While numerous governmental claims brought by the Department of Justice and various State Attorney Generals for damages associated to the oil spill are now settled, it is important to keep these settlements in perspective and continue to ask questions.
First, why did it take BP over five years and a protracted trial to resolve these matters? It is unfortunate for all concerned that BP deliberately delayed resolution of these matters for a number of years and only settled when the trial court was about to render judgment after a lengthy and expensive trial. This alone continues to speak volumes over how BP does business, and how it remains less than contrite over their role in the largest environmental and economic disaster to ever hit the Gulf Coast.
Second, what is the status of remaining unresolved claims of individuals and business owners? The sad fact is that the vast majority of business and individual claims were never amicably resolved in the Economic and Property Damage Class Settlement three years ago, the vast majority of personal injury claims were not amicably resolved in the Medical Class Settlement three years ago, and there were tens of thousands of claimants who chose to opt out of those settlements or were excluded from those settlements, none of which have resolved in the five years since the spill. Worse, none of them have any progress on the disposition of their cases, as they all languish in the convoluted MDL proceedings pending in New Orleans, relegated to the back of the line.
THE FAILURE OF THE ECONOMIC AND PROPERTY DAMAGE CLASS SETTLEMENT
This settlement was announced with great fanfare three years ago. Unfortunately the settlement, at 1500 pages of red tape and legal speak, left much to be desired when it was actually implemented. Bottom line, the vast majority of eligible claimants were never paid. BP successfully challenged numerous interpretations of the agreement and hammered a much more onerous interpretation of loss calculations and documentary proof. The net effect was to discourage tens of thousands of claimants from filing claims, and forced tens of thousands of others to finally give up in frustration. Tens of thousands more have been formally denied. In fact, less than 20% of the individual and business owner claims filed were ever paid. Another SHOCKING statistic is that only ONE PERCENT (40 total claims) of the 3500 businesses that went under after the spill were paid. These sad statistics are available on line at the DHECC website. This in spite of the fact that the Claims Administrator is paid several million dollars a year and the program operates at a whopping 500 million dollars a year. Even the separate Seafood Compensation Fund, which was to pay all claims in full within a year, has bogged down in red tape reviews and audits stringing along hundreds of shrimpers and boat captains for three more years with no payment, and forcing the remainder to continue to wait indefinitely for their final payments. BP is even challenging claims paid to date by appealing the loss calculations on previously paid claims to the Fifth Circuit, hoping to be able to succeed and demand repayment of prior settlements. BP has also filed motions seeking to avoid any final payments to the Seafood Fund, arguing they are entitled to a refund of $500,000,000 pledged to the program due to fraud perpetrated in the negotiations by the Plaintiff Steering Committee.
BCA filed a motion with the trial court to re-notice the class settlement based on what has transpired to date and the hundreds of post settlement revisions to the agreement that have made it almost impossible to get compensated. The Court has yet to rule.
THE FAILURE OF THE MEDICAL CLASS SETTLEMENT
The Medical Class Settlement was also announced with great fanfare three years ago. Tens of thousands of individuals who became sick as a result of exposure to the oils and dispersants in their jobs and in the clean-up processes would have a fast, fair and claimant friendly process to go to for prompt payment for their injuries. Unfortunately, this settlement has fallen apart as well once the claimants were all captured in the deal. Of almost 40,000 who filed claims for their injuries associated to working around these toxic agents, only about a thousand have been paid. And while the claims administrator and adjusters are charging millions and millions of dollars annually to run the program, the average claimant has been paid less than $2,000 for their injuries, often less than their medical bills.
THE IMPASSE FOR TENS OF THOUSANDS OF REMAINING UNSETTLED CLAIMS
Thousands and thousands of business and individuals chose not to participate in the class settlements and instead retain their rights to individual negotiation of their cases with BP. A process was mandated by the United States Government for BP to evaluate claims in this manner. Unfortunately, it did not require BP to negotiate in good faith, or even offer any resolution to any of the claims, although each and every claimant was REQUIRED by the law to remit their claim to BP with supporting information and give BP the option to settle before the claimant was even allowed to file a suit. This process was also utilized by BP as another stall tactic, and the vast majority of claims remitted to this settlement program were never even looked at by BP. At the conclusion of the prescribed waiting period, BP chose not to make any offers on any of the cases either. Every claimant was forced to file suit anyway, and their claims are still sitting in the legal system with no activity.
BP also carefully drafted the Economic and Property Damage Class Settlement to specifically exclude broad categories of claims and exclude geographically most claims. As a consequence, businesses with losses associated to real estate, offshore business activities, financial, gaming and other categories were excluded in wholesale manner. Again, all of those claimants were forced to file suit, and all of those claims still sit on the legal system back burner.
While the United States Government and coastal state governments all sustained losses from the oil spill, it is regrettable that the politics of the situation and the leverage that could be exerted by the governmental attorneys was not utilized to force resolution of the constituent claims first. The government can continue to operate without the benefit of a settlement with BP, but many of the individuals caught in this legal net have endured five years of financial losses and personal losses that have been difficult for them to cope with. Thousands of companies went out of business in the many months after the spill due to a lack of continued operating capital to carry them through all of the oil spill losses. The program initially implemented with the Gulf Coast Claims Facility addressed those concerns by creating an interim payment process, which was unfortunately discontinued by BP in lieu to the class settlement program. Thousands of companies still continue scrape by, having used all their investment and growth capital and prior savings just to keep the doors open. It’s time for them to get closure as well, and time for BP to step and do what they said they would do five years ago, which is restore, repair, replenish and make everyone whole again. They have yet to fulfill that promise.
BCA has assisted dozens of other law firms and over 10,000 claimants in the BP oil spill litigation, ranging from crewmen working about the Deepwater Horizon Rig at the time of the explosion, to hundreds of shrimp boat owners and captains, to those impacted from tourism and hospitality industries all along the Gulf of Mexico from Texas through Florida. BCA has been a vocal critic of the conduct of BP throughout the litigation and filed numerous motions and appeals in opposition to the unfair class settlements and other dilatory tactics of BP. BCA represents the majority of the thousands of claimants who reserved their legal right by not participating in the inadequately operated and funded class settlement programs, and has repeatedly fought for the rights of every individual claimant.