Mobile’s settlement with BP for the 2010 Deepwater Horizon oil spill was among the largest received by local municipalities, but at about 33 percent, the city also paid the most in legal fees.
Mayor Sandy Stimpson announced earlier this month the city had reached a settlement agreement with BP for a total of $7.1 million. By the time legal fees to Mobile firm Burr Forman and the Daphne firm of Mary Beth Mantiply were paid out, the city netted around $4.7 million to cover lost tax revenue.
That means a total of $2.4 million was paid to attorneys. City Attorney Ricardo Woods said around a quarter of the total went to his firm, Burr Forman, while the rest went to Mantiply. Woods is also on retainer for the city.
Other municipalities reached by Lagniappe said outside legal fees for settlements ranged from zero to 25 percent, with a majority paying roughly 16 percent of the settlement amount in legal fees.
In Mobile’s case, Woods said the city put together its claim at a time when it couldn’t operate under the same class action lawsuit joined by many other municipalities. In 2012 a federal judge capped legal expenses for settlement claims at 25 percent, but Woods said this didn’t apply to Mobile’s case because the city wasn’t part of the larger class action.
Without the protection of the cap, Woods said the fee paid to Mantiply was “standard” for legal work paid on contingency. He added that paying her on contingency meant she paid all legal expenses up front, and if the claim hadn’t been successful, wouldn’t have been reimbursed at all.
The city of Gulf Shores was able to reach a $6.5 million settlement without the help of outside counsel. Spokesman Grant Brown said Gulf Shores Mayor Robert Kraft negotiated the deal on behalf of the City Council and used in-house attorney Donald Stewart, from Cabiness, Johnston, Gardner, to help file the paperwork.
Brown said the settlement will replace lost revenues while also taking future growth into account.
From day one, Brown said, Gulf Shores took a “let us help you help us” approach with BP.
“We felt like we put the issue behind us,” Brown said. “We felt the settlement was very fair.”
Mobile County received a $1.8 million settlement and paid 16 percent to attorneys Rick Kirkendall, Rob Riley and Mike Druhan, said county attorney Jay Ross.
Ross said the attorneys were hired on contingency, which is “fairly common throughout the industry,” and the fee was negotiated.
“We were able to negotiate what was a pretty fair percentage,” Ross said. “If it had gone to trial, the fee would’ve increased.”
As for the settlement, Ross said “we think it was the best we could’ve gotten.”
Baldwin County reached a total $11.5 million settlement with BP, according to documents from an Oct. 2, 2012, County Commission meeting. A spreadsheet, included as part of the agenda packet from the meeting, says the county paid 16 percent in legal fees.
The $11.5 million was to be dispersed between several entities, according to the outline, including the Baldwin County Board of Education, the Baldwin County District Attorney’s Office, Faulkner State Community College and several other agencies.
Fairhope received $1.8 million its settlement and paid 25 percent to Cunningham Bounds of Mobile, Mayor Tim Kant said. While he said the economic loss to Fairhope wasn’t as great as other cities, Kant maintains the city’s utilities fund took a hit of about $350,000 because of a “number of restaurants and facilities” closed in the year following the spill. He said “a number” of employees around the city lost jobs because of it.
As previously reported by Lagniappe, Fairhope in 2013 used $3 million from the city’s utilities fund to settle a $8.75 million lawsuit brought by a land developer whose family had attempted to build a retail mall on the “Dyas Trangle” at the north gateway of the city. After periodic litigation that lasted more than 40 years, the City Council agreed to the buy the 108-acre property using the utilities fund and a $5.75 million general obligation loan from Compass Bank.
Bayou La Batre received $352,000 from its settlement with BP. The city paid 16 percent in legal fees, according to Ross, the city’s attorney. Additionally, the city’s utility board received $323,000 in its own settlement.
Biloxi received a $4.9 million settlement and initially more than 20 percent, or $988,000, was to be paid to Biloxi firm Page, Mannino, Peresich & McDermott, spokesman Vincent Creel said. Earlier this month, though, it was announced Mayor Andrew “FoFo” Gilich reached an agreement with the firm to reduce the fees by $200,000 for a total of about $788,000.
Pascagoula received $2.2 million in its settlement and paid a quarter of that amount to attorneys at Dogan and Wilkinson, spokeswoman Ann Pitry said. The city paid a total of $550,000 in attorney fees, she said.
Jason Johnson contributed to this report