http://news.yahoo.com/s/ap/20100606/ap_on_bi_ge/us_gulf_oil_spill_j...

More than half of the federal judges in districts where the bulk of Gulf oil spill-related lawsuits are
pending have financial connections to the oil and gas industry,
complicating the task of finding judges without conflicts to hear the
cases, an Associated Press analysis of judicial financial disclosure reports shows.

Thirty-seven of the 64 active or senior judges in key Gulf Coast districts in Louisiana, Texas, Alabama, Mississippi and Florida have links to oil,
gas and related energy industries, including some who own stocks or
bonds in BP PLC, Halliburton or Transocean — and others who regularly
list receiving royalties from oil and gas
production wells, according to the reports judges must file each year.
The AP reviewed 2008 disclosure forms, the most recent available.

Those three companies are named as defendants in virtually all of the 150-plus lawsuits seeking damages, mainly for economic losses in the
fishing, seafood, tourism and related industries, that have been filed
over the growing oil spill since the Deepwater Horizon drilling rig
exploded April 20, killing 11 workers. Attorneys for the companies and
those suing them are pushing for consolidation of the cases in one
court, with BP recommending Texas and others advocating for Louisiana
and other states.


A Washington-based federal judicial panel is scheduled to meet next month to decide whether to consolidate the cases and, if so, which judge should be assigned the monumental task.
The job would include such key pretrial decisions as certifying a large
class of plaintiffs to seek damages, a potential multibillion-dollar
settlement, whether to dismiss the cases and what documents BP and the
other companies might be forced to produce in court.

The AP review of disclosure statements shows the oil and gas industry's roots run as deep in the Gulf Coast's judiciary as they do in the
region's economy. For example, one federal judge in Texas is a member of Houston's Petroleum Club, an "exclusive, handsome club of, and for, men of the oil industry."

Federal judicial rules require judges to disqualify themselves from hearing cases involving a company in which they have a direct financial
interest, and some Louisiana judges have already done so. For example,
U.S. District Judge Mary Ann Vial Lemmon in New Orleans, who reported
ownership of BP stock, issued an order in early May that the court
clerk not allot cases involving BP or related entities to her docket.

Another New Orleans jurist, U.S. District Judge Carl Barbier, said in court Friday he is selling his oil and gas investments — which included
Transocean and Halliburton
— to avoid any perception of a conflict. Barbier is presiding over
about 20 spill-related lawsuits and some attorneys are recommending
that he be chosen to oversee all cases filed nationally.

Still another judge in Louisiana, U.S. District Judge Eldon Fallon, recused himself because his attorney son-in-law is representing several people and businesses filing suits against BP and the other companies over the rig explosion.

In many ways, the financial conflict rules are murky. For example, a judge does not have to step aside if the investments are part of a mutual
fund over which they have no management control. Mere ties to companies
or entities in the same industry, no matter how extensive, also don't
require disqualification, according to legal experts.

"The specific rule forbids judges from hearing a case in which they have a financial interest. The more general rule forbids them from hearing
cases in which their impartiality might reasonably be questioned," said
Charles Geyh, an Indiana University law professor who has closely
studied judicial ethics.

So a judge like U.S. District Judge Stanwood Duval of New Orleans would not have to disqualify himself even though he reported royalties from "mineral
interest No. 1 and No. 2" in Terrebonne Parish, La., on his 2008 forms.
Likewise for Senior U.S. District Judge William Barbour Jr. of
Mississippi, who listed at least 30 oil and gas interests in three
states including "McGowan Working Partners" and "Petro-Hunt Bovina
Field," both in Mississippi.

Some judges have close ties to the energy industry that aren't for financial gain, but could still raise questions of potential bias.

The judge BP wants to hear all of the spill-related cases, U.S. District Judge Lynn Hughes of Houston, for the past two years has been a
"distinguished lecturer" focusing on ethical issues for the
35,000-member American Association of Petroleum Geologists.

Hughes is not paid a fee but does receive reimbursements for travel, food and lodging, said association spokesman Larry Nation. Hughes has appeared
at petroleum geologist meetings in several Texas cities, in New Orleans
and also in Cape Town, South Africa. He is scheduled to give a lecture
later this month in Calgary, Canada, the oil and gas capital of that
country.

"Under the circumstances, I can see why the questions are being raised," Nation said. "But one of the reasons Judge Hughes was chosen to be a lecturer is that he is known as
a very ethical person. I would think his being an ethics lecturer for
our organization would be a positive, not a negative."

Hughes said at a hearing Friday that his work for the geologists poses no conflict and that his other oil and gas investments — which include
royalties from several mineral rights interests — are not connected to
BP or the other companies involved in the spill lawsuits.

Florida attorney Scott Weinstein, whose firm represents charter captains and other companies suffering economic loss from the spill — including the
owners of the Ripley's Believe It or Not museum in Key West — said
people might think it's unfair for BP to win its wish with a Texas
judge rather than one seated in Louisiana or Florida, where the spill's
impacts are greater.

"I would never assume that a judge is biased because of the jurisdiction that he or she sits in," Weinstein said. Still, "if this case winds up in Houston, many of the
victims will feel very distant from where that justice is being handed
out. It will not make sense to them."

Another Florida plaintiffs' attorney, Stuart Smith, was more blunt about the companies' aims.

"They would get much more sympathetic judges and perhaps a more sympathetic jury," Smith said.

In court papers, BP says that Hughes has the "experience and capacity" to handle the lawsuits and that Houston is the ideal location because most of the defendants' companies have headquarters or major
operations there. BP spokesman have repeatedly declined to comment on
pending lawsuits.

Some attorneys have come up with an unusual assertion: import a New York federal judge with a strong background in environmental lawsuits to Louisiana to preside over the cases.

They are recommending that the U.S. Judicial Panel on Multidistrict Litigation appoint U.S. District Judge Shira Scheindlin. Scheindlin presided over settlement of some 200 lawsuits brought
against BP and other oil companies over a toxic additive called MTBE
that contaminated drinking supplies nationally — and she has no oil and
gas investments, according to her financial disclosure forms.

Attorneys with the Weitz & Luxenberg firm in New York said they recommended Scheindlin rather than a Louisiana judge because "most or all of the judges in the (Louisiana) district have a conflict and
cannot preside" over the consolidated cases.

Scheindlin's deputy said Friday she was out of town and unavailable to comment on whether she would accept such an appointment.

The judicial panel meets July 29 in Boise, Idaho, to hear arguments on consolidation of the oil spill cases. Recommendations also have been made for sending the cases to Alabama, Mississippi and South
Florida.

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