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Lift hold on clients' Gulf oil spill claims payments, law firm urges judge
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Lift hold on clients' Gulf oil spill claims payments, law firm urges judge

A New Orleans law firm representing more than 600 individuals and companies with pending BP oil spill economic damage claims has urged the federal judge overseeing the settlement between BP and claimants to remove his hold on their claims, which was put in place pending investigations into claims processing by the Deepwater Horizon Claims Center.

In June, U.S. District Judge Carl Barbier ordered claims handled by the Andry Lerner LLC law firm put on hold until investigations were completed into whether two attorneys at the court-appointed claims center who may have been paid by the law firm took any actions that involved the firm's clients.

An internal investigation ordered by Patrick Juneau, the head of the claims facility, remains underway. Former FBI Director Louis Freeh is conducting an independent investigation into potential conflicts of interest involving the attorneys accepting payments for referring claims to the Andry Lerner law firm, among other issues in the claims program.

Last week, Barbier denied a motion by BP to halt all payments from the economic settlement program until the investigations were complete, saying the company had failed to produce any evidence that any claim issued so far was improper. But he said his hold on the payments to the Andry Lerner law firm and to the now-separate Andry Law Firm would remain. During the hearing, Barbier repeatedly asked BP attorneys if they had any evidence of improperly processing of claims, and the attorneys said they did not.

"The continued cessation of processing of (Andry Lerner) clients' (claims) will result in delayed awards of tens of millions of dollars to deserving BP oil spill victims, many of whom urgently need their awards to rebuild their lives, homes and businesses," said an attorney for the Andry Lerner law firm in asking to drop the hold.

"Release the money owed the clients," said attorney James Cobb Jr., who represents the law firm. "If they want to escrow the attorney fees, that's fine, but do not hold these claimants hostage."

Even Barbier said he was confused about which law firms were involved in his suspension, requesting an explanation from attorneys representing the two firms during last week's hearing.

At the time of the BP Deepwater Horizon disaster and oil spill, the Andry Law Firm included partner brothers Gilbert "Gibby" Andry and Johnathan Andry. Johnathan Andry began the Andry Lerner law firm after Gibby Andry decided the original firm would not handle BP settlement claims.

However, the Andry Law Firm did file a multimillion-dollar claim for itself, with a share of the payment to be received by Johnathan Andry. That claim also has been frozen, though it has been found to have been accurately computed by the claims facility staff several times since the investigations began.

The investigations stem from an anonymous allegation that Lionel Sutton III, one of three senior attorneys at the claims facility, was receiving payments for referring claims to one of the Andry firms. Sutton resigned on June 21 after the investigation began, and his wife, lawyer Christine Reitano, who also was a senior attorney in the program, was terminated by the claims center on June 26.

"The known facts appear as follows," Barbier said during the hearing. "The two staff attorneys had previously represented claimants before their employment by the settlement program."

When the two lawyers were hired at the claims center, they withdrew as attorneys in the claims cases and referred those clients to what became the Andry Lerner firm, "which in turn later paid referral fees to them during the time they were employed with the program," the judge said.

"There is some evidence that one of the attorneys may have at the time made efforts to inquire as to the status of certain claims and/or to expedite certain claims," Barbier said. "However -- this is most important I believe -- the internal investigation has not found any evidence that either of the two played any part in the actual processing of claims or that they improperly influenced the computation of any claims."

In its motion, an attorney for the Andry Lerner firm said Barbier's order suspending the claims was made in a hearing in which the law firm was not participating, so it was never given an opportunity to challenge the ruling.

Affected by the ruling are claims for shrimpers, oyster fishers and those owning "vessels of opportunity" hired by BP to participate in the oil spill cleanup, as well as larger "business economic loss" claims.

The hold also is harming the law firm, said the memorandum in support of the motion, "by its inability to explain to clients the reason for the stay or when the hold will be lifted and the processing of their claims will resume."

It said that the law firm's partners "have invested several million dollars in establishing and operating its BP oil spill claims practice. The prospects of this investment being recouped diminish the longer the stay remains in effect."

By Mark Schleifstein, NOLA.com | The Times-Picayune 
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on July 29, 2013, at 6:15 PM, updated July 29, 2013, at 6:16 PM

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