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Tuesday, June 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Judge Leans Toward OK of BP Oil Spill Settlement

NEW ORLEANS (CN) - A federal judge said Wednesday that he's "leaning favorably" toward preliminarily approving BP's proposed $7.8 billion settlement with Gulf Coast residents and businesses hurt by the 2010 Deepwater Horizon oil spill.

The judge said he will issue a written order "in the next several days."

"I am not going to issue a ruling from the bench," U.S. District Judge Carl Barbier said in a packed hearing at the New Orleans federal courthouse, in which he heard from attorneys about the terms of the proposed settlement.

"I wanted to issue a written order and I will do that in the next several days," Barbier said.

But Barbier said at the start of the hearing that the earliest the court could get final approval of the settlement would be early November.

BP and plaintiff attorneys announced plans for the settlement in March, on the eve of the first liability trial stemming from the April 20, 2010 oil spill. The first details of the plan were filed with the court last week in thousands of pages of documents.

The proposed settlements are for economic and property damages to Gulf Coast residents and businesses, and for medical monitoring.

They include $2.3 billion to the seafood industry, $105 million to start a program to improve medical care in coastal communities, and $57 million to promote tourism in the Gulf of Mexico region.

The settlements, involving thousands of claimants, also cover losses by businesses and people and provide for 21 years of medical monitoring for clean-up workers and people who lived within half a mile of where oil washed ashore.

There is no cap on payments, but plaintiff attorneys and BP estimate the deal will cost approximately $7.8 billion. Final approval will not take place until a fairness hearing can be held.

But preliminary approval from the court could set payments into motion now.

Robin Greenwald, a member of the interim class counsel and of the plaintiff steering committee, said the judge's preliminary approval of the plan would be enough to get the proposed Gulf Region Outreach Program up and running.

The settlement proposes a $105 million grant for the program, which would provide access to health care, including primary care and mental health services to all residents in the Gulf Coast communities in Louisiana, Mississippi, Alabama and the Florida Panhandle.

The proposed settlement includes up to $600 million in attorney fees.

Several parties have objected to the plan, including Florida, shrimp processors, fisheries, and Halliburton, which worked on the oil well that blew out 2 years ago, killing 11 and unleashing the worst oil spill in U.S. history.

Attorney Daniel Becnel Jr., of Reserve, La., who is not a member of the plaintiff steering committee, and who represents 3,000 clients who suffer medical problems from the oil spill, filed an objection this week to the proposed settlement.

Becnel said in a telephone interview that by setting $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 or anyone else, and added that $600 million is an exorbitant fee in a case that involves no risk.

Becnel said he believes the money is meant to help BP persuade the plaintiff steering committee to rush the settlement along 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.

In a filing with the court, the American Shrimp Processors Association, and Gulf Organized Fisheries in Solidarity and Hope said the way damage payments are calculated would shortchange some of their members. They too said that the settlement does not account for damage to habitat that could take several years to come to light and repair.

Florida said the settlement appears to provide compensation only to businesses in the Panhandle region but not in other parts of the state that border the Gulf.

Halliburton, which helped to build and monitor the failed Macondo well, objected to BP's plan to let the plaintiffs try to collect what BP claims Halliburton and rig owner Transocean owe for the blowout.

And Mississippi filed papers Wednesday urging the court not to approve the preliminary settlement until it has ruled on pending motions and requests related to the GCCF's "illegal and illegally obtained GCCF releases," which the state says would exclude nearly 200,000 class members from the settlement.

BP's former claims payment process through the Gulf Coast Claims Facility required claimants who take a final payment to waive their right to sue BP in the future.

Mississippi's Special Assistant Attorney General Mary Jo Woods said in the state's filing: "The class definition for the 'Economic and Property Damages Settlement Class' ... and the exclusions enumerated in the proposed Settlement, improperly propose to incorporate the illegal and illegally-obtained GCCF releases to exclude almost 200,000 putative class members from the benefits of the settlement and access to the Court-supervised settlement process and Fund. However, the GCCF Releases are unconscionable, contrary to public policy and entered in violation of federal and State law. Consequently, they are unenforceable and void."

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