La. AG opposes proposed BP settlement of oil spill claims

Jessica M. Karmasek Sep. 12, 2012, 10:30am


NEW ORLEANS (Legal Newsline) - Louisiana Attorney General Buddy Caldwell, in a motion filed in federal court late last week, opposes an estimated $7.8 billion deal between BP and a committee representing plaintiffs over claims related to the 2010 Gulf oil spill.

Caldwell filed his 28-page memorandum in the U.S. District Court for the Eastern District of Louisiana Friday.

"In light of the unsupported and grossly misleading statements and declarations filed by BP, which were largely uncontested by the (Plaintiff Steering Committee), Louisiana is compelled to file this response and oppose BP's motion, especially its efforts to have this court accept as true statements regarding the economic damages suffered by the State of Louisiana or its citizens or the alleged 'robust recovery' of the Gulf of Mexico ecosystem," the attorney general wrote in the filing.

The PSC is the group of lawyers representing the private individuals that hammered out the deal with BP earlier this year.

The oil company's motion misrepresents the degree of damage suffered by the state and its citizens, and is based on inaccurate and irrelevant data and legal conclusions, Caldwell argues.

"Specifically, Louisiana objects to BP's blatant misrepresentation of the significant acute and chronic natural resource damages (NRD) and economic damages suffered by the State and its citizens, as well as those future, long-term ecological damages that will continue to occur for years or decades to come," he wrote.

"To the extent this settlement is premised on such incorrect information, it should be rejected."

In March, BP reached an agreement with hundreds of thousands of private individuals and businesses affected by the spill worth an estimated $7.8 billion.

BP said the money will be paid to the plaintiffs from a $20 billion trust fund set up by the company.

Under the proposed settlement, BP would be released from claims by eligible members of the class action who were affected by the explosion and fire that occurred on Transocean's drilling rig Deepwater Horizon, licensed to BP, on April 20, 2010.

The accident killed 11 workers and resulted in the largest offshore spill in U.S. history -- an estimated 210 million gallons of oil.

Louisiana is not a party to the settlement. However, it, along with other Gulf Coast states, are pursuing their own lawsuit.

Caldwell is co-coordinating counsel for the states' suit.

In his memorandum last week, Caldwell says he has "serious concerns" about the following:

- The settlement's failure to account for BP's unlimited, strict, joint and several liability imposed upon them by the federal Oil Pollution Act;

- The deal's provision of a seafood compensation cap, which is contrary to BP's unlimited liability, and its claims deadline, which is arbitrary and unreasonable;

- The settlement's transfer of risk to claimants, and ultimately the states, through its Risk Transfer Premium, or RTP, which is insufficiently defined; and

- The improvement, if any, to the claims process (as required by OPA) that was already being implemented through the Gulf Coast Claims Facility as a result of the proposed settlements.

"Louisiana is in favor of a settlement that fully and expeditiously compensates victims of the Deepwater Horizon Oil Spill for all past, current and future losses. Indeed, OPA requires such a process," the attorney general wrote.

"Here, however, where BP proposes caps on recoveries, imposes unreasonable claim deadlines and submits grossly misleading statements in the form of uncontested declarations, and where the PSC makes no attempt to contradict these misrepresentations, Louisiana files this opposition in an effort to protect the health, safety and welfare of its citizens."

The federal court has scheduled a fairness hearing for Nov. 8 to determine whether to grant final approval to the settlement.

From Legal Newsline: Reach Jessica Karmasek by email at

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