BP Tries to Overturn Gulf Oil Spill Settlement



Is Anyone Surprised?


By Dr Stuart Jeanne Bramhall


BP’s massive 2010 Gulf oil spill virtually destroyed the Gulf of Mexico economy. Fisheries, tourist-related enterprises, and the businesses dependent on them went belly-up in the hundreds of thousands. Yet as business owners quickly found, the only way they could get compensation for losing their livelihood was to sue BP in federal court. In 2012, the oil company finally agreed to a settlement reimbursing business owners who could demonstrate a loss of income during or after the spill. Federal District Court Judge Carl Barbier, who oversees the settlement, appointed Louisiana attorney Patrick Juneau to evaluate and process all spill-related claims. Thus far Juneau’s office has received a total of 186,000 claims.

Now, after paying nearly $4 billion on 48,487 eligible claims, BP is back in court trying to wriggle out of the deal. As of February 2013, this and other criminal and civil settlements and payments to a trust fund had cost the company $42.2 billion. Because there is no cap on the 2012 settlement they signed, the oil company is seriously concerned that covering all 186,000 claims could cut into their profits. They assert that many of the claims are exaggerated or relate to circumstances other than the spill. They give as an example businesses hundreds of miles from the coast that have been reimbursed. They also question companies using 2010 as the base year for their losses if their 2010 income was significantly higher than prior years.

Although Judge Barbier disagrees with their reasoning, he has appointed former FBI director Louis Freeh to investigate Juneau’s office to determine whether there have been any ethical breeches or misconduct in processing the claims. This follows the recent resignation of one of Juneau’s staff attorneys over allegations of “impropriety”.

Meanwhile BP is appealing Barbier’s ruling in the US Fifth Court of Appeals. In preliminary hearings, the Fifth Circuit judges are questioning whether BP has a legal right to challenge the terms of the settlement they agreed to. They point out it did not require businesses to establish causation – owners merely had to show a revenue loss. Moreover the settlement specifically states that losses needed to be calculated in such a way to maximize reimbursement. The judges also question whether the appellate court even has jurisdiction to alter the terms of the settlement. There is no provision in US law for a court to overturn a settlement, which is like a binding contract, once both parties have signed it.

Intimidation Tactics

BP has asked the appellate court to suspend payouts pending the outcome of Freeh’s investigation. They have also sent claimants warning letters that they may have to give some of the money back. The attorneys for the Plaintiffs Steering Committee, James Roy and Stephen Herman, have responded to BP with a “strongly worded” letter reminding them that no legal process exists to alter the amount of an award after it has been paid. They also accuse BP of violating the settlement agreement by discouraging claimants from pursuing claims.

In a press statement, Herman admitted the BP letter didn’t surprise him, given that the oil company was suspended from doing business with the US government after pleading guilty to lying to the federal government about the spill.”
BP has already has settled its criminal penalties with the federal government. However the civil trial, representing the federal government, Gulf state governments and thousands of other Gulf residents and businesses who opted out of the settlement, started about two months ago. In June the plaintiffs asked Judge Barbier to impose punitive damages, which could massively increase the amount the court awards. They insist that overwhelming evidence shows the three companies involved (BP, Halliburton, and Transocean) willfully disregarded the environment and worker safety.
The Heavy Human Cost of Deep Sea Drilling
You would think the worst oil spill in US history might lead Obama to reconsider an energy strategy that relies heavily on hazardous and controversial technologies such as fracking and deep sea oil drilling. Think again. Despite a temporary ban on new offshore oil rigs in 2010, Obama has significantly expanded deep sea drilling in the Gulf of Mexico by offering up new Gulf oil and gas leases for sale. Many of the new leases are in water up to 11,000 feet deep and 230 miles from shore.
What’s even more alarming is that the President is preceding with the lease sales despite a December 2012 announcement by the National Academy of Engineering and the National Research Council that existing blowout preventers won’t stop future catastrophic oil spills. A current uncontrollable leak (since July 9, 2013) off Port Fourchon Louisiana is a case in point.
Obama says we have to dig more deep-water oil wells in the Gulf of Mexico because of the high price of gasoline. He would have us think there are no alternatives to the gas-guzzling clunkers currently manufactured by the US automotive industry. In reality there are dozens of alternatives, and the US is falling far behind China, India and Europe in pursuing a variety of public transport alternatives, electric cars and even low cost carbon fiber cars that travel 100 miles on a single gallon of gas.
Obama’s refusal to acknowledge the immense human cost of deep sea oil drilling is a slap in the face to the hundreds of thousands of Gulf residents who lost their livelihoods to the 2010 oil spill – and to thousands of others, many of them children, who developed chronic health conditions following the spill. Most of the chronic illness in Gulf coast residents is blamed on Corexit, the government-approved chemical dispersant used to break up oil slicks. Oil companies continue to rely mainly on Corexit in large clean-ups, despite scientific research linking it to serious health problems. Adults who inhaled Corexit during the Gulf clean-up have a myriad of chronic complaints, including blood in the urine, health palpitations, kidney and liver damage, migraines, memory loss and reduced IQ. In children, the main Corexit-related complaints are severe asthma, skin infections and blisters between their fingers and on their arms, legs, and feet.
photo credit: Wolfram Burner via photopin cc


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Dr. Bramhall is a retired American child and adolescent psychiatrist, activist and political refugee in New Zealand. Her first book The Most Revolutionary Act: Memoir of an American Refugee describes the circumstances that led her to leave the US in 2002. She has also published two young adult novels about political activism: The Battle for Tomorrow: A Fable View All Books by Dr. Bramhall >>> She is involved in the national leadership of the New Zealand Green Party and has a political blog at StuartJeanneBramhall.com