Louisiana unloads and blows giant hole in BP settlement

For the last 29 months, I’ve been chronicling the widespread and still-very-much-ongoing fallout from BP’s gross negligence — “a corporate culture of recklessness,” as U.S. government lawyers called it — that killed 11 people and spewed an astronomical 5 million barrels of oil into the Gulf of Mexico.

Currently, BP, arm in arm with the class action lawyers (Plaintiff’s Steering Committee, or PSC) who are set to make 600 million dollars for less than two years of work if the settlement is approved, are racing ahead in a push to get a federal judge in New Orleans to give his speedy approval to an $8.7 billion settlement of the legitimate claims that thousands of Gulf Coast residents and business owners have lodged against the oil giant. The settlement would allow the company to sweep most of its massive liability to average citizens for the Deepwater Horizon disaster under the rug and get back to its business of making billions of dollars of profit in exploiting the world’s addiction to fossil fuels.

The State of Louisiana hired incredibly competent private counsel who, unlike the vast majority of the class action lawyers in the PSC, are extremely respected, top-notch environmental lawyers. Like the Federal Government and Alabama, Louisiana could not stand by and let BP, with the assistance of the PSC, whitewash the massive damage caused by the disaster. The papers filed by Louisiana, (also here and here) however go much further than those by the Feds and Alabama. These briefs specify the following objections against the BP and PSC motions to approve the class action settlement in this case.

My personal comments are in parenthesis:

1) The settlement is unfair to the citizens of Louisiana (class action settlements are required to be fair under the law. If it is unfair it cannot be accepted by the Court).

2) The papers filed by BP and the PSC in support of the settlement are misleading (transparency and truthfulness are required to approve the settlement).

3) The settlement is based on errors and misrepresentations by BP which are unrebutted by the PSC (The settlement must be based on accurate facts and reliable science).

4) There is no explanation as to why the settlement claim system is any better than Ken Feinberg’s Gulf Coast Claims Facility (GCCF). In fact, the settlement calls for clients to accept or reject the final settlement without the option of receiving interim payments as required by Federal Law. Even Mr. Feinberg allowed people to file interim claims and not sign a release until they were sure about the future.

5) The settlement and the claims process is an attempt by BP, without opposition from the PSC, to use duress to extract final releases from the victims in violation of the Oil Pollution Act.

6) The PSC has not contested BP’s and its experts “baseless opinions” offered in support of the settlement.

7) There is a real question as to whether the negotiations were conducted at arm’s length. (If there is any evidence of collusion or a perception of impropriety, and I am not saying there is at this time, this deal is dead in the water.)

8 ) There has been no discovery on the question of damages.

9) The evidence submitted on economic and environmental damages by BP and the PSC consist of one-sided declarations of BP’s hired experts. No unbiased evidence of actual losses has been presented to the Court.

10) The settlement unfairly transfers the risks of future losses from BP to the victims even though BP legally remains forever responsible.

In addition to the legal arguments, the Louisiana filing also joins federal and Alabama lawyers in slamming “the unsupported and grossly misleading statements and declarations filed by BP,” which  went largely uncontested by the plaintiff’s lawyers group:

“Remarkably for a company that touts its response efforts, BP has still not removed all of the associated boom equipment, including the thousands of boom anchors that were abandoned in Louisiana’s waterways. Not only does BP oil remain uncontrolled in the nearshore Louisiana ecosystem, but BP is executing one of the worst oil responses in history.”

“Over two years after the spill commenced (and even before Hurricane Isaac), oil continues to wash up on our beaches from submerged tar mats, oil captured in nearshore sediments continue to foul our beaches, and at least four of our fisheries remain closed due to the continued concentration of oil in the Gulf.”

The Louisiana filing also notes that BP’s “most egregious misrepresentation” are its claims of a robust recovery – the centerpiece of its megabucks national TV advertising campaign. It notes that researchers are continuing to study a “vast array of injuries” from the spill. It states that visible oil tar balls and tar mats are recovered weekly in Louisiana, and that 220 miles of its coastal “response miles” are still oiled. Perhaps that shouldn’t be so shocking since, as the filing also notes, the amount of BP oil in the gulf is the equivalent of 20 Exxon Valdezs.

To the casual observer, an $8.7 billion offer sounds mighty generous of BP. But it’s not — not by a long shot and now the State of Louisiana agrees. All of BP’s legal gobbledygook and hired gun experts aside, the reasons that the settlement is inadequate are crystal clear. First, the economic and medical harm unleashed by the Deepwater Horizon blowout is far greater than BP — and its-sometimes-enablers — are willing to concede. Second, the fallout from the oil spill hasn’t stopped and is certain to negatively impact the Gulf region for years to come — making the actual damages much greater than has been acknowledged. The allegations by the United States and the states of Alabama and Louisiana are likely, in my opinion, to blow up the current deal.

My law firm — SmithStag LLC — represents everyday citizens and small business owners across the Gulf Coast whose right to be fairly compensated for BP’s wanton carelessness would not be served by a rush to judgment. On Friday, we filed papers objecting to BP’s proposed settlement on behalf of our clients. This filing included scientific evidence and will be fully discussed in a separate post. Stay tuned.

The read the main objection filed by the State of Louisiana, go to: http://www.stuarthsmith.com/wp-content/uploads/2012/09/1593756764.0.pdf

To see the amicus curiae brief by the State of Louisiana, go to:
stateamicuropp

For more background on Louisiana’s objection, please read: http://www.stuarthsmith.com/wp-content/uploads/2012/09/Louisiana-exhibits-1.pdf

To read my earlier post on the Federal Government and Alabama objections, go to: http://www.stuarthsmith.com/bombshell-feds-slam-bp-in-key-court-filing-admit-pollution-from-2010-spill-continues-to-ravage-gulf

© Smith Stag, LLC 2012 – All Rights Reserved

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