The Donovan Law Group

Oil Spill Settlements, Especially the BP Oil Spill Settlement, Are Wrong For America!

The BP Oil Spill Settlement Is Wrong For America!

By

Brian J. Donovan

Tampa, FL (March 31, 2014) – Oil spill settlements, especially the BP oil spill settlement, are wrong for America!

The BP Oil Spill Multidistrict Litigation (“MDL 2179”) officially started on August 10, 2010. The Transfer Order issued on that date by the United States Judicial Panel on Multidistrict Litigation (“JPML”) clearly states: “…. Centralization may also facilitate closer coordination with Kenneth Feinberg’s administration of the BP compensation fund.” From the very beginning, the purpose of MDL 2179 was to replace democratic adversarial litigation with a fund approach to compensating victims of the BP oil spill. The vast majority of BP oil spill victims would never have their day in court. Judicial economy, rather than justice, was the primary objective.

The fund approach to resolving mass claims, i.e., those claims resulting from the BP oil spill incident, ought to be viewed with a significant degree of concern. The precedent established by the JPML and the MDL 2179 Court is clear: A “Responsible Party” under the Oil Pollution Act of 1990 (“OPA 90”) may now enter into a contract with a politically well-connected third party “Claims Administrator,” i.e., Kenneth R. Feinberg and Feinberg Rozen, LLP, d/b/a Gulf Coast Claims Facility (“GCCF”). This third party “Administrator / Straw Person,” directly and excessively compensated by the party responsible for the oil spill incident, may totally disregard OPA 90, operate the claims process of the responsible party as fraudulently and negligently as it desires for the sole purpose of limiting the liability of, and providing closure to, the responsible party, and the third party “Administrator / Straw Person” shall never be held accountable for its tortious acts.

The operation of the GCCF has allowed BP to control, manage, and settle its liabilities on highly preferential terms; has permitted members of the MDL 2179 Plaintiffs’ Steering Committee, who are directly appointed by Judge Barbier, to be excessively compensated for merely negotiating a collusive settlement agreement; and has enabled judges to clear their dockets of large numbers of cases. In sum, fund approaches to resolving massive liabilities shift power over claims resolution entirely into the hands of self-interested parties and largely evade judicial scrutiny and oversight.

Judicial economy is undoubtedly well-served by MDL consolidation when scores of similar cases are pending in the courts. Nevertheless, the excessive delay and marginalization of juror fact finding (i.e., dearth of jury trials) associated with traditional MDL practice are developments that cannot be defended. The appropriate focus for fund resolution of mass claims should be justice for the claimants, not merely judicial economy and closure for the corporate misfeasor.

In sum, the major oil companies own Congress and the federal judicial system.

However, we can change that in regard to catastrophic oil spills by demanding that Congress holds responsible parties accountable. Proper enforcement of the Oil Pollution Act of 1990 and the Oil Spill Liability Trust Fund (“OSLTF”) will eliminate the need for costly and protracted litigation.

Demand that Congress requires responsible parties to pay the full costs and damages resulting from an oil spill incident by defining the term “expenditure,” under the OSLTF, as “an expenditure that is not reimbursed by the responsible party.”

N.B. – BP paid Feinberg Rozen, LLP a sum of $1.25 million per month to limit its liability (“administer the BP oil spill victims’ compensation fund”).

Spread the word and sign the petition: The Intended Purpose of the OSLTF Is to Fully Compensate Oil Spill Victims via Subrogation

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BP Oil Spill: Reply to PSC’s Response to the Open Letter Dated December 21, 2012

December 31, 2012

VIA Email

Mr. Stephen J. Herman
Plaintiffs’ Liaison Counsel
Herman, Herman, Katz & Cotlar, LLP
820 O’Keefe Avenue
New Orleans, LA 70113

Re: Reply to PSC’s Response to the Open Letter Dated December 21, 2012

Dear Steve,

I refer to the open letter, dated December 21, 2012, wherein I requested the PSC’s answers to ten questions in regard to its representation of my clients and all similarly-situated BP oil spill and Gulf Coast Claims Facility (“GCCF”) victims in MDL 2179.

You promptly responded, via email, by stating, “I respectfully decline to respond to your questions, which seem argumentative and disingenuous. To the extent you sincerely seek answers to the questions you pose, I invite you to review the numerous pleadings, transcripts and orders which are available on PACER.”

As I have already explained, your decision not to address the issues raised in the open letter, although completely understandable, is disturbing.

On December 21, 2012, subsequent to your receipt of the open letter, Judge Barbier granted final approval to the E&PD class settlement agreement. Notwithstanding this fact, all victims of the BP oil spill and the “Delay, Deny, Defend” strategy employed by Kenneth R. Feinberg, et al. have a right to clearly understand how and why they were represented by the PSC in MDL 2179.

The PSC’s clients are not being “argumentative and disingenuous” when they demand to know why they have not been fully compensated for their damages. Furthermore, as you are well aware, the answers to the ten questions in the open letter are not available on PACER. Only the PSC is in a position to fully and properly respond to these questions.

On December 25, 2012, you further state via email, “I suppose that you are free to attack the PSC and/or the Court in whatever way you deem appropriate.”

Steve, as you are well aware, the open letter is not an attack on any individual or group of individuals involved in MDL 2179 anymore than it is “argumentative and disingenuous.” It is, however, an indictment of a judicial system in which: (a) multidistrict litigation has been allowed to devolve to the point where the “Lexecon Rule” has been supplanted by the “Heyburn Rule;” and (b) district courts permit settlement class actions to continue to erode the public’s faith in the federal judicial system.

A. Multidistrict Litigation

1. The “Lexecon Rule”

In In re: Vioxx Prods. Liab. Litig. (“MDL 1657”), Judge Fallon’s analysis in regard to Lexecon is instructive.

“Traditionally, the cases in any given MDL originate from two sources.

First, cases are filed in, or removed to, federal courts across the country and transferred to the MDL court by the Judicial Panel on Multidistrict Litigation. See 28 U.S.C. § 1407(a). In these cases, the MDL court must apply the law of the transferor forum, that is, the law of the state in which the action was filed, including the transferor forum’s choice-of-law rules. See Ferens v. John Deere Co., 494 U.S. 516, 524 (1990). While the precise limits of the MDL court’s authority over such cases is currently subject to debate, it is clear that the court cannot try these cases, but rather must remand them to the transferor forum when pretrial discovery is complete. See Lexecon, Inc. v. Miberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998).

Second, a number of cases are often filed directly into the MDL by citizens who reside in the MDL court’s judicial district. In these cases, the MDL court must apply its own state law, that is, the law of the state in which it sits. It is undisputed that the MDL court has complete authority over every aspect of these cases.”

In re: Vioxx Prods. Liab. Litig., Case 2:05-md-01657 (E.D. La.) (“March 22, 2007 Order and Reasons”) (Rec. Doc. 10488).

2. The “Heyburn Rule”

The Heyburn Rule, in pertinent part, states, “To be sure, the Lexecon imperative does create severe inefficiencies in some cases as the transferor judge must re-familiarize himself or herself with the remanded action (perhaps many months after it was transferred out of the district under § 1407). However, the Heyburn Rule points out that “transferee judges are nothing if not resourceful where necessity dictates and several appropriate strategies are available by which the Lexecon conundrum may be avoided.”

Although Judge Barbier, the PSC, and BP refer to the MDL 2179 court’s “broad discretionary authority,” a “special-procedure” should not be crafted where a mandatory procedure already exists. It is important to remember that the very MDL procedures Judge Barbier, the PSC, and BP wish to circumvent were specifically enacted to reduce costs and promote judicial economy. Allowing the MDL 2179 trial plan is inconsistent with the clear statutory mandate of the multidistrict litigation enabling statute, 28 U.S.C. § 1407(a), and the Supreme Court’s holding in Lexecon. While the need to promote efficiency in litigation is real, it cannot be accomplished by overriding the applicable provisions set forth by Congress. In re: FEMA Trailer Formaldehyde Products Liability Litigation, 2009 WL 2390668 (E.D. La.).

The Heyburn Rule describes the Lexecon decision as a “conundrum” which may be avoided by “resourceful” transferee judges. My clients (who are now PSC’s clients) respectfully disagree. The Lexecon decision is not a conundrum. It is not an obstacle which judicial discretion may circumvent in the name of judicial efficiency/economy or political expediency. It is the law.

B. Settlement Class Actions

Settlement class actions are inherently flawed because they lack the “case” or “controversy” necessary to confer federal jurisdiction under Article III. The settlement class action court is asked not to resolve a real dispute between a litigant class and a party opposing that class, but rather merely to approve and implement a prearranged legal arrangement between the parties that was reached prior to the seeking of class certification.

While settlement class actions may have certain attractive aspects, such as reducing litigation expenses (MANUAL FOR COMPLEX LITIGATION, note 32, at § 21.612 (4th ed. 2004)), many of the traditional aspects of adversarial litigation are missing. As a result, the settlement class action is potentially the product of collusion among the parties: defendants who wish to rid themselves of the burden of litigation and plaintiffs’ counsel who wish to receive immediate compensation. Douglas G. Smith, The Intersection of Constitutional Law and Civil Procedure: Review of Wholesale Justice – Constitutional Democracy and the Problem of the Class Action Lawsuit, Northwestern University Law Review Colloquy, Vol. 104:319 (2010); See also, e.g., John C. Coffee, Jr., Understanding the Plaintiff’s Attorney: The Implications of Economic Theory for Private Enforcement of Law Through Class and Derivative Actions, 86 Colum. L. Rev. 669, 714 (1986) (“Often, the plaintiffs’ attorneys and the defendants can settle on a basis that is adverse to the interests of the plaintiffs. At its worst, the settlement process may amount to a covert exchange of a cheap settlement for a high award of attorney’s fees.”). (Rec. Doc. 6902-1).

“BP and the PSC report that in February 2011 settlement negotiations began in earnest for two distinct class action settlements: a Medical Benefits Settlement and an Economic and Property Damages Settlement.” (p. 3, Rec. Doc. 6418).

In sum, the PSC and other counsel allegedly performing common benefit work in MDL 2179 initiated settlement negotiations “in earnest” merely four (4) months after Judge Barbier appointed members to the PSC. (See Rec. Doc. 6831-1). Clearly, the MDL 2179 settlement class action was not achieved in the full context of adversarial litigation.

Furthermore, after the Supreme Court‘s decisions in Amchem and Ortiz it has become exceedingly difficult to certify a class in the context of a mass tort. (See MANUAL, supra note 22, § 22.7, at 413–14 (“After experimentation with class treatment of some mass torts during the 1980s and 1990s, the courts have greatly restricted its use in mass torts litigation.”); RICHARD A. NAGAREDA, MASS TORTS IN A WORLD OF SETTLEMENT 72 (2007) (“As embodied in Rule 23 of the Federal Rules of Civil Procedure in 1966, the modern class action seemed on its face a device with little applicability to mass torts.”)).

The American Law Institute‘s draft Principles of the Law of Aggregate Litigation summarizes the state of the law: “As a doctrinal matter, the class action has fallen into disfavor as a means of resolving mass-tort claims. This development reflects many factors, including concerns about the quality of the representation received by members of settlement classes, difficulties presented by choice-of-law problems, and the need for individual evidence of exposure, injury, and damages.” A.L.I., PRINCIPLES OF THE LAW OF AGGREGATE LITIGATION: PROPOSED FINAL DRAFT, note 7, § 1.02, notes to cmt. b(1)(B), at 26 (Apr. 1, 2009).

Indeed, even before the Amchem and Ortiz decisions, courts had recognized that there was a national trend to deny class certification in drug or medical product liability/personal injury cases. This resistance to certification in such cases can be traced to the 1966 amendments to Rule 23, which specifically noted that the class action device was “ordinarily not appropriate” in a “mass accident” case where there would be “significant questions . . . affecting the individuals in different ways.” (See FED. R. CIV. P. 23, Notes of Advisory Committee on Rules, 1966 Amend. See also In re “Agent Orange” Prod. Liab. Litig., 818 F.2d 145, 164 (2d Cir. 1987) (“The comment to Rule 23(b)(3) explicitly cautions against use of the class action device in mass tort cases. Moreover, most courts have denied certification in those circumstances.” (citation omitted)).

Presentment

In your email of December 25, 2012, you also state, “…….I would suggest that your clients not participating in the Economic Settlement will best be served if you: (i) ensure that you and/or they make Presentment of what you and/or they believe to be their full damages before January 18, 2013; and then, having made such presentment, (ii) file (or re-file) (and/or amend) suit on their behalf by April 20, 2013….”

I appreciate your advice and sudden concern for my clients. However, whenever our firm filed a claim on behalf of a client with GCCF, a copy of the claim was also filed directly with BP. In each case, BP provided a letter confirming its receipt of the claim. I understood that if a lawsuit was to be brought against BP, it should be brought under OPA and, therefore, the OPA Presentment requirement would have to be fulfilled.

GCCF Release and Covenant Not to Sue

In your email of December 25, 2012, you further advise, “…. (iii) with respect to any client whom you believe to have executed an invalid GCCF Release, assemble and prepare the best case you can to support the argument that such Release was procured under fraud, error or duress.”

As you are aware, our firm’s position is that every GCCF Release and Covenant Not to Sue violates federal law, State contract law, and is contrary to public policy. We shall address this matter at the proper time.

Steve, the PSC response generated the following additional questions.

QUESTION NO. 11

Why did the PSC wait until one month before the claim filing deadline to notify all BP oil spill and GCCF victims (its clients) of the OPA “Presentment” requirement?

On October 8, 2010, Judge Barbier appointed the members to the PSC (Rec. Doc. 506). The PSC sent a letter, dated December 13, 2012 and filed with LexisNexis on December 17, 2012, to all BP oil spill and GCCF victims wherein it finally advises its clients: “you must make ‘Presentment’ under the Oil Pollution Act for your Short Form Joinder, lawsuit or other claim to be valid…..before January 20, 2013. ”

The PSC should have notified all BP oil spill and GCCF victims (its clients) of the “Presentment” requirement in October, 2010, not in December, 2012.

QUESTION NO. 12

Why has the PSC failed to notify all BP oil spill and GCCF victims (its clients) that a lawsuit may be filed against Kenneth R. Feinberg, et al. without having to fulfill the OPA “Presentment” requirement?

GCCF victims may file an action alleging that Defendants Kenneth R. Feinberg, Feinberg Rozen, LLP, and GCCF misled them by employing a “Delay, Deny, Defend” strategy. This strategy, commonly used by unscrupulous insurance companies, is as follows: “Delay payment, starve claimant, and then offer the economically and emotionally-stressed claimant a miniscule percent of all damages to which the claimant is entitled. If the financially ruined claimant rejects the settlement offer, he or she may sue.” In sum, Plaintiffs would allege that BP is responsible for the oil spill incident; Feinberg, et al. (independent contractors), via employment of their “Delay, Deny, Defend” strategy, are responsible for not compensating and thereby financially ruining Plaintiffs. See Pinellas Marine Salvage, Inc., et al. v. Kenneth R. Feinberg, et al., 2:11-cv-01987 and Salvesen v. Feinberg, et al., 2:11-cv-02533. Motions to Remand for both cases remain pending in this Honorable Court.

Since Feinberg, et al is not a “Responsible Party” and therefore may not be sued under OPA, a lawsuit against Feinberg, et al. may be filed immediately because it does not require Presentment. The PSC would, however, need to advise all GCCF victims in regard to the statute of limitations and the associated tolling of the statute of limitations for class actions and fraudulent concealment or a misrepresentation by the defendant.

QUESTION NO. 13

Why does the PSC, which failed to adequately challenge the legality of the GCCF Release and Covenant Not to Sue for the past two years, suddenly advise non-PSC attorneys to “assemble and prepare the best case you can to support the argument that such Release was procured under fraud, error or duress?”

The ultimate objective of the “Delay, Deny, Defend” strategy of Feinberg, et al. was to obtain a signed “Release and Covenant Not to Sue” from as many BP oil spill victims as possible. Here, the GCCF Status Report as of March 07, 2012 is instructive. (See background information for “QUESTION NO. 8.”).

Feinberg, et al. cannot justify limiting payments under the Quick Payment Final Claim program to just $5,000 for individuals and $25,000 for businesses. There is no evidence that these amounts even remotely represent adequate consideration to compensate Claimants for the damages that Claimants did or will suffer as a result of the BP oil spill.

Steve, if the PSC had properly filed the B1 Master Complaint under OPA rather than alleging claims under admiralty law, Feinberg, et al. would never have been allowed to use the Release and Covenant Not to Sue to illegally exclude approximately 200,000 BP oil spill victims from the E&PD class settlement.

It has been, and remains, the responsibility of the PSC to “assemble and prepare the best case to support the argument that such Release was procured under fraud, error or duress.” On September 25, 2012, my clients filed their Motion to Nullify Each and Every Gulf Coast Claims Facility Release and Covenant Not to Sue. (See Rec. Doc. 7473-1). Please feel free to use the legal argument in this motion to assist with the preparation of the PSC case.

QUESTION NO. 14

Are you declining to answer these questions because you believe that an attorney-client relationship does not exist between the PSC and all BP oil spill and GCCF victims?

BP is extremely happy with the settlement. In a December 21, 2012 statement, BP said “it was pleased that the court approved the plaintiff steering committee’s settlement.” The PSC is ecstatic. Attorneys and CPA firms submitting claims for BP oil spill victims are giggling with delight over their new revenue stream. Unfortunately, the vast majority of BP oil spill victims are left scratching their heads over the entire MDL process and settlement class action. The numbers do not lie (See background information for “QUESTION NO. 8” and “QUESTION NO. 9”).

The combination of a settlement class action and MDL, which in this case appears to be “the product of collusion among the parties: defendants who wish to rid themselves of the burden of litigation and plaintiffs’ counsel who wish to receive immediate compensation,” has resulted in BP oil spill and GCCF victims receiving, if they are very fortunate, grossly inadequate compensation.

Steve, please understand that these fourteen questions are directed to the PSC by me on behalf of my clients (now PSC’s clients) and all similarly-situated BP oil spill and GCCF victims. These questions are not directed to the MDL 2179 Court. In sum, the PSC’s clients merely seek a better understanding of their representation by the PSC.

If you have any questions, please do not hesitate to contact me at 352-328-7469 or via e-mail at BrianJDonovan@verizon.net. Again, I would be happy to provide the PSC with any and all supporting documentation.

Very truly yours,

/s/ Brian J. Donovan

Brian J. Donovan

cc: James Parkerson Roy (jimr@wrightroy.com), Brian H. Barr (bbarr@levinlaw.com), Scott Summy (ssummy@baronbudd.com)

Click here to download a copy of this letter.

Click here to read the open letter.

Has the MDL 2179 Court Overreached Its Authority?

Has the MDL 2179 Court Overreached Its Authority?

_______________

Supreme Court Decision Poses an Interesting Dilemma for the BP Oil Spill Trial Court

Tampa, FL (April 11, 2012) – The Supreme Court has held that a district court conducting pretrial proceedings pursuant to 28 U.S.C. §1407(a) has no authority to invoke 28 U.S.C. §1404(a) to assign a transferred case to itself for trial. Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998).

On April 8, 2012, Selmer M. Salvesen, a clam farmer in Florida, filed a Motion to Vacate Order and Reasons [As to Motions to Dismiss the B1 Master Complaint] (Rec. Doc. 3830 dated August 26, 2011) with the MDL 2179 court. Mr. Salvesen’s Motion to Vacate poses an interesting dilemma for the BP Oil Spill trial court: (a) Does the court grant the motion to vacate the B1 order thereby derailing the MDL 2179 runaway train? or (b) Does the court ignore the Supreme Court decision in Lexecon in the name of judicial discretion, judicial efficiency, judicial economy and political expediency?

The Lexecon Rule

Justice Souter, in delivering the opinion of the Court in Lexecon, explained 28 U. S. C. §1407(a) authorizes the Judicial Panel on Multidistrict Litigation (the “Panel”) to transfer civil actions with common issues of fact “to any district for coordinated or consolidated pretrial proceedings,” but imposes a duty on the Panel to remand any such action to the original district “at or before the conclusion of such pretrial proceedings.” “Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated.” 28 U.S.C. §1407(a).

Justice Souter pointed out that the Panel’s instruction comes in terms of the mandatory “shall,” which normally creates an obligation impervious to judicial discretion. Anderson v. Yungkau, 329 U. S. 482, 485 (1947).

Moreover, the Supreme Court found that neither the statute’s language nor legislative history can unsettle §1407’s straightforward language imposing the Panel’s responsibility to remand, which bars recognizing any self-assignment power in a transferee court and consequently entails the invalidity of the Panel’s Rule 14(b).

The legislative history tends to confirm that self-assignment is beyond the scope of the transferee court’s authority. Justice Souter noted that the same House Report that spoke of the continued vitality of §1404 in §1407 cases also said this:

The proposed statute affects only the pretrial stages in multidistrict litigation. It would not affect the place of trial in any case or exclude the possibility of transfer under other Federal statutes…..The subsection requires that transferred cases be remanded to the originating district at the close of coordinated pretrial proceedings. The bill does not, therefore, include the trial of cases in the consolidated proceedings.” H. R. Rep. No.1130, 90th Cong., 2d Sess., p. 4 (1968) (Emphasis added)

The comments of the bill’s sponsors further suggest that application of 28 U.S.C. §1407 would not affect the place of trial. See, e.g., Multidistrict Litigation: Hearings on S. 3815 and S. 159 before the Subcommittee on Improvements in Judicial Machinery of the Senate Comm. On the Judiciary, 90th Cong., 1st Sess. Pt. 2, p. 110 (1967) (Sen. Tydings) (“[W]hen the deposition and discovery is completed, then the original litigation is remanded to the transferor district for trial”). Both the House and the Senate Reports stated that Congress would have to amend the statute if it determined that multidistrict litigation cases should be consolidated for trial. S. Rep. No. 454, 90th Cong., 1st Sess., p. 5 (1967). (Emphasis added)

MDL 2179

In order to efficiently manage MDL 2179, the court consolidated and organized the various types of claims into several “pleading bundles.” The “B1” pleading bundle includes all claims for private or “non-governmental” economic loss and property damages.  There are between 100,000 – 130,000 individual claims encompassed within the “B1” pleading bundle.

Rather than allege claims under the Oil Pollution Act of 1990 (“OPA”) (which governs the MDL 2179 cases alleging economic loss due to the BP oil spill) and the Outer Continental Shelf Lands Act (“OCSLA”) (which governs the MDL 2179 personal injury and wrongful death actions and borrows the law of the adjacent state as surrogate federal law), the PSC made the unfathomable decision to allege claims under a hodgepodge of statutes.

In the B1 First Amended Master Complaint, the PSC states, “The claims presented herein are admiralty or maritime claims within the meaning of Rule 9(h) of the Federal Rules of Civil Procedure. Plaintiffs hereby designate this case as an admiralty or maritime case, and request a non-jury trial, pursuant to Rule 9(h).”

Under general maritime law, the PSC alleges claims for negligence, gross negligence and willful misconduct, and strict liability for manufacturing and/or design defect. Under various state laws, the PSC alleges claims for nuisance, trespass, and fraudulent concealment. Under the Florida Pollutant Discharge Prevention and Control Act, Fla. Stat. § 376.011, et seq., PSC alleges a claim for strict liability. The PSC also seeks: (a) punitive damages under all claims; and (b) a declaration by the Court that the conduct of BP and its agents and representatives, including the Gulf Coast Claims Facility (“GCCF”), in obtaining releases and/or assignments of claims against other parties, persons, or entities is not an obligation of BP under OPA.

The PSC appears to be more interested in ensuring significant economy and efficiency in the judicial administration of the MDL 2179 court rather than in obtaining justice for the MDL 2179 plaintiffs. As noted above, in its B1 First Amended Master Complaint, the PSC alleges claims under general maritime law, not under OPA and OCSLA, thereby assisting the court in expeditiously being able to:

(a) Find, “The Deepwater Horizon was at all material times a vessel in navigation.”

(b) Find, “Admiralty jurisdiction is present because the alleged tort occurred upon navigable waters of the Gulf of Mexico, disrupted maritime commerce, and the operations of the vessel bore a substantial relationship to traditional maritime activity. With admiralty jurisdiction comes the application of substantive maritime law.”

(c) Find, “State law, both statutory and common, is preempted by maritime law, notwithstanding OPA’s savings provisions. All claims brought under state law are dismissed.”

(d) Find, “General maritime law claims that do not allege physical damage to a proprietary interest are dismissed under the Robins Dry Dock rule, unless the claim falls into the commercial fishermen exception.”

(e) Find, “…. That nothing prohibits Defendants from settling claims for economic loss. While OPA does not specifically address the use of waivers and releases by Responsible Parties, the statute also does not clearly prohibit it. In fact, as the Court has recognized in this Order, one of the goals of OPA was to allow for speedy and efficient recovery by victims of an oil spill.”

In re Oil Spill by the Rig Deepwater Horizon in the Gulf of Mexico, on April 20, 2010, – F. Supp. 2d -, 2011 WL 3805746 (Aug. 26, 2011 E.D. La.).

Since the PSC requests a non-jury trial pursuant to Rule 9(h) and alleges claims under general maritime law, rather than OPA and OCSLA, the MDL 2179 court has formulated a trial plan that dispenses with trial by jury and instead conducts a bench trial applying general maritime law.

The Heyburn Rule

The Honorable John G. Heyburn II, Chair of the Judicial Panel on Multidistrict Litigation, addressed the Lexecon decision in his article, “A View From the Panel: Part of the Solution,” 82 Tulane L. Rev. 2225 (2008).  The following is an excerpt from Judge Heyburn’s article.

Judge Heyburn points out that five appropriate strategies are available by which the Lexecon conundrum may be avoided:

(a) Provided the plaintiff is amenable and venue lies in the transferee district, the action could be refiled there.

(b) The parties could also agree to waive objections to venue.

(c) Alternatively, the transferee court could try a “Bellwether” case that was originally filed in the transferee district, the result of which may promote settlement of the transferred actions in the MDL.

(d) Another option, suggested in the Lexecon opinion itself, is for the transferor court to transfer the action back to the transferee court under § 1404(a).

(e) Still another option would be for the transferee judge to follow the action to the transferor court after obtaining an intracircuit or intercircuit assignment.

The MDL 2179 court has failed to avail itself of any of these “appropriate” strategies.

A “Bellwether” trial is sui generis; a “walks like a duck, quacks like a duck, it must be a duck” analysis cannot be used. Judge Barbier cannot try the cases transferred for “pretrial proceedings.” Judge Barbier certainly cannot try all of the plaintiffs’ claims in the aggregate in this proceeding. Nor can the Lexecon decision be circumvented by the device of permitting claimants to file “short-form joinders” injecting themselves into the limitation action. Accordingly, Judge Barbier, at the request of the PSC, formulated a non-jury trial plan which does not seek to adjudicate all the plaintiffs’ claims in the aggregate. Instead, it plans a non-jury trial of “issues” related to “allocation of fault” in the abstract. This novel proposal is still defective, as a trial of “issues” would try parts of actions that under Lexecon the MDL judge must not try and would amount to a class action in a limitations proceeding contrary to Rule 23. Moreover, the Fifth Circuit has held that class actions are not permitted in limitation proceedings. Lloyds Leasing Ltd. v. Bates, 902 F.2d 368 (5th Cir. 1990). Indeed, such a trial resembles an unsanctioned class action in almost everything but name. It does not remotely resemble a “Bellwether” trial.

Although Judge Barbier and the PSC refer to the MDL 2179 court’s “broad discretionary authority,” a “special-procedure” should not be crafted where a mandatory procedure already exists. It is important to remember that the very MDL procedures Judge Barbier and the PSC wish to circumvent were specifically enacted to reduce costs and promote judicial economy. Allowing the MDL 2179 trial plan would be inconsistent with the clear statutory mandate of the multidistrict litigation enabling statute, 28 U.S.C. § 1407(a), and the Supreme Court’s holding in Lexecon. While the need to promote efficiency in litigation is real, it cannot be accomplished by overriding the applicable provisions set forth by Congress. In re: FEMA Trailer Formaldehyde Products Liability Litigation, 2009 WL 2390668 (United States District Court, E.D. Louisiana).

Judge Heyburn describes the Lexecon decision as a “conundrum” which may be avoided by “resourceful” transferee judges. Plaintiff Salvesen respectfully disagrees. The Lexecon decision is not a conundrum. It is not an obstacle which judicial discretion may circumvent in the name of judicial efficiency, judicial economy or political expediency. It is the law.

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