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Getting It in Writing Should Be Enough

Monday, March 18, 2013 @ 03:03 PM
Brian Montague

Oil from BP Spill, June 2010

Want some sound, free legal advice?  Here it is.  Get it in writing.  Someone promises you that they will do or pay something.  Get in in writing.  You are in a lawsuit and the other side says that they will settle under certain terms.  Get in writing, without delay

That is good advice, but sometimes it is not enough.  In December 2012, Federal District Judge Carl Barbier in New Orleans approved a detailed written agreement between BP and attorneys representing business economic loss claimants throughout the Gulf South.  Judge Barbier’s ruling was 125 pages long and left no detail unaddressed.  BP agreed to and, in fact, co-authored the settlement.  According to the Times Picayune, “The settlement was intended to compensate claimants for economic damages resulting from the blowout of BP’s Macondo well in April 2010, which caused a fire and explosions aboard the Deepwater Horizon drilling rig, killing 11 workers, and resulted in the uncontrolled flow of oil into the Gulf of Mexico for three months.”

On March 15, 2013, BP asked Judge Barbier to issue a temporary injunction as part of the class action suit, but also filed a separate complaint in federal court against Claims Administrator Patrick  Juneau and the settlement program demanding that the rules be changed.  BP sought essentially the same thing earlier and Judge Barbier rejected its position on March 5, holding that Juneau’s interpretation of the rules is correct and that the claims process should continue.  As the Times Picayune reported on March 15:

“In his ruling, Barbier agreed that the rules might result in ‘absurd results’ at times, but he said BP was aware of that fact when it signed the settlement. That was part of the cost of settling a class action lawsuit, he said.  ‘Indeed, the settlement agreement provides that if a claimant fails to select the period that generates the greatest recovery, the program will choose that period for him,’ Barbier wrote.  ‘BP’s interpretation injects a subjective notion of alternative causation and a degree of complexity that are contrary to the settlement’s terms,’ the judge wrote.

“The Plaintiffs Steering Committee, which negotiated the settlement with BP on behalf of private claimants, also disagreed with the company’s reading of the rules, in a statement issued Friday.  ‘This court has already affirmed Mr. Juneau’s independent interpretation of the settlement agreement, which is to say that claims are to be paid under the terms spelled out in the agreement — terms which were negotiated, co-authored and expressly agreed to by BP,’ said co-lead counselors Steven Herman and Jim Roy. ‘Simply put, BP undervalued the settlement and underestimated the number of people and businesses that qualify under the objective formulas that BP agreed to’.”

The settlement between BP and the Plaintiffs’ Steering Committee reflects the reality that the effect of the 2010 oil spill was catatrophic, region-wide, and pervasive.  The courts will hopefully continue to say that BP, which experienced cash flow from its operations in the fourth quarter of 2012 of $6.3 billion (or about $68.5MM per day), should honor its written agreements.  Getting it in writing should be enough.

Written by Brian Montague

Brian Montague

A fourth generation Hattiesburg native, an Iraq and military veteran, and a 1983 graduate of the University of Mississippi Law School, Brian Montague has established an AV rated, well-respected neighborhood law practice focusing on trying cases in state and federal court, corporate and transactional work, insurance defense and coverage, personal injury and wrongful death, residential construction and development issues, and estate probate and administration.

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