New Orleans Judge Sells Investments to Avoid Oil Spill Conflict

By Laurel Brubaker Calkins June 4 (Bloomberg) — A New Orleans federal judge presidingover lawsuits related to the Gulf of Mexico oil spill said hesold his investment in companies linked to the disaster to avoidany appearance he might be biased. “So there is no perception of a conflict in these cases,yesterday I instructed my broker to sell the few Transocean andHalliburton bonds in my account,” U.S. District Judge CarlBarbier said in an e-mail. BP Plc and Transocean Ltd. oil-spill lawsuits may becombined before a judge from outside the Gulf Coast states,because judges in the region are withdrawing from cases, citingconflicts of interest. Six of 12 active judges assigned to the federal judicialdistrict based in New Orleans already have removed themselvesfrom spill-damage lawsuits, according to a court official andpublic records. The judges found conflicts tied to oilinvestments or personal relationships with lawyers or companiesinvolved. Several additional federal judges in districts based inLafayette, Louisiana, Mobile, Alabama and Pensacola, Florida,have also disqualified themselves from oil-spill cases,according to public records. Barbier said the judicial code of conduct forbids federaljudges from owning common stock in a corporation involved in anycase that comes before them. ‘Not Required’ “However, recusal is not required if the stock is part ofa mutual fund unless the judge participates in the management ofthe fund,” Barbier said. “Nor is recusal required because ofownership of debt instruments such as corporate debentures orbonds.” Barbier’s portfolio contained Transocean Sedco Forex Notesand Halliburton Co. debentures, according to financialdisclosure forms posted by Judicial Watch, a self-styledconservative advocacy group based in Washington. More than 170 proposed class-action lawsuits, representingpotentially thousands of claims, have been filed in courthousesfrom Texas to Florida. The plaintiffs include fishing industryworkers, property owners and coastal businesses harmed by theoil spill caused by the sinking of the Deepwater Horizon inApril. BP, the owner of the offshore lease, and Transocean, therig owner, are named in virtually all the cases. HalliburtonEnergy Services Inc., which provided cementing services to thewell, and Cameron International Corp., which supplied blowoutprevention equipment, are also named in most of the lawsuits. Federal Judicial Panel A federal judicial panel will hear arguments in July overwhether all oil-spill cases should be consolidated into a singlemultidistrict litigation proceeding before one judge. One group of plaintiffs’ lawyers has asked that a judge bebrought in from outside the Gulf Coast to preside over the oil-spill litigation, because of the number of judges within theregion stepping aside over conflicts of interest. “Plaintiffs have been informed that most or all of thejudges in the district have a conflict and cannot preside” overthe oil-spill cases, lawyers with Weitz & Luxenberg PC of NewYork, said in a request for the multidistrict-litigation panelto consolidate the cases in New Orleans, which the lawyerscalled “the epicenter of this disaster.” The attorneys suggested U.S. District Judge ShiraScheindlin, also of New York, be brought to Louisiana to presideover the combined spill cases. Scheindlin previously handled the consolidation of morethan 200 lawsuits over drinking water supplies contaminated by agasoline additive. Some of the world’s largest energy companieswere defendants in that litigation, including a unit of BP, thecompany with primarily liability for damages from the Gulfspill. The case is In Re: Oil Spill By the Oil Rig “DeepwaterHorizon” in the Gulf of Mexico on April 20, U.S. Judicial Panelon Multidistrict Litigation, MDL-2179, Washington. To contact the reporter on this story:Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.