APNewsBreak: La. AG's oil spill tab nears $24M
Monday - 1/14/2013, 4:18pm ET
By MELINDA DESLATTE and MICHAEL KUNZELMAN
Associated Press
BATON ROUGE, La. (AP) - Louisiana's attorney general has spent nearly $24 million building the state's legal case against BP over the 2010 Gulf of Mexico oil spill, with much of the money paid to outside law firms that have contributed to his campaigns.
Attorney General Buddy Caldwell's payments to outside lawyers _ $15.4 million and counting _ account for about two-thirds of his total spending, according to figures requested by The Associated Press.
While Louisiana took a much harder hit than other states during and after the disaster, that spending far exceeds the contract work paid by Caldwell's counterparts, according to data provided by their offices.
Alabama Attorney General Luther Strange opted to let lawyers on his staff take on the work, and he says his office's tab is well under $200,000 so far.
New Orleans-based U.S. District Judge Carl Barbier, who is presiding over most of the claims spawned by the spill, at one point appeared to take issue with Caldwell's use of outside lawyers, remarking in a December 2011 order that the attorneys "obstructed and frustrated the progress of the litigation" rather than cooperate with Strange and the plaintiffs' attorneys.
He also chided Caldwell for having "apparently no qualms about paying substantial legal fees to multiple lawyers" while Strange used only in-house attorneys.
The judge did not question the lawyers' qualifications, however, and made no mention of the outside firms' close connections to Caldwell.
Louisiana's lawmakers have approved the payments, which thus far haven't come from state tax dollars. Of the $24 million Caldwell's office has spent, $10 million came from a grant BP provided to Louisiana after the spill. The remaining dollars were earmarked from a state set-aside fund that includes fees, taxes, penalties and other money paid by the oil industry to cope with spills.
Caldwell plans to ask lawmakers for the authority to spend even more on the case, money that could continue to be drawn from the spill fund, but also could eventually come from state taxes if the spill fund runs dry.
The attorney general declined an interview with the AP, but defended his spending choices in an email.
"Properly handling this case requires expertise and experience in areas of mass tort and complex litigation, as well as class action and environmental law," he said, calling the case one of the largest and most complicated in history. "Few attorneys have this experience, and we have no staff attorneys who could fulfill this role without contract counsel."
Louisiana and Alabama have sued London-based BP PLC, owner of the blown-out well that spewed more than 200 million gallons of oil. Florida and Mississippi haven't sued but have contracted with outside lawyers to help recoup money for environmental damage and economic losses.
It is, in fact, common practice for outside lawyers to represent states in complex litigation. In the 1990s, for example, private lawyers made hundreds of millions of dollars in fees by suing tobacco companies on behalf of states.
Caldwell, a Republican in office since 2008, has always said it would cost his office millions of dollars to hire experts, collect evidence and do the legal work required to challenge a corporation with billions of dollars in resources. He told legislators before his lawsuit was filed that he might need as much as $100 million, while noting that Alaska's attorney general spent $35 million to hire outside counsel after the Exxon Valdez spill in 1989.
Caldwell didn't elaborate on how he determined the spending in the Alaska case, parts of which are still being contested.
The mounting bill along the Gulf Coast is to be expected, said David Uhlmann, a University of Michigan law professor and former chief of the Justice Department's environmental crimes section.
"There's tens of billions of dollars in damage, so it probably shouldn't be a surprise if the legal fees run into the millions of dollars," Uhlmann said.
Elsewhere on the Gulf Coast, Mississippi Attorney General Jim Hood's office has paid out $765,000 to outside lawyers and $240,000 to an economic damage expert as of October 2012, spokeswoman Jan Schaefer said. Among the lawyers hired by Hood, a Democrat, is his predecessor and longtime political ally, former Attorney General Mike Moore, a driving force in the tobacco lawsuits.
Florida Attorney General Pam Bondi, a Republican, thus far hasn't spent any money on outside lawyers but has enlisted help from private law firms in exchange for a cut of any future damages awarded to the state. Contingency fees for contracts with outside lawyers in Florida are capped by the Legislature at $50 million.
