The Tort Lawyer and the BP Oil DisasterBy
Daniel Becnel Jr., speed dialing over a speaker phone, places a call to a lawyer for a defendant in the British Petroleum-Deepwater Horizon rig explosion and oil spill.
"This is the king of torts calling," he says when he reaches the attorney's executive assistant.
"Oh," she says. "Then it must be Danny Becnel."
Becnel, adjusting his gold-rimmed glasses, nods appreciatively from his mahogany desk strewn with an impressive pile of legal papers. It's from here, in a French colonial-style office in Reserve, La., population 10,000, that he orchestrated the filing of the first federal lawsuit eight days after the Apr. 20 blowout, and where he tracks the legal squadrons gathering to sue BP (BP) and its contractors for claims that experts say could add up to a half-a-trillion dollars or more. About 110 suits have been filed so far, according to Becnel, and dozens more appear to be on the way.
"So where the hell is Jimmy?" Becnel says to the assistant on the phone.
The sought-after party is in a meeting, but the assistant promises a quick return call. Before hanging up, she says: "Danny, would you give me some inside scoop, because I really enjoy hearing things before they get to the lawyers here."
"Now, why do you think I know stuff?" he asks.
She laughs: "Because you're the one who has the direct-dial phone to the White House."
As the spill spreads, waves of lawyers have followed. Becnel, as is his custom, is surfing out front. So far, he and partnering law firms have filed nine federal suits—representing Louisiana commercial fishermen, a New Orleans area oyster restaurant, and Key West charter boat operators, among others—and they're preparing to file three or four more.
Becnel, 65, is soft-spoken. In his khakis, open-collar shirt, and fondness for breaking out dog-eared volumes on industrial safety, he might be mistaken for an engineering professor. In fact, he has represented plaintiffs in some of the highest-profile class actions in American history, from fen-phen diet pills and Big Tobacco to Dow Corning breast implants and the recent Toyota (TM) sudden-acceleration cases. He demurs as to whether he actually has a direct line to the White House, though he openly admires the President, and Bradley Becnel, one of his four children, is an advance man for the Obama Administration, helping set up Presidential visits all over the world.
Addressing reports circulating on a spill litigation website that U.S. Navy submarines are tracking the oil spill, Becnel says it was his attorney brother, Robert Becnel, who contacted his "close personal friend" U.S. Navy Secretary Ray Mabus about the need for the government to monitor where the oil is going. (A Defense Dept. spokesman says the Navy has provided skimmer boats and other equipment to the spill-containment effort but knows of no submarine involvement.)
Becnel has plenty of competition in the BP litigation stakes. The spill, says Jerrold Parker, a Bonita Springs (Fla.) lawyer, may turn into "the largest disaster in American history" and is already a mass tort bonanza. A recent seminar sponsored by the Louisiana State Bar Assn. at New Orleans' downtown Sheraton Hotel, at which Becnel was one of the speakers, attracted about 300 tort attorneys from around the country. "Ultimately, you're talking about thousands of lawyers being involved," says Richard J. Arsenault, a dean of the Louisiana tort bar who is working several cases with Becnel.
People who know him aren't surprised to find Becnel in the center of the litigation. "[Becnel is] like a firehouse dog," says James Roussel, a longtime acquaintance and sometimes legal adversary of Becnel's who is a defense lawyer with the New Orleans arm of Baker Donelson Bearman Caldwell & Berkowitz. "When the bell rings, he's out the door."
What makes the BP case so extraordinary is the potential for the spill to damage the economies of the five Gulf states—Alabama, Florida, Louisiana, Mississippi, and Texas—and the livelihoods of tens of thousands of citizens who live there. Should the oil start moving up the East Coast, damage claims will spread with it. According to the latest National Oceanic & Atmospheric Administration estimates, the spill forms a surface slick at least 130 miles long and 70 miles wide that stretches from about 30 miles west of the Mississippi River to the offshore waters of western Florida. Roughly 45 miles of Louisiana's coastline of marshy bays and sandy barrier islands have already been coated with oil, a state of Louisiana website reported on May 26. Oil-sickened pelicans are being pulled out of the water around Grand Isle, the state's one sandy beach resort about 60 miles below New Orleans. Oil from the blown-out rig, which independent scientists have told Congress could be gushing at ten times the BP estimate of 5,000 barrels a day, has entered the Gulf Stream and could be headed toward the tip of Florida, the coast of Cuba, and beyond, according to the European Space Agency, which has been monitoring the spill by satellite.
Becnel estimates that the actual damages, as opposed to total claims, will run $20 billion to $50 billion. That would dwarf the $5 billion judgment that was rendered in the 1989 Exxon Valdez Alaska spill, which involved more than 32,000 plaintiffs, before it was reduced to about $500 million by a 2008 Supreme Court decision. BP recently waived a $75 million limit on environmental damages relating to the spill and has pledged to cover costs, whatever they are. The numbers and class of people who have claims are going to be "extraordinary," says Camilo K. Salas III, a New Orleans lawyer who is working with Becnel on some of the litigation.
Already, charter boat captains and resort operators from as far away as Texas and Florida have sued as clients scared off by the spill canceled trips. Many of Louisiana's 15,000 commercial fishermen are filing claims as the spill shuts down and pollutes shrimping and oyster grounds in an industry valued at about $2.5 billion a year. The spill couldn't have come at a worse time for shrimpers, who were entering the peak spring season when the leak began.
The district attorney of Terrebonne Parish, La.—where long tongues of oil were just discovered drifting into Lake Barre, a popular sports fishing and shrimp-trawling area—has filed suit to recover damages on behalf of the parish's wildlife. Two environmental groups, the Gulf Restoration Network and the Sierra Club, have sued the U.S. Minerals Management Service for its alleged failure to require companies drilling in the Gulf to have adequate worst-case scenario plans for dealing with spills. Meanwhile, the Louisiana Municipal Police Employees' Retirement System has sued BP, accusing the company of damaging shareholders by opting to maximize output at its rigs such as the Deepwater Horizon instead of complying with safety regulations.
Long established lawyers like Becnel lure clients through word-of-mouth or through a network of attorneys who work the nationwide mass-tort circuit. Other lawyers have to hustle. In Chauvin, La., a fishing community south of Houma where BP is staging some of its spill-containment operations, lawyers have been swarming community meetings and docks trying to sign up hundreds of commercial fishermen for their lawsuits, says Kimberly Chauvin, co-owner of Mariah Jade Shrimp Co. "It's like sharks feeding on guppies down here. The lawyers are the only ones who ever come out winners in situations like this."
One of Becnel's cases involves a Mandeville (La.) sports fisherman named Tom Garner, who has filed a class action in New Orleans federal district court on behalf of Louisiana's millions of outdoor enthusiasts who use the wetlands in this fishing- and hunting-mad state for recreation (Louisiana's license plates bear the slogan "Sportsman's Paradise"). In his suit Garner says "the ever-growing oil spill has already caused serious and permanent environmental damage to the Louisiana coast," depriving both recreational and commercial users access to an ecosystem that is also "the first line of defense from storms and hurricanes."
The suit further alleges that the explosion, sinking of the rig, and oil spill were a direct result of BP's negligence in "providing blowout preventers that did not work properly and were not calibrated" and by "conducting well and well cap cementing operations improperly by removing mud from the well before cementing the well, a procedure which is never done."
Becnel thinks the company's legal woes will worsen if further evidence shows it operated in a culture that put profit before safety; he cites congressional testimony earlier this month suggesting BP ignored signs that a cement job meant to maintain well pressure was faulty and that the blowout preventer may have been previously damaged."They were in a hurry to finish this job, because it was so expensive," says Becnel. "In the rush, they made a chain of bad decisions." BP declined to comment.
Becnel takes pride in having refused to move his law operations 35 miles downriver to New Orleans, where most of the local tort lawyers have splashy offices. He often describes himself as a "country lawyer," although he hasn't fooled anyone with that bit of mythology in quite a while. "Danny's a wheeler-dealer," says Roussel of Baker Donelson. "He's a good guy, but the country lawyer thing is kind of a shtick. Some people don't like him. They don't think he's very effective. They are somewhat jealous of him." Roussel says Becnel's sense of self-worth can be grating. "One thing about Danny—nobody has a higher impression of him than he does of himself."
Becnel says that he simply works harder than most of his colleagues. "Most tort lawyers are lazy," he says. "I'm always working. You know how many hours a night I sleep? Four."
He turns to his colleague, Salas, who is in his office: "What time do you start getting calls from me some mornings?"
"Four a.m.," says Salas.
Whatever other lawyers say about him, Becnel has a pile of victories that speak volumes. He won a million-dollar judgment in a 1972 car accident case when he was three years out of Loyola University law school, and since then, Becnel has been involved in six billion-dollar-plus settlements. Those include the national tobacco litigation, in which he was part of a large team of lawyers sharing a $1.65 billion fee in California alone, and the Dow-Corning breast-implant defect cases, in which his firm was among several that won a global $7.2 billion 2001 settlement that was later reduced when Dow-Corning took the case to bankruptcy court. He was also a lead lawyer in the post-Katrina, $330 million settlement against Murphy Oil (MUR) over a tank spill during the storm that unleashed more than 1 million gallons of oil in several neighborhoods in St. Bernard Parish below New Orleans.
Becnel says he first heard about the Deepwater Horizon blowout from a personal-injury attorney friend who tracked him down by phone at the Wynn Las Vegas hotel where he was attending a two-day, $1,395 seminar called "Mass Torts Made Perfect." "I said to my friend, 'You take the personal injury cases, and we'll handle the environmental litigation,' " says Becnel. Since then, Becnel has asked a federal judicial panel to consolidate the lawsuits into a class action to avoid what he calls "judicial chaos." He also filed motions in New Orleans federal district court for an expedited hearing on the matter of where the suits will be heard. (So far they have been denied.) BP and its contractors are trying to get the cases transferred to Houston; The Louisiana bar and a huge chorus of local residents argue the suits ought to stay put.
"If it goes to Houston, there will be a huge uproar down here," says Roussel, who declined to handicap the decision either way. If an expedited hearing isn't granted, the issue will be heard July 29 in federal court in Boise, Idaho.
While Becnel says he takes all of his cases personally, this one has particular resonance. Born in New Orleans, he grew up in a middle-class family in Garyville, La., near Reserve. His father, D. Elmore Becnel, was a military prosecutor after World War II who settled back in Louisiana as small-town lawyer. His mother was a nurse.
Back then, Reserve was a rustic hamlet of a few hundred people with a gravel road paralleling the towering levees of the Mississippi River. The town sat amid thousands of acres of sugar cane fields and woodlands interspersed with the aging plantations of sugar barons who had built them in the previous century.
Like most men and a lot of women in South Louisiana, Becnel spent his youth hunting and fishing the wild lands around him and often ventured down into the saltwater estuary, the system most under siege by the oil spill, to spend a day trawling for shrimp. He echoes a refrain heard over and over—that it's not just an ecosystem under assault but a way of life. "This is making people physically sick," he says.
A short drive from his office is a 15-acre gated compound that holds his house, a guest house, pool, horse paddock, barns, vegetable gardens, and a hurricane bunker. At a table in the guest house, over a lunch of chicken-and-andouille gumbo prepared by his cook, Becnel talks about his attachment to his hometown and the influences that prompted him to become a tort lawyer. His ancestors were part of a wave of German migration to Louisiana's Mississippi coast starting in the 1720s. His father died in 1965 at the age of 57 from lung cancer after an adult lifetime as a smoker. His estate was a house valued at $14,000 with a $7,000 mortgage remaining on it. Becnel worked his way through Louisiana State University, earning a bachelor of science degree in 1966. During law school at Loyola, he took a job as a night dispatcher for the local sheriff's office. "That's where I learned not to sleep," he says.
When Becnel graduated from Loyola in 1969, he had few resources. He rented one quarter of a tiny cinder-block building from the local gas company within walking distance of the office he now owns and occupies. The space, he recalls, was so small that he had to crawl over the top of his desk to get in and out.
Becnel envisioned himself as a small-town lawyer handling wills and property transactions. One of his first clients was a young woman, on the cusp of her honeymoon, who wanted to get her car transferred to her soon-to-be husband's name. "It was a $3 fee, and at that point I was dying for that $3," he says. "I said, 'no charge.' But I told her: 'Look, one day you might have a good case, don't forget me.' "
She didn't. The woman, Paulette Trosclair, sought out Becnel when she was later injured in a horrific car accident. Her case went to trial in Jefferson Parish and netted Becnel his first million-dollar verdict. His career as a tort lawyer was born.
Becnel doesn't mind talking about how well he's done, how good he is at what he does, and whom he knows. He also likes to drop names. His office and home are decorated with photos of Becnel and Jimmy Carter, Becnel and Ronald Reagan, Becnel and Hillary Clinton, Becnel and John Kerry, among others.
He shows off several of the 17 Mercedes-Benzes that he owns, some of which he assigns to his staff to drive. "I have 12 tractors," he says, each one hooked to a separate implement that he uses to do yard work. The explanation is that he can't change implements because he donated a kidney several years ago to his brother, and rib-cage weakness prevents him from heavy lifting. It doesn't, however, prevent him from mowing his own grass from on top of a tractor or from working in his multi-acre vegetable garden, which he has rigged with night lights so that he can garden through bouts of insomnia. "Ten p.m. or 3 a.m., it doesn't matter. I could be out there," he says.
An inveterate tinkerer, Becnel completed a 3,000 square- foot hurricane bunker—made from structural steel and rod-trussed, concrete-filled cinderblocks—earlier this year, which he says will withstand 250 mile-per-hour winds and can hold several families. He has hooked it all up to a generator that he says "could run two city blocks," and he has 20,000 gallons of diesel in underground tanks to power it.
He has a 40,000-acre ranch near Aspen, Colo.—a fact he mentions more than once—and takes a visitor on a tour of his main house, where he shows off a bathroom and curved walk-through closet used by his wife, Mary Hotard Becnel, a local judge. The addition was completed several years ago and was designed by Bill Gates' architect, whom he knows from Aspen. Becnel says his other holdings include about 4,000 acres of land in and around Reserve where he keeps 500 chickens to supply fresh eggs for his compound and for friends.
Ironically, Marathon Oil (MRO) has a large refining operation in nearby Garyville that partly occupies property that Becnel says he sold the company. Earlier this month, an explosion ripped through a boiler there, causing injuries. So far around 200 plaintiffs have poured into Becnel's law office to sue.
"I'm probably one of the few people in the country who doesn't accept his Social Security," Becnel says. "I could retire, but I don't because I just love the work."
Becnel and the other spill lawyers may have a big job ahead of them if the Exxon Valdez litigation is a foreshadowing of the BP cases. Exxon fought the $5 billion Alaska state court damage verdict for 14 years, all the way to the U.S. Supreme Court. Although the oil giant spent $3.4 billion to clean up 1,200 miles of Alaskan shoreline, and tens of millions more on legal fees, it eventually won a $4.5 billion reduction from the Supreme Court on the punitive damages. On the other hand, "this is a radically different fact pattern than Exxon Valdez," says Arsenault. While the Exxon Valdez disaster was blamed on a drunken ship captain, "the BP spill follows a very troubling pattern of systemic failures." Arsenault also doubts that our "judicial, legislative, and executive branches will allow a repeat" of the drawn-out Exxon Valdez case. So far, at least, BP is playing contrite corporate citizen, offering to help commercial fishermen with their bills and providing no hints about its legal defense strategies.
Becnel thinks that no matter how large the judgments finally are, BP will be able to shoulder the costs of a massive cleanup and the damage claims simply based on the value of its oil reserves. A parallel can be found in the case of U.S. tobacco companies, which continue to pay claims, estimated at more than $270 billion, out of future income. Salas, Becnel's partner in the litigation, says that he has another theory of how BP will finance the damages: "The American people will ultimately pay for it at the gas pump."