NEW ORLEANS – After nearly two years of waiting, the fate of a group of attorneys caught up in an alleged kickback scheme including secretive payments between private personal injury lawyers and a former employee of the BP Deepwater Horizon claims center has been decided by a federal judge – and the penalties are severe.
U.S. District Judge Carl Barbier has barred attorneys Jon Andry, of New Orleans, and Glen Lerner, of Las Vegas, principals of the Andry Lerner law firm, and former Deepwater Horizon claims center attorney Lionel “Tiger” Sutton III from representing clients seeking damages from the 2010 Deepwater Horizon oil spill. He also has recommended lodging ethics complaints against the three for misleading the court, which could lead to their suspension or disbarment.
According to Barbier’s ruling, the Andry Lerner law firm, which was set up specifically to draw oil spill claimants, has several hundred clients pursuing settlements with the oil giant.
Andry and Lerner were accused in a 2013 report released by Special Master Louis Freeh of engaging in a kickback scheme in which they provided Sutton, a settlement fund employee with a secret $40,000 payment. Freeh characterized the payment as a kickback for attempting to help expedite claims through the payment process. Andry, Lerner and Sutton all say the $40,000 payment was a case referral fee for legal work Sutton did on behalf of Slidell fisherman Casey Thonn before he referred Thonn’s case to Andry Lerner – not an attempt to bribe Sutton. That claim was later determined to be fraudulent and Thonn, who pleaded guilty to filing the false claim, is awaiting sentencing.
In his ruling, Barbier said the claim itself appeared to have been handled correctly, but that Sutton has admitted he misled the court when confronted with the payment. Barbier added that all three men “engag[ed] in conduct involving dishonesty, deceit and misrepresentation.''
Others named in Freeh’s report fared better. Sutton’s wife, Christine Reitano, also an employee of the settlement fund, was accused by Freeh of fraud, money laundering and perjury. However, Barbier said there was no evidence that she did anything wrong.
Gilbert "Gibby" Andry, brother of Jon Andry, was also named in Freeh's report, but was not sanctioned by Barbier. In fact, Barbier ruled that a $7.9 million damage claim filed by the Andry brothers on behalf of their partnership, the Andry Law Firm, could proceed. However, the claim, which is believed to be one of the largest BP-related damage requests by any Gulf Coast law firm, could be reduced substantially. Barbier intimated in his ruling that the Andry Law Firm claim will be refigured under so-called “Policy 495,” which was implemented last year. Policy 495, which was demanded by the U.S. Court of Appeals for the Fifth Circuit, has sharply diminished payments to certain classes of businesses.
Lerner, the Andry brothers and Sutton, as well as their attorneys, either declined to comment or did not respond to requests for comment.
Of the sanctions handed down by Barbier, the Andry Lerner law firm may have been hit the hardest. While Barbier said the firm would be entitled to fees for work already performed on BP claims cases, he stipulated that Andry Lerner will not receive the money until all other claimants have been paid first. Given that some 130,000 claims still await payment in the five-year-old case, it could be years before Andry Lerner receives those funds.
In the proceedings leading up to Barbier's ruling barring the Andry Lerner firm from representing further claimants, they were represented by prominent New Orleans-based bankruptcy attorney Douglas Draper.
Barbier additionally ordered Freeh to report Andry, Lerner and Sutton to the respective bar association disciplinary arms in the states of Louisiana and Nevada, as well as the federal ethics panel for the U.S. District Court of the Eastern District of Louisiana.