Sept 2014 Frequently Asked Questions
In spite of the flurry of activity in the proceedings this month, with the judge's ruling that BP is guilty of gross negligence and may have to pay 18 billion dollars in penalties, BP motions to remove the Class Settlement Administrator, the proposed $1.1 Billion dollar settlement with Halliburton announced Tuesday, and the MDL Court ruling on a wide array of issues today stemming from the months long trial from last year – claims are still not getting paid. BP reneged on their original “$20 Billion dollar” settlement with all claimants entered into with our White House four years ago, then they reneged on a partial “$10 Billion dollar” settlement agreement entered into with the MDL trial court over two years ago (the Class Settlement) which would have settled several hundred thousand claims, and then they reneged on a private party settlement program run in house by BP, refusing to fund any of the tens of thousands of claims filed there. Now the MDL court has weighed in again on the first round of trial opinions, hitting BP with punitive damages for their reckless and willful misconduct. But does that advance the ball with any of the claimants, who have languished for years with one false promise after another? Sadly, the answer is no.
Topic 1: Judge rules the BP is guilty of gross negligence and may have to pay 18 billion dollars in penalties
Question: What does this mean for me and how much of the 18 billion dollars goes to us, the victims?
Answer: Tragically, not a penny of the up to $18 Billion from BP's Oil Spill Fine will go to the victims. With the 'gross negligence' penalties laid on BP by Judge Barbier last week all going to the government, this almost certainly takes away from any willingness on the part of BP to start paying the victims again. Worse, after their "Hail Mary" appeals we're called out by the 5th Circuit Court and they were told to return to their obligations, they will undoubtedly use this as an excuse and a renewed call to fight their responsibilities - and find new way to use their inevitable appeals of this decision to not return to past agreed obligations to compensate the hundreds of thousands of lives they have ruined. These findings, particularly the punitive damage findings, may actually be a worst case scenario for the victims and very people in the media or even in legal circles fully understand it.
The much awaited ruling from Judge Carl Barbier (the Phase One bench trial conducted last year in New Orleans) involving primary defendants: BP, Transocean and Halliburton, has finally resulted in a comprehensive order, called a Findings Of Fact & Conclusions of Law. It includes 618 separate findings in a sweeping 153 page opinion.
First and foremost, the court finds all 3 primary trial defendants negligent (finding 542). Further, BP’s conduct was so reckless as to subject it to punitive damages. The court further “apportioned” the fault between the defendants as follows: BP- 67%, Transocean- 30% and Halliburton: 3% (finding 544).
However, BP was NOT liable for punitive damages to those harmed from the spill. Instead, BP’s reckless and willful misconduct will only subject it to civil penalties under the Clean Water Act.
Bottom line, these rulings will likely have nominal impact or benefit to the class settlements already in effect and the hundreds of thousands of victims along the coast who have yet to be paid or obtained a court setting.
It is likely that most, if not all, of the findings of the court will now be set up for appeal. These realities, and the resistance of BP to pay claims in prior settlements or through the out of court process continue to suggest that it will still be a number of years before the dust clears on many of these issues, leaving most claimants sitting on the sidelines way too long. Congress tried to avoid these delays and legal posturing by passing the Oil Pollution Act after the Exxon/Valdez disaster. Unfortunately, it only works if the responsible parties honor its intent, something that BP clearly has chosen to ignore. No reason not to if the net result is that they get to continue to drill for oil on US shores, gain the benefits of favorable laws on oil production in the United States, and at the same time continue to disrespect our laws regarding accountability. Classic case of having your cake and eating it too”.
Topic 2 Haliburton - The proposal of a 1.1 billion dollar fund by Halliburton -
Question: Who can file a claim and when? Can I file a claim?
Answer: It was announced September 02, 2014, that Halliburton had reached a $1.1 Billion dollar “settlement” in the BP oil spill litigation. This has invited a great deal of questions. What have they settled? Who have they settled with? When are they going to pay? How much are they going to pay?
Unfortunately, there are no definitive answers yet, and also unfortunately, most victims will never see any of this money.
Here is the basic outline. This settlement was entered into between Halliburton and the Plaintiff Steering Committee overseeing the litigation in the MDL Federal Court in New Orleans, the same place that the last “class settlement” with BP was announced two years ago. First of all, it is a proposed class settlement. As a consequence, it will have to go through an extended public notice and formal hearings before the MDL court and ultimately may or may not be approved. This will take a number of months. In addition, there is no outline yet as to who exactly would get paid, nor how much. What is clear is that only certain limited “categories” of claimants are eligible. The primary reason for this is that this settlement proposal is only to address the “punitive damage” liability of Halliburton, not compensatory damages. The way the law works for most victims of this oil spill is that per court rulings, most claimants are only eligible for actual damages, not punitive damages, under federal law, and that the actual damage payments are addressed exclusively by the prior class settlement for most victims, or by BP directly as a result of the strict liability of the law under the Oil Pollution Act.
The Court has ruled that the only available remedy for punitive damages are for claimants who were “physically impacted” from the oil spill. This restricts the scope of potential beneficiaries of this proposed settlement to people who made a living offshore, who had properties that came into physical contact with the oil, or who were exposed directly to the oil. It also appears to be conditioned to final approval of prior class settlement agreements, which may or may not come to pass. In addition, two days after this proposal was announced, the MDL Court ruled that Halliburton did not engage in any punitive or reckless conduct. This ruling may also impact this proposal. While we would think “a deal is a deal”, it certainly hasn’t been for BP and may not be for Halliburton either.
Because the Court has yet to approve the settlement, and because the “universe” of the persons or companies eligible have not yet been identified, and it impossible to say how much, if anything, anyone would ultimately get. What the proposal does say is that after all the eligible BP economic settlement cases have been resolved (which would be another year or two, that those amounts paid could be used as some barometer of how much could be paid out. Again, there is nothing in the agreement that earmarks any proposed method of payment, so all of this is highly suspect to predict at this juncture. Later this year, or next year, when the fairness hearing is likely to be set, we will hopefully obtain some additional clarification to this rather odd agreement.
We wish there was more clarity and insight to the proposal but at this juncture there are certainly a great deal more questions than answers. The entire draft proposal is attached to provide some additional detail to the terms of the proposal.