to the independent special master in charge of reviewing settlement claims. Mr. Watts and his law firm sent people regular updates regarding the status of the litigation. Only a small percentage contacted him to say they had never intended to sign up with him, and he promptly stopped making submissions for those who did. With respect to the remainder, he made the necessary filings to preserve their rights. Mr. Watts will defend himself against BP’s misleading attack.”

In a press release it issued Tuesday, BP stated: “BP relied on Mr. Watts’ representations when it agreed to pay $2.3 billion to the Seafood Compensation Program, which was established to compensate those who earn their livelihood from Gulf waters and were directly affected by the spill. Today’s lawsuit and related motions collectively seek to suspend the distribution of the remaining money in the Program fund, and grant BP discovery and an evidentiary hearing regarding the extent of Mr. Watts’ fraud and how much of the balance of the Seafood Compensation Program fund should be returned to BP as a result of it.

“The facts in this case shout fraud. Tens of thousands of Mikal Watts’ ‘clients’ have proved to be phantoms,” Geoff Morrell, a senior vice president and spokesman is quoted as saying in the company’s statement. “Mr. Watts’ false representations improperly inflated the value of potential claims against the Seafood Compensation Program and resulted in an overblown $2.3 billion fund. Under these circumstances, BP is not going to stand idly by and allow payments to proceed without first addressing the fraudulent conduct.”

In March, Watts resigned from the Plaintiffs’ Steering Committee (PSC) that leads in the pending litigation over the massive oil spill in the Gulf of Mexico. “The Clerk shall remove Mr. Watts from the list of PSC and Class Counsel members,” stated a March 13 order by U.S. District Judge Carl J. Barbier, who presides over the multidistrict litigation in the Eastern District of Louisiana in New Orleans.

At the time, Watts’ attorney, McCrum Law Office owner Michael McCrum, confirmed for Texas Lawyer that the Secret Service searched two San Antonio offices of Watts’ firm, Watts Guerra Craft, on Feb. 8 and took paper and electronic documents. McCrum said the search was part of an ongoing investigation about issues regarding the oil spill litigation and Watts—specifically, “The client list and the circumstances surrounding the signing up of those clients and filing lawsuits on their behalf.”

McCrum did not return a call for this report.