BP motion to remove claims administrator alleges multiple instances of impropriety, incompetence

By Louisiana Record reports | Sep 3, 2014

NEW ORLEANS – The motion BP PLC filed Tuesday to have settlement administrator Patrick Juneau removed from the Deepwater Horizon oil spill case alleged a number of mistakes and deficiencies the Lafayette lawyer has allegedly made during his two and a half years on the job.

Below are some of the missteps that BP says make Juneau unsuitable for his $3.4 million-per-year position:

• Juneau represented a plaintiff prior to becoming settlement administrator and did not divulge this fact to the court.

In its massive filing on Tuesday, BP provided a copy of a 2011 contract that Juneau signed with the State of Louisiana. The contract, for $275,000, calls for Juneau to provide advice about the Deepwater Horizon oil spill to Louisiana’s government regarding the claims process. Louisiana later decided to sue BP, seeking millions of dollars in damages.

BP’s filing also includes a series of emails Juneau sent on behalf of the state to his predecessor, Ken Feinberg. In those emails, Juneau appears to press Feinberg to relax standards of proof for fishermen pursuing claims.

BP’s filing also includes an expert opinion from William Ross, a legal ethics professor at Samford University, who concludes that Juneau is unfit to serve as claims administrator for several reasons, including for improperly disclosing his state contract work.

• Juneau has been a "wasteful" steward of settlement money, having racked up more than $1 billion in administrative expenses during his tenure.

In its motion, BP says that 18 cents of every dollar paid out in claims under Juneau has gone toward overhead.

In its filing, BP attaches an opinion from Mark Hutchins, a managing partner at the national accounting firm KPMG, which says Juneau’s operation fails to meet the minimum level of accountability.

“Based on my 30 years of experience in reviewing countless major corporations
and other entities, I believe the Claims Administrator failed to meet the basic standard of
reasonable due care,’’ Hutchins said in the report.

• Top managers under Juneau were "corrupt" or negligent.

BP’s motion takes note that no fewer than five senior officials – including the claims office’s chief executive, its chief financial officer, its general counsel and its appeals chief have either been fired or resigned under a "cloud of misconduct."

• Juneau presided over an operation that rewarded connected lawyers and other insiders.

BP’s motion notes the findings of New Orleans investigative blogger Jason Berry who obtained and published emails and internal documents showing that the top lawyers in the case, members of the so-called Plaintiff’s Steering Committee, pushed more than 400 claims through the settlement system before anyone else, thereby paying themselves before the thousands of other claimants who had no inside connections. This expediting system carried Juneau’s blessing, Berry’s leaked documents showed.

Juneau later told Berry that the expediting program was carried out with BP’s full knowledge and consent.

• Juneau has made public statements accusing BP of lying and issued a veiled threat to sue company officials for disparaging him.

In an interview with a newspaper reporter for the Lafayette-based Daily Advertiser Juneau said statements allegedly made about him by BP’s CEO Bob Dudley saying he “willfully misinterpreted” the settlement contract was a “lie” and “actionable.”

BP has said it can find no instance where Dudley disparaged Juneau in public. “Even if his assertions were correct, it would be impossible for any judge to remain on a case after giving an interview to a newspaper in which he claims a right to initiate legal action against a litigant or comments on the merits in such a manner,’’ the BP motion reads. "The appearance of partiality is obvious.’’

Juneau said in a recent interview that his newspaper comments were taken out of context and that his characterization that BP’s public statements as “actionable” were not meant to imply that he planned to sue the oil giant.

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