BP Appeals Rejection Of Removing Spill Claims Head

NEW ORLEANS (AP) — BP PLC is asking the federal appeals court in New Orleans to kick out the administrator of damage settlement claims from its 2010 oil spill.

         A 75-page brief submitted last week to the 5th U.S. Circuit Court of Appeals contends, among other things, that Patrick Juneau had secretly drafted court papers filed against BP before he was appointed claims administrator. It asks the court to overturn U.S. District Judge Patrick Barbier's November decision rejecting the oil giant's arguments.

         "BP presented the District Court with extensive, recently uncovered evidence that Mr. Juneau actively advocated against BP's interests and litigated against BP in this very case as part of his work for the state of Louisiana in 2010 and 2011," BP spokesman Geoff Morrell said in a statement released last week. "That work is a clear and serious conflict of interest — one that Mr. Juneau failed to disclose properly and that disqualifies him from serving as Claims Administrator."

         Barbier's ruling said that before his appointment, the Lafayette attorney told BP and at least six of its attorneys that he had been a state consultant about the spill. Barbier also said BP filed its motion to remove Juneau too late.

         BP said it didn't realize the extent of Juneau's state work until late July, when lawyers found his 2010 contract among tens of millions of pages of documents.

         Morrell also said "Mr. Juneau's gross mismanagement of the settlement program — which has resulted in poor performance, ethical violations among the program's leadership, and wasteful administrative costs that have risen to more than $40 million per month — is well documented and separately warrants his removal."

         According to the filling, the claims center expenses for this month are expected to be more than $40 million, with the total for this year estimated at $463 million.

         A claims center audit demanded by BP contradicts the company's allegations of poor performance, lead plaintiffs' attorneys Steve Herman and Jim Roy said in a joint statement emailed last week.

         The report received in late November estimated that calculation errors probably account for about $17.5 million, or 0.5 percent, of the $3.7 billion in claims awarded through Oct. 3, 2013.

         McGladrey LLP of Chicago examined 1,852 claims totaling $741 million. Although nearly 7 percent of the claims had calculation errors, those added up to $2.1 million — about 0.3 percent of the total. More than half, $1.1 million, was in a single oyster lease claim, the claims center noted in its response.

         The comment about ethics apparently referred to a November hearing at which Barbier said evidence showed that a lawyer working for the claims center and two outside attorneys lied about a system of payments set up to help speed claims handled by the outside lawyers. Former claims center attorney Lionel Sutton III denied any wrongdoing. None of the attorneys has been charged with a crime, and Barbier has not indicated what sanctions he might impose or when he might do so.

         BP also challenged Juneau's interpretation of a 2012 economic loss claims settlement once hailed by both sides. The U.S. Supreme Court refused without comment on Dec. 8 to hear that case, clearing the way for a June 8 deadline for filing claims.

         "Now that it has lost its Supreme Court bid to get out of the settlement, BP's latest attack on the Claims Administrator is simply a desperate attempt to disrupt the payments by any means necessary," Herman and Roy wrote.

         BP is asking the 5th Circuit to schedule oral arguments in its case against Juneau.

         – by AP Reporter Janet McConnaughey


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