A former Bayou Corne resident says he and some of his former neighbors who were plaintiffs in a federal class-action lawsuit over the Assumption Parish sinkhole were manipulated by their attorneys and the special master overseeing the case.
Michael Schaff, 65, now of Pierre Part, wrote U.S. District Judge Jay C. Zainey earlier this month about those concerns and asked for a private meeting.
“What we wish to discuss with you is the way we were mistreated and manipulated by Class (Counsel) and the Special Master,” Schaff wrote to the judge in New Orleans.
Schaff told Zainey he was asked by “several former members of our community” to seek the meeting and “gain some closure in our lives on this horrific event.”
Zainey granted them a hearing on April 8 but will hold it in public. He is requiring attendance by all lawyers on the plaintiffs’ steering committee, as well as the special master. Texas Brine representatives and all class members also were invited.
In the letter, Schaff told Zainey he and five other former residents of Bayou Corne or nearby Grand Bayou would attend the meeting.
Schaff declined to elaborate on his concerns in an interview last week.
Larry Centola III, one of the class counsel lawyers, said the attorneys are ready to clear up any misconceptions at the public hearing.
Schaff and the other plaintiffs sued Texas Brine Co. over the formation of the sinkhole, which appeared in a nearby swamp around Aug. 3, 2012. The plaintiffs alleged a Texas Brine salt dome cavern broke open and sparked the sinkhole’s formation and the release of dangerous methane gas, which, state officials say, still threatens the area.
The suit was settled in April 2014 right before it was headed to six bellwether damages trials. Texas Brine and its insurers agreed to the $48.1 million lump-sum award to buy out residents from their homes, pay them other damages for pain and suffering, and pay attorney fees and costs.
Schaff’s letter comes after the buyout process has ended — checks went out late last year and in January — and Zainey is now being asked by the plaintiffs’ attorneys to approve how their fees should be split and to certify payment of upfront costs. Zainey already agreed earlier this month that the attorneys will receive a 25 percent cut of the $48.1 million settlement.
Texas Brine officials, who declined comment, have not raised objections to the fees and costs with the court, but a longtime critic of Louisiana’s civil courts, and in particular of trial lawyers, claims the $12.3 million in fees and costs are out of line. That critic also claims a conflict of interest exists between at least one of the class counsel lawyers and the special master. The master has played a key role in recommending how the attorney’s fees are divvied up and establishing the plaintiffs’ damages.
Melissa Landry, executive director of the nonprofit Louisiana Lawsuit Abuse Watch, charged that the $12 million in fees are unreasonable and work out to $1,300 per hour based on the approximately 8,900 hours that the attorneys said they spent on the case.
“I think it’s excessive and particularly offensive since it comes at the expense of individuals who lost their homes,” Landry said.
Centola said that under the law, the court must consider a variety of issues in setting attorneys’ fees, known as Johnson factors, not just hours.
“There are rumors and misinformation that is being put out by special interests with an ulterior motive,” he said.
Centola added that the 25 percent fee is far lower than what several clients who joined the class action had originally agreed to pay when they first hired private lawyers. He said class counsel later agreed attorneys’ fees would be set at the lower 25 percent share of the settlement for all 16 law firms involved and delivered an unusually quick result.
“That is unheard of,” Centola said. “Over $30 million in the hands of clients within 21/2 years of the date of the incident — it just doesn’t happen.”
Some outside legal experts have said the 25 percent attorneys’ fees are reasonable for the size, complexity and risk of the sinkhole litigation, noting that fees in other cases of that type can run 33 percent or more.
Landry said the speed with which the case was finished suggested the case was not as complex or risky as the attorneys say.
But the case is not completely resolved. A stack of lawsuits and unresolved claims remain over the sinkhole from large landowners, pipeline companies, state government and more than 40 residents and businesses that opted out or were excluded from the residents’ class action.
Centola noted that the class-action clients were notified more than a year ago that the attorneys would be seeking 25 percent of the settlement in fees.
Earlier in the case, Zainey set aside 28 percent of the settlement for possible fees and costs. While 25 percent ended up going toward fees, the remaining 3 percentage points of the set-aside — $1.4 million — will cover costs, Centola said.
The class counsel is requesting $291,566 in common benefit costs for the litigation. Centola said the special master’s hourly fee will come out of the 3 percent as well and whatever is left will be distributed back to the clients.
Separately, Landry has charged that plaintiffs’ attorney Calvin Fayard Jr., a prominent trial lawyer in Louisiana, is the second cousin of special master A. Shelby Easterly III. Landry also pointed to 2005 litigation in which Easterly represented Fayard and his law firm.
“I certainly think the fact that they had a pre-existing relationship at the very least creates a perception of a conflict of interest and at the very worst is something much more than that,” Landry said.
In an email and court papers, Fayard and Easterly disputed any conflict existed but did not dispute that they are distantly related. Fayard noted that Easterly does not represent him, anyone in his firm, other class counsel firms or anyone in those firms.
“Under the federal rules that govern the appointment of special masters, we maintain that legal representation which occurred before an appointment — in years-old matters not related to the current litigation — does not create a conflict of interest,” Fayard wrote in the email.
Easterly, who is a member of the Academy of Court Appointed Special Masters, filed a disclosure in the class-action Friday saying he is not aware of any conflict in the case but that he represented Fayard and his law partner in a civil matter that ended nine years ago. Easterly also has acted as their notary and possibly they for him.
Under federal rules of civil procedure, special masters fall under requirements that apply to judges for disqualification.
Smith added the law notes specific instances in which judges must disqualify themselves. One happens when judges or their spouses are related to an attorney or litigant within the third degree.
Smith said a separate code of conduct for federal judges does not include second cousins as relations within the third degree.
Follow David J. Mitchell on Twitter, @NewsieDave.