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J.R. Whaley
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BP Settlement — BP Loses Appeal. Again.

6 comments

BP’s momma must have taught it that old adage, “If at first you don’t succeed, try, try again.”  But this is getting ridiculous.  Momma can’t be proud.

As noted here and other places, BP has continued to try to crawfish out of its commitment to the people and businesses of the Gulf region.  That effort met failure — again — yesterday evening when the United States Fifth Circuit Court of Appeals denied BP’s request to argue — again — that it really didn’t mean what its own negotiated and court-approved settlement agreement said.

The majority of the appellate court adopted an opinion by Judge Leslie Southwick, a Mississippi jurist appointed to the United States Fifth Circuit by President George W. Bush, in which Judge Southwick ruled that BP had bargained-for and approved objective formulae for determining whether or not a claimant’s losses were “caused” by BP’s oil spill, thereby qualifying for compensation in the class action settlement.  That formula is included, for the most part, in Exhibit 4B to the Settlement Agreement (in which the “V-Test” is included) and articulated by the court-approved and BP-recommended settlement Claims Administrator in his October 10, 2012 Policy Statement.

So its important to understand what exactly the October 10, 2012 Policy Statement is and how it relates to Exhibit 4B and the “V-Test.”  According to Judge Southwick, “After the proposed settlement was filed in April 2012, the Claims Administrator asked the parties what should be done with claims in which payment under the terms of Exhibit 4B would be permissible, but a cause for the business losses other than or in addition to the Deepwater Horizon disaster seemed possible. The Policy Statement expressed the agreement by all participants, including BP, on the answer to the Claims Administrator’s question.”  Later, Judge Southwick explained that, “As that Policy Statement explains, it was agreed after discussions among the parties and the Claims Administrator that a claimant establishes causation by satisfying the criteria set forth in Exhibit 4B even if additional or alternative explanations for a claimant’s loss might exist . . .”

Hold on.  BP agreed to that?  Yep.

Judge Southwick found that Exhibit 4B was an “. . .agreed-upon methodology for presenting proof establishing that a claimant’s loss was caused by the Deepwater Horizon disaster.”  But what would BP get out of such an objective formula?  Southwick explains that too: “Any claim not meeting the requirements of Exhibit 4B is precluded from recovery.”  Gotcha.  So BP agreed to an objective formula in which some claims would qualify and some wouldn’t?  Seems so:  “Through Exhibit 4B, the parties agreed that claims would be governed by an objective formulae.”

So BP got something from such an objective formula (a class-wide release of ALL claims, even those that don’t satisfy Exhibit 4B for purposes of causation and compensation) and gave up something (a claim-by-claim review of each claim).  Sounds like a settlement to me.  And don’t forget about the other tactical advantages that BP obtained when it entered into the class action agreement we explored last week.  Wonder why didn’t BP say as much on 60 Minutes?

Judge Southwick wraps up a meaty legal and factual issue up nicely:  “To summarize, causation is established by certain factors set out in Exhibit 4B that the parties agreed were a sufficient indirect way to satisfy the goal of connecting a claim to BP’s conduct in the Gulf. The parties did not reject the need to establish a connection. Instead, they agreed to a means for doing so that sufficiently satisfied each party’s litigation interests.”

“Exhibit 4B can be analogized to a stipulation at trial. If parties stipulate to an element of a claim, no proof at trial will be needed. Here, they stipulated to the form of the proof that would demonstrate causation.”

For those scoring at home, the vote to deny BP’s request for the entire Fifth Circuit to consider BP’s “causation” argument was 8-5.  Judge Carl Barbier, the district court judge overseeing the settlement, and the Claims Administrator implementing the settlement, Patrick Juneau, have also found that Exhibit 4B was an objective means to determine causation that the parties agreed-to and asked the district court to approve.

BP has vowed to keep trying — to keep appealing.  The people of the Gulf continue to wait for BP to make good on its “commitment to the Gulf.”

6 Comments

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    […] losing its effort to have the entire United States Fifth Circuit Court of Appeals undo the legal agreement it made, […]

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    The tide seems to finally be turning! After years of unwarranted attacks and millions of dollars spent, the media and hopefully the American People are finally starting to realize that they have all been misled and scammed by false ads which were bought and paid for by BP. The HBO episode VICE was a very eye opening piece and should catch the attention of many. What BP has done is appalling and we don’t know the half of it. Enviromental crews on the scene after the spill weren’t allowed by BP to use regulators because BP was scared of the image it portrayed. They then chose to sacrifice the safety of the cleanup workers to save their image!

  3. Tom Young says:
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    Judge Clement is getting awfully close to losing the appearance of impartiality. Her enthusiasm for BP’s cause and disdain for the majority’s reasoned opinion will embolden those who feel she is too close to groups like FREE.

    If she wishes to continue down this path, resigning from FREE, as her 5th Circuit colleague Judge Davis did once the Committee on Codes of Conduct found board membership in the group unethical for sitting judges, seems prudent.

  4. Cajunlawyer says:
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    I love how Clement accepts BP’s allegations from the 60 minutes episode regarding claimants it didn’t think were impacted by the spill despite having absolutely zero evidence in the record to support that conclusion, and without even getting the claimant’s side of the story first. When did Judges start accepting completely unsupported allegations as fact? It always seemed to me that if BP had won its appeal on the basis that unaffected claimants were allowed to recover under the settlement, that any such decision would almost necessarily involve a reversable error because there is zero evidence in the record related to the impact, or lack thereof, of the spill on any particular claimant’s revenues or profits. How could the court possibly conclude that unaffected claimants were receiving payments if there is no evidence in the record suggesting that any particular claimant wasn’t impacted by the spill or that some event other than the spill led to their losses? Clement had zero basis on which to make those statements.