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Sunday, May 26, 2024 | Back issues
Courthouse News Service Courthouse News Service

BP & Plaintiff Attorneys Deliver|Details of Oil-Spill Settlements

NEW ORLEANS (CN) - BP and attorneys for more than 100,000 people who sued it have handed a federal judge hundreds of pages of documents relating to settlements of economic and medical claims from the worst oil spill in U.S. history.

Friday will be the second anniversary of the explosion of the Deepwater Horizon oil rig, which in ensuing weeks dumped 5 million barrels of oil into the Gulf of Mexico.

One proposed settlement agreement relates to economic and property damages suffered by more than 100,000 individuals and businesses; the other includes settlement terms for plaintiffs' medical claims.

Two class actions filed in New Orleans Federal Court this week by the plaintiff steering committee outlined the classes for settlement.

The general terms of the proposals remain the same as in the agreement in principal reached in March, including $7.8 billion in payments from BP, according to the documents filed in Federal Court on Wednesday.

In the new filings, BP and plaintiff lawyers call the agreements a "compromise."

The parties' joint motion in support states: "As in any settlement, neither side will receive everything it wants - not BP, which believes that plaintiffs' claims are subject to considerable litigation risk, and not the PSC [Plaintiff Steering Committee], who maintain that they would one day obtain larger awards if their claims were to proceed to trial. On balance, however, the agreement creates a comprehensive compensation system, and thus represents a resolution that is more than fair, reasonable, and adequate when judged against the standards of Federal Rule of Civil Procedure 23."

The settlement proposal will require U.S. District Judge Carl Barbier's approval.

The $7.8 billion payout would make it one of the largest class-action settlements in history. There is no cap, and the ultimate payout could be more or less than BP projects.

The agreements include $600 million in attorney's fees for several hundred lawyers involved in the litigation.

The settlement would bring an end to civil litigation from private plaintiffs seeking property damages and personal injury claims.

Civil litigation with the federal government and Gulf states, however, has yet to be resolved, and the Department of Justice is continuing its investigation into criminal proceedings.

The $600 million in attorneys fees is to come from BP, not from client settlements, according to Jim Roy, one of the lead plaintiff attorneys.

The plaintiff steering committee filed two new federal class actions this week, which include the lead plaintiffs and class terms related to the settlement agreements.

One, Bon Secour Fisheries Inc. et al. v. BP Exploration & Production Inc. et al. (civil docket number 12-cv-00970) pertains to property and economic damages.

The second, Kip Plaisance et al. v. BP Exploration & Production et al. (docket 12-cv-00968) outlines the medical class and terms of the medical settlement agreement.

Tony Buzbee, a plaintiff attorney not on the plaintiff steering committee, who represents 15,000 oil spill clients, spoke favorably of the proposed settlements.

"Any settlement that provides compensation for victims of exposure and sets aside monies for future medical treatment I would look upon favorably," Buzbee said in an email to Courthouse News.


A third class action was filed Tuesday by plaintiff attorney Daniel Becnel Jr., seeking damages against not just BP, but also Nalco, the manufacturer of the toxic dispersant Corexit that was used on the oil spill. That case is Jarod Elrod et al. v. BP Exploration & Production Inc. et al. (docket 12-cv-00981).

Becnel, who is not a member of the plaintiff steering committee, represents more than 3,000 people who suffer medical problems from the oil spill. He said he intends to try his cases separately from the BP and plaintiff attorney class-action settlement.

Earlier this month, Becnel objected to plaintiff attorneys' motion to dismiss Nalco from the litigation.

Becnel's opposition states that not only did the PSC not oppose Nalco and other companies seeking dismissal from the litigation, "it actually agreed to dismiss these defendants, but it never met with, much less even attempted to advise whatsoever, the non-PSC lawyers in this litigation who have hundreds, perhaps thousands, of clients with claims against Nalco and the clean-up defendants. Further, the PSC has apparently not met with any class representatives to discuss this matter."

Plaintiff attorneys responded that their motion to dismiss "was based solely on strategic grounds."

In a telephone interview Wednesday, Becnel said he believes BP is in a rush to settle for oil spill damages before more evidence of the spill's ultimate environmental and health toll comes to light.

"Why would you take a slam-dunk trial that you've spent a year preparing for" and settle? Becnel asked.

He pointed to a Tuesday article in Al Jazeerain which Gulf fishermen, scientists and seafood processors say they are finding disturbing numbers of mutated shrimp, crab and fish that they believe are deformed by chemicals released during the 2010 BP oil disaster.

The article speculates that, as with environmental damages caused by the 1989 Exxon Valdez oil spill off the coast of Alaska which did not show up in full until four years after, the worst effects of this oil spill are yet to be seen.

Becnel said one element of this litigation that is unique is that the effects of the massive amounts of oil and dispersants dumped into the Gulf have never before been seen.

BP has admitted spraying and injecting an unprecedented 1.8 million gallons of dispersant on the oil spill.

"If it's doing that to the fish, you can imagine what it's doing to the people who work out there," Becnel said.

He said that by taking $600 million as private attorney fees, BP and the plaintiff steering committee have ensured the money can't be touched down the line by an appeals court judge or anyone else, and added that $600 million is an exorbitant fee in a case that involves no risk.

By comparison, Becnel said, attorneys working on the Vioxx litigation, which is considered one of the largest settlements ever and took place over years, in multiple cities and with dozens of painstaking trials, made $350 million.

Aside from the large fee, Becnel wondered why the attorneys did not take the whole of what BP originally brought to the table to pay damages. He wondered why they settled for less than the $20 billion BP set aside for payment of damages through the Gulf Coast Claims Facility that was overseen by Kenneth Feinberg.

Feinberg had $20 billion. He spent $6.2 billion paying claims. The settlement is for $7.8 billion. Together that equals $14 billion.

"Why didn't the lawyers take the whole $20 billion? Especially not knowing what's going to happen?" Becnel asked.

"It was impossible for them to lose."

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