Cresskill, NJ: BP is appealing a lower court’s refusal to block payments to businesses that suffered losses because of the Gulf Oil spill. The legal battle — which may go all the way to the U.S. Supreme Court — will certainly delay payments to the plaintiffs’ attorneys who work on a strictly contingency basis. To ease their financial cash flow problems, RD Legal Funding, LLC (“RD Legal”) is making accelerated attorney fee financing available.
BP Plc. is appealing U.S. District Judge Carl Barbier’s decision last March that the terms of the BP Gulf Oil Spill settlement are being correctly interpreted. BP’s lawyer, Theodore Olsen, told New Orleans U.S. Court of Appeals judges that misinterpretation by Claims Administrator Patrick Juneau is causing “irreparable injuries” and the “hemorrhaging of cash.” Theodore Olson, former solicitor general under President George W. Bush, is best known for advocacy before the U.S. Supreme Court which suggests that if BP does not get satisfaction in New Orleans, they may appeal to the highest court.
When the Deepwater Horizon drilling rig exploded off the coast of Louisiana in April 2010, the Macondo well spilled more than four million barrels of oil into the Gulf of Mexico. BP created a $20 billion fund to compensate victims. BP reached a settlement which received final approval in December 2012 resolving economic loss claims for multiple classes of businesses and property owners.
According to BP, thousands of businesses have secured hundreds of millions of dollars in payments for “inflated and fictitious losses.” BP says that a January 2013 policy decision by Juneau allows businesses to manipulate their figures and falsify their actual lost profits (individuals are not affected by BP’s appeal). Payments to businesses are derived through a numerical formula based on their distance from the spill, and a comparison of their revenues and expenses before and after the spill. The businesses do not have to prove a direct impact or link to the spill as their suffering is assumed because of the economic impact on the region.
Plaintiffs’ attorneys counter that although BP knew of the payout formula as early as April 2012 and had multiple opportunities to object, they did not do so until December 2012. BP never offered an alternative claim evaluation method, agreeing from the beginning that the claims administrator should interpret it to provide the greatest payouts. When Juneau informed BP in September 2012 that the claims included damages that were not necessarily connected to the spill, BP responded that “false positives” were expected.
Plaintiffs’ attorneys say that BP wanted “peace” when negotiating the original settlement. Now, the company seems more focused on reducing the impact on its bottom line. An aggressive marketing campaign of national television spots, social media, and advertisements paints the Gulf Coast region as better than ever, with BP generously sponsoring the recovery. Meanwhile, BP agreed to plead guilty to 14 criminal counts last year and will pay $4 billion over five years in a settlement with the Justice Department. In September, if Judge Carl Barbier finds BP grossly negligent in violating the federal Clean Water Act, fines could amount to as much as $14 billion, depending on the amount of oil spilled and the apportionment of responsibility between BP, Halliburton, and Transocean. BP has already lodged documents claiming that the federal government over-estimated the amount of oil spilled by as much as 50 percent.
Last June, lawyers representing Gulf area businesses whose claims had already been settled received notification that BP reserves the right to recover “excessive” payments” should the company’s appeal be upheld. Meanwhile, the appeals judges are questioning their court’s jurisdiction; BP says it is only asking the court to make a determination based on the interpretation of the contract’s terms; and the plaintiffs’ attorneys say that BP is trying to back away from a settlement it negotiated, co-wrote, and agreed to because the company undervalued the amount it would have to pay out. BP issued a statement that the claims administrator’s misinterpretation “has ignited a feeding frenzy among trial lawyers attempting to secure money for themselves and their clients that neither deserves.”
What is certain is that the Gulf Coast plaintiffs’ attorneys, who receive no financial compensation for their services until claims are paid, are facing an even longer time before their fees are settled. RD Legal is extending its exclusive post-settlement Fee Acceleration Program to help attorneys improve their cash flow. For more information, contact RD Legal at 1-800-565-5177 or visit http://www.legalfunding.com/eligible-cases/bp-oil-spill-legal-funding. Founded in 1998, RD Legal is one of the nation's leading providers of settlement funding to attorneys and plaintiffs.
