Amanda Bronstad, The National Law Journal
March 7, 2016
Two plaintiffs lawyers who were the first target of BP PLC’s claims of fraud in connection with the $9.9 billion Deepwater Horizon oil-spill settlement are asking a federal appeals court to reverse sanctions against them that were based on a report by former FBI director Louis Freeh.
Freeh, who was appointed as special master to investigate fraud in the settlement, issued a 93-page report in 2013 that said Jonathan Andry and Glen Lerner paid more than $40,000 to a lawyer working at the claims administration office. Freeh determined that they paid Lionel “Tiger” Sutton III, the former claims administration lawyer, in exchange for Sutton’s referring a shrimper who claimed losses associated with the 2010 spill to Andry Lerner.
Overall, Freeh’s report found no conflicts within the claims process. Despite that, BP made several unsuccessful attempts to convince the U.S. Court of Appeals for the Fifth Circuit to unravel portions of the settlement due to widespread fraud—in particular, that many businesses were making claims for falsified damages.
U.S. District Judge Carl Barbier in New Orleans in February 2015 upheld most of Freeh’s findings and sanctioned Andry and Lerner, principals of a New Orleans law firm called Andry Lerner, banning them from representing oil-spill claimants. He also sanctioned Sutton.
On Tuesday, lawyers for Andry and Lerner told the Fifth Circuit that the sanctions should be reversed. Lerner’s attorney, Dominic Gentile of Las Vegas-based Gentile, Cristalli, Miller, Armeni, Savarese, argued that Sutton had assured his client that his boss had no problem with the referral payment and that it presented no conflict. “Sutton told Mr. Lerner uncontroverted that he disclosed all of this and got approval,” he said. He insisted that his client should not be punished for the wrongdoing of Sutton, a business partner and former colleague at Tulane University Law School.
In appellate briefs, Andry said Freeh’s report was full of “smoke and mirrors” and that the sanctions were a “professional death sentence.”
“It should be clear now that Mr. Andry did not participate in any payments to members of the BP claims settlement facility,” wrote Andry’s attorney, Scott Joanen of Joanen Law Firm in Metairie, Louisiana, in an email.