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Tom Young
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BP’s Legal Machinations Exact Heavy Toll on Gulf

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BP’s legal settlement promises, made and then broken, weigh heavily on the residents and businesses of the Gulf. Victimized once by the historic spill, the people of the Gulf are again being dragged through the ringer by a company that now paints itself as the victim of the claims resolution program it designed and agreed to.

The economic damage inflicted by BP’s negligence – more likely gross negligence – is staggering, widespread and persistent. When tourism stops along the coast, the impacts are far reaching inland. The Gulf region’s economy essentially ground to a halt after the 2010 spill. While perhaps not obvious to the untrained eye, when confidence is lost, development and other business deals are postponed or cancelled. The professionals – architects, engineers, and planners – who are integral to such deals are told to stand down. The tradespeople – carpenters, construction workers, roofers, electricians, plumbers, you name it – have fewer jobs to go to. Then the industries that rely on the disposable income of those professionals, tradespeople and others – the restaurants, retail shops, theaters, malls, theme parks, hair salons, etc – take a hit as we all tighten our belts.

Don’t think this dynamic really happens? Just look at the economic disaster that was the recent government shutdown. While Federal workers didn’t receive their paychecks for over two weeks, a direct cost for sure, the indirect economic trickle-down went far beyond government employees. The 16 day shutdown cost the economy an estimated $24 billion.

BP’s oil spewed into the Gulf for 87 days – over 5 times as long as the government shutdown – a conservative $100 billion toll on the economy of the Gulf. Yet BP is now protesting that it is paying too much to the people and businesses located in the impact zone. The company, without explanation (except perhaps to appease its shareholders), originally set aside $7.8 billion to compensate those affected, when the actual economic damages were obviously many times that. Now faced with the reality of the bill coming due, BP is pulling the rug out from under the region’s struggling economy, refusing to pay any and all claims based on some imagined and manufactured allegations of fraud and something the company calls “fictitious losses.”

Yet one would be hard pressed to find a business within tens – even hundreds – of miles of the coast that was not affected by the company’s negligence in one way or the other, either directly or through trickle-down.  As BP agreed to in the settlement agreement, the company is to pay businesses for economic damage defined as follows:

“Loss of profits, income and/or earnings allegedly arising out of, due to, resulting from, or relating in any way to, directly or indirectly, the Deepwater Horizon Incident.” Settlement Agreement, Section 38.57 (emphasis added)

This language, to which BP agreed – “relating in any way to, directly or indirectly, the Deepwater Horizon Incident” – is powerful and widely inclusive. Attorneys for Gulf area businesses and individuals specifically negotiated with BP over that exact wording, as was their right to do. BP could have refused, as was its right, yet the company agreed. As BP’s lead attorney, Richard Godfrey, said upon announcing the settlement:

“Like any settlement, 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. The settlement stands alone, however, in its substantive generosity to the class members and in its procedural fairness.”

A compromise, yes, except now BP wants to renege, seeking to require each business claiming loss to “prove” BP was directly responsible. But this is not a trial. This is a settlement reached by a sophisticated operator that’s no spring chicken. The language of the agreement is unequivocal – “relating in any way to, directly or indirectly, the Deepwater Horizon Incident” – and clearly contrary to BP’s new found position. Before this change of heart Mr. Godfrey continued, saying:

“BP made a commitment to help economic and environmental restoration efforts in the Gulf Coast, and this settlement provides the framework for us to continue delivering on that promise, offering those affected full and fair compensation, without waiting for the outcome of a lengthy trial process.” (emphasis added)

Yet a lengthy trial process is exactly what the company is now using to exploit the people of the Gulf. BP has filed appeal upon appeal, claiming it just fell off the turnip truck and didn’t really understand what the settlement agreement meant to the company. These appeals have slowed victim payments to a crawl, in fact, as of this writing all payments have been halted as the courts try to sort out BP’s mess. So much for that “commitment.”

One of my favorites from Mr. Godfrey before he came to his corporate senses:

“This settlement is placing large sums of money today and tomorrow and next week into the hands and the communities of the Gulf, the victims of this tragic event. We believe that it’s fair, just and reasonable, and that this process should not be interrupted or stopped based upon the objections of the few for the purpose of injuring the many who need to be compensated now.” (emphasis added)

Lies, damned lies…

3 Comments

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  1. crafool says:
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    BP was spill was an accident. BP admitted it and tried to do the honorable thing with a settlement. Unscrupulous, unethical and greedy lawyers killed the good with the fabulously fictions of claims. Don’t blame BP blame the fraudsters and their lawyers. A lot of honest people can not get relief because some crooks hijacked the settlement. In my opinion, the failure of the settlement falls on the lawyers.

  2. Eric M says:
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    I was originally please by BP’s actions (“alleged”) to fix the issues that they created for the Gulf Coast. Based on their more recent actions, I WILL NEVER buy another drop of BP Fuel. Such pettiness from such a big company. Would like to see you BANNED from the USA!!

  3. Kim A. LIRETTE says:
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    Well it time action get done to these crock and KENNETH FEINBERG. They lie to us screw us with quick pay and now our shrimping is down big time. Who in the hell gone to paid our dam bills now we got screw by them liars. This is sad to let people from other country come destroy our living. Us TAXES paying people are being put out of work because BP DRILLING.

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