Published: Monday, September 10, 2012, 8:00 PM
By Mark Schleifstein, The Times-Picayune
Add the states of Louisiana and Mississippi and an organization representing fishers to the list of those objecting to a proposed $7.8 billion settlement of private claims against BP for damage caused by the 2010 Deepwater Horizon oil spill. Louisiana Attorney General Buddy Caldwell, in a brief filed in federal court Friday, said approval of the settlement, which includes a cap on payments to fishers, could leave the state holding the bag if a fishery collapses in the future as a result of the spill, as happened in Alaska three years after the 1989 Exxon-Valdez tanker spill.
Caldwell also repeatedly criticized the Plaintiff Steering Committee, a group of lawyers representing the private claimants that worked out the settlement with BP, for failing to object to provisions of the settlement that would limit payments for future damages resulting from the spill.
The state also supported an earlier filing by U.S. Justice Department attorneys, who in their own objection to the proposed settlement accused BP of “gross negligence” in actions leading up to the spill. Such a finding could result in Clean Water Act fines of as much as $20 billion. Otherwise, the fines could approach only about $5 billion, based on the size of the spill.
In a similar filing, Mississippi Attorney General Jim Hood objected to the geographical zone system used in the settlement, saying several heavily oiled areas, including parts of Moss Point, Ocean Springs, Gautier and Pascagoula, were placed in zones that would result in property owners there receiving much smaller settlement payments.
Attorneys representing Gulf Organized Fisheries in Solidarity & Hope, or GO FISH, an organization of fishers and fishing businesses put together after the spill, said the settlement is underestimating losses to fishers and would improperly undercompensate some claimants, including deckhands.
Attorneys Joel Waltzer, Robert Wiygul and Clay Garside said a later change in the seafood settlement provisions that would allow fishers to apply for money left after a first round of claims could result in enough money being available to adequately compensate their clients. But that would require the individual subclasses of fishing employees to be properly assigned by a neutral observer appointed by the court, they argued.
In the state’s brief, Caldwell said the $2.3 billion the settlement sets aside for claims by fishing interests may not be enough to pay future damages. That would force the state to pay part of the cost of future damages if an unexpected collapse of fisheries occurs.
“For example, if, as was the case in Alaska following the Exxon Valdez oil spill, the Gulf suffers a fisheries collapse as a result of the oil spill, threatening the economy and putting hundreds or thousands of Louisiana citizens out of work, it is the state (through the expenditure of taxpayer monies) that will be faced with the financial liability in the form of unemployment compensation benefits and job re-training services,” said Caldwell’s brief. His filing objects to a provision that would allow BP to make one-time “risk transfer premium” payments to fishermen.
Caldwell also objected to the settlement’s proposal to require fishers to file their claims within 30 days of U.S. District Judge Carl Barbier’s approval of the settlement. Other private claimants, such as landowners, would have up to a year after the approval to file their claims, his brief said.
“Requiring them to file their claim within 30 days of approval is akin to asking a car accident victim to evaluate their claim before seeing a doctor,” the brief said.
Early claims may not account for future fishing closures that would affect fishers’ earnings, the brief said. The brief pointed to tarballs being washed onto the beach at Elmer’s Island during Hurricane Isaac, which resulted in the closure of state waters off the beach to fishing, as an example of future damages that fishers might experience that would be missed by an early claims process.
The state also asked Barbier to make it clear he is not recognizing as fact a series of claims BP has made in court filings about the speed in which the Gulf has supposedly returned to health, as that might cause problems for later phases of the trial in which the state and federal government press their own claims for damages to natural resources.
The brief said BP’s representations concerning environmental harm was mostly based on reports by Shoreline Cleanup Assessment Teams and Operational Science Advisory Teams, which were aimed at directing cleanup response efforts. Not included were still incomplete studies being conducted for federal and state trustees as part of a required Natural Resource Damage Assessment.
“It is clear that BP’s motion (for approval of the settlement offer) contains little more than misrepresented, self-serving declarations designed to downplay its liability, the significant harm to the environment, and the amount of economic damages suffered by private citizens and governments,” Caldwell said.
And just because BP was able to reach a settlement with attorneys representing a majority of the private claims, Caldwell said, Barbier should not endorse their conclusions.
“Further, the PSC’s failure to offer any evidence to rebut BP’s opinions regarding the current and future health of the Gulf provides reason to question whether the negotiations between the parties truly occurred at arms’ length,” the brief said.
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Mark Schleifstein can be reached at mschleifstein@timespicayune.com or 504.826.3327.