BP Tries to Overturn Gulf Oil Spill Settlement

Is Anyone Surprised?

By Dr Stuart Jeanne Bramhall

BP’s massive 2010 Gulf oil spill virtually destroyed the Gulf of Mexico economy. Fisheries, tourist-related enterprises, and the businesses dependent on them went belly-up in the hundreds of thousands. Yet as business owners quickly found, the only way they could get compensation for losing their livelihood was to sue BP in federal court. In 2012, the oil company finally agreed to a settlement reimbursing business owners who could demonstrate a loss of income during or after the spill. Federal District Court Judge Carl Barbier, who oversees the settlement, appointed Louisiana attorney Patrick Juneau to evaluate and process all spill-related claims. Thus far Juneau’s office has received a total of 186,000 claims.

Now, after paying nearly $4 billion on 48,487 eligible claims, BP is back in court trying to wriggle out of the deal. As of February 2013, this and other criminal and civil settlements and payments to a trust fund had cost the company $42.2 billion. Because there is no cap on the 2012 settlement they signed, the oil company is seriously concerned that covering all 186,000 claims could cut into their profits. They assert that many of the claims are exaggerated or relate to circumstances other than the spill. They give as an example businesses hundreds of miles from the coast that have been reimbursed. They also question companies using 2010 as the base year for their losses if their 2010 income was significantly higher than prior years.

Although Judge Barbier disagrees with their reasoning, he has appointed former FBI director Louis Freeh to investigate Juneau’s office to determine whether there have been any ethical breeches or misconduct in processing the claims. This follows the recent resignation of one of Juneau’s staff attorneys over allegations of “impropriety”.

Meanwhile BP is appealing Barbier’s ruling in the US Fifth Court of Appeals. In preliminary hearings, the Fifth Circuit judges are questioning whether BP has a legal right to challenge the terms of the settlement they agreed to. They point out it did not require businesses to establish causation – owners merely had to show a revenue loss. Moreover the settlement specifically states that losses needed to be calculated in such a way to maximize reimbursement. The judges also question whether the appellate court even has jurisdiction to alter the terms of the settlement. There is no provision in US law for a court to overturn a settlement, which is like a binding contract, once both parties have signed it.

Intimidation Tactics

BP has asked the appellate court to suspend payouts pending the outcome of Freeh’s investigation. They have also sent claimants warning letters that they may have to give some of the money back. The attorneys for the Plaintiffs Steering Committee, James Roy and Stephen Herman, have responded to BP with a “strongly worded” letter reminding them that no legal process exists to alter the amount of an award after it has been paid. They also accuse BP of violating the settlement agreement by discouraging claimants from pursuing claims.

In a press statement, Herman admitted the BP letter didn’t surprise him, given that the oil company was suspended from doing business with the US government after pleading guilty to lying to the federal government about the spill.”


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