BP Wants Thousands of Oil Spill Claims Tossed
NEW ORLEANS (CN) - A BP attorney told a federal judge Thursday that thousands of lawsuits for economic damages must be dismissed because they were filed before claimants tried to settle through BP's $20 billion Gulf Coast Claims Facility, administered by Kenneth Feinberg.
Oil spill defendants also claimed immunity from liability for the toxic dispersant Corexit, saying they simply made "decisions that should have been made by the United States government."
BP and other oil-spill defendants, including Nalco, which makes Corexit, told U.S. District Judge Carl Barbier that they are immune from liability because they were simply following orders that should have been handed down by the president of the United States under the National Environmental Emergencies Contingency Plan.
"The point we are trying to make, your honor, is that the claims the plaintiffs are making - that the dispersants are too dangerous, etc. - these were decisions that should have been made by the United States government," Mary Rose Alexander, attorney for Nalco, told Judge Barbier toward the hearing's end.
BP attorney Andrew Langan said the Oil Pollution Act (OPA) was set up to help claimants settle out of court. He said that one stipulation for filing an economic damages lawsuit against BP is that a claimant must have filed a claim with the Gulf Coast Claims Facility (GCCF) and been denied.
But now that the lawsuits have been filed, Barbier, who is presiding over the consolidated litigation, wondered how to address the issue of presentment to the GCCF.
"I could rule as a matter of law - which you have asked me to do - but I don't want to down the road have to deal with individual rulings on 100,000 claims," Barbier told Langan.
Earlier Thursday, Barbier said the number of lawsuits so far filed in the multi-district litigation "is probably something north of 120,000 - 130,000 cases."
Ninety-five thousand claimants have joined the litigation by filing short-form joinders that were created to allow plaintiffs to join the litigation without excessive paperwork.
The GCCF meanwhile has been criticized for requiring extensive documentation from claimants.
Gulf Coast lawmakers this past winter expressed frustration with the claims center, saying BP and Feinberg were intentionally stalling responses to claims to lure desperate claimants into accepting onetime quick payments, of $25,000 for businesses or $5,000 for individuals. The payments require a signed waiver stating the claimant won't litigate for more damages from BP or any of the other oil spill defendants.
"BP's position is that any people who have claims should decide this out of court," Langan said.
Langan said he knows that filing through the GCCF "is a huge inconvenience for the plaintiffs" and he understands the plaintiff steering committee wants to take the matters to court and "stick their stake in the ground," but he said OPA guidelines still apply.
The next issue addressed was whether people who have lost wages because of the federal drilling moratorium can file claims with BP.
"It is our position that 'but for causation' under OPA is not enough," Langan told the judge. Langan defined "but for causation" as that which arrives through a thought process like: "but for the oil spill I would still have a job."
"If 'but for causation' were the standard, there would be no end to OPA litigation," Langan said.
Barbier kept arguments moving, to stay within the 3 hours allotted for the hearing.
Next up, Jeffrey Breit from the plaintiff steering committee told the judge the language of the Oil Pollution Act should not be read as open to debate. Much argument surrounds how OPA interacts with state and maritime law.
Breit said that if something is not written in the act, then it isn't there. He said the act was intended as "an expansive statute" to help oil-spill victims, but the "defendant attorneys want to use OPA as a shield" against liability.
Plaintiff liaison counsel Steve Herman said the moratorium was a foreseeable consequence of the oil spill, and BP and the other defendants are obligated to pay for lost wages resulting from the moratorium.
Herman said "the moratorium was actually imposed by the environmental damages of the Macondo well" blowout.
"When you have an environmental catastrophe, you expect the government to step in," Herman said. He said it wasn't the moratorium that kept companies from drilling, but the response to the oil spill.
"Drilling in Idaho wasn't halted" in response to the spill, Herman said, only drilling in the Gulf of Mexico.
Barbier asked what Herman thought about BP's argument that thousands of claimants have joined the litigation without going first to the GCCF.
"If they're right about the law, how do you want to handle it?" Judge Barbier asked. "I'm sure you acknowledge that a large number of claims were filed without presentment."
Herman said it seemed a waste of resources to go through each claim individually to make sure it has been properly filed.
Barbier did not indicate when he would rule on the matter.
The next issue involved oil-spill response workers who have filed claims for health problems from exposure to oil and dispersant.
Mary Rose Alexander, representing Nalco, told the judge that using Corexit on the spill was the president's decision.
"Plaintiffs allege that the dispersants were too toxic, too dangerous, but the Clean Water Act gives this to the president to decide," Alexander said.
Corexit is banned in several countries including, the United Kingdom, for being highly toxic. Different forms of the dispersant were used in large amounts during the Exxon Valdez spill and were later blamed for liver and kidney failure, miscarriage and fetal death, rapid destruction of red blood cells leading to severe anemia, and other health problems.
BP continued to spray Corexit in May 2010 even after Environmental Protection Agency Administrator Lisa Jackson told it to stop. When BP did not stop, Jackson told it to try to find a less toxic alternative.
Michael Lyle, an attorney for O'Brien's Response Management, which bought and supplied dispersant, laid boom and performed in situ burning, said the company was acting through the federal government under the command of Coast Guard Adm. Thad Allen, and therefore shared in the government's immunity from liability.
Lyle referred to a 2nd Circuit ruling on response workers that came after the World Trade Center bombings.
"The facts are remarkably similar" to the World Trade disaster, Lyle said.
"The 2nd Circuit said, 'We need contractors to come, we need them and we can't make them afraid of liability,'" Lyle said.
"Actually, it was more compelling in our case, because it was the federal government controlling the response," not the state, Lyle said.
Robin Greenwald of the plaintiff steering committee rebutted Lyle's argument, saying the difference between the World Trade Center bombings and the Gulf of Mexico oil spill is that the bombings were acts of terrorism while the oil spill was caused by a company that subsequently took responsibility and coordinated its own response effort.
"The responders - all of them - worked for BP. They worked for the polluter. The World Trade disaster contractors had a relationship with the government. But without that relationship, how can the government tell the contractors what to do?" Greenwald asked.
The hearing addressed defendants' motions to dismiss pleading bundles B1, B2 and D1 in the consolidated oil spill litigation.
A monthly oil spill status conference took place before the hearing. The next status conference is scheduled for July 8 at 9:30 a.m.
(See the Thursday report on Bundles B1, B2 and D1, on this Courthouse News page, below.)