Sunday, March 09, 2014

The Wisner Trust: Horse trading in Louisiana's wild, wild justice system

It was recently brought to my attention that the Wisner heirs had filed a complaint with the U.S district court, Eastern District of Louisiana in respect to the five JV attorneys hired by Mayor Mitch Landrieu to represent The Wisner Trust Advisory Committee in their case against BP for the damages inflicted upon Wisner properties during the 2010 Macondo oil spill.

I received that complaint last week.   Apparently it has already been dismissed by Federal Judge Sarah S. Vance:

Complaint against JV attorneys representing Wisner Trust v. BP

The five law firms I refer to as the "JV (joint venture) attorneys" are: Herman, Herman & KatzDomengeuax, Wright, Roy & Edwards; Fayard & Honeycutt; Fred Herman and Leger & Shaw.  Three of these firms...Herman, Roy and Fayard....also serve on the Plaintiff Steering Committee for the Deepwater Horizon Economic Claims Center.

These JV attorneys also represent The City of New Orleans as well as Orleans Parish Prison in their lawsuits against BP.

Keep in mind that public entities are not allowed to enter the settlement program (DHECC), only private individuals.  Public claims against BP for the oil spill must be filed in open court.

The Great Wisner Train Robbery

For over a year, AZ has documented the shenanigans that occurred with the Wisner Trust Advisory Committee and how Mayor Landrieu, along with his appointee to the Trust, Michael Sherman, manipulated the five-seat committee in order to create a "hostile takeover":

American Zombie: The Wisner Fund - Battle for the Bayou - Part I

American Zombie: The Wisner Fund - Battle for the Bayou - Part 2

Immediately after two Mayoral cronies, Anthony Lorino for Tulane and Ron Gardner of LSU, were placed on the board by their respective entities; Michael Sherman called a vote to fire the Trust's existing legal counsel in their case against BP and replace them with the aforementioned JV attorneys.  Having the majority three-man vote needed to pass a motion, Sherman, Lorino and Gardner succeeded in their plan to fire the environmental law firm Waltzer and Wiygul in order to bring the JV attorneys on board.

After over a year of documenting this story, I've uncovered so many conflicts of interest with the JV attorneys and falsifications by City attorneys, specifically former Executive Counsel to the Mayor, Michael's difficult to keep up with them all.

In respect to conflict of interest issues, the most notable was in Part 2, when I posted an email chain between Sherman, Steve Herman and BP attorneys, Mark E. Holstein and  Nathan Block.  There, Herman was providing Holstein and Block with privileged information from a Wisner Trust Advisory Committee executive session.  Keep in mind....this is the plaintiff attorney providing the defense's attorney with privileged information from the claimant.  I'm not sure how a conflict of interest gets any more explicit than that and it's right there in black and white.

And the obfuscation and dissembling has continued even after Sherman quietly resigned his position as a city attorney to seek the brights lights of show business as an on-air legal analyst for WDSU (officially making him a public figure).

Indeed, the Mayor's counsel won a major victory in Orleans Civil District Court, per Ad Hoc Orleans Civil District Court (CDC) Judge Melvin Zeno, partially on the premise that The Wisner Trust Advisory Committee should have no oversight on the City's portion of the Wisner proceeds because an oversight body already existed in City Council.  Sherman's successor to the Wisner trustee postion, Erica Beck, sat through the entire hearing listening to her colleague, City Attorney Sharonda Williams, make the City Council oversight argument to Judge Zeno in order to avoid oversight from the Advisory Committee.

One month later Beck stood in front of City Council and told them no one in the Mayor's office envisioned City Council having oversight over the Wisner funds:

American Zombie: What wicked webs we weave...

One of the biggest revelations the blog uncovered was a complaint filed in may of 2013 against BP by the JV attorneys on behalf of the Orleans Parish Sheriffs Office (OPSO).  In that complaint, the JV attorneys claimed the Sheriffs Office had suffered economic losses, per taxes, because of the damage to Wisner property:

American Zombie: "Complaints"

1.  In item 31 of the Wisner complaint this grievance for OPSO is listed:  "...including New Orleans, was a foreseeable result of the oil spill. The adverse impacts to these industries resulted in reduced economic activity in New Orleans which is heavily dependent on the seafood, tourism and petrochemical industries. Due to the foreseeable adverse impact on these industries, the Sheriff of Orleans has lost, and continues to lose, ad valorem property tax revenues and other taxes."

The only problem with that is that there is no Wisner property in Orleans Parish.  This claim is fraudulent...pure and simple...and it was filed by the JV attorneys.

If you read the comment section of that post, you will see an exchange I had with an anonymous commenter who claimed the inclusion of Wisner in the Orleans Parish Sheriffs Office complaint was simply a "cut and paste" error.  A simple mistake on behalf of the law firm that filed it.  That would be a potentially multi-million dollar cut and paste error but the commenter assured me this happens all the time.

I'm curious if the legal filing was retracted or amended since last May....if's still fraudulent... and it's still pending in Orleans Parish CDC.

I also noted that a "loss of natural resources" from Wisner land was claimed on behalf of the City and OPSO but was curiously absent from the Wisner claim filed by the JV attorneys:

Item #2  

Why would they fraudulently file a claim for OPSO in respect to Wisner while downplaying losses for the Wisner Trust, itself?  Let me provide a thesis.

Art of the horse trade:  

a clever and often secret agreement made by powerful people who are usually trying to get an advantage over others

Getting back to the Wisner heirs complaint filed with U.S district court, Eastern District of Louisiana  and the items within it I found to be of the greatest significance...the main problem with the JV attorneys representing the City, OPSO and Wisner is the potential for them to "horse trade", as Wisner heir Michael Peneguy refers to it on Page 28, item # 20 of the complaint.  The scenario being that the JV attorneys could be using the Wisner settlement as leverage to increase the amount on other settlements they are representing such as the City's or OPSO's:

After having followed this story for over a year, I believe this is exactly what is happening.  Keep in mind that any money awarded to Winser by BP has very strict guidelines in how it must be spent...but not so with the City.

In filing this complaint with  the U.S district court, Eastern District of Louisiana against the JV attorneys, the heirs hired University of Mississippi law professor, Benjamin Cooper, to offer a legal opinion on the possible conflict of interest issues.  In his affidavit, he offers the opinion that a conflict does indeed exist with bullet points to that effect in items 10 -12 on pages 10 through 13:

Click on the pic to expand or refer to the original document
These bullet points tellingly reflect Mayor Landrieu's MO with the Wisner Trust Advisory Committee since he took office and first placed Michael Sherman as his appointee.  Herman and Herman attorney and the point person for the JV attorneys on Wisner, Soren Giselson, echoes the Mayor's mantra perfectly, "...the ultimate decision-making authority should rest with the Mayor, as Trustee".

Waltzer and Wiygul were originally hired by the Committee after an extensive vetting process to find an environmental law firm that would have the best understanding of the damage incurred to the Wisner property from the BP spill.  Shortly after Sherman was appointed and the Committee was politcally stacked, W&W was then inexplicably removed at Sherman's suggestion and replaced with the JV attorneys.

But even with the crony votes on the Committee (Lorino and Gardner) following orders to approve the hiring of the JV attorneys the move was not congruent with Rule 1.0(e) of the Louisiana Rules of Professional Conduct regarding "Informed Consent" which states:
(e) “Informed consent” denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.   
In items 18 - 20 Cooper details how not only did they JV lawyers fail to obtain the required waiver from the Committee, they admitted that a potential conflict could exist due to their existing joint representation with the City of New Orleans in its case against BP.  However, they failed to explain to the Committee what that potential conflict may be.

Cooper also details how the JV attorneys presented the Committee with a proposed contract in the 11th hour, one day, before the September 25, 2012 meeting in which they were being asked to vote on its approval.  Cooper argues that there was no possible way the entire Committee could have vetted the JV attorneys' contract or sought outside legal advice as to their potential conflicts of interest within that 24-hour time frame.

Nonetheless, in that meeting Michael Sherman, Anthony Lorino, and Ron Gardner provided the 3 votes needed to contract the JV attorneys with the heirs and the Salvation Army casting the two minority dissenting votes.

Basically, the JV attorneys were steam-rolled in as the new counsel to replace Waltzer and Wiygul.  Later on in the complaint...we get a pretty good idea why.

In item number 23 on page 18, we discover that the JV attorneys created a contingency fee arrangment within their contract.  Cooper points out that under LRPC 1.5 (a), a lawyer "shall not make an agreement for, charge, or collect an unreasonable fee...".  He later points that there is almost no chance of the Donation not being able to recover a substantial damage amount and that even Soren Giselson has publicly acknowledged as much.  The Donation could have easily paid attorneys on an hourly basis and considering most of the leg work had already been accomplished by Waltzer and Wiygul the addition of a contingency fee is most likely inappropriate in this case.

He also points out that even though the heirs have requested the details of the contingency fee, the JV attorneys have failed to provide them.  Which brings me to a final point, independent of the complaint filed with the U.S district court, Eastern District of Louisiana.

There's only one Marshall in this town

Months ago, the heirs stopped receiving update statuses from the Wisner Field Inspector on the ongoing effects of the BP oil washing in on Wisner property.  Michael Peneguy contacted the Field Inspector by email asking why the update statuses had stopped.  The Field Inspector replied that he was told by JV attorney Soren Giselson to stop sending updates to the Advisory Committee.  After further inquiry by Peneguy to Giselson, City Attorney and current Mayoral appointee to the Advisory Committee, Erica Beck, informed Peneguy that she had instructed Giselson not to reply to him because she didn't want to "jeopardize the Committee's position with respect to its BP claim."

So understand this...Beck is ordering the JV attorneys not to share information with the Wisner Trust Advisory Committee....the counsel's clients.  Apparently the clients don't have the right to see information held by their attorneys in their own lawsuit.

This isn't surprising though if you look at the objectives of the Mayor and the JV attorneys.  The mayor believes the entire Trust is his...or rather the City's.  Actually I can't tell which.  The Lens calls actions like this being a bully (read the comment section)...the TP dutifully polished the turd and called it political hardball....other people call it being a productive asshole.

I call it not only unethical but quite possibly illegal.

The government, court and media roundup?

Both times I visited Wisner Beach, In February and October of 2013, to document the constant barrage of oil washing onshore there was a backlash from the Mayor's office towards the heirs for allowing me on the property.  The first trip I took in February resulted in Michael Sherman creating a "media policy" where the Advisory Committee would have to approve anyone wanting to visit the beach.  But Sherman didn't seem to think he needed Committee approval when he went on camera with John Snell of Fox 8.  Snell and Fox 8 had their cameras on the beach the same day I did.  (The beginning of that Snell story looks vaguely familiar does it not?)

Any rational legal person may look at this evidence and think at the very least there is an obvious malpractice suit waiting in the wings.  But the Mayor, his City attorneys and the JV attorneys may have even lassoed that bucking bronc....remember the City is now claiming that the heirs were never actually heirs to begin with.  Even though Ad Hoc Judge Zeno handed the mayor most everything he wanted in the hearing without much legal explanation, he refrained from ruling on the matter of the heirs' standing.  If the court decides the heirs aren't really heirs...they can't file a malpractice suit can they?

I recently made a post about "The $ Estate".  What I mean by The $ Estate is that I believe there are a a select few people within the city that have enough power and money to control all four estates of our democracy: executive, legislative, judicial and the press.  The three basic branches of government speak for themselves in this matter but the influence these power brokers have over the fourth estate, the press, may be a little harder to see.

If you scrape the surface, it reveals itself.  

I find it curious that the Times-Picayune's "Louisiana Purchased" series focused on politicians and campaign bundling but left Mayor Landrieu out of the fray.  I did point out back in February of 2013, a year ago, that three of the JV attorneys contributed at least 10%, possibly as high as 15% or more, of Mayor Landrieu's campaign contributions for 2012 through campaign bundling.  Herman and Herman alone accounted for approximately $71,000 of $755,882.

I guess it never occurred to the TP to look at the Mayor's campaign contributions.  I wonder why?

Seems like the $ Estate is truly above the justice system, eh?  Well....maybe not.  Stay tuned to AZ this week, cowpokes...this rodeo could get interesting.  


Anonymous said...

The Earl of Louisiana is an oldie but a goodie on politics, Louisiana style.

This Wisner stuff really is wild.

I`m upset that there was a backlash when you went to go and photograph oil.

That seems like exactly the kind of thing the heirs and trustees of the land should be encouraging.

John said...

How is it that the Donation members (beneficiaries) did not have a choice in how their attorneys were to be paid, contingency or hourly?

Who is the actual client? The City (as Trustee) or the beneficiaries (including the City)?

Anonymous said...

Based on previous posts' comments, I know individuals in the legal profession frequent this blog.

How has the attached federal complaint in this post not attracted more attention from the readers?

I cannot fathom how this was overlooked by the court and dismissed so simply. Am I crazy?