It’s not too difficult to comprehend why state Attorney General Buddy Caldwell was criticized for paying some $38 million in legal fees and other costs to oversee the state’s claim against BP in light of the Deepwater Horizon catastrophe in the Gulf of Mexico more than five years ago.
After all, this is an election year and Caldwell is running again. The blubbering and whining seem appropriate.
At the heart of this so-called controversy is roughly $6.8 billion the state of Louisiana will collect from BP over the next decade. Louisiana’s cut of the settlement, which totals some $18 billion for five states, is the largest of all the states impacted by Deepwater Horizon. That’s only fair since Louisiana suffered the most losses from 4.9 million barrels of oil spilled into the Gulf after the Deepwater Horizon oil platform exploded some 41 miles off the Louisiana coast. It took roughly five years of hardball negotiations and squabbles in the courts to force BP to pay up. Eleven people lost their lives on that fateful day, April 20, 2010.
In 2012, BP pled guilty in federal court to 11 counts of manslaughter, two misdemeanors and a felony count of lying to Congress. Hindsight tells us BP got off with a slap on the wrist since the oil and gas conglomerate is still in business and doing quite well financially.
Though a federal judge appointed a panel of attorneys to spearhead negotiations between the states and BP, Caldwell reasoned that he wanted Louisiana represented by its own attorneys who would answer directly to him. Seems reasonable to me.
But that’s where the rub comes into play.
It seems at least some of the attorneys Caldwell hired have a connection to him in some fashion. They either worked for him at one time or they’ve contributed to his campaigns. And over the course of the past several years, those attorneys have collected or will collect roughly $38 million from the state, which is pittance compared to the $600 million the panel attorneys appointed by the court will collect thanks to the settlement. It should be noted the $600 million in payments to attorneys appointed by the court won’t come out of any monies due the states, including Louisiana. It’s also worth noting the attorneys Caldwell hired won’t collect a dime of the state’s share of the settlement with BP for services rendered.
Anyone who has ever been put in the unfortunate position of having to hire a plaintiff attorney knows how the gig works. Often times a plaintiff attorney wants a retainer and a percentage of any money recovered for the client. The going rate is one-third, or roughly 33 percent. Some attorneys will take 25 percent. Others want 40 percent. Once in awhile an attorney will take a case without a retainer, chancing that the claim represents a win-win. In those instances, the 40 percent fee of any money collected for the client is the norm.
That brings us back to Caldwell and the attorneys he hired to oversee Louisiana’s interests in the negotiations with BP.
The $38 million in attorney fees is a drop in the bucket, especially since $10 million of it was for discovery that BP eventually paid.
Yet, even if Caldwell had agreed to a percent fee arrangement, someone’s got to do the negotiating and the litigating. And 75 percent or 66 percent or 60 percent of something is far better than 100 percent of nothing.
But that scenario doesn’t apply in this case. The attorneys who represented Louisiana were or are in the process of being paid roughly $28 million. That’s it. Nothing more.
It’s a good deal for the state, and instead of being vilified over it, Caldwell should be applauded for his work.
Sam Hanna is a state political writer.