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BP Settlement: Lilly Tomlin Was Right.

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Lilly Tomlin said that, “No matter how cynical you get, it’s almost impossible to keep up.” With BP’s most recent filing, it’s hard to argue with that observation.

BP filed a motion today, seeking return of awards previously made to certain claimants. This is referred to as a “clawback” request — BP argues that new Policy 495 should be applied retroactively to claimants who have long since signed releases and received payments and BP wants to “clawback” previous payments made.  BP says that its “right to restitution is clear, and equity demands that windfall payments in breach of the settlement agreement should be refunded.” As with almost all of BP’s legal filings of late, however, BP ignores some critical points – all of which it agreed-to long ago.

While there are lots of reasons why BP’s most recent attempt to unwind its settlement is without legal and factual merit, the most glaring one is the terms of the Release that all of those claimants signed. Critical to note, this is the Release that BP drafted and proposed — not one foisted on it by a misguided Claims Administrator or a pack of ambulance-chasing-plaintiff-lawyers, all of whom are BP’s favorite punching bags. And that Release is crystal clear that the exact situation that BP now claims is the basis for its motion is NOT, in fact, a basis for such a motion.

What is particularly unique is the detail that BP’s Release includes about the enforceability of the Release — even if “further legal proceedings” change the terms of the proposed settlement. For example, the fifth paragraph on page 2 of 20 of the Release states:

“The settlement payment you have been offered arises under the auspices of the   federal District Court in New Orleans presiding over the multidistrict litigation titled In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010 (MDL No. 2179). A class action settlement has been proposed in that case, but the Court has not yet given final approval of that proposed settlement. If the Court does approve the proposed class action settlement, an appellate court could reverse the approval. In addition, it is possible that the terms of the proposed settlement may change in the future—for better or for worse—as a result of further legal proceedings. However, if you sign this Individual Release, none of those uncertain future events will affect you. By signing this Individual Release you are forever waiving and releasing all claims that you may have against BP (except for Expressly Reserved Claims) in exchange for the compensation being provided. In fact, even if the Court does not approve the proposed class action settlement agreement or the approval is reversed by an appellate court, you shall continue to be bound by this Individual Release.”

Paragraph 16 of the Definitions section of the Release further confirms the effectiveness of the Release, irrespective of future court decisions:

16. Continuing Effectiveness of Agreement. This Individual Release shall remain effective regardless of any appeals or court decisions relating in any way to the liability of the Released Parties in any current or future litigation. THIS INDIVIDUAL RELEASE SHALL ALSO REMAIN EFFECTIVE REGARDLESS OF WHETHER THE SETTLEMENT AGREEMENT RESOLVING THE CLAIMS OF THE ECONOMIC CLASS IS APPROVED.

BP thus anticipated that “the terms of the proposed settlement may change in the future — for better or for worse — as a result of further legal proceedings.” BP also assured claimants that if they signed the release, and accepted what was then offered, “none of those uncertain future events will affect you” and that “This Individual Release shall remain effective regardless of any appeals or court decisions relating in any way to the liability of the Released Parties in any current or future litigation.”

You don’t have to be Clarence Darrow to read BP’s Release language and see that BP is, yet again, trying to crawfish on its previous agreements. And with its most recent filing, BP shows, yet again, that it believes the rules don’t apply to it.

A fair point to ask, that some friends have asked me, is can all of the cash-strapped claimants who signed GCCF releases now can get their claims re-calculated under Policy 495? Or what about those DHECC claimants whose claims actually go UP under Policy 495 but already signed releases — do they get a do-over too? I suspect that BP would say no because, after all, a deal is a deal. Except when a do-over works in BP’s favor. Then “equity” requires it.

Lilly Tomlin was right. BP is making it tough to keep up an appropriate level of cynicism. But I’ll keep trying.  BP will require it.

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  1. up arrow

    […] It is important to note that these reports of daily oil discoveries and further environmental damage come at a time when BP is attempting to renege on its oft-stated “Commitment to the Gulf.” BP is repudiating the Contract and Settlement Agreement it made with area businesses and individuals that compensates them for economic and environmental losses associated with the spill. Worse, the company has recently acted to take back payments already made to victims. […]

  2. up arrow

    […] It is important to note that these reports of daily oil discoveries and further environmental damage come at a time when BP is attempting to renege on its oft-stated “Commitment to the Gulf.” BP is repudiating the Contract and Settlement Agreement it made with area businesses and individuals that compensates them for economic and environmental losses associated with the spill. Worse, the company has recently acted to take back payments already made to victims. […]