For months, BP has complained that a Louisiana attorney who is administering its settlement with tens of thousands of Gulf Coast businesses and residents has made decisions that expose the company to what could be billions of dollars in fictitious claims arising from the 2010 oil spill in the Gulf of Mexico.
Now the court-appointed administrator himself is investigating allegations that could provide the London-based oil giant with fodder for its argument that it hasn’t gotten a fair shake from the claims processing team.
Lafayette-based lawyer Patrick Juneau confirmed Friday that he has opened an internal probe of alleged misconduct by one of his staff attorneys, Lionel H. Sutton III, who has been accused of collecting portions of settlement payments from a New Orleans law firm to which he had once referred claims.
Sutton resigned Friday morning, Juneau spokesman Nick Gagliano said.
A BP PLC official who has reviewed a report outlining the allegations said Juneau delivered a copy of it to U.S. District Judge Carl Barbier during a meeting in his chambers Thursday.
Lawyers for BP and the team of private attorneys who brokered the multibillion-dollar settlement also attended the meeting. The BP official spoke on condition of anonymity because the report hasn’t been made public.
It’s unclear how much influence Sutton had over the process of evaluating and paying scores of claims spawned by the deadly Deepwater Horizon disaster, which killed 11 rig workers and led to the nation’s offshore oil spill. But the revelation could strengthen BP’s position as it forges ahead with a high-stakes challenge to Juneau’s interpretation of the settlement terms.
“If I’m Judge Barbier, I’ve got to worry about this,” said Howard Erichson, a Fordham University law professor specializing in complex litigation. “Any claims settlement relies on a reliable claims process. If the integrity of the claims process is challenged, the judge is going to take that very seriously.”
Even before the allegations involving Sutton arose, BP PLC had sued to block settlement payouts to businesses, accusing Juneau of trying to rewrite the terms of the deal. Barbier, who appointed Juneau last year, has upheld his decisions for calculating payments. BP has appealed, and the 5th U.S. Circuit Court of Appeals is scheduled to hear the case in July.
Juneau said in a statement that both BP and claimants “rightfully expect fairness and objectivity from this claims process.”
“Our goal is to operate in an efficient, transparent and fair manner,” Juneau added. “All allegations are taken seriously and investigated thoroughly.”
Earlier Friday, BP issued a statement saying only a “comprehensive and independent investigation will ensure the integrity of the claims process.”
Sutton acknowledged in an email late Thursday that he has been told he was suspended “pending an investigation of an anonymous allegation against me.”
“I have not been made aware of the substance of the allegation or the status of the investigation,” Sutton wrote. “Once this is resolved, I would be happy to discuss it all with you.”
The BP official said the report indicates that Juneau’s security head, David Welker, also notified the FBI’s New Orleans division about the lawyer’s alleged misconduct. Welker until recently was the special agent in charge of the FBI office in New Orleans.
An FBI spokeswoman in New Orleans declined to comment Thursday.
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