The Wisner Trust - How deep do the conflicts run?

If you've followed the Wisner story here on AZ, you know that some members of the Plaintiff Steering Committee for the BP settlement also serve as a team of joint venture (JV) attorneys for the City of New Orleans and The Wisner Trust Advisory Committee in their litigation against BP for economic and environmental damages sustained by the 2010 oil spill.

The JV attorneys that are also on the PSC are Stephen Herman, Calvin Fayard Jr., Walt Leger and James Roy.  A fifth attorney, Fred Herman, is also a member of the JV group representing CNO and Wisner but he is not on the PSC.

These JV attorneys were initially hired by Mayor Landrieu to represent the City's interests in their claims against BP.  They subsequently took over The Wisner Trust Advisory Committee's case through what amounted to a hostile takeover of the Committee's board members thanks to Mayor Landrieu's back room maneuvers.  The Trust was initially being represented by the environmental law firm Waltzer and Wiygul but Landrieu claimed they should be replaced because they had a conflict of interest due to a lawsuit they had pending against the City regarding the Old Gentilly Landfill.

The Wisner heirs, wanting to remain with Waltzer and Wiygul, filed a complaint stating that the JV attorneys were themselves conflicted due to their role as the City's attorneys and even their role as PSC attorneys.

Federal Judge Carl Barbier ruled that it was ok for the JV's to represent both stating:

"The mere fact that the city and the donation may have different types of claims does not create an actual conflict.  Consequently, the court will grant the motion to substitute counsel. If at some future time an actual conflict arises, the court can address the matter at that time."

Perhaps that time is upon us regarding JV firm Herman and Herman.

Turns out senior partner, Russ Herman, has a pending lawsuit against the City of New Orleans over the proposed Tracage residential development in the Warehouse District.  Herman first filed a complaint with the City back in November of 2013 objecting to the height of the building among other grievances.

Since then he's filed a lawsuit against the City of New Orleans, his own client, (as well as the Tracage developers) in an attempt to block the building's construction.  The suit is Herman v. City of New Orleans and the docket # in Orleans Parish Civil District Court is 2014-896.

This is the exact reason the Mayor used to justify the removal of Waltzer and Wiygul as the Trust's attorneys against BP.  I would expect the Mayor is going to remove Herman and Herman as the City's counsel and Wisner's council any day now?  I ain't holding my breath.

As luck would have it, City Council moved to waive the conflict back in April of this year.  Jump to about 02:10:18 in the video.

That's convenient but what say Judge Barbier?

It's become brazenly clear in the past few months that the conflicts of interest with these guys are numerous and detrimental to both the City and the Wisner Trust.  It's also become brazenly clear they are not environmental lawyers and were not properly vetted to handle the Wisner case which at its core is an environmental lawsuit.

In a recent memo regarding complaints against BP for abandoning the clean up on Wisner Beach, BP seems to be keenly aware to the bogus claim the JV attorney's filed on behalf of the Orleans Parish Sheriff's Office for damages incurred to Wisner property from the oil spill.  As I pointed out in this post, OPSO has no interest in Wisner land and could not have incurred any economic loss in respect to Wisner.

BP recently referred to the claims mentioned in that post on page 5 of this legal filing.

Let us also consider that one of these JV firms serving on the PSC turns out to be the firm mentioned on page 60 of the first Freeh report....the firm that allegedly filed fraudulent seafood claims with the DHECC.  If that surfaces, does it become ammunition for BP and how would it affect the City and Wisner's claims against them?

Take it one step further and consider if these conflicts are possibly being used by BP to squeeze the JV attorneys on the City's case, Wisner's case or even in their role as PSC attorneys.

I don't have a law degree but I understand there's a damn good reason why potential conflicts of interest in litigation should be taken with the utmost scrutiny.  The conflicts that exist here could have a staggering monetary effect on both the BP settlement class the PSC/JV attorneys represent as well as the City and Wisner's litigation.

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.