A Tort Riot

[cato2]

A Tort Riot

The depredations of the trial bar are legion. But sometimes a case is so exquisite in revealing the character of the modern tort industry that its details deserve national distribution. Such is the case of the 79 lawyers fighting like a hyena pack over the spoils of a $10 million Shell Oil settlement in New Orleans.

Back in 2004, Shell sold misformulated gasoline to tens of thousands of customers, fouling their fuel gauges and creating a class-action bonanza for four-score plaintiffs lawyers. Our readers won't be surprised to learn that most of the $10 million that Shell coughed up went to the lawyers. The plaintiffs got "a new fuel gauge and a 100 bucks," says Dane Ciolino, a law professor at Loyola University in New Orleans who's now involved in the case.

The lawyers, on the other hand got -- well, no one really knows exactly what they got, except for the judge and the handful of lawyers who divvied up the pot. The total amount that Shell agreed to pay the lawyers was about $6.9 million, but the rest of the details are under seal. The 79 lawyers who shared in that windfall are barred from discussing their take with anyone, according to a January gag order.

That order was issued at the urging of the five lawyers who decided how much everyone else would get. "Letting each person's award [sic] stand on its own merits and be examined on its own merits would lead to a peaceful situation," attorney Don Barrett told the judge in requesting that the amounts paid be put under seal. Allowing the lawyers -- or the clients, for that matter -- to compare jackpots could only lead to jealously, the five argued. On the other hand, Mr. Barrett noted, "we think that when people look at what they got compared with what they did, they are going to be quietly pleased." After all, he added, "we have money to go around."

Mr. Barrett got his gag order, and that might have been the end of it. But some of the other 74 lawyers were neither pleased nor quiet about the secrecy and result. At least four attorneys and one of the original plaintiffs (remember them?) have appealed to have the seal lifted. Prof. Ciolino is representing them in the case, which the New Orleans Times-Picayune has joined on freedom-of-speech grounds.

The sealed order arose out of a January 22, 2007 hearing before U.S. District Judge Ivan L. R. Lemelle. The hearing was apparently public, but according to the five lawyers present, none of the other 74 lawyers in the case was informed beforehand. This gave the five, who had been appointed by the court to decide on the allocation of the $6.9 million, a free hand to argue for their allocation as well as for sealing their justification of the amounts.

Judge Lemelle did pause long enough to ask whether the proposed sums were different from what each of the 79 had requested. Mr. Barrett said they were. "Yes, sir. . . . Some people turned in hours that were clearly grossly excessive." Lest the point be overlooked, Mr. Barrett added: "There were two firms that . . . we generously gave a substantial award that really didn't do anything for the common benefit." (Our emphasis, since this could be said about all 79.)

Mr. Barrett nonetheless said the five were "proud" of their work, though not proud enough to let it see the light of day. They needed Judge Lemelle's help to cover their tracks, however, and he obliged. He even agreed, according to the transcript, to seal the record of the hearing -- although copies are now circulating.

The Fifth Circuit Court of Appeals has been asked to examine the order sealing the records, but no hearing date has been scheduled. If the Fifth Circuit agrees that the class member and the other attorneys have an interest in knowing how the pot was divvied up, it will be a victory for common sense. But even without that data, the lawyers' conduct is revealing.

By Mr. Barrett's own admission, the committee raised most of the lawyers' fees -- "raised them generously" -- to make sure most of the money extracted from Shell was doled out to the lawyers. Mr. Barrett admitted in open court that some of the lawyers had "grossly" overbilled, or done little or nothing to merit a share of the pie, but the committee paid these lawyers well anyway.

We're grateful to the lawyers who blew the whistle on Mr. Barrett's cover-up, but it's hard to feel sympathy for anyone in a group that walked away with almost two-thirds of the money won in the case. Unsealing the records would be a good first step, but Mr. Barrett's statements suggest that the juiciest story is not how the money was divided among the lawyers, but how 79 lawyers extracted nearly twice as much from the defendant for themselves than they won for their 81,000 clients. Just another day at the office for the tort bar.

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