Legal News

Is Win for St. Joe a Win for All Plaintiffs in Gulf Spill Litigation?

By Dionne Searcey

Did St. Joe score one for the team in the oil spill litigation?

The major Florida developer that had sued over economic damages suffered after the massive oil spill in the Gulf secured a legal victory that could lead to broader implications for all plaintiffs suing defendants in the spill.

Late Tuesday, a federal judge in Delaware ruled St. Joe Co. could opt out of the sprawling litigation consolidated in New Orleans federal court over the Deepwater Horizon incident. Click here for the complaint; here for the opinion.

St. Joe, one of the Gulf region's biggest landowners, had sued rig-owner Transocean Ltd. in Delaware Superior Court saying the April 20 explosion caused its stock price to tumble more than 40% and the value of its 577,000 acres to plummet. St. Joe owns eight luxury resorts near Panhandle beaches.

Transocean had sought to keep the case in federal court where it would fall into the pool of more than 400 disparate lawsuits that have been consolidated before U.S. District Judge Carl J. Barbier in New Orleans.

But St. Joe wanted the case to be tried in Delaware state court, where it thought it could gain a better legal advantage.

By staying in state court, St. Joe and plaintiffs in the oil spill litigation in general secure advantages. A state court action that includes St. Joe as the sole plaintiff is bound to move along at a faster clip than the morass of suits before Judge Barbier, giving St. Joe a leg up in the case.

That's because the St. Joe case can set a trial date while the oil spill is still in the public conscience. The first trial in the federal litigation isn't slated to begin until 2012 and likely will be later. If a trial date were set for, say, late this year, Transocean would have more incentive to settle with St. Joe to keep the trial out of the media, which gives St. Joe leverage to seek to boost any settlement amount.

And if the first case winds up in a big settlement, that likely will set the tone for how the federal litigation goes.

"We are now on a much shorter course to recovery for our clients," said St. Joe's attorney William Brewer III of Bickel & Brewer in Dallas. Being a part of the MDL process, he said, is like being "stuck on glue."

Transocean has filed a notice of appeal.

Full post as published by Law Blog - WSJ.com on March 16, 2011 (boomark / email).