Alabama fires law firms handling BP case

NEW YORK Thu Jan 27, 2011 1:10pm EST

NEW YORK Jan 27 (Reuters Legal) - Alabama's new attorney general, Luther Strange, has shaken up the state's lawsuit against oil giant BP (BP.L), firing the two plaintiffs' firms handling the case and naming himself lead counsel. The outside firms had been brought in by Strange's predecessor, Troy King, who initiated the only lawsuit filed against BP by a Gulf Coast state in the wake of the largest oil spill in U.S. history.

Strange said the attorney general's office has ample resources and doesn't need outside counsel, especially given the cost. "I'm not going to give any law firm 15 to 20 percent of the money due the people of the state of Alabama," Strange told Reuters Legal in a phone interview. "Any money received will go directly to citizens, not to lawyers." Alabama's case is part of the multi-district BP litigation overseen by U.S. District Judge Carl Barbier of the Eastern District of Louisiana in New Orleans.

Lawyers from the fired firms -- Rhon Jones and David Byrne of Montgomery-based Beasley Allen Law Firm and Robert Prince and Joshua Hayes of Tuscaloosa-based Prince Glover & Hayes -- declined to comment on the change in counsel. King did not return phone calls seeking comment.

It is not yet clear how Strange's approach to the BP litigation may differ from that of the attorneys who had been on the case. Strange declined to comment on whether he would amend the complaint, originally filed by King in August, which seeks unspecified damages under the federal Oil Pollution Act. Strange said he is working with state agencies to "come up with a number" to quantify Alabama's damages.

Strange's views on suing BP have shifted since the fall. In an October interview with Reuters Legal, Strange, then a candidate, said he would consider dismissing the case brought by King, who he defeated in the Republican primary. In the interview, Strange expressed concern that King had rushed into the suit without consulting local officials. "If there's any way something can be worked out, we'd be looking at a dismissal without prejudice," Strange said. "I don't think there's anything wrong with negotiating to see what we can agree on."

Strange said this week that his new perspective on the litigation was influenced by the U.S. Justice Department's pursuit of a civil suit against BP and by mounting evidence of the depth of economic losses in Alabama stemming from the oil spill.

The case has posed a sensitive political issue for Strange. In the 2010 primary, King seized on Strange's previous work as an oil industry lobbyist, which he argued would impede Strange's ability to take on BP. In particular, Strange was registered to represent Transocean Offshore Drilling (RIGN.VX)(RIG.N) on matters related to offshore drilling for six months in 1998, federal records show. Transocean's successor company owned the Deepwater rig that exploded in the Gulf of Mexico.

In a letter dated Aug. 19, Alabama State Bar General Counsel J. Anthony McLain advised Strange that his work with Transocean would present a conflict only if Strange had obtained confidential information during his employment with Transocean that could be used against the company in litigation. Strange maintains he has no conflict. BP declined to comment on the issue.

Strange plans to make his first appearance in the case on Friday at the monthly status conference before Judge Barbier. (This article first appeared on Westlaw News & Insight, www.westlawnews.com) (Reporting by Moira Herbst of Reuters Legal; editing by Amy Singer and Eric Effron)

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