DHECC - A BP motion that slipped under the radar

I am falling way behind on posts because my real world jobs and responsibilities are taking precedence but there is a lot going on in the BP claims world.

By now most people have seen the motion for recusal by Kurt Mix's attorneys to remove Judge Duval from his case.  Judge Duval had filed a an economic loss claim against BP without disclosing it to the court.  This only adds to Judge Duval's woes as the latest Freeh report seems to be targeting his son David's actions within the claims office and also calls into question how David was hired at the office in the first place.  I have reason to believe Magistrate Judge Sally Shushan may have also played a role in influencing Claims Office Administrator Patrick Juneau to hire David Duval.

It's not clear if David Duval used his position at the claims office to benefit claims filed by his family's law firm but lots of rumors are swirling.

While all of this is unfolding, Freeh's autonomy and integrity are also being called into question by the Andry law firm, Christine Reitano and Lionel Sutton...the accused parties in Freeh's first report. Wednesday Andry filed a motion to have Freeh removed as Special Master with both Sutton and Reitano joining that motion today.  As I write this, I believe Judge Barbier has denied that request but I haven't seen the official denial.

BP also filed a letter to Barbier requesting much of the evidence used to levy the allegations against Andry Lerner, Reitano, and Sutton.

These are all significant issues but there is one issue I want to focus on in this post that passed completely below the radar.  One week ago today, on Jan. 17th, BP filed a Motion for Leave to Class Counsel's Comments on the Special Master's Report.  What I want to point out in this report is item number 3:

Class Counsel note that Louisiana Rule of Professional Conduct 1.5(e) does not specify the time when the client’s written consent to a fee-sharing arrangement must be obtained. See Cmts.   3. Yet a practice of obtaining client consent to a shared representation “at different times” after the commencement of the representation would defeat the purpose of Rule 1.5(e) and thus should be strongly discouraged. The obvious aim of Rule 1.5(e) is to protect the client’s right to select counsel of his choosing before legal services are provided. The practice of obtaining consent to shared representation at later or different times lends itself to abuse, as the client may not know who is handling his case until well after services have already been provided. In In re Fewell, cited by Class Counsel (Cmts.   3 n.11), the Louisiana Attorney Disciplinary Board stated that “[o]bviously, it is prudent for such writings to occur at the commencement of the representation.” No. 12-DB-048 (La. Discip. Bd. Aug. 7, 2013) at 8, available at http://www.ladb.org/new/DR/handler.document.aspx?DocID=8027. The Disciplinary Board further found that the client had been informed in advance of all lawyers who would represent him and consented to the shared representation. Written consent to the representation by all lawyers in a fee-sharing agreement should be obtained at the outset of the representation and before legal services are provided. Class Counsel further suggest that express client consent to the share of the fee that each lawyer will receive in a fee-sharing agreement may not be required. See Cmts. ¶ 3 n.11. Louisiana Rule 1.5(e)(1), however, provides that fee division is permissible only if “the client agrees in writing to the representation by all of the lawyers involved, and is advised in writing as to the share of the fee that each lawyer will receive.” Since the choice of lawyers at all times Case 2:10-md-02179-CJB-SS Document 12180-2 Filed 01/17/14 Page 3 of 10

I'm not sure if I'm interpreting this correctly but I think it may confirm an issue I've been working on for the past couple of weeks regarding one specific PSC firm, Herman, Herman & Katz.

I've been informed that Herman, Herman & Katz created "fee-sharing" agreements with multiple law firms across the Gulf Coast at the onset of the DHECC.  Allegedly, they created an arrangement where the partnered law firms would submit their client's claim information to Herman, Herman & Katz who would then file the partnered firm's claims for them, under the partnered firm's name.  I'm not sure what the advantage to the partnered firms would be other than to possibly have their claims expedited by Herman, Herman & Katz within the claims office or to perhaps ensure their claims were not rejected.

I've spoken with a couple of attorneys regarding this issue and I'm still not sure if it is illegal but as BP suggests it is highly unethical.  The partnerships could create a scenario where the partnered firms' clients may not know they are being represented by Herman, Herman & Katz and more importantly it creates a scenario where the claims office, itself, may not know Herman, Herman & Katz was involved in the submittal of the claims.

This may not seem like a huge deal at first glance but the complications that arise with the overall evolution of the DHECC claims process can get pretty hairy.

For example, remember that the seafood claims are a capped fund so any money left over in that fund will be distributed pro rata to the claimants who received claims.  Depending on the extent to which a single firm, especially a PSC firm, has partnered with other law firms around the Gulf they may have a significant, if not a majority, interest in the seafood claims submitted unbeknownst to the claims office.  As you can imagine, if this PSC firm held any influence over which seafood claims were approved or denied, they could potentially be manipulating the claims process to their advantage by ensuring their firm's claims and their partnered firms' claims were approved while other claims were denied.  When all the claims are processed they could reap a substantial benefit with the pro rata payout without the claims office even knowing the PSC firm had partnered with the other firms.

There is even the potential for collusion among the PSC firms to ensure the above scenario unfolds.

This also ties back in to my original FOIA request to the DHECC where I asked for a list of the claims filed in the first four weeks of the claims office opening.  If you recall I had received reports that the PSC firms' claims had been pushed ahead of other claims and also that at least one PSC firm may have sold access to the "formula" of the claims process before the office opened.  The possibility that a PSC firm may have sold access to partnerships on top of the shared percentages upon payout also exists.

I've also been informed that the latest Freeh report was in fact a "preliminary" report to an upcoming more comprehensive report.  I still don't know if Freeh is going to reveal the identity of the page 60 law firm...a PSC firm....but it doesn't seem likely.     

DHECC - Are Juneau's days numbered?

So much to talk about with the DHECC...where to begin?

Let's start with this James Varney editorial that came out weekend before last.

A trial lawyer web entangles the BP settlement:  James Varney

This whole editorial appears to be a plant that was given to Varney in order to set up an ensuing effort to remove Pat Juneau from the Claims Office.  I wouldn't mind it that much but Varney seems to have only a half-ass idea of what he's writing about.  Juneau is not a trail attorney, he's a defense attorney.

Also this pargraph:

In addition, the things Freeh did outline - Sutton's failure to disclose a financial interest he and his wife, Christine Reitano (herself a lawyer on Juneau's staff prior to being dismissed), had with a filing claimant and other shenanigans by trial lawyers - served to cast a dubious light on the proceedings thus far.

This has been refuted by both Sutton and Reitano...they both claim the Thonn claim was disclosed to Juneau.  Varney stated they didn't disclose the claim as fact, not an allegation.

 I'm also curious what Varney means by "other shenanigans by trial lawyers".  What the fuck does that mean?

The sentence implies that Reitano had something to do with "other shenanigans by trial lawyers".  I have read the Freeh report, the Andry filings and Reitano's breach of contract suit and I don't have any idea what he's talking about unless he's referring to the unnamed law firm on Page 60 of the report.

I want to pause make an observation about the TP before I continue.  Why is the first report of this story in the Time-Picayune coming from an editorialist?  This column is an obvious plant that wreaks of an agenda.

I have pretty good idea who Varney got the information from and why it was published ahead of the second Freeh report's release but why aren't these issues actually being "reported" by the TP?  They're letting Varney break (incorrectly I might add) one of the biggest stories in the region?  Why isn't an actual reporter being assigned to this story?

The Freeh report should be coming out any day and judging from Varney's proxy-mouthpiece-editorial it's rather apparent it will most likely target Juneau.

Aside from Varney's article, an even bigger indicator that Juneau is in hot water occurred on October 30th when Judge Barbier appointed Court-Designated Neutrals over the Business Economic Loss (BEL) Program.  It's clearly a smack-down by Barbier and I believe a sign of darker days to come for Juneau.  I wouldn't be surprised to see Juneau's resignation tendered any day now.

Speaking of resignations, I think it would also be prudent to look at the resignation of Appeals Coordinator and son of Federal Judge Stanwood Duval, Jr., David Duval, that occurred on October 7, 2013 and was first reported here on AZ.  Instead of running down all of the possibilities as to why Duval resigned, I'll refer you to the thread of questions posed by AZ commenter, Kevin, in this Comment Bump.  But mainly, I want to point out a comment in that comment bump:

Kevin said....
More questions Mr. Andry might have for Mr. Duval: 

Is an entity know as "Lake Eugenie Land & Development, Inc." named as a plaintiff in the class action case that produced the class action settlement 

Is Lake Eugenie Land & Development, Inc. a "Class Representative" for the class action settlement being administered by the DHECC and CAO? 

Is any member of your family's law practice a director of Lake Eugenie Land & Development, Inc.?

Big frikkin' deal here, folks...believe me when I tell you...this is a big deal.  I am hoping we will find out more when Freeh releases the next report.

Here's another big deal from a Kevin comment:

Kevin said... 

On the subject of CPA's in the CAO, can any AZ reader shed some light on Danny Clavier's activities at the CAO? 

He was the former head of the Class Action Consulting section of Bourgeois Bennet ( where David Duval's aunt is a principal) and came out of "retirement" for a position with the CAO.  

I think we're about to find out more on this issue by the end of the week as well.

I believe the heads of Juneau, Duval and Clavier will most likely roll as a consequence of the next Freeh report.  Well, Duval's already has if he was indeed forced to resign as a result of the Freeh investigation.

But what I'm most curious about is if Freeh will finally name the mysterious law firm on page 60 of his original report that "may have had claims overpaid by up to 114%.  As I pointed out in the post linked above, the most likely suspect as to who this law firm is would be one of the Plaintiff Steering Committee firms.  I draw this conclusion because a PSC firm would have the most intimate knowledge of the claims process, how the CAO works and it also goes a long way to explaining why Freeh (and possibly Barbier) protected the firm's identity in the first report.

It begs the question, "How could a PSC firm have manipulated the claims process to get such massive overpayments?"  I suspect they could accomplish this by manipulating their knowledge of how the parameters were set for individual classifications and payouts.  After all, they are the ones that set the parameters and classifications to begin with.

I'm going to draw out a hypothetical scenario in a subsequent post on how the process may have been manipulated with claims filed by shrimpers but for now I want to stay focused on Barbier and the validity and implications of the Freeh investigation.

On November 7, Both BP and Patrick Juneau filed motions in federal court to have Christine Reitano's breech of contract lawsuit against the DHECC and BP removed from the state court.  The case was automatically assigned to Barbier and filed under MDL (multi-district litigation) status.  I thought the protocol for both filings should have been randomly assigned to judges but I called the Clerk of Court's office and they told me that they are under a mandate from the national MDL judicial panel to assign anything having to do with BP to Barbier.

This is a big issue because it will most likely bury the lawsuit for years and put a lid on any discovery that may have occurred in the case.

Barbier has also denied discovery to the three parties Freeh accused in his first report, Reitano, Sutton and the Andry Lerner law firm.  This has created a scenario where the court appointed special investigator has levied allegations against these three parties, even suggesting that the state and/or federal bar as well as the Dept. of Justice investigate the matter, however, the accused have no access to the evidence Freeh based the allegations on.  They have no avenue of recourse at all.

Apparently this isn't the first time this scenario has occurred with a Freeh investigation but in the Penn State Sandusky matter the tables were turned on Freeh:

Louis Freeh Fires Back at Graham Spanier for Lawsuit

“Spanier has not articulated — and cannot articulate — a single reason why he will be prejudiced if he is compelled merely to file a complaint backing his accusation,” the filing continued. “If Spanier does not file a complaint, [Freeh] will remain stuck in the untenable position of having Spanier’s broad accusation clouding their reputations without being able to defend themselves.”

The comment section is worth a 5 to 10 minute glance on that story.

This next Freeh report is going to be revealing not only by what he discloses but more importantly by what he may omit...namely the identity of the page 60 law firm.  It's going to reveal if this investigation is fo' true or if it is simply a PR witch hunt that was designed to offer up a few souls to the BP altar as an attempt at pacification.

I would also note that I requested an interview with David Odom, the CEO of the DHECC but I received no response.  I have some questions I'd like to ask him about his relationship with one of the court appointed vendors.