Plaintiffs, BP Urge Judge to Approve $7.8B Spill Settlement

BP Plc and lawyers representing over 100,000 individuals and businesses claiming economic and medical damages from the 2010 Gulf of Mexico oil spill on Thursday urged a U.S. judge to approve a proposed $7.8 billion class-action settlement.
U.S. District Judge Carl Barbier initially approved the deal in May, but called the “fairness hearing” to weigh objections from about 13,000 claimants challenging the settlement to resolve some of BP’s liability for the worst offshore oil spill in U.S. history.

BP still faces civil and potential criminal liability charges brought by the U.S. government and U.S. states.

Barbier did not issue a final ruling at Thursday’s hearing in a New Orleans court, but he appears poised to grant final approval to the deal in the coming days, legal experts said.

“We shouldn’t lose sight of the forest for the trees,” Barbier said at the end of the hearing, saying that some objections “were not frankly made in good faith and bordered on being frivolous.”

London-based BP’s Macondo well spewed 4.9 million barrels of oil into the Gulf of Mexico over a period of 87 days. The torrent fouled shorelines from Texas to Alabama and eclipsed the 1989 Exxon Valdez spill in Alaska in severity.

Lawyers for some affected parties say they will “opt out” of the deal, reached in March between BP and lawyers representing plaintiffs ranging from restaurateurs, hoteliers, and oyster men who lost money from the spill to recovery workers and coastal residents claiming medical damages from the cleanup.

“The settlement zones are inherently unfair,” said Stuart Smith, a lawyer for Florida business owners, referring to boundaries set by the deal which are meant to compensate businesses and homeowners based on their proximity to the spill.

Barbier said he had no authority to tweak the deal as written, but merely to approve or reject it.

“It sounds to me that maybe your gripe is that you weren’t in the room and that you would have done things differently,” Barbier told one of the objectors’ lawyers. “I don’t think there is such a thing as a perfect settlement.”

Jim Roy, a lead plaintiffs’ attorney, said the deal would resolve “well in excess of 100,000 claims.” BP in March estimated the deal’s cost at $7.8 billion, but damages are uncapped and could rise to far exceed that, Roy said.

“This is not a bunch of insurance adjustors trying to save money for BP,” Roy said of the deal, but rather “a way to quickly get a fair and objectively determined settlement and to avoid litigating for potentially 20 or more years such as what happened in the Exxon Valdez.”

Rick Godfrey, an attorney for BP, said the settlement should not be delayed by the “miniscule” number of objectors.

“BP has no intent of allowing justice to be delayed, much less denied, as a result of this tragic event,” he said.

Barbier is likely to approve the settlement in coming days, said Blaine LeCesne, a law professor at Loyola University, citing the judge’s initial approval of the deal as the strongest signal of its eventual fate.

“It’s inevitably going to leave some people unsatisfied,” LeCesne said. “But it casts a very wide net and includes a remarkably high number of potential claimants.”

BP has been locked in a year-long legal battle with the U.S. government and Gulf Coast states to settle billions of dollars in civil and potential criminal liability from the explosion aboard the Deepwater Horizon rig that killed 11 workers and caused the massive spill that soiled the shorelines of four Gulf Coast states.

Absent a far-reaching settlement, Barbier will preside over a sprawling three-part non-jury hearing to decide BP’s liability for the spill, now set to begin on Feb. 25, 2013.