By David Hammer, The Times-Picayune
BP and the private plaintiffs in the massive Gulf oil spill litigation have reached a settlement that BP estimates will cost $7.8 billion. But that is an uncapped amount, an the court still must supervise the payment of damages. U.S. District Judge Carl Barbier also issued an order delaying the trial for a second time in light of the settlement.
In a statement released late Friday, BP said its settlement with private individual and business claimants includes $2.3 billion specifically for Gulf seafood industry claimants.
An uncapped settlement means a new claims administrator, similar to Kenneth Feinberg who handled claims out of court for the last year and a half, will have to determine payments. But BP put out a statement that emphasized the certainty of the payment amount and that it would not exceed what BP has long reported it had set aside to pay such claims.
Stephen Herman and James Roy, leads for the plaintiffs steering committee, said the process would be transparent and will address economic loss claims, loss of subsistence claims and, in a separate agreement that breaks significant new ground, compensation for medical claims and payment for periodic medical care over the next 21 years.
“This settlement will provide a full measure of compensation to hundreds ofthousands — in a transparent and expeditious manner under rigorous judicial oversight,” Herman and Roy said in a statement. “It does the greatest amount of good for the greatest number of people.”
But there are hundreds of private claimants whose lawyers were not part of the steering committee and may decide to opt out of the settlement.
Herman and Roy contended that the court-monitored payment of claims would generally be more generous than Feinberg has been in paying 221,000 individuals and businesses a total of about $6 billion out of court. The plaintiffs said their negotiated payment process would employ a risk multiplier and would let claimants choose the time frames for measuring their losses.
The plaintiffs attorneys said there would be a transition period in which Feinberg’s Gulf Coast Claims Facility would finish some pending claims and transfer others to New Orleans, with court claimants having the right to take a portion of what Feinberg has offered them while still being able to collect under the new settlement terms.
The plaintiffs also touted the settlement for claimants who say that the oil and chemical dispersants caused major health issues. Government agents have not been able to confirm the connection between reported skin and respiratory illnesses and the spill, and, therefore, Feinberg declined to accept those claims. The plaintiffs’ statement Friday suggested the burden of proof for those who worked on boats cleaning up the oil for BP would be particularly low under the terms of the settlement.
“At one end of the spectrum, cleanup workers can submit a claim with a declaration under penalty of perjury describing the conditions or symptoms after exposure even if they did not seek medical treatment at the time of exposure,” the plaintiffs said. “At the other end, residents and workers who suffer chronic symptoms or conditions from exposure will be required to submit medical records from the time of exposure and for ongoing medical care.”
Magistrate Judge Sally Shushan reported the agreement after moderating talks this week, although specific terms have not been released.
Barbier had already delayed the start of the trial from Monday until this coming Monday, March 5, but now says another delay will be necessary.
Claims by government plaintiffs and others remain against BP, and there are also thousands of claims for damages against BP’s contractors on the Deepwater Horizon rig, which exploded April 20, 2010, killing 11 men and setting off the worst accidental offshore oil spill in history.
Wyn Hornbuckle, a spokesman for the U.S. Department of Justice, said government negotiators remain open to a settlement, too, but are also prepared for trial.
“We are hopeful that the resolution of the private plaintiffs’ lawsuit will provide swift and sure compensation to those harmed by the Deepwater Horizon oil spill,” he said. “With regard to the United States’ outstanding claims, and as Attorney General Holder recently testified before Congress, the United States is prepared to hold the responsible parties accountable for the damage suffered in the Gulf region. The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states.”
Garret Graves, the state of Louisiana’s trustee for the its environmental damage claims, welcomed the settlement between BP and private plaintiffs, but also made it clear that the government claims are still ready for trial.
“It is pretty clear that BP feels that they are above the law and the Coast Guard is still looking for it,” Graves said. “We are looking forward to an expedited trial plan to fast track justice and recovery.
“We have been preparing for trial for over 18 months and are very anxious to get into court as soon as possible on the remaining matters before the court,” Graves added. “This would include confirming the obvious gross negligence determination, any criminal issues resulting from the investigation, and tens of billions of dollars in natural resources and Clean Water Act fines reinvested in our coast and the Gulf — it is the only way we will have a long term recovery from one of the nation’s worst environmental disasters.”
Barbier’s order said terms of the proposed settlement will be submitted to the court for approval.
No new date was immediately set.
The judge said the settlement will require substantial changes to the current trial plan but he didn’t elaborate.
The rig owner, Transocean Ltd., said it remains prepared for trial.
“Delays or deals made by other players do not change the facts of this case and we are fully prepared to argue the merits of our case based on those facts,” company spokesman Lou Colasuonno said.
The Deepwater Horizon rig exploded in the Gulf of Mexico about 50 miles off Venice, causing about 4.9 million barrels of oil to spew from an undersea well owned by BP. The rig, owned by Transocean Ltd., sank two days later. The leak a mile below the water’s surface couldn’t be plugged for 87 days, in spite of several attempts by BP and its contractors.
The spill soiled sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.
Barbier was assigned to oversee nearly all of the federal claims spawned by the Deepwater Horizon rig explosion.
The main targets of litigation resulting from the explosion and spill were BP, Transocean, cement contractor Halliburton Co. and Cameron International, maker of the well’s failed blowout preventer. BP, the majority owner of the well that blew out, was leasing the rig from Transocean.
The Justice Department sued some of the companies involved, seeking to recover billions of dollars for economic and environmental damage. The department opened a separate criminal investigation, but that probe hasn’t resulted in any charges so far. Attorney General Eric Holder recently promised news on that front within a few months.
The companies also sued each other, although some of those cases were settled last year. In one of the pending lawsuits, BP has sued Transocean for at least $40 billion in damages.
Trial preparations have produced a staggering 72 million pages of documents and included depositions of more than 300 witnesses. The trial also is designed to determine whether Transocean can limit what it pays those making claims under maritime law.
A series of government investigations have spread blame for the disaster.
In January 2011, a presidential commission found that the spill was caused by time-saving and money-saving decisions by BP, Halliburton and Transocean that created unacceptable risk. But the panel also concluded that the mistakes were the result of systemic problems, not necessarily the fault of any one individual.
In September 2011, however, a team of Coast Guard officials and federal regulators issued a report that concluded BP bears ultimate responsibility for the spill. The report found BP violated federal regulations, ignored crucial warnings and made bad decisions during the cementing of the well a mile beneath the Gulf of Mexico.
BP has repeatedly said it accepts some responsibility for the spill and will pay what it owes, while urging other companies to pay their share.
BP established a $20 billion claims fund to resolve claims, and BP says the current settlement will be paid out of that account. As of Thursday, Feinberg’s Gulf Coast Claims Facility, a group run by administrator Kenneth Feinberg after he was selected by President Obama and BP, has paid out more than $6 billion from the fund to more than 221,000 individuals and businesses. In addition, BP paid about $1 billion to claimants before Feinberg took over the process in August 2010.
Staff writer Mark Schleifstein and The Associated Press contributed to this report.