BP Settlement Won't Be Undone By S. Ct.

This week, the U.S. Supreme Court denied a petition for certiorari by BP challenging its own 2012 multibillion dollar settlement over the Deepwater Horizon oil spill in the Gulf of Mexico. BP asserted there was fraud in some settlements, while plaintiffs have already been paid over two billion dollars in such claims. BP sought to reopen the lower court-approved settlement it negotiated that allowed the businesses and families impacted to continue to make claims. BP's attempt to halt payments from a settlement fund to reimburse businesses and individuals for losses following the 2010 accident was previously rejected following arguments that the fund administrator had misinterpreted claims and miscalculated payments-- allegedly amounting to fictitious claims. BP maintains decisions made in claims handling exposed the company to losses never contemplated in the settlement. Initially, it was estimated BP would pay roughly $7.8 billion to resolve tens of thousands of claims by businesses and individuals covered by the settlement. The company said it couldn't give a reliable estimate for the total value of the deal, but now believes its liability under the business-claims settlement will exceed $9.7 billion. It is very difficult to reopen a settlement of this type at the appellate level because of extensive negotiation and ultimate approval by BP and its legal team. See new story here-- http://buswk.co/1wXIVJK and ruling here-- http://www.supremecourt.gov/orders/courtorders/120814zor_f2bh.pdf

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-- http://abcn.ws/1a8NuRf and case no. 2:10-md-02179-CJB; MDL 2179, U.S. District Court, Eastern District of Louisiana.

Mediated Settlement Agreement Enforced Despite Second Thoughts

When a settlement is reached, parties typically sign a binding settlement agreement before they leave-- often to prevent buyer's remorse. At the conclusion of a long mediation, litigants are sometimes physically and emotionally exhausted. Recently in Florida, a trial court let one party out of a mediated settlement agreement after she claimed coercion. In that case, the mediator allegedly denied her request to take the agreement home over the weekend. The lower court judge believed a request for additional time to review the document was warranted, due to fatigue from the extensive negotiation. After reflecting upon the settlement terms, the litigant apparently requested the agreement be rescinded, instructing her attorney to file a Motion to Vacate. When her attorney suggested he could not file such a motion, she then filed pro se. The trial court erroneously concluded she did not freely, knowingly and intelligently enter into the agreement. The district court of appeal, upon reversing, found the record devoid of evidence that the agreement was signed as a result of fraud, misrepresentation, coercion, or overreaching, and ordered the settlement agreement to be enforced. To void the agreement, the presence of fraud, misrepresentation, coercion, or overreaching is needed. Fatigue, distress, and second thoughts are not enough. The court reasoned though appellee may have been fatigued and distressed-- and later suffered second thoughts-- without more, these facts do not provide grounds for setting aside an otherwise valid agreement. See First DCA Opinion Case No. 1D13-1546 http://opinions.1dca.org/written/opinions2013/12-10-2013/13-1546.pdf

BP Settlement Fund business loss payouts to continue per Judge

New Orleans U.S. District Judge Carl Barbier denied BP's attempt to halt payments from a settlement fund to reimburse businesses and individuals for losses from the 2010 Deepwater Horizon accident in the Gulf of Mexico. The court rejected BP's arguments that the fund administrator misinterpreted claims and miscalculated payments, amounting to fictitious claims. The judge previously upheld interpretation of settlement terms governing payments to businesses affected by the spill. BP sought an injunction blocking making payments to businesses. BP maintains decisions made in claims handling expose the company to losses never contemplated in the settlement. Attorneys who brokered last year's deal with BP say the request was designed to set up an appeal to the United States Court of Appeals for the Fifth Circuit to review the matter. The oil company filed a notice of appeal and is reportedly evaluating how to proceed following the ruling to preserve rights and prevent so-called meritless awards. Last year, BP estimated it would pay roughly $7.8 billion to resolve tens of thousands of claims by businesses and individuals covered by the settlement. The company now claims it can't give a reliable estimate for the total value of the deal. According to experts, it appears difficult to reopen the settlement at the appellate level because of extensive negotiation and ultimate approval by BP and its legal team. The hearing last Friday took place during a break in the sixth week of the continuing civil trial aimed at determining the degree of culpability that BP and other companies have for the accident. See stories-- http://on.wsj.com/14KdZxJ and http://usat.ly/10kDou3

EU Enforcing Settlement Agreement against Microsoft

Microsoft was fined over $700 million by the European Commission for failing to offer a choice of browsers in its computer operating system used by some fifteen million people in the EU. This agreement was the result of Microsoft's legal fight over competitive practices with the European Union that was settled in 2009, making a dozen internet browsers available for use in Windows. Apparently, Microsoft dropped the ability for choice during a recent service pack update. "Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems," said Joaquín Almunia, Commission Vice President in charge of competition policy. "Of course, such decisions require strict compliance. A failure to comply is a very serious infringement that must be sanctioned accordingly." Microsoft retained outside counsel last year to conduct the investigation and offered to extend the compliance period while cooperating with the EU. The fine comes when Microsoft Internet Explorer's influence is waning globally as competitors like Google Chrome and Mozilla Firefox have become increasingly popular. The European Commission has also been formally investigating Google. VP Almunia reportedly offered Google a settlement last year after finding that it might have abused its dominance in internet search and advertising by giving its own products an advantage over those of others, even while maintaining that it offered neutral results. Google and the EU have been negotiating since then, and a final agreement may not come until later this year, suggesting that the strategy of seeking quick results in antitrust technology cases through settlements instead of lengthy legal battles could be coming undone. See news items here http://usat.ly/15xeZDf and http://nyti.ms/XSAoEP

Jurist tough on settling parties in mortgage crisis litigation

Last month, the Securities and Exchange Commission had to defend their proposed settlements to U.S. District Judge Jed S. Rakoff, who according to the Wall St. Journal is "No Mr. Nice Guy." The SEC apparently considers factors including losses suffered by investors as a result of the alleged wrongdoing in weighing how much the company benefited from the behavior and whether they will be hurt by a penalty. Judge Rakoff was skeptical why Citigroup's penalty is less than one-fifth the penalty paid by Goldman Sachs Group Inc. in its $550 million settlement with the SEC last year over a different mortgage-bond deal. Likewise, Judge Rakoff forced Bank of America and the SEC to come back with a 50-page statement and a higher penalty. He reluctantly approved the revised deal, quoting "the great American philosopher Yogi Berra" in a ruling. The judge says he saw in private practice how delays and gamesmanship made the American legal system too slow and expensive for the average person. See related stories at: http://on.wsj.com/sBSoL0 and http://on.wsj.com/u7f9FE