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Joseph F. Rice
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BP wrench-throwing continues, despite 5th Circuit ruling

5 comments

The following is an opinion piece reposted with permission from attorney Joe Rice, one of the lead negotiators of the BP Deepwater Horizon Economic and Property Damages Class Action Settlement.

Next week will mark eight months since claims payments through the Deepwater Horizon Settlement’s Business Economic Loss program were halted due to an October 2013 Fifth Circuit Court of Appeals ruling in which Judge Barbier was instructed to craft a “narrowly-tailored injunction” that subsequently stopped payouts.

To add insult to injury, during this time, BP continued placing costly full page ads in major media outlets and throwing legal wrenches at every turn, crying fraud in the claims system.

That’s eight months since countless businesses, families and people throughout the Gulf Coast have lost the ability to have their claims paid while their livelihoods have continued to be put on hold.

Another step closer: Court makes BP live up to agreement

We are seeing some progress justifying the continued fight against BP’s objections. On Monday, May 19, the Fifth Circuit Court of Appeals voted 8-5 to deny BP’s attempts to avoid its responsibly under the Settlement Agreement. The Fifth Circuit refused to rehear BP’s appeals, confirming the certification of the class and that the Settlement Agreement appropriately provides standards for proving causation that meet all of the constitutional requirements.

Put simply, the Fifth Circuit told BP to live up to the agreement it made and move forward—exactly what plaintiffs’ counsel has been saying from the beginning and a strong reinforcement of the civil justice system.

As expected, two days later, BP released a statement saying that it will seek review of the court’s decision by the U.S. Supreme Court and, in the meantime, that the suspension of payments should continue.

BP’s request to stay the mandate was turned down by the Fifth Circuit on Tuesday, May 27, and a three-judge panel ruled 2-1 on Wednesday, May 28, that it will not stop payments while BP appeals to the Supreme Court. This means that the Claims Center can soon begin operating again. However, having been delayed for this long, it will take some time before it is in a position to start funding settlements again, but at least another hurdle in this process has been leapt successfully.

Policy 495 is still an issue

At the same time, however, we cannot lose sight of the fact that the appellate process did provide that there had to be some type of matching of expenses to revenue for at least some of the Business Economic Loss (BEL) claims. This has resulted in the Claims Administrator issuing a court-approved policy known as Policy 495. It’s my opinion that Policy 495 is not consistent with the Settlement Agreement, and I’m not the only one who thinks so. Class Counsel has already filed a motion to reconsider Policy 495 with the District Court.

We’re making progress

There is potential light at the end of this terrible tunnel that has taken lives and livelihoods. We remain committed to continuing to do everything we can to move forward with each and every claim. BP can only stall the system for so long and, no matter what they throw at the courts next, we’ll continue to fight for your rights.

5 Comments

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  1. Daniel says:
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    Unfortunately there is nothing the Fifth Circuit can do to force Justice Scalia to recuse himself. Supreme Court Justices are free to regard judicial canons as optional, and don’t take orders from Circuit Court judges.

  2. John says:
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    Bp’s Request for stay to SCOTUS/Scalia revolves around a single issue, that is:

    “…certify a class settlement that includes numerous members who have suffered no injury plausibly traceable to the defendant’s actions…”

    BP restates this in numerous ways in their 34 page request submitted to Judge Scalia. Each time BP’s attorneys state that the class as constructed includes numerous or insinuates “huge” numbers of claimants who have no loss traceable to the BP oil spill of 2010.

    I would suggest that the PSC and the 5th Circuit have missed an opportunity to dismiss these specific points. (Please note that the lack of full file disclosure of past claims information that BP uses keeps all such discussions as theoretical, but importantly PLAUSIBLE connections.)

    Please consider the following explanations for defeating BP’s assertions of no causal nexus for their “poster child” fraud case claims:

    1) A car dealer who lost his franchise for a car line (Pontiac) – This dealer publicly stated that he tried unsuccessfully for the entire summer and fall of 2010 to get a new franchise to sell new vehicles. Prior to the spill they had 3 contacts with other auto makers bidding to give them their franchises to sell their new vehicles. The spill ended those talks and the business shut for the year. That is a real loss as opposed to the BP half truth.

    An RV park that had a foreclosure filed against it prior to the spill – This is a not an RV park that had closed it’s business. It simply had a filing against it. Their business remained open at that location through 2010. A foreclosure does NOT mean a closure of business in the current FL real estate market for businesses. Most negotiate for a rental contract with the bank who forecloses as the banks prefer a property to be occupied and thus keeping the property from becoming abandoned. Many home owners are keeping residence in their homes in FL now under the same management agreements with banks (though ownership of the property is lost their business income was not.) This property faced the effects of the tourist exodus from the region in 2010 caused by the oil spill.

    The cellular phone business that burned down prior to the spill – This company was reported to have been ready with contractors to use their insurance money to move to a different adjacent location and restart their business, but failed to be able to do so as there was simply no customer base to move forward.

    The oft quoted “4 partner accounting firm” where one partner takes a medical leave during the oil spill…this was a hypothetical case not a real one. If it was real then there would be other factors that would have allowed the case to proceed against BP in a normal court of law. As it is hypothetical then one might ask first – Did this 4th partner decide to take his medical leave at this time because there simply wasn’t enough business for him to be needed in the office? Or did his absence from the office result in any turning away of clients? Really…would a business of that type actually lose business because one partner had a forced medical leave? Of course not! They would hire a temporary staff accountant. There were many unemployed accountants due to the prior economic crisis available to hire to take up his work load IF and only if such a work load existed.

    Truly these cases put forward by BP are red herrings meant to deceive the public (as well as SCOTUS) and succeeded with at least one
    Judge by the name of Clements.

    Please consider making public and visible statements on this subject. Four of my friends have been recent US Supreme Court Clerks and all agree that lack of clarity on this point of “plausible” and “traceable” is hurting the side of the PSC. The SCOTUS Clerks are often the ones in the Justice’s office to find the points of law that the Justice then champion in their first discussions that lead to acceptance of a writ or not.

  3. John says:
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    Joe you write:
    “it will take some time before it is in a position to
    start funding settlements again”

    This is phrase that chills the hearts of every claimant who “opted in”. Does this mean that BP does not have the proper funds in the escrow accounts as agreed for the DHECC to draw payments from? Or is it just referring to the structures inside the DHECC and it’s lack or preparedness to process claims to full eligibilities?

  4. Eyeswideopen says:
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    This policy on the surface appears to be self serving and beneficial to only the court vendors in the form of more billable hours. The flaw is that it was designed and drafted after the information was captured by the same people in charge of implementing the settlement. See statement below:

    “Based upon the CSSP’s experience in reviewing claims and analyzing accounting records submitted to the CSSP since the inception of this settlement program and in light of the rulings and directives received from the Court, the Claims Administrator, in consultation with the CSSP Accounting Vendors, has arrived at the following conclusions relative to the “matching” issues at hand”

    Now Policy 495 smoothing and matching procedures will continue and exacerbates what has become an audit and verification death struggle for small businesses to obtain compensation under the agreed upon parameters of the settlement fund. This will be a struggle that most small businesses can’t and will never win. Their records and records keeping were never designed to be maintained to the level of detail on a monthly basis which will be required. Nor can their historical records be remediated in any meaningful or cost effective manner to satisfy this new found demand for minutiae. This factor was never anticipated or presented for consideration prior to the given Opt-Out date.

    Keep fighting 495
    Can you please publish or look into the CA reports on how many claims are expected to be impacted, denied causation and the projected reduction in the overall cost to the settlement, along with the increased budget needed to implement this policy.

    Thanks

  5. Jon says:
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    BP has officially submitted a request to Justice Scalia to have the US Supreme Court intervene & continue the hold on the BEL payouts. Scalia’s son, Eugene, is actively working on BP’s behalf with the law firm of Gibson, Dunn & Crutcher. Ethically Scalia must recuse himself & pass the decision to someone else whose family is not directly affected by it. Anyone affected by this decision should immediately call the US Fifth Circuit Court & demand justice. The number is (504)310-7808 & the case # is 13-30095 (for when they ask for it). If we act now, we may have a chance at preventing a worst case scenario. God only knows when the hold would be lifted if the Supreme Court grants BP’s request.

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