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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.


  1. Gravatar for Derek

    Thank you for this article. You pretty much summed up 15 months worth of BPs legal maneuvers to do anything it takes to stall and keep from paying claimants. Although doubtful, I hope it ends here.

  2. Gravatar for Odysseus

    I haven't been keeping up with this blog, which may be why there seems to be a factual leap here to me. Don't get me wrong! I hate BP and believe its incredibly disingenuous efforts, if successful, will undermine almost any class settlement in any case in the 5th Circuit going forward. That said, however, are the assertions that BP has heretofore had access to the confidential Claimant info based on plaintiffs' counsel's filings? I didn't see anything in this entry or the Court's Order supporting those troubling assertions.

    BTW, how is Judge Clements allowed to continue to sit on this case given reports of her board membership on an oil industry related entity (which has apparently been found unethical by an ethics committee)?

  3. Odysseus - BP freely admits that the company has been mining confidential claimant data for many months. They hang their hat on Claims Admin Policy 378 which seems to give them the green light, despite the fact that BP knew damn well this is not what they negotiated and not how the parties intended for the program to work.

  4. Gravatar for Dennis Bradley

    Lets talk about fairness here.

    You have a legal system that allows people and companies who have not suffered any loss as a result of the oil spill to claim and be paid,and you are calling foul on document access.

    Lets hope the next line up of legal brains that will hear BP's appeal uphold the basic principal that any claimant seeking restitution should need to prove loss relating to the incident before being paid.

    The problem with having a legal brain focusing on legal interpretations is you forget what is right and just.

    It is right and just that BP and all those involved in this tragic accident meet their obligations to ensure those trully affected are adequately compensated.

    Any legal system that allows free loaders who have not suffered losses as a result of the incident to receive compensation flies in the face of natural justice and needs reforming.

  5. Dennis, you are simply wrong.

    Only entities that have suffered a loss as a result of BP's negligence are to be compensated. In fact, there is a highly complex mathematical formula which determines who was impacted and who was not. I would encourage you to review that causation formula.

    Then review this report on the macro-economic damage our area experienced due to BP's negligence.

    After you have complete your homework, if you still maintain that the burden should be on the claimant to prove to BP's satisfaction that loss was a result of the company's actions, above and beyond the voluntarily entered Settlement Agreement's contractual requirements referenced above, then I can only conclude you are a BP apologist and not a man of logic and reason.

    Good day.

  6. Gravatar for Dennis Bradley

    Reuters) - A divided U.S. appeals court on Monday rejected BP Plc's (BP.L) bid to block businesses from recovering money over the 2010 Gulf of Mexico oil spill, even if they could not trace their economic losses to the disaster.

    By a 2-1 vote, the 5th U.S. Circuit Court of Appeals in New Orleans upheld a December 24 ruling by U.S. District Judge Carl Barbier in New Orleans, authorizing the payments on so-called business economic loss claims. It also said an injunction preventing payments should be lifted.

    Monday's decision is a setback for BP's effort to limit payments over the April 20, 2010, explosion of the Deepwater Horizon drilling rig and rupture of BP's Macondo oil well.

    The disaster killed 11 people and triggered the largest U.S. offshore oil spill.

    Barbier had ruled that BP would have to live with its earlier interpretation of a multi-billion dollar settlement agreement over the spill, in which certain businesses claiming losses were presumed to have suffered harm.

    BP argued that this would allow businesses to recover for fictitious losses, but the 5th Circuit rejected its appeal.

    "The settlement agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill," Circuit Judge Leslie Southwick wrote for the majority.

    Terms of the settlement "are not as protective of BP's present concerns as might have been achievable, but they are the protections that were accepted by the parties and approved by the district court," the judge added.

    The 5th Circuit also said claims administrator Patrick Juneau retained the authority to root out bogus claims, without having to perform the "gatekeeping" function that BP sought.

    Circuit Judge Edith Brown Clement dissented, saying the decision wrongly helps claimants whose losses had "absolutely nothing to do with Deepwater Horizon or BP's conduct."

    BP spokesman Geoff Morrell said the London-based oil company disagreed with Monday's decision, believing that the claimants were not "proper class members" under the settlement. He said BP will consider a further appeal.

    Steve Herman and Jim Roy, who represent the business claimants, said in a joint statement: "Today's ruling makes clear that BP can't rewrite the deal it agreed to."

    A spokesman for Juneau did not immediately respond to a request for comment.

    BP originally projected that its settlement with businesses and individuals harmed by the spill would cost $7.8 billion. As of February 4, it had boosted this estimate to $9.2 billion, and said this sum could grow "significantly higher."

    As of Monday, about $3.84 billion had been paid out to 42,272 claimants, according to Juneau's website. (here)

    The case is In re: Deepwater Horizon, 5th U.S. Circuit Court of Appeals, Nos. 13-30315 and 13-30329.

    (Reporting by Jonathan Stempel in New York; Additional reporting by Mica Rosenberg; Editing by Andre Grenon and Ken Wills and Miral Fahmy)

    I agree with Judge Edith Brow

  7. Gravatar for Eric M

    Judge Edith Brown is the "Only" 5th Circuit Judge to have sided with BP and happens to sit on a special board supporting big oil. It is a huge "ethical issue" that she had any saying over any of this and quite frankly, I believe that she should be reprimanded for this crap that she has pulled!! Let me show you the MANY MANY ways that BP "screwed" many deserving claimants, and continues to do so, through the "terms" of this settlement. Nope, to involved to get into it in a comment section here, but I am one American citizen living on the Gulf Coast (who doesn't happen to have a claim) and I AM PISSED!!! Big business and government cover-ups SUCK!!!

  8. Gravatar for Eyeswideopen

    Let's take a step back and ask how the causation test V and Modified test was designed. Was it based on claims captured by GCCF in the first place.

  9. Gravatar for Edward Dale Jansen
    Edward Dale Jansen

    I would like to talk about the specifics of Causation rules and regulations regarding April 1st 2010, and other Particulars For Individuals loss of income claims.

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