Late Tuesday afternoon, Federal Judge Carl Barbier of the Eastern District of Louisiana Ordered the Claims Administrator of the Deepwater Horizon Court Supervised Settlement Program to terminate BP’s access to confidential, claimant specific information.
Agreement is Clear and Unambiguous as to Confidentiality
BP had argued that it was entitled to such data by virtue of Claim Administration Policy 378. Judge Barbier disagreed and held that Policy 378 should be modified to disallow such access as the policy violates the terms of the controlling Settlement Agreement which reads in Section 4.4.14:
“BP and Class Counsel shall not have access to any Claim Files for claims that are being processed and have not yet been resolved in the Settlement Program except if the Claim File is needed by BP, a claimant, or their counsel to prosecute or defend an Appeal.”
Judge Barbier ruled that Section 4.4.14 is “clear and unambiguous” and required BP to immediately destroy any data it had collected pursuant to the errant policy.
The Cat is Out of the Bag
Unfortunately, as a practical matter, the damage is done. BP, in a clear violation of the express terms and spirit of the Settlement Agreement, now knows the identity of the hundreds of thousands of Gulf Coast businesses that have filed claims.
Worse, BP has enjoyed months-long, unilateral access to these claimants’ confidential financial data. Such access gives BP unprecedented insight into the claims evaluation program as well as an unfair advantage in the adversarial claims payment process.
Claimants can bet that from the day their claim was filed, BP’s legions of CPA’s, bean counters and financial analysts went to work looking for any avenue to dispute the filing, legitimate or not. This is fundamentally unfair as the appeals process was designed to place both BP and the claimant on equal footing by allowing each party between 15 and 30 days to appeal a claim determination. With such determinations taking well over one year from the filing date, under this scheme, BP enjoys at least 12 months to formulate its response, while the claimant a scant 2 weeks.
Fruit of the Poisonous Tree
As troubling as this BP advantage is on a micro, claim-by-claim basis, it is even more so when one considers how BP likely used this ill-gotten confidential data to attack the Settlement from a global perspective, including taking on Claims Administrator Juneau, Judge Barbier, the judicial system of the United States and all 200,000 Deepwater Horizon claimants.
Before this revelation, one wondered how BP came up with this concept of “matching” that the company has ridden up through the 5th Circuit? It is no surprise now, considering BP’s actuarials and computer scientists have been running high level mathematical algorithms on every claim since day one, looking for the slightest perceived systematic weaknesses to exploit. The plaintiffs did not enjoy such access, only BP did, and it has paid off handsomely.
BP supported the implementation of the Settlement Agreement right up to the December 21, 2012 Court Order approving it. Then within days the company started lodging complaints. BP desperately wanted the Settlement Agreement ratified, and feigned acceptance of its interpretation in order to win certification. It now appears likely that BP was aware from the very beginning how claims were being processed and paid, contrary to the company’s assertion that it just fell off the turnip truck.
Judge Barbier and the 5th Circuit Court of Appeals should take judicial notice of this underhanded BP maneuver when considering the company’s pleas for intervention. In the criminal system, evidence gathered by nefarious means is excluded from the proceedings. Likewise, BP should not enjoy the fruits it harvested from this poisonous tree.