Fla. AG asks federal court for 'methodical review' of BP settlement

By Jessica M. Karmasek | Apr 16, 2012


TALLAHASSEE, Fla. (Legal Newsline) - Florida Attorney General Pam Bondi last week asked a federal court in Louisiana overseeing the Gulf oil spill litigation to review a pending settlement before granting preliminary approval.

Bondi filed an eight-page statement of interest in the multidistrict litigation in the U.S. District Court for the Eastern District of Louisiana Friday.

The attorney general said the filing -- which asks the court for a "methodical review" -- ensures that Floridians harmed by the spill receive the "relief they deserve."

"I am greatly concerned that we lack substantial information about the pending settlement that could have significant ramifications for Floridians and could also, among other things, eliminate short-term, interim damage claims," Bondi said in a statement.

Last month, BP reached an agreement with hundreds of thousands of 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 settlement proposal, the company 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.

In her statement, Bondi raised two specific concerns regarding the proposed settlement.

First, the attorney general said it appears that the deal will apply only to claims from Florida businesses and residents located in the Panhandle, or along the west coast of the state.

"Accordingly, thousands of Florida individual and business claims would not be covered by the settlement's terms and may be left without any recourse under the settlement, despite the fact that BP and even the Gulf Coast Claims Facility (GCCF) have paid claims from almost every county in Florida," she wrote.

Second, Bondi believes the federal court's preliminary approval of the proposed settlement would result in the "immediate discontinuation" of the interim claims process -- despite the fact that the Oil Pollution Act of 1990 requires such a process, she noted.

"This could significantly harm those individuals and businesses that have sought and received interim payments but decided not to submit final claims, perhaps due to their concerns over the spill's unknown long-term effects," she wrote.

"Requiring such claimants to pursue only final settlements, without regard for whether they can properly assess the value of their final claim, is unfair, contrary to OPA, and even an idea that Mr. (Kenneth) Feinberg advocated but later abandoned."

The Gulf Coast Claims Facility draws on an escrow fund to pay people and businesses harmed by the spill. Feinberg serves as the administrator of the victim compensation fund.

"Given the many unanswered questions regarding the proposed settlement terms, as well as the unusual and potentially adverse consequences of preliminary approval in this case, Florida respectfully submits that the court should establish a briefing schedule on the preliminary approval motion to ensure that all concerned parties have an opportunity to review and provide input regarding the proposed settlement terms," Bondi wrote.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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