NEW ORLEANS – As the U.S. Fifth Circuit Court of Appeals hears arguments concerning BP’s attempt to remove Deepwater Horizon Claims Administrator Patrick Juneau, prominent plaintiffs’ attorney Daniel Becnel says he backs the oil giant’s position.
Over the past 45 years Becnel has built a thriving plaintiffs’ firm in rural St. John the Baptist Parish and has never been hesitant to go after large corporations with deep pockets. But when it comes to the Deepwater Horizon class action - Becnel was the first to file suit - he says the case has become a “money grab” for all involved. That includes Juneau who, in his position as Claims Administrator, is being paid $3.5 million annually to oversee the settlement process.
While Becnel represents several claimants and is adamant that the 2010 Deepwater Horizon oil spill severely damaged the economy and BP should be held accountable, he said he is fed up with what he describes as collusion between Juneau and the Plaintiffs Steering Committee (PSC), the group of 18 lawyers who negotiated the settlement.
Juneau is a Lafayette-based defense attorney who was appointed to oversee the Deepwater Horizon settlement, the largest class action in history with more than 288,000 claims filed and issued in excess of 75,000 awards totaling more than $5.2 billion. However, nearly five years after the oil spill, more than half of the claimants have yet to see any payment.
Citing the slow pace at which Juneau has settled cases over the past year alone, which he sees as an incentive for Juneau to hold onto his title and continue to personally benefit from the case by taking home millions. Becnel said Juneau should be removed.
“Juneau ought to be thrown out immediately. Absolutely, he, his family members and all of that staff,” he said.
In its September 2014 motion to remove Juneau as claims administrator BP pointed to several problems with his time at the reins of the Court Supervised Settlement Program (CSSP).
BP’s complaints include a conflict of interest by Juneau stemming from a $275,000 contract that his law firm, Juneau David, had with the State of Louisiana to advise on oil spill issues prior to Juneau being appointed claims administrator. In addition, BP maintains that Juneau has been a poor steward of claims administration funds running up more than $1 billion in administrative costs. Juneau spent $471 million alone in 2013 at a cost of $15,000 in administrative costs per claim settled. But perhaps the most damning claim by BP involves alleged corruption within the CSSP’s ranks.
Also, under Juneau's leadership at least five senior level employees were ousted from the program, some under allegations of unethical behavior for which they currently face investigation.
Becnel’s criticism of Juneau goes far beyond what is laid out in the oil giant’s legal motion. In a recent interview he added more commentary including allegations that Juneau has close ties to PSC attorneys who he says may have had a hand in getting Juneau appointed as special master to replace Kenneth Feinberg who previously served as the head the Gulf Coast Claims Facility, the predecessor to the CSSP. In addition, Becnel questions Juneau’s move to hire his own son, Mike Juneau, as his assistant at the CSSP.
Becnel is particularly upset because he believes Feinberg, as Juneau’s predecessor, was wrongfully removed for being considered unfriendly to the PSC and being too harsh in his requirements that claimants show ample proof of damages connected to the oil spill.
Becnel’s argument is backed up by a previous ruling by the Court of Appeals which found business economic loss claims under Juneau were being improperly calculated, resulting in the payment of claims that were not directly related to the 2010 oil spill. As a result of the Fifth Circuit ruling, a new method for calculating claims, deemed Policy 495, was implemented by Juneau in May 2014.
Policy 495 forces businesses seeking damages to more closely match post-spill revenue with expenses. The effect, according to many experts, is that future claims in the Deepwater Horizon case will be smaller and many Gulf Coast businesses once deemed eligible for a settlement may no longer collect at all. While BP attempted to recover $185 million in claims they found been overpaid or would not have been paid at all had Policy 495 been implemented from the beginning, U.S. District Judge Carl Barbier, who is overseeing the case, rejected the attempt.
Barbier similarly rejected the motion to remove Juneau as claims administrator at the district court level in November 2014. In that ruling, Barbier wrote that Juneau’s disclosure to the oil giant of his past work had been sufficient and thus not deemed to be a conflict of interest and further that BP’s complaint over the matter came too slowly.
Following that ruling BP vowed to appeal and later won a hearing at the Court of Appeals where arguments are being heard this week. It is now up to that court to decide if any of BP’s arguments against Juneau are valid.
(Editor’s note: This is the second of an installment of articles and accompanying videos with attorney Daniel Becnel, who filed the original multi-district litigation against BP regarding the 2010 Deepwater Horizon oil spill. To see the first installment CLICK HERE.)