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Tom Young
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BP and the Geography of Compromise

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BP has been complaining for nearly a year about what the company calls “fictitious claims,” “false positives” or what in the oil major’s opinion are otherwise undeserving claimants of the Deepwater Horizon Court Supervised Settlement Program, the facility through which Gulf businesses submit claims for losses associated with BP’s 2010 oil spill. This despite the fact that BP negotiated, drafted and signed a 1,200 page Settlement Agreement which clearly lays out how one qualifies for compensation.

The Calculus of Compromise

BP asserts that it is being unfairly forced to pay hundreds of millions of dollars to “undeserving claimants,” even though the alleged “fictitious claims” meet the exacting standards memorialized in the Settlement Agreement.

It seems as though the company has forgotten that parties come to a settlement through compromise. Both sides give. Both sides take. No one walks away perfectly satiated, but having something to eat is better than starving, so the combatants call it a day, put pen to paper and draft a contract.

I have written recently on some of the plaintiffs’ considerable “gifts” to BP, given in an effort to reach consensus and settlement. Regretfully, I am having a difficult time finding much in the way of reciprocation from the company. Instead we have been met with attacks and accusations.

Drawing Lines in the Florida Sand

Take for instance the geography covered by the Settlement Agreement. Using Florida as an example, well over 50% of the population has been excluded from participating in the compensation program. The Plaintiffs’ negotiators knew that such a boundary was on BP’s wish list, and while they didn’t necessarily care for it, the negotiating team understood that a compromise (excluding most of Florida) would be required to get the deal done.

BP Florida Compensation Map

Under BP’s new Settlement Agreement, only businesses located on Florida’s West Coast are eligible to participate. Under the old compensation system, BP paid claims in all Florida counties. Cutting the state by more than 50% was a significant concession by the plaintiffs.

Even Pam Bondi, the business-friendly Republican Attorney General of Florida, wondered why most of her state was excluded. The fact is, BP had drawn a firm line in the sand that cut the state by two-thirds and the Plaintiffs had to concede if the deal was to be consummated.*

As BP’s lead attorney put it before the ink dried, “the settlement that has been reached to resolve this litigation is a compromise, a yielding of the highest hopes in exchange for certainty and resolution.”

It seems that BP’s hopes are still sky high.

BP’s GCCF v. Judge Barbier’s CSSP

The Settlement Agreement replaced the much maligned Gulf Coast Claims Facility (GCCF) with the Court Supervised Settlement Program (CSSP), the differences of which are night and day.

As alluded to above, one of the primary changes was to the map used to qualify eligible businesses in Florida. The GCCF allowed payments to businesses located anywhere in the state. The new CSSP map restricts payments to the West Coast and then primarily only to businesses located in counties that touch Gulf tidal waters, with those located immediately on the coast treated more favorably than those based a few miles inland.

GCCF Florida Map

Prior to entering into the Settlement Agreement, BP paid oil spill loss claims to businesses located in all parts of Florida. Under the new settlement compensation program, only West Coast businesses are eligible. BP’s liability has been reduced by more than 50%. So why is the company complaining?

This eliminated cities like Jacksonville, Miami and Orlando from the process – a very significant portion of the state.

It is not difficult to imagine that a business in Orlando (excluded area) was harmed by the spill. The young family from Des Moines that wanted a combo Disney / beach vacation simply went to Disneyland in California rather than Disney World in Florida. Why go to Orlando for a few days with Mickey and then drive the hour west to Tampa Bay for an oily beach vacation when you can get the same thing, sans petroleum products, in Los Angeles?

In conclusion, the Plaintiffs’ conciliatory reduction of the geographic area eligible for compensation in Florida is allowing BP to have its cake and gorge itself on ours as well. Thank you BP, may we have another?

 

*To be clear, businesses located outside of the settlement’s compensation zones were free to file their own individual lawsuits against BP.

2 Comments

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  1. Monk says:
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    Great article. I would add that some of BP’s corporate officers received reduced sentences for murder and perjury in exchange for entering into the settlement agreement. Also, BP’s own counsel Mark Holstein admitted the agreement may result in “false positives,” yet conceded that such results are an “inevitable concomitant of an objective, quantitative, data-based test.”

  2. Eyeswideopen says:
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    Yes I agree, I attended the Fairness Hearing and the judge threw out the states arguments on the grounds that the government claims were excluded from the settlement and they are not class members therefore could not object.
    As for the zone map the lead Objector fought hard and argued the maps were gerrymandered to reduce RTP’s and payouts. This is very obvious by viewing the mapping tool and selecting aerial view. When you remove the zone colors and just view the Coastal claim map it shows vast amounts of government land excluded from recovery. One can only assume the added paint to the map made the settlement appear to be a much greater than reality.

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