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The Times-Picayune: Secret legal fee division appealed

Judge won’t release details in Shell case

Thursday, April 26, 2007

From staff reports

A federal judge should not be allowed to secretly divide up nearly $7 million in legal fees among 79 attorneys who filed suit against Shell Oil Co. in 2004, The Times-Picayune is arguing in an appeal of an unusual confidential court decision.

U.S. District Judge Ivan Lemelle secretly allocated cash to some law firms described by one lawyer as claiming hours that were “grossly excessive.” Two firms received a “substantial award” even though they “didn’t do anything for the common benefit,” according to a transcript of a January hearing before the judge.

Lemelle has refused to disclose how he divided up the pot of legal fees and issued a secret order outlining his reasons for confidentiality. He ordered lawyers not to discuss with each other how much they got, and threatened them with court sanctions.
The Times-Picayune is asking the 5th U.S. Circuit Court of Appeals to overturn Lemelle’s secrecy orders. Lemelle’s decision is also being appealed by some of the 79 attorneys who worked on the case but were not allowed to participate in distributing the fees.

The case dates back to 2004, when Shell manufactured gasoline containing too much sulfur at its Norco refinery. The fuel fouled the gas gauges in vehicles, causing them to malfunction.

When motorists began complaining, Shell volunteered to fix broken gauges in tens of thousands of vehicles at a cost of $200 to $1,000 each, depending on the car model. By September 2004, Shell had processed about 81,000 claims, meaning the company by that time could have spent tens of millions of dollars on the repairs.

Despite Shell’s pledge, the 79 lawyers became involved in a class action lawsuit against the oil firm.

In a settlement of the case, Shell agreed to expand the repair program and provide $3.7 million to cover general damages, such as lost wages, for plaintiffs who filed repair claims. The settlement limited individual payments to $150 for general damages and $300 for lost wages.

Shell also agreed to pay $6.8 million in legal fees to the attorneys.

Lemelle, an appointee of President Clinton, named five of the lawyers to serve on a committee to divide the money. The panel delivered its proposal to him in January at a court hearing that was not announced to the other 74 lawyers.

One of the committee members, Don Barrett of Lexington, Miss., told Lemelle that the awards were generous and lawyers would be displeased only if they found out what other attorneys got.

“We have money to go around,” he said, according to a transcript. And when lawyers “look at what they got compared with what they did, they are going to be quietly pleased.” It was Barrett who made the comments about firms submitting excessive hours and being paid despite not contributing to the case.

The committee suggested the best way to keep lawyers from complaining was secret allocations. Lemelle agreed at the January hearing, but his decision was subsequently challenged by some of the 74 lawyers who were excluded from the committee.

This month, Lemelle decided to keep the list secret and went a step further, sealing the reasons for his decision. The lawyers and the newspaper have said they will appeal, but the 5th Circuit has not named the judges who will handle the case. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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