BP spill suits to be heard in New Orleans

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BP and other companies involved in the Gulf of Mexico oil leak suffered their first legal blow on Tuesday when a judicial panel ordered scores of damages lawsuits launched against them to be heard in New Orleans.

The judges’ allocation of the 77 cases to a jurisdiction near the “geographic and psychological” heart of the disaster means BP faces the possibility of a more hostile jury and a bigger pay-out than in its own preferred venue of Texas, legal experts say.

The ruling on the cases brought by individuals and businesses from oyster houses to estate agents is one of the opening moves in what is likely to be years of litigation as BP and its co-defendants fight claims running into billions of dollars.

The Judicial Panel on Multidistrict Litigation rejected BP’s arguments that the lawsuits should be heard in southern Texas, where legal experts say a jury might be more sympathetic because of the area’s deep association with the oil industry.

BP said in a statement: “We are aware of and respect the decisions of the Judicial Panel on Multidistrict Litigation on consolidating various federal court cases. We look forward to the cases proceeding as expeditiously and efficiently as possible in the selected venues.”

The judicial panel ordered initial proceedings in the Gulf of Mexico cases to be heard by Judge Carl Barbier, who has come under pressure from some quarters to recuse himself because he once held bonds issued by Transocean, the owner of the Deepwater Horizon platform where an explosion first started the spill, and Halliburton, a contractor on the rig.

The panel said it was “quite comfortable” with its choice of an “exceptional jurist”.

Tony Buzbee, who is representing 25 Deepwater Horizon workers and 15,000 claimants alleging business interruption, said Judge Barbier was “very well respected” and had “already invested time and energy” in the case.

John Coffee, professor at Columbia Law School, said the selection of New Orleans was a “victory for plaintiffs”.

He said: “The decision is not surprising to me because the eastern district of Louisiana is the logical centre of gravity.”

The cases, which comprise mostly economic damages claims, could now be consolidated and added to others in a piece of “super-litigation” like the one seen in the case of the far smaller Exxon Valdez oil spill. ExxonMobil was initially ordered to pay $5bn in punitive damages, although that was eventually reduced on appeal to a little more than one-10th of the amount.

The judges did rule that several damages claims by BP shareholders over the fall in the company’s share price should be heard in Texas. Shareholder actions have yielded billions of dollars in previous cases of alleged corporate wrongdoing, although a Supreme Court judgment in June has complicated investors’ efforts in the BP case.

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