On the surface, an escalating fight between state Attorney General Buddy Caldwell and Gov. Bobby Jindal looks like a territorial dispute. Caldwell says he's the state's chief legal officer and therefore should call the shots in Louisiana's BP litigation. Jindal says he's the client — and the governor — and therefore he has final say-so.
Truth is, there's much more at stake than who gets to sit at the Big Boys' table in the BP lawsuit. What's really driving this spat are potentially hundreds of millions of dollars in legal fees. That's where things get interesting.
It's more than a tad ironic that Jindal, who aspires to be the darling of the GOP's right wing, is in league with some of the nation's largest plaintiff lawyers in their attempt to razoo the state's pot — while Caldwell, who historically has been supported by trial lawyers, opposes them. Both Caldwell and Jindal are Republicans, so this is not about party.
It's about money.
Jindal, who received substantial contributions from trial lawyers during his last campaign, hired the Dallas plaintiff firm of Baron & Budd to represent the state. A Baron & Budd attorney now sits on the Plaintiffs' Steering Committee (PSC) with a handful of private plaintiff lawyers in an ongoing federal lawsuit against BP and others. Caldwell says that's a conflict of interest.
Caldwell's fears of a conflict seem well-founded. Jindal recently signed an agreement consenting to a 4 percent "holdback fund" that would give the PSC a claim on what the state recovers from BP. The same agreement waives the state's right to appeal any award of attorneys' fees.
Given that BP has set aside $20 billion to pay claims, 4 percent is no small amount. Besides, every penny of the state's recovery should go towards repairing Louisiana's coast and other environmental projects.
That roils Caldwell, who has hired other private plaintiff lawyers to pursue the state's claims. Caldwell's attorneys are being paid by the hour; Baron & Budd likewise has contracted for hourly fees. The private plaintiff lawyers work on a percentage basis.
U.S. District Judge Carl Barbier, who formerly was a plaintiff attorney, has sided with Jindal and the PSC on several key issues. Barbier also excoriated Caldwell in a recent ruling, accusing Caldwell of not cooperating with the PSC and allegedly frustrating the litigation.
Barbier also signed an order setting aside 6 percent of the private funds recovered from the Gulf Coast Claims Facility (GCCF, run by Ken Feinberg) since November — to help pay the PSC's legal fees. That order effectively gives the PSC a claim on recoveries by clients they didn't even represent.
The order was requested by the PSC — on which Jindal's favored firm of Baron & Budd sits — and Barbier granted it without a hearing. The judge later scaled back the order, but Caldwell still appealed. The AG's appellate brief is as much a reply to Barbier's barbs as it is a legal challenge to his ruling. He called Barbier's criticisms of him "an extremely disappointing, false and inaccurate diatribe."
He also took aim at Jindal and Baron & Budd, writing, "The Governor's chosen special counsel stands to receive a potentially large fee in connection with the payment of common benefit fees out of a holdback fund."
Caldwell isn't the only one who has criticized these developments. The New York Times' Joe Nocera recently wrote, "They are trying to grab fees from clients they've never represented. Amazing."
Team Jindal claims Caldwell's lawyers could cost state taxpayers $15 million in legal fees. That's small potatoes compared to the millions the PSC stands to gain from the state's recovery — all of which is also taxpayers' money.