Plaintiffs in BP oil spill case accuse their own lawyers of fraud

July 12, 2016

(Reuters) – The reputation of the plaintiffs’ bar – always a vulnerable target for the business lobby – has not been enhanced by long-running litigation stemming from the 2010 BP Deepwater Horizon oil spill. The good work by members of the plaintiffs’ steering committee, who negotiated and subsequently defended one of the biggest private settlements in U.S. history has been overshadowed by accusations against their supposedly less scrupulous colleagues.

To whit: Famed Texas trial lawyer Mikal Watts is scheduled to go to trial next week in Gulfport, Mississippi, where he faces federal criminal charges that he defrauded BP and the courts by asserting claims on behalf of tens of thousands of Vietnamese seafood workers who either didn’t exist or didn’t sign up with Watts’ firm. Some of those workers have sued two other Texas plaintiffs’ firms for supposedly funding Watts’ case generation program. And, of course, BP itself has been whining for years about allegedly unjustified claims cooked up by plaintiffs’ lawyers capitalizing on imprecision in its settlement terms. At its insistence, former FBI director Louis Freeh was appointed as a special master to investigate fraud in the case; in 2013, he informed the court of evidence that two plaintiffs’ lawyers had paid a onetime claim administrator to steer cases their way.

Those accusations all involve allegations that trial lawyers tried to take advantage of BP. But now four Vietnamese seafood workers and fishing boat owners are claiming plaintiffs’ lawyers – their own lawyers, in fact – tried to squeeze money from them, not from BP.

In May, the four BP plaintiffs sent a detailed complaint against the New Orleans firm Waltzer Wiygul & Garside to the Louisiana Attorney Discipline Board and the clerk of the federal court in New Orleans, where the multidistrict litigation against BP is based. They all allege that they agreed to be represented by Waltzer Wiygul in low-dollar claims against BP stemming from work they performed during the oil spill cleanup – but that the law firm improperly attempted to extend its representation to higher-value claims for economic losses.

The plaintiffs, who are not fluent in English, assert they never agreed to retain Waltzer Wiygul – nor to pay its contingency fees – in connection with those economic loss settlements. They say the law firm tried to take advantage of the language gap. The disciplinary board filing also claims Waltzer Wiygul affixed client signatures to documents they did not sign and improperly obtained tax returns and documents without client authorization.

A former consultant at the Louisiana Small Business Development Center, Thoai Nguyen, wrote and distributed the plaintiffs’ disciplinary complaint against Waltzer Wiygul. In the filing, Nguyen said all of the men worked with her at the public interest group, which helped fishing boat owners and workers (among others) bring claims against BP without using attorneys. In some instances, plaintiffs only found out that a law firm was purporting to represent them when the law firm placed a lien against their settlement.

“Forged signatures, falsified notarized documentation, unauthorized access to tax and business information, no work performed yet seeking compensation, no translation and explanation of key documents such as the retainer agreement – these are just some of the elements,” Nguyen said in an email. “The bottom line is, they preyed on the disadvantaged – that is, the persons with limited English proficiency.” Nguyen said she intends to file additional disciplinary actions against other plaintiffs’ firms that, according to her, have demanded unwarranted contingency fees from unsuspecting BP clients.

Last week, after one of the plaintiffs in the disciplinary complaint protested a lien by Waltzer Wiygul, the BP claims adjudicator acknowledged that the plaintiff, Can Tran, terminated the law firm in 2012, before he settled economic loss claims against BP. The adjudicator nevertheless awarded the law firm half of the $25,000 in disputed fees.

I emailed Joel Waltzer and the other name partners in his firm for comment on their former clients’ disciplinary allegations. I also left phone and email messages in the firm’s general mailbox. I did not receive a response.

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