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Tom Young
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Judge Scolds BP, Sets Settlement Record Straight

9 comments

In recent months, BP has declared war on the people and businesses of the Southeast who have come forward to settle with the company over its unprecedented 2010 oil spill. BP set the rules and we have simply followed them.

Now the company, which has less than a stellar record in the veracity department (see suspension from doing business with the US government for a lack of corporate integrity and a conviction for lying to the Federal Government about the spill), claims the judge and neutral administrator overseeing settlement payments have hijacked the agreement, rewriting key terms to allow windfalls to undeserving businesses.

BP has trotted out examples of so-called “fictitious claims” made by businesses that in the company’s opinion are “too far” from the Gulf or “too far removed from tourism” to possibly have been impacted. Poppycock.

First, all should agree that BP’s spill certainly did not help the Gulf Coast economy. Tourism simply stopped for months, and if our region is anything, it is an economy driven by tourists’ dollars. The only businesses that may have benefited from the spill were disaster response companies. Everyone else was negatively impacted in one way or the other, to one degree or the other.

The very precise compensation formulas contained in the painstakingly negotiated 1,200 page agreement take proximity – to both the Gulf and tourism – into account when determining whether a business qualifies. In short, the farther from the coast and more remote connection to tourism, the harder it is to qualify and the lower the payment if you do.

Putting aside for a moment that almost every business was hurt by the economic trickle down of BP’s spill, the company seems to forget that a settlement is a compromise. For plaintiffs (claimants) the qualification bar is lowered. For the defendant (BP) it escapes possible punitive damages, does not have to admit wrongdoing, is only on the hook for losses experienced by businesses in 2010, and enjoys a release from all commercial liability as of May 2014.

As BP’s lead lawyer told the court last year when seeking judicial approval of this very same deal:

“Settlements are a yielding of the highest hopes in exchange for certainty and resolution. This settlement stands alone, however, in its substantive generosity to the class members and in its procedural fairness.”

That BP lawyer, along with hundreds of other well heeled and highly paid Manhattan attorneys, seemed to have changed their tune.

Late last Friday the trial judge had heard enough whining from BP. Carl Barbier, Federal District Court Judge for the Eastern District of Louisiana, issued a scathing order in which he took the company to task for in essence lying to the court and misleading honest business people of the Southeast:

“It is unclear what standing BP has to raise arguments against the fairness of the settlement. BP was a party to the settlement, helped to draft the Settlement Agreement, did not object to or appeal approval of the settlement, and in fact strenuously advocated for approval of the settlement.”

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“BP accuses the Claims Administrator of “rewriting” and “systematically disregarding” the Settlement Agreement. To the contrary, when it talks about causation, if anyone is attempting to rewrite or disregard the unambiguous terms of the Settlement Agreement, it is counsel for BP.

Frankly, it is surprising that the same counsel who represented BP during the settlement negotiations, participated in drafting the final Settlement Agreement, and then strenuously advocated for approval of the settlement before this Court, now come to this Court and the Fifth Circuit Court of Appeals and contradict everything they have previously done or said on this issue. Such actions are deeply disappointing.”

9 Comments

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  1. 30yrBP says:
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    As a 30 year plus BP employee it is commical to see BP argue for Fairness when they have treated their longest serving US employees so dishonestly and unfairly. When BP swallowed the US company SOHIO they confiscated the pensions of the US employees while leaving UK pensions in place. When they cancelled the pensions for Americans in 1989 they made writen promises that the new retirements would be as good or better. This turned out to be a lie and now their longest tenured US employees are working as indentured servants well beyond the years they planned to retire. BP management has mocked and laughed in the face of the SOHIO heritage employees who have raised this concern. In fact the 64 year old well supervisor for BP who has been charged in the Macondo tragedy openly declared he is suffering serious health problems. Why has there not been an investigation to establish if BP had an ill supervisor in place because the man could not afford to retire due to BP unfair policies.

  2. Rick Shapiro says:
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    Tom: Thanks for this “reality check” article. We seem to be in an alternative reality when it comes to BP. They were airing all the feel good commercials about helping the Gulf Coast recover (from their incredible neglect and carelessness) and were all for the settlement being approved. Can you imagine how much their lawyers were being paid to negotiate that massive settlement which they calculated would save BP millions or billions? Now, they say the businesses and fishermen and whoever can claim under the deal they sought are “screwing” them.
    I love when their same attorneys say that the deal is being perverted and mis-applied.
    The hypocrisy of BP is epic. Hollywood can’t write a script this insane.

  3. Scot says:
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    Queue the congressman from Texas offering apologies to BP for the “harassment”. And how dare we get our clean water all over their oil. And, what about all the oil that was on the birds? That’s money lost right there. That should be scraped off and given back to BP!

  4. stvjns daughs says:
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    Its disturbing to notice the absence of mention of the enormous health effects BP has caused. Human health initially (enormous and hidden) but the ocean population perhaps even more so since that is a spreading domino effect with global consequences. I think thats the sort of thing BP made sure to protect itself from with the so-called “settlement”.

  5. Robert Hammer says:
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    Thank you for this report. Judge Barbier is doing a great job trying to keep BP making good on its promises. I think some people thought BP would have an easier time with a local claims administrator, Patrick Juneau, than they did with Ken Fineberg, but I am glad that turned out to not be the case. BP failed to admit [to themselves] the cost of properly compensating for the damages they caused, and now they are trying to protect their profit line and the value of their stock.

  6. up arrow

    Quoted from DemocracyNOW, the Nov 22, 2013 show. From the headlines:

    Study: 90 Companies Responsible for Bulk of Greenhouse Gas Emissions
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    Talks at the U.N. climate summit in Warsaw, Poland, are in their final day. A coalition of environmental groups staged a walkout on Thursday in protest of the failure to reach a binding deal limiting emissions. A new study, meanwhile, shows just 90 corporations have been responsible for nearly two-thirds of all greenhouse gas emissions since the Industrial Revolution began in 1854. According to the Climate Accountability Institute, half of all emissions have been produced in the past 25 years. The top corporate polluters are Chevron, ExxonMobil, Saudi Aramco, BP and Gazprom.
    ========================

    I think the fact that half of all post-industrial age emmissions coming in the last 25 years is a very good talking point for climate debate. I’ve suspected for some years that the lacadaisical attitude of corporations has something to do with them thinking that it’s taken over 200 years just to get to this so there must be plenty of time. But in fact it may have actually only taken 25 years… Imagine at that pace what it will be like in another 25 years. Scientists are also claiming that it’s now too late to meet the 2 degree centigrade temperature rise limit, and that we’re likely looking at a 4 degree rise in average global temps. And that’s centigrade…

  7. Omar Saiyid says:
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    Oil company’s in general and BP in particular have record of raping the land and using their huge wealth to ride roughshod over the people of the land, while charging exorbitantly for energy. It is no wonder that they are held in such contempt.

  8. Zenda Boss-Hall says:
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    I am disappointed tat BP will be “off the hook” in May of 2014. That was a massive win for BP and likely a disaster for the Gulf businesses and citizens who will likely be adversely effected for generations.

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