BP Oil Spill Settlement Initial Approval is Likely, Judge Says
U.S. District Court Judge Carl Barbier
U.S. District Judge Carl Barbier said he’s leaning toward approving a preliminary settlement between BP and private plaintiffs that will allow final Gulf oil spill claim payments to begin. But Barbier stopped short of ruling from the bench at a hearing today, saying instead he would take the next few days to write a full order.
(From Nola.com / by David Hammer) – The ruling will not be a final approval of the settlement, but the preliminary approval is necessary to begin due process for those who object to the class settlement or want to opt out of it. BP and the plaintiffs urged quick preliminary approval, however, because they said it would allow them to stand up the settlement claims payment process and start paying out what BP estimates will be $7.8 billion to claimants.
“I’ll just say for the record, I’m leaning in favor of doing it, but I’m not going to do that from the bench here today,” Barbier said after the plaintiffs and BP urged him to grant the preliminary approval.
“That will simply launch the ship, get it on to the journey,” Barbier added.
Barbier said he’s received some objections to preliminary approval, including a complaint from Florida’s attorney general about the decision to exclude eastern Florida claimants from the class, and Barbier said he would consider those before ruling. But he added, there will be months of opportunities to lodge formal objections to the terms of the settlement once he grants preliminary approval.
The plaintiffs and BP both noted that the immediate start of claims payments under the settlement is a break from what was done in past major lawsuits, such as the 1989 Exxon Valdez tanker spill case, which took 20 years of trials and appeals to resolve. And Barbier said he was duly impressed with their speed, noting the contrast with Valdez.
“To get to where we are right now is a very commendable thing,” Barbier said. “It’s a very complex case, it’s a very complex settlement, but again, I remind people this is just the starting point, it’s not the ending point of the court deciding whether to approve the settlement.”
The lawyers used the hearing, which Barbier said was designed to help inform the public and the press, to tout their agreement and get into the weeds of how settlements will be calculated.
Most of the details have already been released and reported. BP estimates the settlement will cost $7.8 billion, but it’s not capped. The only part that is a fixed amount is $2.3 billion BP dedicated to paying seafood loss claims. The rest of the settlement will be for paying tourism and property loss claims, as well as medical claims from workers and coastal residents who suffered maladies during the cleanup.
But a presentation by plaintiff attorney Joe Rice did shed new light on how BP and the plaintiffs arrived at $2.3 billion for seafood industry claims. He said they culled together data from various government agencies to determine that shrimpers, crabbers, oyster harvesters and other fishers lost a combined $46 million in annual revenues in 2010.
Rice then showed how many vessels were operating and how their owners, captains and crew will be compensated. When all of that was considered, along with estimates for how many years each seafood crop will be affected, the total loss came out to $1.9 billion, he said.
BP’s lawyer, Rick Godfrey, noted that BP’s agreed to pay six times the annual revenues of the whole Gulf fishing industry and 70 times the average annual profit.
Godfrey also used the hearing to brag about how fully BP had stepped up to “offer compensation now, plus (extra payments for future damage risks), not years from now after multiple trials, multiple appeals and after the claims are distant memories.”
And in a scene that may have seemed strange a few months ago, one of BP’s main adversaries, plaintiff attorney James Roy, asked the court to let the plaintiffs take on BP’s claims against its drilling contractors, Halliburton and Transocean. As a part of the proposed settlement, the plaintiffs agreed to pursue the drilling companies for billions of dollars already paid by BP for cleanup, for profits lost when the well blew up and for what Roy said was approximately $150 million BP paid to those injured or killed in the explosion.
