BP oil spill payouts: BP takes legal battles to court of public opinion
BP will place a full-page ad in three national newspapers on Wednesday to challenge billions of dollars in settlement payouts to businesses following its 2010 oil spill in the Gulf of Mexico.
NEW ORLEANS — BP was placing a full-page advertisement in three of the nation's largest newspapers on Wednesday as the company mounts an aggressive campaign to challenge what could be billions of dollars in settlement payouts to businesses following its 2010 oil spill in the Gulf of Mexico.
The ad, scheduled to run in The New York Times, Wall Street Journal and Washington Post, accuses "trial lawyers and some politicians" of encouraging Gulf Coast businesses to submit thousands of claims for inflated or non-existent losses.
"Whatever you think about BP, we can all agree that it's wrong for anyone to take money they don't deserve," the ad says. "And it's unfair to everyone in the Gulf — commercial fishermen, restaurant and hotel owners, and all the other hard-working people who've filed legitimate claims for real losses."
In April, U.S. District Judge Carl Barbier upheld a court-appointed claims administrator's interpretation of the multi-billion dollar settlement it reached with a group of plaintiffs' attorneys.
The London-based oil giant appealed the decision. A three-judge panel from the 5th U.S. Circuit Court of Appeals is scheduled to hear the case on July 8.
"The Court has rejected BP's argument multiple times," said Jim Roy, one of the lead plaintiffs' attorneys who brokered the class-action settlement with BP. "Simply put, BP has buyers' remorse because it guessed wrong on the cost of a deal, which it — for nearly two years — negotiated, co-authored, agreed to and sought Court approval of. The notion that BP is somehow trying to portray itself as a victim is preposterous."
BP's ad claims Barbier's ruling "interprets the settlement in a way no one intended" and results in settlement payouts to businesses that didn't suffer any spill-related losses.
"Even though we're appealing the misinterpretation of the agreement, we want you to know that the litigation over this issue has not in any way changed our commitment to the Gulf," it says.
BP spokesman Geoff Morrell said the newspaper ad is consistent with the company's efforts to keep the public informed of its economic and environmental restoration efforts.
"It explains the actions we are taking to defend the contract we agreed to and to assure the integrity of the claims process," he said in a statement. "But it is also intended to make clear that BP remains as committed today as it was three years ago to doing the right thing. While we are actively litigating the payments by the claims program for inflated and even fictitious losses, we remain fully committed to paying legitimate claims due to the accident."
Barbier appointed Lafayette-based attorney Patrick Juneau to administer the settlement program. BP PLC has accused Juneau of trying to rewrite the terms of the settlement and claims he has made decisions that expose the company to what could be billions of dollars in fictitious claims.
But the judge upheld the claims administrator's interpretation of settlement terms that govern how businesses' pre- and post-spill revenue and expenses — and the time periods for those dollar amounts — are used to calculate their awards.
Plaintiffs' attorneys have said the payments to businesses were clearly spelled out in the agreement. They claim BP simply undervalued the settlement and underestimated how many claimants would qualify for payments.
They also asserted in a filing last month that BP had pointed to "four examples out of more than 40,000 filed claims that it hopes will shock this Court," and then relied on its own experts to claim "mistakes" or "overpayments."
The judge's ruling has not deterred BP.
Last week, BP called for an independent investigation of alleged misconduct by an attorney who worked on Juneau's staff. The lawyer, Lionel H. Sutton III, resigned last Friday — a day after Juneau delivered a report to Barbier that outlined the allegations.
A law firm allegedly paid Sutton a portion of settlement proceeds from claims he referred to the firm before he went to work for Juneau. In a statement, BP said only a "comprehensive and independent investigation" of the allegations involving Sutton will ensure the "integrity" of the claims process.
BP estimated more than a year ago that it would spend roughly $7.8 billion to resolve tens of thousands of claims by businesses and individuals covered by the settlement. The company now says it can't give a reliable estimate for the total value of the deal.
Barbier also heard testimony earlier this year for a first phase of a trial designed to identify the causes of BP's April 2010 well blowout and assign percentages of fault to the companies involved.
Billions more hinge on the outcome of the trial, which includes claims by the federal government and Gulf states. It's unclear whether Barbier will issue any substantive rulings before the trial's second phase, which is scheduled to start in the fall.