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Wednesday, March 16, 2016

BP dodges BILLIONS of dollars in additional oil spill liabilities

Attached is a very important new ruling and Order from the BP oil spill Federal MDL Court regarding the viability of claims brought by hundreds, and perhaps thousands,  of businesses and individuals in the oil servicing industry claiming that the impact of the Government shutdown on drilling for a number of months after the Deepwater Horizon well operated by BP erupted, dumping hundreds of millions of gallons of oil into the Gulf of Mexico in 2010. Click to download the Ruling>

The Court is essentially ruling that claims brought by this sector for billions of dollars in losses do not fall under the Oil Pollution Act as compensable claims, and therefore are to be dismissed. While this ruling only applies to the “test cases”, the same arguments will clearly attach to the remainder.  Unless the Court reconsiders and alters this ruling, or the Fifth Circuit Court of Appeals overturns it, this decision bodes poorly for yet another massive block of claims that have been waiting for years on the status of their claims and whether they will ever receive ANY compensation for their losses. The answer now appears to be “NO”.


The MDL Court assigned to handle the bulk of the litigation associated to the spill has plowed through hundreds of legal issues over the last six years, setting trials on various issues along the way.  Due to the unprecedented magnitude of the spill and ensuing litigation, and incumbent contingent liabilities, the Court has had to grapple with hundreds of thousands of claims from every sector of business along the Gulf of Mexico, claims and cross claims of all the parties plaintiff and defendant, insurance disputes, scope of liability, quantification of oil spilled and numerous other legal disputes.

BP initially made a number of public overtures to make amends in response to the horrible publicity and criticism of the incident, immediately announcing a  “$20 billion dollar fund” to begin the reparations process outside the litigation, and to stay the course until “the gulf was made whole”.  This fund was run by settlement Czar Ken Feinberg, who had overseen numerous other funds in the past, including the 9/11 fund for victims of the terrorist incident in New York.  And yet, as soon as the media attention to the spill died down, BP very quietly shut down that $20 billion dollar operation without disbursing the vast majority of the monies it had announced were set aside for claims payments.  This transferred any future resolution of any claims back to the single court in New Orleans appointed by a federal panel to handle the case.  

A highly controversial “class action” subsequently captured and settled several hundred thousand claims in an “economic and property damage” settlement four years ago in the MDL Court.  This effort has been the source of constant criticism by both sides, BP claiming unfair settlement practices and conflicts of interest in the operations, and claimants maintaining unfair and arbitrary evaluations, changes to the methodologies to the evaluation of claims, and four years of deliberate delays in evaluating and paying claims.   The majority of claims have yet to be paid four years later, and it appears that ultimately more than half will never see any compensation from that settlement. Some groups, such as businesses shut down from the spill, have recovered in less than one percent of total claims filed.

The MDL Court also approved a “medical class” which was designed to get compensation to the tens of thousands of persons who claimed illnesses from working in the aftermath of the spill around the hydrocarbons and toxic chemicals utilized in the dispersant and cleanup processes.  Those claims have also struggled in the years since that fund was approved, with operational costs far exceeding the amounts paid to victims, most being awarded less than $1000 stipend payments for their injuries and medical bills.

There was another sweeping settlement late in 2015 involving resolution of essentially all of the claims brought by the U.S. government, the impacted states Attorney Generals and hundreds of municipal entities.  That settlement, estimated at approximately $18.7 Billion dollars, is to be paid out over a 15 year time frame. 

An additional estimated 85,000 claims also remain pending before the MDL court the last six years outside the class settlements, either due to decisions of the claimant to opt out of the previous class settlements or lack of eligibility for those settlements.  Most of them have been locked out of the process of any further settlement discussions throughout the duration of the litigation, and are still looking for closure or for relief to other courts to actually have their cases heard.  With the MDL court announcements on the only remaining issues otherwise set on the trial docket now resolved, it may clear the way for further attention to these claims relegated to the “back burner” of the litigation for several years. 

“Our law firm is the largest stakeholder in this litigation in the sheer number and variety of claims, which total in excess of 10,000 cases involving businesses and individuals from every sector of industry impacted from this incredibly devastating oil spill.  It is not only a national tragedy that it happened, but in the way BP has handled it. Delays, lies, political pandering, backroom deals, misleading and often completely false public relations campaigns and other dishonest and unscrupulous tactics have a very bad situation even worse.  BP has sadly done a good job at only one thing, making the media, politicians and the general public away from the Gulf Coast believe that they did what they said early and often that they were going to do, compensate everyone quickly and fairly”.  Says Brent Coon, founder of the public policy and litigation firm of Brent Coon and Assoicates.

“Publicly announced settlement after settlement has either subsequently been unfunded, defunded, delayed or altered to the point where six years into the litigation BP has only paid a fraction of what they owe and only a small fraction of those who lost their jobs or businesses have been compensated.  Even the “big settlement” with the government was purposely delayed by BP for almost six years, and the “deal” recently announced with the government gives BP 15 more years to actually PAY IT.”   Why our government would continue to do ANY business with such a corporation is anyone’s guess, and why there has been such a false perception of what BP has actually done versus what they said they would do is frankly at this point unfathomable.  Clearly the masses don’t have the same level of organization and effective media skills as demonstrated by BP throughout this litigation, and the government has not shown much interest in clearing the record either” .

“We commend Senator Nelson of Florida for finally speaking up this week on the plight of the victims of this spill at least as it relates to the citizens of Florida.  It is time for BP to step and do what they have said the last six years they were going to do, and accept full responsibility and accountability.  The fact that they have now refused to contribute a dime of compensation to the billions in losses sustained from the oil services industry as a result of the spill does nothing but reinforce what our firm has said all along, that this is an amoral corporation with the longest and ugliest track record of ignoring safety and health standards set by government and industry, which has resulted in the most fatalities, most injuries, most governmental fines and citations and the most consequential damages of any corporation in the world. Not a recognition worth bragging about, but one much earned by BP”. 


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