Multidistrict Litigation: A Panel of Seven Federal Judges Appointed by the Chief Justice of the United States Runs a Protection Racket for Big Business

The BP Oil Well Blowout MDL: A Case Study

The United States is no longer a republic. It is a plutocracy where political power derived from wealth is devoted to protecting wealth. Corporations convert their immense wealth into political power which is then converted into judicial power which, in turn, protects the corporations.

The Protection Racket

A “protection racket” is commonly defined as the practice in which businesses and/or individuals pay money to the Mafia in return for protection from harassment or acts of violence.

Similarly, the U.S. federal judicial system runs a protection racket for corporations. It is known as “Multidistrict Litigation.”

The U.S. federal judicial protection racket is composed of the judicial panel on multidistrict litigation (“JPML”) and the individual multidistrict litigation (“MDL”) judges. The protection racket focuses on limiting the liability of the corporate defendant(s) in MDL. Each MDL judge focuses on running the protection racket for the defendant corporation(s) and maximizing judicial efficiency in his specific MDL.

The JPML was created in 1968 when Congress enacted the MDL Statute (28 U.S.C. § 1407).

A basic understanding of the incestuous hierarchy of MDL is helpful.

(a) The Chief Justice of the United States appoints the members to the JPML;

(b) The JPML selects the MDL court and appoints the MDL judge; and

(c) The MDL judge selects, appoints and compensates the cooperative, dealmaking Lead Counsel and settlement fund administrator(s).

The JPML

The JPML consists of seven sitting federal judges who serve staggered seven-year terms. Theoretically, the job of the JPML is to: (a) determine whether lawsuits pending in different federal districts involve one or more common questions of fact such that the lawsuits should be transferred to one federal district for coordinated or consolidated pretrial proceedings; and (b) ensure such transfer of lawsuits to one federal district will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.

Once a case is transferred, the control of the case is out of the JPML’s hands and in the control of the MDL judge. The JPML has neither the power nor the inclination to dictate in any way the manner in which the coordinated or consolidated pretrial proceedings are to be conducted by the MDL judge. Nor does the JPML review the actions of an MDL judge.

Nonetheless, when federal judges assume the bench, all take an oath to administer justice in a fair and impartial manner to all parties equally. That oath applies as much to an MDL involving thousands of lawsuits and scores of parties as it does to a single lawsuit between one plaintiff and one defendant. That oath also applies to each member of the JPML. The JPML members have abdicated their oath.

The MDL Judge

An MDL judge is a “Mob Boss.” More accurately, he is the ultimate “Teflon Don.” He is accountable to nobody. He is appointed by and for big business.

MDLs have created a judicial elite among the federal judges chosen to lead them, subverting the baseline premise of horizontal equality among federal district judges and instantiating Judge Richard Posner’s view that federal judges, with life tenure and little prospect for formal promotion, are eager to find some way to distinguish themselves from the pack. MDL judges do not manage to trial or even to the possibility of trial. They are chosen specifically for their expertise in practical administration.

Ninth Circuit Judge Alex Kozinski characterizes MDL as “a remarkable power grab by federal judges,” because the practice exceeds the authority Congress granted to MDL judges.

Judge Patrick E. Higginbotham further explains, “The disconnect between the power of the MDL judge and the power that the judge exercises rests on a statute that authorizes only the transfer of cases to that judge for purposes of pretrial proceeding with return to their filing homes. The rest of the operation finds its footing in some form of consent and assertions of implied and inherent authority sometimes on little more than empty air.”

The Lead Counsel

The term “Lead Counsel” means any lawyer appointed by the MDL judge to allegedly act for plaintiffs in an MDL, whether designated Co-Liaison Counsel or a member of the plaintiffs’ steering committee (“PSC”). In reality, Lead Counsel represent the MDL judge. They zealously advocate on behalf of the MDL judge, not on behalf of the plaintiffs who had previously retained their own counsel and never wanted to be in the MDL to begin with.

Attorneys appointed as Lead Counsel are not appointed by the MDL judge to be litigators. These attorneys are not selected for the purpose of zealously advocating on behalf of the plaintiffs. Lead Counsel are cooperative dealmakers.

Lead Counsel push hard for settlement as opposed to remand, prefer a quick settlement in favor of a protracted discovery period, and advocate for settlement terms that may not be particularly favorable to the MDL plaintiffs. The First Circuit has acknowledged existence of this “inherent conflict of interest” between Lead Counsel and the individual plaintiffs in mass-tort MDLs.

Judicial Efficiency

In 1968, Congress envisioned that the consolidation of lawsuits in MDLs would achieve judicial efficiency by: (a) avoiding duplication of discovery; (b) preventing inconsistent pretrial rulings; and (c) conserving the resources of the parties, their counsel and the judiciary. The plaintiff would have his day-in-court when his case is sent back to the court in which he originally filed his lawsuit.

The JPML achieves judicial efficiency by appointing MDL judges who are willing to disregard human life and defy the law. The MDL judge’s task is to limit the liability of the corporate defendant by ensuring that the plaintiff will never have his day-in-court.

The members of the JPML are appointed by the Chief Justice of the United States. They can’t be bothered with congressional intent, a statute’s language or legislative history. The Honorable John G. Heyburn II, former Chair of the JPML, addressed the MDL statute’s strict requirement that cases transferred to an MDL court be remanded to the original district “at or before the conclusion of such pretrial proceedings.” Judge Heyburn explained that this duty to remand is merely a “conundrum” which may be avoided by “resourceful” MDL judges.

Efficiency is not the only touchstone of justice. A substantial body of opinion and a respect for jurisdictional principles suggest that a plaintiff ordinarily has a right to a trial in the forum of his or her choosing. Aggregation of cases for the purpose of facilitating settlement is a byproduct of the MDL statute but is not its central statutory purpose.

MDL 2179

The BP oil well blowout MDL (“MDL 2179”) is considered to be the gold standard for MDL. The MDL 2179 fraudulent scheme proved to be so successful that, since 2010, it has served as a template for subsequent MDLs. Many of the cooperative dealmakers who were appointed as Lead Counsel in MDL 2179 also served as Lead Counsel in the Opioid MDL (“MDL 2804”). In other words, the mob boss and mass tort victims in MDL 2804 are different but the protection racket is the same as MDL 2179.

MDL 2179, like almost all MDLs, cannot be considered a “litigation” because it is unconstitutional for two reasons. MDL 2179, which employs a victims’ compensation fund on the frontend and a settlement class action on the backend, involves no case or controversy and infringes individual claimants’ procedural due process rights. It has been creatively argued that it is an administrative agency with a federal judge serving as the administrator. MDL 2179 is not an agency. It lacks guarantees of transparency, accessibility, and accountability that modern administrative agencies operate under. The reality is that it is a protection racket for defendant corporation(s) run by an MDL judge.

Upon transfer into MDL 2179, the attorneys who the BP oil well blowout plaintiffs initially retained are magically replaced by Lead Counsel who were appointed by, and serve, the MDL 2179 judge. Not only does the plaintiff lose the counsel which he retained and the right to a trial in the forum of his choosing, he is now deemed to be a plaintiff in the MDL 2179 Master Complaint. The plaintiff’s allegations, claims, theories of recovery and/or prayers for relief contained within his pre-existing complaint are deemed to be superseded by the MDL 2179 Master Complaint. The MDL 2179 judge employed the Master Complaint as a procedural device for administrative purposes to facilitate the corralling of the plaintiffs and claimants for the ultimate purpose of more efficiently limiting BP’s liability.

MDL 2179 Co-Liaison Counsel explains in a Loyola Law Review article which he authored in 2018: (1) the primary purpose of the appointment of Lead Counsel in MDL 2179 is to further the interests of judicial efficiency [while maximizing their compensation]; and (2) their primary fiduciary duty is to the MDL 2179 judge. He states “the notion that some ‘fiduciary duty’ extends to individually retained counsel, in my view, goes too far.”

Co-Liaison Counsel’s candor is possible because he is certain that he shall never be held accountable. He has sworn allegiance to, and is protected by, the mob boss.

A plaintiff in MDL 2179 is not a person. MDL 2179 plaintiffs are merely bargaining chips or commodities directly signed up en masse by, or bargained for by, Lead Counsel and later “sold” in bulk to BP by Lead Counsel. MDL 2179’s contravention of the MDL statute, U.S. Supreme Court decisions, the Oil Pollution Act of 1990 (a strict liability statute), toxic tort law (a strict liability tort), and the Clean Water Act (a strict liability statute) while denying plaintiffs their day in court, treats the plaintiffs as nothing more than a commodity.

In mid-2010, BP made the business decision to pay a total amount of US$20 billion to compensate all the BP oil well blowout victims. Lead Counsel and BP worked backwards from that agreed upon total amount to draft the terms and conditions of the settlement agreement. In February 2011, only four months after the MDL 2179 judge appointed his cooperative Lead Counsel, backroom settlement negotiations began in earnest between Lead Counsel and BP. During settlement negotiations, justice for the BP oil well blowout victims was never discussed.

Judge Frank Easterbrook has noted: “The political branches of government claim legitimacy by election, judges by reason. Any step that withdraws an element of the judicial process from public view makes the ensuing decision look more like fiat and requires rigorous justification.” The MDL 2179 judge and Lead Counsel ensured that the BP oil well blowout victims were oblivious to the court-sanctioned settlement negotiations.

Any MDL 2179 plaintiff who expressed reservations about the settlement was threatened by Lead Counsel with being afforded no recovery at all. Lead Counsel’s objective was to keep as many of the plaintiffs in the settlement class action as possible. Opt-outs were seriously frowned upon. The settlement class action agreement was the only game in town. Take it or leave it! A plaintiff directly represented by Lead Counsel knew he would be compensated because he must pay a contingent fee to his dealmaker attorney.

Notwithstanding the clarity of purpose set forth in the MDL statute, global settlement, not remand, is the main purpose of consolidation into an MDL. Few MDL cases are sent back to the district courts in which they were originally filed. Less than 3% of cases are remanded following transfer to an MDL. For more than 97% of transferred cases, MDL is a permanent “Black Hole.”

MDL has frequently been described as a “Black Hole” because transfer is typically a one-way ticket. On the surface, MDL practice seems largely innocuous; the JPML merely temporarily transfers cases to a different district court for pretrial matters. But for a variety of reasons the plaintiffs are MDL hostages and transfer effectively amounts to the end of the road for the overwhelming majority of cases.

The Racketeer Influenced and Corrupt Organizations (RICO) Act

On November 5, 2020, I filed a civil RICO complaint (Donovan v. Barbier, et al.) against the MDL 2179 judge, co-liaison counsel, and two fund administrators on behalf of my business, myself, and those parties who were injured as a result of the tortious conduct of the RICO MDL 2179 defendants and who are not able to assert their rights because they have been denied access to the courts.

I filed this lawsuit because I believe the U.S. federal justice system is not a sanctuary for the JPML and MDL judges to use for the purpose of carrying out their own massive, sophisticated, nefarious protection racket in the name of “judicially-efficient” MDL and to hold the RICO MDL 2179 defendants responsible for their “Eight-Step” fraudulent scheme which limits the liability of BP and turns MDL 2179 into “the MDL 2179 Enterprise.” Justice for the BP oil well blowout victims was never a consideration. The ongoing injuries to the plaintiffs caused by the tortious conduct of the RICO MDL 2179 defendants far exceeds the damages resulting directly from the BP oil well blowout.

This lawsuit provides a window into: (a) why the BP oil well blowout victims received little or no compensation for their damages while nineteen Lead Counsel were compensated $3.035 billion; (b) why the victims of the U.S. opioid epidemic will probably never be compensated for their losses and suffering; and (c) how a panel of seven federal judges, appointed by the Chief Justice of the United States, and the JPML-appointed MDL judges are able to run a protection racket for big business.

The conduct of the JPML, the MDL 2179 judge and Lead Counsel offends a public sense of justice and propriety. The potential harm to the public’s perception of the judicial process is especially acute in MDL 2179 because of the large number of plaintiffs.

Nonetheless, on November 23, 2020, the JPML files Conditional Transfer Order (CTO-140) for the purpose of initiating the transfer of the civil RICO complaint from the U.S. District Court for the Middle District of Florida to the U.S. District Court for the Eastern District of Louisiana.

On December 11, 2020, I file a Motion to Vacate Conditional Transfer Order (CTO-140).

On February 4, 2021, the JPML issues a Transfer Order transferring the civil RICO complaint to MDL 2179 and assigns the case to the Honorable Carl J. Barbier for the sole purpose of allowing him to promptly dismiss the case with prejudice under Louisiana law. The JPML ensured the MDL 2179 Mob Boss and his Lead Counsel would not be held accountable.

The civil RICO complaint hit a judicially-sensitive nerve.

The JPML’s concern is justified. If Donovan v. Barbier, et al. is allowed to proceed, the entire protection racket “house of cards” could come tumbling down. The manner in which the JPML and MDL judges have been allowed to run a protection racket, sanctioned by the Chief Justice of the United States, makes virtually every MDL a potential “MDL Enterprise.” CTO-140 was filed by the JPML to make Donovan v. Barbier, et al. disappear as expeditiously as possible.

On February 17, 2021, I voluntarily dismissed Donovan v. Barbier, et al.

Conclusion

America has allowed the self-proclaimed elite to corrupt its values. Corporate money saturates U.S. elections. Lobbyists draft U.S. legislation. The U.S. federal judicial system protects the corporations.

The U.S. plutocracy has created an integration of powers. The executive, legislative and judicial branches have blended into one bureaucratic morass. The proliferation of corruption in each of the three branches has something in common: each is the result of ego, greed, lack of transparency, and lack of accountability.

While the media focuses on the executive and legislative branches, the judicial branch poses the greatest danger to American democracy due to the unprecedented explosion in MDL. Since the creation of the JPML in 1968, there have been 1,056,706 civil actions centralized for pretrial proceedings. As of September 30, 2021, a total of 17,357 actions had been remanded for trial and 647,396 actions had been terminated in the transferee court. At the end of this statistical year, there were 391,953 actions pending in 184 MDLs in 45 transferee district courts. New data from the JPML and the United States Courts, analyzed by Lawyers for Civil Justice (LCJ), shows that over 70% of the federal civil caseload (391,953 cases out of 559,653 federal civil cases) resides in MDLs as of the end of fiscal year 2021 (FY21). Over the past decade, there has been a rapid rise in the percentage of the civil caseload in MDLs, an increase in concentration of 142% since FY12. Due to the resultant expansion of the federal judicial protection racket, millions of mass tort victims are no longer able to assert their legal rights because they are being denied access to the courts.

In order to re-establish the day-in-court ideal, the American public must:

(a) be made aware of how the above-described U.S. federal judicial protection racket focuses on limiting the liability of the corporate defendants and maximizing judicial efficiency rather than focusing on accountability, transparency, and obtaining justice for MDL plaintiffs; and

(b) demand, not request, a congressional investigation into the devolution of MDL.

TABLE 1 - Examples of Actions Taken by the Protection Syndicate in Order to Limit BP’s Liability and Thereby Maximize Judicial Efficiency and the Compensation of the PSC Members in MDL 2179

(a) MDL 2179 is Unconstitutional. MDL 2179, which employs a victims’ compensation fund on the frontend and a settlement class action on the backend, involves no case or controversy and infringes individual claimants’ procedural due process rights.

(b) The primary purpose of the appointment of Lead Counsel in MDL 2179 is judicial efficiency. (See Stephen J. Herman, Duties Owed by Appointed Counsel to MDL Litigants Whom They Do Not Formally Represent, 64 Loy. L. Rev. 1, 8 - 12 (2018)).

(c) MDL is really a dispositive, not pretrial, action. Settlement or dismissal, not remand, is the endgame.

(d) Lead Counsel breached their fiduciary and ethical duties to the victims of the BP oil well blowout.

(e) The MDL 2179 judge and Lead Counsel did not hold BP accountable.

(f) Lead Counsel grossly exaggerated the benefits of the BP victims’ compensation fund, the economic and property damages settlement agreement, and the medical benefits settlement agreement.

(g) Lead Counsel retained law professors (“Thought Leaders”) to make false statements of material fact in order to induce the MDL 2179 plaintiffs into believing that the proposed settlement is “fair, reasonable, and adequate.” These professors were highly compensated for their “unbiased” opinions.

(h) Unbeknownst to the victims of the BP oil well blowout, Lead Counsel and BP made the business decision to have BP pay a total amount of $20 billion to compensate all the BP oil well blowout victims in the settlement class action.

(i) The BP victims’ compensation fund denied payment to approximately 61.46% of the claimants who filed claims.

(j) Approximately 220,000 BP victims’ compensation fund claimants who executed a “Release and Covenant Not to Sue” in exchange for a one-time miniscule final payment ($5,000 for individuals and $25,000 for businesses) were subsequently excluded by the MDL judge and Lead Counsel from the settlement class action.

(k) The compensation paid to the administrator of the BP victims’ compensation fund by BP from June 15, 2010 to April 15, 2012 was approximately $24,700,000.

(l) The MDL judge, Lead Counsel and BP fraudulently induced the MDL 2179 plaintiffs not to opt-out of the settlement.

(m) The Deepwater Horizon Claims Center (“DHCC”) denied payment to approximately 60.03% of the claimants who filed claims.

(n) Lead Counsel and BP negotiated a Medical Benefits Class Action Settlement Agreement which the MDL judge approved on January 11, 2013. In order to limit BP’s liability, the MDL judge and Lead Counsel knowingly ignored the fact that public policy dictates that a toxic tort is a strict liability tort. Seventy-eight percent (78%) of Specified Physical Condition (“SPC”) claims submitted received either a “Request for Additional Information” or a “Notice of Defect.” In the end, only 20% of claimants received any compensation. These claimants were forced to accept the lowest payment of $1,300 because they could no longer wait for the money to cover their medical expenses.

(o) As part of the overall strategy to limit BP’s liability, the MDL judge knowingly failed to hold BP fully accountable in regard to the Clean Water Act (“CWA”) civil penalty. The MDL judge saved BP approximately $4.30 billion by finding that only 4.0 million barrels of oil, rather than 5.0 million barrels of oil proposed by the United States, exited the reservoir.

(p) On October 5, 2015, the DOJ released the following statement: “….This global settlement resolves the governments’ civil claims under the Clean Water Act and natural resources damage claims under the Oil Pollution Act, as well as economic damage claims of the five Gulf states and local governments. Taken together this global resolution of civil claims is worth $20.8 billion.” The DOJ failed to point out that BP is able to deduct $15.3 billion of this $20.8 billion on its U.S. tax return. In short, this “global settlement” requires U.S. taxpayers to pay $15.3 billion and BP is only required to pay $5.5 billion. BP also wrote off the cost of its $32 billion cleanup effort after the spill, costing U.S. taxpayers roughly $10 billion.

(q) The total compensation paid to nineteen Lead Counsel in MDL 2179 was $3.035 billion. It is beyond cavil that a reasonable, objective observer would not conclude that this amount is out of all proportion to the value of the professional services rendered.

(r) The MDL judge improperly applies Louisiana law rather than the choice-of-law rules of the state in which the plaintiff originally filed his lawsuit.

(s) The Oil Pollution Act of 1990 (“OPA”) is a strict liability statute. In order to recover damages under OPA, a claimant merely needs to show that his damages “resulted from” the oil spill or oil well blowout. In order to limit BP’s liability and thereby maximize judicial efficiency and their compensation, Herman and Roy fraudulently, recklessly, negligently and knowingly circumvented OPA by negotiating and drafting a settlement class action which limits a claimant’s recovery of damages to geographic bounds and certain business activities while requiring a heightened and vague proof of causation between his, her, or its damages and the BP oil well blowout incident.

(t) In his July 2, 2020 Order, the MDL judge held “OPA does not impose on the Responsible Party a duty to settle Plaintiffs’ claims….” Although the durability of the MDL judge’s uniquely creative reasoning in regard OPA is questionable, the precedent established by MDL 2179 is clear: the offshore oil and gas industry will never be held strictly liable for damages resulting from an oil well blowout in the Gulf of Mexico.