© 2013 The Texas Lawbook.
By Mark Curriden
Senior Writer for The Texas Lawbook
During the past two decades, Donald Godwin has gotten his best client, Halliburton Co., out of some pretty big messes.
He negotiated a $4 billion settlement resolving 382,000 potentially devastating asbestos lawsuits facing the Houston-based oil field services corporation. He fought a billion-dollar dispute over an environmental dumpsite in Alabama – a case Godwin says settled “very favorably” for his client. In 2004, he battled – and eventually settled – a dispute over a $680 million contract involving an oil field in Kazakhstan.
On Monday, Godwin again takes center stage to defend Halliburton in what is undisputedly the largest environmental litigation ever. The long awaited trial starts in New Orleans to determine who is responsible for the Deepwater Horizon rig explosion that killed 11 people and resulted in more than four million barrels of oil being spilled into the Gulf of Mexico in 2010.
In the weeks and months following the BP oil spill, thousands of lawsuits were filed by fishermen and shrimp boat operators, hotels and restaurants, banks and real estate companies. The U.S. government sued under the Clean Water Act. Four states – Alabama, Florida, Louisiana and Mississippi – claim the oil spill costs them billions of dollars in lost tax revenues. Even teacher pension funds and a handful of Mexican state governments have sued, claiming they were injured.
“I’ve been involved in some big cases, but the Deepwater Horizon is the largest multi-district litigation ever consolidated into one trial,” says Godwin, who is the founding partner of Dallas-based Godwin Lewis. “This case is unprecedented, both in terms of the size of the litigation and the amount of money at stake.
“The Exxon Valdez lawsuit was huge, but it pales in comparison to the Deepwater Horizon,” he says. “The trial will likely last more than a year. Damages could exceed $70 billion.
“I’ve never seen anything like it. Nobody has.”
BP, of course, is the defendant that has received the most attention because it owned and operated the Macondo well, but other defendants, including Houston-based Transocean, which owned the Deepwater Horizon, and Halliburton, which was a contractor on the rig and well, also face potentially devastating damages.
Last year, BP reached two major settlement agreements. The UK oil giant agreed with the U.S. Justice Department to plead guilty to 11 felony counts involving the deaths of the workers and paid a $4.5 billion fine, which was the largest ever in U.S. history. A handful of individuals also have been charged and are awaiting trial.
BP also reached a $7.8 billion with a limited number of plaintiffs on a limited number of undisputed claims, such as basic clean up costs incurred by the states, as well as undisputed health-related costs and damages for some individuals who live closest to the Gulf.
In January, Transocean reached its own agreement with the federal government by pleading guilty to violating the Clean Water Act and paying $1.4 billion in civil and criminal fines.
This weekend, the Wall Street Journal reported that the Justice Department and BP were in negotiations to settle the federal government’s portion of the suit for an estimated $16 billion.
Halliburton is the one company that hasn’t made any pretrial settlements, which legal experts say only enhances Godwin’s reputation as a “gun-slinging risk-taker.”
“We aren’t going to New Orleans to break even and we aren’t going down there to wave the white flag,” says Godwin. “We are going to win.”
Legal observers say that Godwin has shown a willingness in the past to settle a case when it is in the best interest of the client.
“The fact that Don isn’t interested in a settlement shows that he feels he’s holding a pretty good hand as far as the evidence and the court is concerned,” says Fish & Richardson partner Tom Melsheimer of Dallas.
U.S. District Judge Carl Barbier, who is overseeing all the civil claims in the litigation, has divided the trial into three stages. Phase one, which starts Monday, focuses exclusively on what caused the explosion and the spill and allocating responsibility against the defendants. The first phase is expected to last three to four months. The second phase of the trial will determine the amount of oil spilled into the Gulf, while the third phase will determine damages.
The first two phases of the trial will be heard by Judge Barbier, but the final stage to levy the financial judgments will be decided by a jury.
“There are literally hundreds of lawyers who are actively participating in this case – the courtroom is going to be packed,” says Houston trial lawyer David Beck, who is defending Cameron International Corp., which manufactured the failed blowout preventer. “We all have assigned seating. There will be lawyers sitting in the jury box.
With so many prominent trial lawyers actively participating in the trial, the “logistics of running this trial for the judge and court staff is like putting on the Lion King, Les Miserables and Miss Saigon on the same stage at the same time,” says Melsheimer.
“Knowing Don, I think he will thrive in that environment,” he says.
The son of a North Carolina Pontiac car salesman, Godwin worked his way through high school stocking shelves at Winn Dixie. He quickly excelled, becoming manager of the produce section and later managing the whole store. Even so, law school wasn’t in the plans.
Godwin’s first love was the tax system. He became a CPA and then received a master’s degree in accounting. But that wasn’t enough. In 1973, he graduated from Southern Methodist University Dedman School of Law and joined a Dallas firm that slowly transitioned him from tax law to litigation.
In 1980, Godwin started his own law firm with George Carlton called Godwin & Carlton. In the 33 years since, the law firm grew and shrank, only to grow again, depending on the litigation caseload. The name following Godwin on the door has changed a few times. Last year, Godwin announced that former state District Judge Marilea Lewis, who is an expert in family law, would be the second name on the firm’s marquis.
Godwin says the invitation for him to get involved in the BP oil spill litigation came as he was preparing to watch the Kentucky Derby on May 1, 2010, just 10 days after the explosion. His long-time friend and Halliburton General Counsel Bert Cornelison wanted him to lead the company’s legal efforts related to the BP spill.
Cornelison was the in-house litigation head for EDS and later Dresser Industries. Halliburton acquired Dallas-based Dresser for $7.7 billion in 1998. Dresser’s assets were accompanied with tends of thousands of asbestos lawsuits, which Godwin helped resolve.
“There are few people you would want more at your side if you have to have a fight in a dark alley than Don,” Cornelison told D CEO magazine in 2011.
In the nearly three years since being hired, Godwin says he’s had 45 lawyers work on the case, taking more than 200 depositions and examining millions of pages of documents. He says there are a dozen paralegals and three IT support staff working on the case full-time.
Lawyers familiar with Godwin say his hourly billable rate ranges from $675 to $800 an hour. They estimate that he’s already put about 10,000 hours into the case, and that’s before the judge has brought down the trial’s opening gavel.
“I’ve spent more time on an airplane going to take depositions in London and court hearings in New Orleans than I’ve been at home,” he says.
Godwin has scored numerous legal successes going into Monday’s trial. For example, he convinced U.S. District Judge Barbier in New Orleans to rule that Halliburton’s contract with BP requires that BP pay any compensatory damages, which is payments to victims for losses, leveled against Halliburton for its work on the Deepwater Horizon.
As a result, Halliburton will only have to pay any money if the judge finds that the company acted with gross negligence or wanton reckless behavior, which would allow the court to levy punitive damages against Halliburton.
Legal observers say Godwin’s pretrial win puts his client in a position of strength.
“Don now knows the burden of proof against his client is higher, which gives him a tremendous strategic advantage in the courtroom,” says Melsheimer. “It’s like everyone else is trying a civil case [requiring a mere preponderance of the evidence] while Don is trying a criminal case [which requires beyond a reasonable doubt].”
Godwin also scored a major advantage early in the case when he got a key engineering expert witness for BP to admit under oath that the Deepwater Horizon blast might not have occurred if officials from BP and Transocean hadn’t misinterpreted key “well-integrity tests.”
According to a report in Bloomberg News, BP officials interpreted the negative-pressure test as showing that the cementing provided by Halliburton had sealed off leaks in the well.
“If the negative test had been correctly interpreted by BP and Transocean and a determination was made that the cement job was not a good job, remediation work could have been done that would have resulted in this blowout not occurring. Would you agree with that?” Godwin asked in the deposition.
“I would agree with that,” J.J. Azar, the expert, responded, according to the Bloomberg report.
“My client was not given an opportunity to go in and correct anything that might have been wrong with the cement job because the negative test was misinterpreted. Isn’t that a fact, sir?” Godwin asked.
“That was a fact,” Azar answered.
While Godwin declines to discuss specific evidence about the case on the eve of trial, he says he is confident that his client will not be held responsible for the tragedy.
“We are going to tell the story about why Halliburton should not be held liable,” Godwin says. “We think our case is going very well.”
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