Texas lawyer indicted over BP oil spill litigation had sought 'tens of millions' in '07 MC Vioxx trial

By Ann Maher | Nov 5, 2015

Texas attorney Mikal Watts, under indictment for fraud and identity theft in the BP oil spill litigation, may be hoping for "red and black" jurors if the case against him ends with trial rather than a plea in the Southern District of Mississippi.

Watts, 48, of Corpus Christi, has attracted national attention for more than a decade by pursuing cases against big names in the drug and auto and tire industry. Through the years adversaries and associates have accorded him high status in negotiations, and judges have routinely appointed him to committees leading mass actions. In many instances he has been very successful - notably in the Ford and Bridgestone/Firestone rollover litigation, Bayer genetically modified rice litigation and Boehringer-Ingelheim Pradaxa bleeding litigation.

But, he's also had some losses.

Before and during trial in 2003 in a product liability case involving heart medicine Baycol - Hollis Haltom v. Bayer - Watts urged opposing counsel to settle the case (in Corpus Christi) because it had "seated a terrible jury that is going to inflict great harm on Bayer," according to an article in the Wall Street Journal.

Watts had stated that he had mastered the art of jury selection.

"My jury selection methodology categorizes jurors into four basic categories," the article states, quoting from an email Watts sent to Bayer outside counsel Gene Schaerr:

(1) green -- plaintiffs' ringers -- i.e., great plaintiffs' jurors;

(2) blue -- good jurors for the plaintiff

(3) red -- good jurors for the defense; and

(4) black -- defendants' ringers -- i.e., great defendants' jurors.

"My notes show we seated a jury of 8 greens, and 4 blues.. I cannot understand how, having seen the jury, it is going to do Bayer's master settlement strategy any good, to get its a-- kicked here," the article quotes Watts as writing

He also wrote that "given the events thus far, most psychologists tell us that there is a 90% shot that this case has already been decided," the article states.

In the Haltom case, which Watts lost, he also was quoted as saying, "It was part of my strategy to affect the stock price, which I was very successful at."

After jurors ruled for Bayer the company's stock rose 39 percent. It had dropped 25 percent in the first few days of trial, according to the Wall Street Journal article.

Watts also lost what was among the first Vioxx trials in the country in Madison County in 2007. A four-week trial before Circuit Judge Daniel Stack ended in favor of Merck.

Watts had been seeking "tens of millions of dollars" for his client Frank Schwaller of Granite City who alleged his 52-year-old wife died suddenly after using Vioxx. According to testimony, Patricia Schwaller was 5 feet, two-inches tall, weighed 280 pounds and had several health problems.

After trial, one juror, Joyce Landre of Fosterburg, said attorneys for the plaintiff used information out of context during the trial.

She said the jury did see faults with Merck but not in Schwaller's case. Landre did not elaborate.

A juror from Alton who asked not to be identified said the appropriate focus for plaintiffs' attorneys should have been on Mrs. Schwaller's relationship with her primary care physician. Instead, the plaintiffs' attorneys spent too much time during the four-week trial attacking Merck, she said.

Two alternate jurors excused from duty before deliberations began said that it would take a lot of convincing for them to rule in favor of the plaintiff.

They also said they would be "shocked" if the remaining jurors came back with a plaintiff's verdict.

One of the jurors said that Patricia Schwaller had too many health risk factors to find proximate cause.

The other juror said there was "no way" he could find for the plaintiff, citing credibility issues with plaintiff witnesses.

The excused jurors said they had doubts about testimony from Dr. Mark Furman. Furman testified that Schwaller's risk factors, including morbid obesity, sedentary lifestyle, high blood pressure, high cholesterol and diabetes, played only a 1 percent factor in her risk for heart attack.

Furman also lost credibility with these jurors when he failed to mention Schwaller's obesity and diabetes during his testimony. During cross examination he said that was "an oversight."

The jurors were also troubled by plaintiffs' attorneys selective display of portions of emails between Merck officials. They said they only got the full context of the meaning of the communications after defense attorneys put things in perspective.

The Watts indictment: Dog was among plaintiffs in BP oil spill litigation; Unidentified Chicago law firm received plaintiff fact sheets

Grand jurors in federal court at Gulfport charged Mikal Watts, his brother David, and five others on Sept. 15, through indictments that remained under seal until Oct. 29.

The indictment shows that after the Deepwater Horizon rig exploded in the Gulf of Mexico in 2010, Watts immediately started planning litigation on behalf of seafood crews. Eventually, he would derive $2.3 billion in settlements.

U.S. District Judge Carl Barbier, who presides over the massive litigation still ongoing in the Eastern District of Louisiana, picked Watts for the plaintiff steering committee against BP, and kept him there until the criminal investigation started.

As things initially got underway, two attorneys offered to buy pieces of Watts' litigation and would provide more than $10 million over the next few months: one piece was for the lawyer and the other piece was for a Texas businessman.

The indictment doesn’t identify the attorneys or the Texan.

Watts apparently figured he could safely claim to represent 41,000 clients because he had raised enough money to find that many.

He hired Greg Warren of Lafayette, La., to lead the hunt for clients.

Warren, now a defendant with Watts, hurried out and bought a BMW 328i and a BMW X3 sport utility vehicle, according to the indictment.

The next day, he signed a lease for two years on an office in Biloxi, Miss.

The indictment charges Wynter Lee, mass torts coordinator for Watts, as a party to the fraud, along with business owner Hector Guerra of Weslaco, Texas.

It also charges Thi Houng Le of Pascagoula, Miss., also known as Kristy Le, and her sister in law, Thi Hoang Nguyen, also known as Abbie Nguyen.

The indictment paints David Watts as a brother sensing danger but going along with the plan.

He worked for Mikal as director of mass torts, though not a lawyer.

The indictment alleges that on Aug. 24, 2010, David sent email to his brother and Guerra stating that 2,477 dates of birth had changed in 2,510 records.

“This does not pass the smell test,” David Watts wrote, with 11 question marks.

Mikal Watts applied for the plaintiff steering committee three days later, stating that he currently represented over 40,000 plaintiffs.

On Oct. 8, 2010, Barbier appointed him to the committee.

On Oct. 11, David notified Guerra and Kristy Le that he found five dead plaintiffs among the names they provided.

On Nov. 10, according to the indictment, “KF” of the Gulf Coast Claims Commission asked Mikal to confirm his representation of each client.

The initials fit Kenneth Feinberg, who ran the claims process for BP as he had previously done for the World Trade Center attack.

According to the indictment, KF wrote, “We have received notification from claimants, and from the Department of Justice hotline, concerning complaints of unauthorized use of their social security numbers.”

On Nov. 18, according to the indictment, Lee sent 22,533 plaintiff fact sheets to a law firm in Chicago.

The indictment doesn’t identify the firm or explain its connection.

One fact sheet identified Lucy Lu as a deckhand on a fishing boat, but grand jurors found Lucy Lu was a dog.

Lee allegedly filed fact sheets for the five dead plaintiffs that David Watts found.

On New Year’s Eve, according to the indictment, Warren bought an Audi Q7 sport utility vehicle for $69,212.

On Jan. 6, 2011, according to the indictment, David Watts warned the group and the lawyers who bought into the action that he didn’t trust the social security numbers or the birth dates.

He wrote that there was a problem with the process and lots of duplicates.

On that date, according to the indictment, Lee sent 17,469 fact sheets to the Chicago firm.

On Jan. 21, 2011, according to the indictment, one of the lawyers with a piece of the action wrote that, “40k clients are ghosts in the wind.”

He allegedly wrote, “No amount of $$ will bring them back and time is an enemy.”

He allegedly wrote, “Mikal, you know I say this with love in my heart so hear me on this, this is either a super plan for a billion dollar success that I just don’t see, even when I try to read between the lines of JC’s emails, or if I just read what is written in JC’s emails, and add my own gut feeling, it is a ‘king has no clothes’ cluster f--- that needs to be dealt with openly, quickly, and effectively.”

The indictment doesn’t identify JC.

On the same date the other lawyer allegedly wrote that they had bad phone numbers and street addresses, names from phone books, duplicates, and plaintiffs claiming they were duped into signing fees.

On Jan. 31, 2011, Warren bought another Audi Q7.

On March 8, 2011, Lee replied to email about dead clients by writing, “Another fine example of the sh—we paid for; dead 5 years ago.”

On July 29, 2011, according to the indictment, Watts falsely told the Louisiana Attorneys Disciplinary Board that letters he sent were status letters to clients with written engagement agreements.

On Sept. 2, 2011, according to the indictment, he falsely told the board a lawyer referred two individuals to him when Warren and the others had done it.

On March 2, 2012, he announced a settlement to David Watts, the two attorneys, and the Texas businessman.

According to the indictment, he wrote, “Importantly, BP pays the $2.3 whether the proof supports it or not.”

He allegedly wrote, “Hope this makes everyone feel better about our eggshell plaintiff docket. To quote Monty Python, ‘it’s merely a flesh wound; I’m not dead yet.’ Mikal.”

In 2013, after federal agents seized his computers, BP sued him.

Barbier stayed the suit pending resolution of the criminal investigation. The stay remains in force.

(Steve Korris contributed to this report).

Want to get notified whenever we write about Wall Street Journal ?

Sign-up Next time we write about Wall Street Journal, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Wall Street Journal

More News

The Record Network