BP: Beyond Prosecution

On May 1, less than two weeks after the Deepwater Horizon rig exploded, Louisiana Attorney General Buddy Caldwell announced that he would "ensure that BP and other liable parties take full financial responsibility" for the unfolding disaster. Yet...

June 30, 2010 | Source: Mother Jones | by Josh Harkinson

On May 1, less than two weeks after the Deepwater Horizon rig exploded, Louisiana Attorney General Buddy Caldwell announced that he would “ensure that BP and other liable parties take full financial responsibility” for the unfolding disaster. Yet even as Caldwell prepares to go after the oil company for billions in damages, his hands are tied. He says the case could cost as much as $100 million over several years. That’s money his state, which is facing a $320 million budget deficit, not to mention the economic impact of the spill, just doesn’t have.

As any lawyer who advertises on late-night TV could tell you, there’s an easy solution to that problem. Forty-eight states allow their attorneys general to hire private attorneys on a contingency basis. In other words, if outside lawyers help the state win a big civil case, they get a cut of the cash. This tactic can be a win-win for states, particularly when deployed against well-funded adversaries, since it comes with few financial risks and the potential for big rewards. In the 1990s, private attorneys suing tobacco companies on contingency won billions of dollars on behalf of state governments (while pocketing as much as a quarter of the settlements).

But that approach is a non-starter in Louisiana, one of two states that bar their AGs from pursuing contingency lawsuits. (The other is Wisconsin.) Just last week, an effort to greenlight a contingency case against BP failed in the state legislature. So did a proposal to tax the company and another that would have allowed Louisianans to sue it for punitive damages. These bills’ deaths underscores just how much influence the oil and gas industry wields in the state even as it faces the worst environmental disaster in its history. The contingency bill’s demise “is devastating for the state of Louisiana,” writes Attorney General Caldwell in an email to Mother Jones. He adds that he’ll still prosecute BP as best he can. “We will continue to fight for the state even if all we have is a slingshot and a stone.”