BP settlement delivered to federal court for approval
23rd April 2012 · 0 Comments
By Susan Buchanan
The two-year anniversary of the BP spill was Friday and no one threw a party or baked a cake. But residents and businesses who have claims against the London-based company got a step further last week. Terms of BP’s settlement with plaintiffs, announced on March 2, were filed with U.S. District Judge Carl Barbier in New Orleans Wednesday. That agreement still has to be approved by the court.
BP and the Plaintiffs Steering Committee—representing over 100,000 individuals and businesses—filed two settlement agreements, one for economic and property losses and another for medical claims. The PSC includes 17 individual attorneys and two additional liaison counsel, all appointed by Judge Barbier to coordinate litigation against BP.
On Wednesday, Bob Dudley, BP Group’s chief executive, said the settlement allows the company to continue its effort to restore the Gulf Coast by compensating claimants—who won’t have to wait for a long trial. BP expects the cost of the settlement to total $7.8 billion, including fees for plaintiffs’ attorneys, which will be paid from a $20 billion trust it established in mid-2010. BP has paid out over $8.1 billion to individuals, businesses and government entities since the spill.
BP asked the U.S. District Court to adjourn a trial of liability for monetary damages, known as multi-district litigation or MDL 2179, until the settlement agreements have been approved. The trial was originally scheduled to start back in February. The PSC said it won’t oppose adjournment. BP and the PSC requested that the court hold an early November hearing to evaluate fairness of the settlements.
Claimants can participate in either or both of the settlements for economic and medical losses. The economic portion includes compensation formulas, with some claims to be paid using multipliers to compensate for any future, spill-related losses. Claims will be processed on a rolling basis and the goal is to pay them as quickly as possible.
In March, BP agreed not to wait for final approval of the economic-loss, settlement agreement before paying claims. A transitional, court-supervised operation replaced the Gulf Coast Claims Facility in early March, and since then it has paid out $168 million to cover losses. If approved by the court, a new claims facility will open this spring, operating under terms of the settlement.
Under the medical settlement agreement, payments will be made based on a matrix for certain physical conditions. Class members can file claims forms before an effective date of the settlement. The agreement authorizes periodic, medical consultations over 21 years for qualifying class members. Class members with related, future health complaints can pursue their claims through a mediation and litigation process, but cannot seek punitive damages.
In early March, BP agreed to provide $105 million to a Gulf Region Health Outreach Program to improve care in coastal communities.
What was the reaction to the proposed settlement? Garret Graves, chairman of the Louisiana Coastal Protection and Restoration Authority, said “this agreement represents progress for a number of fishermen and small businesses that have suffered most. This is a belated step in the right direction.”
Graves said much more work remains to be done, however. “We will not accept any resolution of the public’s claims that falls short of ensuring BP and the other responsible parties are held accountable for the extensive damage they caused to the environment and citizens of the state,” he said. “While we are hopeful that the responsible parties do what is right, we are fully prepared to try this case to ensure full recovery.”
Tony Buzbee, partner in The Buzbee Law Firm in Houston, had a favorable view of the settlement. He said “I’m encouraged. I think it’s a good deal and will recommend it to my clients.” Earlier, Buzbee represented 19 injured, Deepwater Horizon rig workers, who were paid a combined total by the GCCF that exceeded $100 million.
As for medical claims, Buzbee said “if there is a settlement, there will be monies set aside for future medical treatment, most likely from some sort of fund. An individual would have to demonstrate exposure to take advantage of monies in the fund for treatment.”
A major complaint against the GCCF was that it didn’t pay medical claims.
When asked how long the settlement process might last, Buzbee said “It could be a year or more. There are many different types of cases. Many of them haven’t even been discussed at this point and are not included in the present, proposed settlement.”
The process is expected to be swifter than the twenty years that plaintiffs in Alaska’s Exxon Valdez spill waited for compensation. The current, court-supervised settlement approach is intended to cut through red tape so that victims can file their claims and get paid in a timely, transparent manner.
Meanwhile, several attorneys have opposed efforts to dismiss Nalco Company, the Illinois-based maker of Corexit oil dispersant, and other firms engaged in the oil cleanup from litigation in the settlement. Concerned citizens have signed petitions and written letters to the U.S. District Court in New Orleans saying Nalco should be prosecuted.
The settlement between BP and the PSC does not include government claims or private suits against BP’s contractors on the Macondo well. And it doesn’t include claims against BP from certain private plaintiffs, including some Florida residents and businesses.
As for the fed’s case against BP, U.S. Dept. of Justice spokesman Wyn Hornbuckle said last week “the U.S. settled with one of the defendants, MOEX, in February.” MOEX Offshore was a minority partner in BP’s Deepwater Horizon well. “All other U.S. claims against BP and the other defendants remain in the ongoing, multi-district litigation, which we decline to comment on,” he said. “An in-chambers, status conference among parties involved in the litigation and the federal judge is scheduled for early May to determine a new trial date.” Judge Barbier has scheduled a May 3, closed-door conference on lawsuits that are outside the settlement.
The government estimates 4.9 million barrels of oil spewed from BP’s well, and the company faces federal penalties—possibly $4,300 per barrel—on the amount spilled.
How does the coast look two years after the spill? Last Wednesday, Plaquemines Parish President Billy Nungesser said “patrols continue to find oil washing onto our precious marshes. Early indications are that our oyster reefs are suffering, our fish and shrimp populations have decreased, and there’s still concern about ongoing diseases in mammals such as dolphins.” He said Plaquemines Parish wants to make sure BP keep its promise to restore the coast.
The explosion of the Deepwater Horizon rig killed 11 workers and caused the worst offshore spill in the nation’s history. A flood of lawsuits ensued against BP; Switzerland-based Transocean Ltd., which owned and operated the rig; and Houston-based Halliburton Co., which cemented the well.
Last month, BP said that its proposed settlement with plaintiffs was not a confession of fault and it will continue to pursue its cases against Transocean and Halliburton.
Under the proposed settlement agreement, BP and the PSC intend to use a website, mailings and the media to explain details to spill victims and the general public.
This article originally published in the April 23, 2012 print edition of The Louisiana Weekly newspaper.