Wednesday, December 25, 2013

BP Settlement Causation Arguments Rejected

This week, New Orleans U.S. District Judge Carl Barbier rejected BP's argument that a multibillion-dollar settlement over the company's massive 2010 Gulf oil spill shouldn't compensate businesses if they can't directly trace their losses to the spill. Recently, the U.S. Circuit Court of Appeals for the Fifth Circuit ruled that the trial judge must reconsider BP's arguments for injunctive relief that 2012 settlement proceeds only compensate businesses whose economic losses are directly traced to the 2010 Gulf of Mexico oil spill, holding that the lower court erred last month in refusing to consider causation arguments in interpreting the consent decree. Perhaps because BP has previously received favorable rulings on appeal, it attacked the multibillion-dollar settlement by disputing payouts to businesses. BP argued court settlement administrators wrongly considered bogus or inflated claims. Plaintiffs' lawyers countered that BP undervalued claims and underestimated the number of claimants qualifying for payments. BP and the plaintiffs' lawyers had previously agreed on objective and specific methods of proving losses were caused by the spill such that losses for businesses located from Louisiana to Florida were presumed to be caused by the spill under the settlement's terms. The lower court felt it unreasonable to expect claimants to prove losses were directly traced to the spill. The appellate court directed the trial judge to allow businesses who can trace their losses to the spill to continue receiving payments. Judge Barbier said in his ruling on remand that the settlement was designed to avoid the delays that would result from a claim-by claim analysis of whether each claim can be traced to the spill. BP attorneys complained dozens of claimants whose losses were caused by something other than the spill have received millions. Judge Barbier sided with plaintiffs' lawyers that BP can't make those arguments because the company took a contradictory position on the same issue when it urged the court last year to approve the settlement. Stay tuned; another trip to the 5th Circuit may be coming. See story here-- and case no. 2:10-md-02179-CJB; MDL 2179, U.S. District Court, Eastern District of Louisiana.