## Facts

- After the April 20, 2010 Deepwater Horizon explosion and oil discharge, thousands of economic and property loss claims were centralized in MDL No. 2179 in the Eastern District of Louisiana.
- The court oversaw negotiated class settlements, including an Economic and Property Damages Settlement administered through a court-supervised settlement program.
- The settlement structure included common-benefit work performed by court-appointed plaintiffs’ leadership (including the Plaintiffs’ Steering Committee) for the benefit of all claimants.
- Under the settlement arrangements, BP agreed to pay common-benefit fees and costs associated with leadership counsel’s work.
- Many claimants also retained private counsel under contingent-fee agreements and faced attorney fee deductions from their individual settlement recoveries.
- The court addressed how private contingent fees should operate in light of BP-funded common-benefit compensation and the court’s supervision of the settlement program.

## Issues

1. Whether, and to what extent, privately retained attorneys may charge contingent fees to settlement-program claimants when common-benefit fees are paid separately by BP.
2. Whether the MDL court has authority, in supervising a class settlement and its claims program, to regulate or cap private attorney-client fee contracts to protect claimants’ net recoveries.

## Decision

- The court held that the question of private attorneys’ fees for claimants paid through the settlement program was ripe once the settlement program was operational.
- The court exercised its authority over the MDL and class settlement administration to regulate private fee arrangements connected to the settlement program.
- The court implemented limits designed to prevent duplicative or excessive fee recovery when common-benefit work was already compensated by BP.
- The order maintained the settlement’s administration while addressing fee practices that could reduce claimants’ recoveries and affect settlement fairness.

## Legal Principles

- A federal court supervising a class settlement and an MDL may oversee attorney compensation arrangements that affect class members’ net recoveries.
- When a defendant funds common-benefit fees, private contingent-fee charges to claimants may be restricted to avoid double compensation for overlapping services.
- In administering a class settlement program, the court may act to protect absent class members against unreasonable fee practices that could impair the settlement’s fairness.

## Conclusion

The court, supervising the Deepwater Horizon economic and property damages settlement program, regulated private contingent-fee arrangements because BP’s separate payment of common-benefit fees created a risk that unrestricted private fees would duplicate compensation and unfairly reduce claimants’ recoveries.


In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico, on April 20, 2010, No. MDL 2179, 2012 WL 2236737 (E.D. La. June 15, 2012)