TPT November 2014

Global Marketplace

As a condition of a March 2012 settlement with BP, the Steering Committee stipulated that Mr Feinberg – the seasoned administrator of the 9/11 World Trade Center victims compensation programme – be replaced by a local lawyer, Patrick Juneau. BP also agreed to expand the potential universe of applicants for compensation, thus lowering the bar for claims of having suffered economic damage from the oil spill. As described by Mr Feinberg in the CBS interview, some of these would be comical if they were not so venal. BP estimated that the settlement would cost it an additional $7.8bn. ‘I s that really what we want ?’ Given Mr Juneau’s “unique” interpretation of such concepts as revenue and earnings, wrote the Times ’s Mr Nocera, businesses unaffected by the BP disaster – and which moreover had suffered no losses of any kind – were getting millions of dollars. Some businesses that had seen rising profits after the oil spill still got money. Lawyers seeking clients downplayed the necessity of tying claims to the disaster. To no avail, BP complained to Judge Carl Barbier, the overseer of all BP litigation in New Orleans and himself a former plaintiffs’ lawyer and president of the Louisiana Trial Lawyers Association. Finally, on 7 July of this year, in a federal appeals court in New Orleans, BP – facing the prospect of paying tens of billions more to people with no justifiable claim to Deepwater Horizon compensation – planted its foot. › Whatever the ultimate outcome of the Deepwater Horizon case, the following excerpt, lightly edited, fromMr Nocera’s forceful defence of BP is worth pondering: “I realise that many people don’t much care that a multinational corporation responsible for a huge oil spill is being fleeced in Louisiana. But they should. BP’s response has been the opposite of the unfeeling corporation. It waived the $75mn liability cap that US law allows. It has spent, so far, $14bn cleaning up the Gulf and another $11bn settling claims. It has taken its medicine willingly. Yet its efforts to do right by the Gulf region have only emboldened those who view it as a cash machine. “The next time a big company has an industrial accident, its board of directors is likely to question whether it really makes sense to ‘do the right thing’ the way BP has tried to. Any board comparing BP’s response to the Gulf oil spill with ExxonMobil’s response to the Exxon Valdez spill is going to come to the obvious conclusion: ExxonMobil’s litigation-to- the-death strategy – which ultimately cost it $4bn rather than the potential $40bn liability BP is now facing – was the right one.” Mr Nocera ended with a question: “Is that really what we want as a country?” Of related interest . . . › One Louisiana entity which definitely has not suffered from the Deepwater Horizon disaster is the state’s oil and gas

Oil and gas With two-thirds of claims for ‘Deepwater Horizon’ damages deemed unjustified, and $11bn paid out, BP declares an end to the compensation bonanza “The biggest accidental oil spill the world has ever seen began with the explosion, in 2010, of the Deepwater Horizon [oil rig] in the Gulf of Mexico. Thousands of businesses suffered along an oily arc from Texas to Florida. BP, the company at fault, started paying them compensation right away. “BP says it wanted to do the right thing and paying victims early bought the company some goodwill at the time that it was facing criminal charges and billions in federal fines. But now, four years later, BP says it’s the victim of Gulf Coast swindlers who have the oil giant over a barrel. BP says it is being forced to pay hundreds of millions of dollars to people who never saw oil anywhere but on TV.” This, from the script of “Over A Barrel,” a CBS-TV segment which aired 4 May, introduced an interview with Kenneth Feinberg, theAmerican lawyer who oversaw the compensation process for London-based BP and who concurs in BP’s view of its victimisation. Mr Feinberg told CBS that he found only a third of Deepwater Horizon claims to be justified, out of more than a million examined. In response to criticism that too many claims were being denied – and to avoid decades of court battles and uncertainty – BP had even agreed to a more generous compensation programme. But by midsummer 2014 the company had decided that enough is enough. In July, Geoff Morell, BP’s senior vice-president, asserted outright that the company was being exploited by businesses claiming losses not linked to the spill. In the op-ed piece “Justice, Louisiana Style” (8 July), New York Times columnist Joe Nocera, who previously wrote the “Talking Business” feature for that newspaper, came down strongly on BP’s side. He located the point at which “BP began to get hosed in Louisiana” at March 2012. L earning from E xxon M obil By then, Mr Nocera noted, BP had paid out around $6.3bn to some 220,000 people and businesses in the Gulf Coast region. Mr Feinberg had required recipients of the payouts to pledge not to sue BP, which hoped to avoid the kind of drawn-out litigation that engaged ExxonMobil after the Exxon Valdez oil spill offshore Alaska in 1989. He also required that the claims be for real, documented harm. “It almost goes without saying that the Louisiana plaintiffs’ bar found such a scheme offensive,” wrote Mr Nocera. Accordingly, a group of lawyers – the Plaintiffs’ Steering Committee – persuaded their clients to skip the Feinberg process and sue BP.

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N ovember 2014