BP takes aim at federal judge’s son

When David Duval found himself out of a job in 2012, the former lawyer had a powerful ally in his corner: his father, U.S. District Court Judge Stanwood Duval Jr.

The elder Duval reached out to a fellow LSU law school alumnus, Lafayette lawyer Patrick Juneau, who had just been tapped to oversee a multibillion-dollar court-supervised settlement program to compensate victims of the 2010 Deepwater Horizon oil spill, federal court records show.

Over lunch, the senior Duval mentioned that his son had recently been laid off from a friend’s tugboat company. As it turned out, Juneau had an opening for a claim appeals coordinator, according to notes from interviews of David Duval conducted by investigators reviewing the operations of the settlement program.

Nearly two years later, David Duval’s brief tenure at the claims facility has become one of the latest targets in British oil giant BP’s push to create the perception that the settlement program is rife with conflicts and wrongdoing on the part of its own staff, claimants and trial lawyers who sniffed out an easy payday after the 2010 oil spill.

An independent investigation of the claims office found that in October, the younger Duval forwarded a confidential work email to his cousin, a partner at a Houma law firm that represented businesses and individuals affected by the oil spill.

He quit when confronted with his actions, which BP in legal filings contends “no doubt are of concern to members of the class and the public at large, and they are especially alarming to BP, which bears the cost for the (settlement program’s) inefficiency, errors and corrupt practices.”

Duval is just one example of alleged cronyism that BP has trotted out in the campaign it is waging both in court and before the public. In a series of full-page newspaper ads in the New York Times and elsewhere, BP argues that the cozy nature of the Louisiana legal community has turned the claims program into a feeding frenzy that pays out “windfall payments to numerous business claimants for non-existent, artificially calculated losses.”

The elder Duval also finds himself on the sharp end of a separate attack on his integrity related to the BP spill, but this time from criminal defense lawyers for Kurt Mix, a former BP engineer found guilty in December of obstructing justice as the federal government investigated the BP spill.

Those attorneys, who are paid by BP but work independently of the company, raised a potential conflict-of-interest claim against the judge, who presided over Mix’s trial, in a court filing seeking to disqualify him from the case. They contend that Duval is hopelessly tainted by the fact that he filed a claim against BP seeking payment, including punitive damages, after his Grand Isle fishing camp was polluted with oil in the wake of the disaster, which killed 11 men and spilled 4.2 million barrels of heavy crude into the Gulf of Mexico.

BP on PR campaign

BP’s campaign against the settlement program is clearly trying to reframe the debate away from the environmental disaster on the Gulf Coast caused by the spill to another unpopular topic: supposedly ravenous trial lawyers now reaping the benefits.

But the company is also reeling from the scope of claims filed. BP initially estimated the deal could cost $7.8 billion. That prediction later rose to $8.5 billion. BP has since said in regulatory filings that “no reliable estimate can be made of any business economic loss claims.”

The class-action settlement, preliminarily approved by U.S. District Judge Carl Barbier in May 2012, sought to avoid piecemeal litigation by resolving hundreds of thousands of claims for economic damages from what is generally considered the worst environmental disaster in U.S. history. In November 2012, BP and the Plaintiffs’ Steering Committee, the group of lawyers that brokered the pact, celebrated the deal during a fairness hearing, urging Barbier to sign off on it.

But the good feelings didn’t last. Four months later, BP sought an injunction from Barbier, contending that the claims administrators were misinterpreting the terms of the deal — specifically, the formula used for claimants to match revenue with expenses in showing post-spill losses. Barbier denied that request, ruling in April that BP acknowledged that “class settlement payments do not always perfectly match economic losses in every instance.”

BP has since adjusted its approach by taking its case to the court of public opinion. In a full-page ad that ran in December in three national newspapers, BP contended that “half the management” at Juneau’s claims facility quit or were fired since it opened in June 2012. It was an oblique shot at David Duval, among others.

Now, some observers speculate that the extended Duval family may soon find themselves the targets of an upcoming BP ad.

“The law seems to be a family business. Different parts of the family have different parts of the business, but they’re all in the law business, and they’re all in the BP business,” said David Logan, dean of the law school at Roger Williams University in Rhode Island.

Freeh investigating program

Last year, Barbier named former FBI Director Louis Freeh to investigate the claims program’s operations after a lawyer on Juneau’s staff, Lionel “Tiger” Sutton III, resigned amid allegations that he got money from a claim he referred to a law firm before joining the claims center.

Freeh has given BP some fodder in the oil giant’s push to condemn the settlement it once lauded. His first report in September found that key executives and senior lawyers in Juneau’s office engaged in improper, unethical and possibly criminal behavior. Using that information, BP has taken to shaming specific — though mostly unnamed — plaintiffs and claims administrators in its ads.

Freeh’s report absolved Juneau of having taken part in any wrongdoing.

Barbier asked Freeh to keep digging.

In a second report, released last month, Freeh focused on David Duval, outing him for a potential conflict-of-interest issue and confidentiality breach for forwarding an email from a settlement appeals panelist to his cousin, Stan Duval, a partner at Duval Funderburk, the Houma law firm.
The investigation absolved David Duval of receiving money in exchange for the information he provided to Stan Duval about a client’s appeal.

Stan Duval’s father, Berwick Duval II — who is Judge Duval’s brother — is also a partner at Duval Funderburk.

In a court filing last month, BP said the combined findings from Freeh’s two reports were “stunning.”

By forwarding the message, David Duval “knew the email contained ‘the thoughts of a panelist,’ and that he had never sent a panelist’s email to any other claimant,” Freeh said in the eight-page report.

In October, after being confronted with the allegations, David Duval resigned from the claims program after 17 months on the job.

Freeh’s report found that Berwick Duval reported the Oct. 2 email to U.S. Magistrate Sally Shushan, who is handling the case with Barbier. “Judge Shushan instructed Berwick Duval to treat the email as an inadvertent disclosure, and instructed him to make no use of the information or reveal the receipt of the email,” the report said, noting that Berwick Duval’s action was “prompt and proper.” It’s unclear from Freeh’s report exactly what the email showed.

In a deposition taken in August, Juneau testified that David Duval was hired as appeals coordinator based on Shushan’s recommendation, according to a transcript. That account did not mention Juneau’s lunch with the elder Duval, which was how David Duval told Freeh’s investigators that he landed a job at the claims program.

David Duval’s attorney, former U.S. Attorney Harry Rosenberg, declined comment. Stanwood Duval did not return a message left for him at federal court in New Orleans. Efforts to reach Berwick Duval for comment were unsuccessful.

One of the lawyers who was directly criticized in Freeh’s reports has argued they are biased. That attorney, Christine Reitano, also filed a defamation lawsuit against Juneau, in which she asserted she was wrongly fired and that BP’s public relations campaign had escalated from a “slander war to a full-on media assault.”

Mix’s attorneys target Duval

Mix’s BP-funded defense lawyers summed up their concerns against the elder Duval in a Jan. 22 motion seeking his disqualification from the case, saying the judge is too close to the action.

“The defense has been unable to identify any case that looks remotely like this: namely, one where the district judge and his lead law clerk are active litigants in a highly-publicized civil case worth billions of dollars that is unfolding in the courtroom literally next door and, through their legal representatives in that civil case, are actually advocating in favor of the very same arguments that the prosecutors have been making for over a year against the criminal defendant over whose case the district judge is presiding and on whose case the law clerk is working,” the motion states.

Duval’s law clerk is his wife, Janet Daley.

Though BP is footing the bill for Mix’s attorneys, as well as its own civil defense, legal experts said it is unlikely the two camps are working in tandem to cast doubt on the Duvals.

“I would guess that it’s not part of a BP conspiracy to go after the Duval family, that both are somewhat separate and that BP’s lawyers thought there would be an advantage in each case,” said Edward Sherman, a Tulane University law professor who specializes in complex litigation.

Judge Duval has not said when he plans to rule on the defense motion to disqualify him from the former BP engineer’s case.

During a status conference in May 2012 — the same month Mix was indicted — Duval told defense lawyers and prosecutors about his sullied Grand Isle fishing camp and noted that he was entitled to seek compensation from BP. “However, such compensation cannot be sought through the Deepwater Horizon Court Supervised Settlement Program,” the judge noted in the minutes of the phone call.

That was because the settlement’s terms precluded sitting judges of the U.S. District Court for the Eastern District of Louisiana from recovering losses from the claims program. Instead, Judge Duval joined the litigation in 2013 by filing a separate three-page form allowing him to bring a civil claim against BP on his own.

Coincidentally, Duval also disclosed during the status conference that his son worked for the claims program. “It is my understanding that my son’s duties include, at this time, governmental affairs and the handling of appeals,” the judge said.

In their motion supporting the judge’s recusal, Mix’s attorneys said they inferred from his initial disclosure that Duval “had no plans to file any sort of lawsuit against BP, let alone file a lawsuit seeking punitive damages and adopting allegations that BP and its employees (including Kurt Mix) willfully and wantonly misled the public” about efforts to try to kill the flow of oil from BP’s runaway Macondo well

Duval is also presiding over the trial of Robert Kaluza and Donald Vidrine, BP’s top two supervisors on board the Deepwater Horizon rig at the time of the blowout. Each faces 11 counts of involuntary manslaughter, along with violating the federal Clean Water Act.

Legal experts said Mix’s effort to have Duval disqualified faces an uphill battle, simply because his lawyers filed their objections too late.

“In a sense, the clock started running for the defense lawyers to make that argument and sort of pin him (Duval) down and they didn’t pin him down,” Logan, the law dean, said about the amount of time that passed after the judge’s 2012 disclosure. “Instead, he went ahead and did, some months later, what he said he might do.”

Attorneys for Kaluza and Vidrine recently said in court filings they do not object to Duval presiding over the case.