BP wants Houston judge with oil ties to hear spill cases

Miami HeraldMay 26, 2010 

MIAMI — Facing more than 100 lawsuits after its Gulf of Mexico oil spill killed 11 workers and threatened four coastal states, oil giant BP is asking the courts to place every pre-trial issue in the hands of a single federal judge in Houston.

That judge, U.S. District Judge Lynn Hughes, has traveled the world giving lectures on ethics for the American Association of Petroleum Geologists, a professional association and research group that works with BP and other oil companies. The organization pays his travel expenses.

Hughes has also collected royalties from several energy companies, including ConocoPhillips and Devon Energy, from investments in mineral rights, his financial disclosure forms show.

Hughes, appointed to the bench in 1985 by then-President Ronald Reagan, declined to comment for this report.

Legal experts say the request for a single judge, while not unprecedented, is unusual, and they surmise BP is seeking rulings from a judge well-versed in the company's issues.

Edward Sherman, a law professor at Tulane University in New Orleans who has closely followed the BP legal maneuvers, said BP probably studied Hughes' past rulings and his caseload before suggesting he take the cases.

"Obviously, another factor is they would like to have a judge who understands their point of view," Sherman said.

Hughes is "well known as a competent judge," Sherman added.

No one has suggested that Hughes — or any judge — would rule a certain way before hearing the evidence. Records show the jurist has ruled both for and against the industry — including one ruling on behalf of oil companies later overturned on appeal.

In court papers, BP said Hughes should handle the cases because he is already hearing one class-action case, filed by a group of Vietnamese-American fishermen after the spill, and has presided over complex, multi-jurisdictional cases in the past.

The company wants all of the oil spill lawsuits — at least 98 as of May 21 — to be heard in Houston because that's the home of BP's American headquarters, where many witnesses and records are located, and where many of the suits have been filed. BP is facing suits in at least seven different courts in five states, including Florida.

BP requested the judge in papers filed with the U.S. Judicial Panel on Multidistrict Litigation, as part of a larger request to have all pre-trial matters decided in one court to save time and money. The special panel of judges will decide in July if the BP suits should be consolidated in a single court — and if Hughes should handle the cases.

Shrewd lawyers often try to steer cases to judges viewed as potentially sympathetic to their arguments, said Elizabeth Chamblee Burch, an assistant professor of law at Florida State University.

"Sometimes they will ask for a judge by name," Burch said. "Other times, they are a bit wilier about what they'll ask for, so it looks less blatant."

Other lawyers were surprised that BP was seeking to select its own judge; in both state and federal courts, cases are typically assigned to judges randomly.

"I'm utterly horrified," said David Guest, an environmental lawyer with Earthjustice with decades of experience handling complex pollution cases. "That's not to impugn the integrity of the judge, but something is fundamentally wrong when you're doing a thing like that."

Lawyers for BP referred questions to a spokesman, who did not return calls Wednesday.

Most legal observers suspect the BP suits will be consolidated either in Houston — home to Transocean and Halliburton, the drilling contractors also facing scrutiny over the spill — or in New Orleans, the region now suffering the brunt of the oil spill's impact. Plaintiffs' attorneys have filed their own request to have the BP cases heard in New Orleans.

BP could potentially face hundreds of millions of dollars in claims stemming from what U.S. officials are now calling the worst oil spill in American history. In addition to suits from those injured in the April 20 explosion on the Deepwater Horizon, the company faces a litany of claims from commercial fishermen and others who say the oil spill fouling the Gulf has harmed their businesses.

BP has already paid $29 million to settle more than 12,000 claims, the company said in court papers.

If the outstanding claims against BP are set before Hughes, he will have considerable sway over how those cases are handled, deciding which lawyers will lead the case for the class of plaintiffs, and how the law should be applied. If the cases go to trial, they will be transferred back to their original courts.

For the past two years, Hughes has served as a "distinguished lecturer on ethics" for the American Association of Professional Geologists, a Tulsa-based organization representing 35,000 geologists around the world, most of whom work in the oil and gas industry. During that time, the judge has given 13 speeches for the organization, from Texas to Cape Town, South Africa.

Just days before the rig explosion that triggered the spill off Louisiana's coast, Hughes spoke on a panel at an AAPG convention in New Orleans.

The AAPG pays for Hughes' travel costs from the organization's $32 million charitable foundation, said Larry Nation, an AAPG spokesman. BP does not contribute to the fund that pays for Hughes' travel, though the company has made other donations to the AAPG foundation, Nation said. The judge receives no fees for his speeches.

The AAPG is primarily a scientific organization, not a trade group, Nation said, and the organization has long had a position for a lecturer to coach its members on issues of professional ethics in a competitive industry.

Geologists who attend the judge's lectures can also earn educational credits that count toward their state licenses, Nation said. Hughes' tenure as AAPG's lecturer on ethics is scheduled to end in July.

"Because of who we are and what we are, we are very concerned about ethics," Nation said. Hughes "is known as an ethical kind of guy."

Hughes also has dabbled in the oil business himself, leasing the mineral rights on 11 parcels to different oil and gas exploration firms — none of them BP — according to his financial disclosure form filed last year. The report indicates Hughes received between $7,500 and $26,000 in royalties from those leases in 2008.

As a judge, Hughes has handled many cases involving BP and other oil companies — including disputes among oil companies — as have other federal jurists in Houston, a petroleum industry hub.

In one controversial 2002 case, Hughes ruled in favor of oil companies seeking to avoid the $100 million cost of moving their pipelines for a dredging project in the Port of Houston. An appeals court later reversed the judge and said the industry, not the government, was responsible for the cost.

In 2007, Hughes ordered three European oil companies to pay $26 million in fines for paying off Nigerian officials for an offshore drilling expedition — the largest fines ever levied for violating U.S. foreign bribery laws.

Hughes is now overseeing a suit brought by two former auditors with the federal Minerals Management Service, who have accused Royal Dutch Shell of under-reporting almost $4 million in royalties owed to the U.S. government. The case is pending.

Hughes has also managed multi-district litigation in the past, and he oversaw a special docket of asbestos-related lawsuits in the 1990s.

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