Deepwater Horizon contractor drops bid to replace Barbier as MDL judge

Steve Korris Aug. 31, 2010, 8:24am


Cameron International dropped its bid to replace U.S. District Judge Carl Barbier as pretrial judge over oil spill litigation from five states.

Cameron, blowout prevention contractor on the Deepwater Horizon rig, moved on Aug. 20 to withdraw a recusal motion it filed in June.

Barbier granted withdrawal on Aug. 25, canceling a Sept. 16 hearing on his investments in rig owner Transocean and cement supplier Halliburton.

Barbier presides over federal cases from Louisiana, Texas, Alabama, Mississippi, and Florida, by appointment of the U.S. Judicial Panel on Multi District Litigation.

On April 20, when the rig exploded and 11 men died, he held at least $30,000 in Transocean and Halliburton bonds.

When litigation began, he presided over suits in the Eastern District of Louisiana against Transocean, Halliburton, rig operator BP, Cameron and others.

He sold the bonds on June 3, after Bloomberg News reported on them.

Bloomberg found that six of 12 federal judges in New Orleans and federal judges in Louisiana, Alabama and Florida disqualified themselves.

Barbier wrote, "So there is no perception of a conflict in these cases, yesterday I instructed my broker to sell the few Transocean and Halliburton bonds in my account."

Cameron sought recusal anyway, claiming federal law disqualifies a judge who knows he has a financial interest in a party.

Halliburton and rig operator BP joined the motion.

Barbier denied recusal on June 17, finding the law applied to stocks but not bonds because bonds don't constitute ownership.

At the time he presided over 33 cases.

On appeal, U.S. Fifth Circuit judges in New Orleans agreed with Barbier on the distinction between stocks and bonds.

"This conclusion, however, does not put the matter completely to rest for two reasons," wrote judges Grady Jolly, Emilio Garza and Carl Stewart.

Even if bonds don't convey ownership, the judges wrote, they might require recusal as financial interests in the subject matter.

The judges found a separate basis for possible disqualification in a portion of law on "any other interest that could be substantially affected."

Finding nothing in the record about the potential impact of the litigation on the bonds, they wrote that they would be forced to speculate.

"We note that if the district court concludes that the debt instruments could be substantially affected, then recusal would be mandatory," they wrote.

The decision appeared to invite swift action, and Cameron responded in 11 days with a motion for judicial disclosure.

Cameron asked Barbier for a hearing on his holdings in Halliburton and Transocean as of April 30, the dates he bought and sold the bonds, and the prices.

Barbier set a hearing for Aug. 18.

On Aug. 10, the multi district panel consolidated the cases in Barbier's court with 44 from other districts and assigned them all to Barbier.

Panel judges declared themselves comfortable with the choice though other judges recused themselves and Barbier might be subject to recusal.

"Judge Barbier is an exceptional jurist, who would be a wise selection for this assignment even had those other judges in the district been available," they wrote.

Barbier postponed Cameron's disclosure hearing to Sept. 16, and the delay resulted in Cameron owners changing their minds.

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