Environmental

BP trial judge issues scathing criticism of BP legal team

BP 435x292 BP trial judge issues scathing criticism of BP legal teamThe federal judge overseeing Deepwater Horizon oil spill litigation in New Orleans said he was “deeply disappointed” in the behavior of BP’s legal team, condemning it for attempting to undermine his authority and undo the complex settlement agreement with plaintiffs that it helped design.

Judge Carl Barbier issued the unusually striking order Nov. 22 in response to an “emergency motion” the oil giant filed in the U.S. Court of Appeals for the Fifth Circuit. In that motion, BP accuses the judge of refusing to suspend hundreds of millions of dollars in settlement payments it believes are being sent to claimants that weren’t harmed by the giant 2010 oil spill in the Gulf of Mexico.

Judge Barbier said that BP has repeatedly attempted to sabotage the uncapped settlement agreement its own lawyers helped write and approve simply because it underestimated how much it would cost to settle all outstanding claims. BP originally estimated it would spend about $7.8 billion to resolve all the claims, but has since conceded that it doesn’t know how much it will have to pay. Some outside estimates predict the company may have to pay twice or more its original estimate.

In his 11-page order, Judge Barbier said that BP is backpedaling on an agreement its lawyers largely helped write once it found out it would have to pay out more money to claimants than it originally anticipated. According to Bloomberg, he cited a letter written by an in-house BP lawyer on Sept. 28, 2012 that acknowledged that “false positives” (claimants who aren’t truly entitled to oil-spill compensation) would “be an inevitable byproduct of the settlement agreement.”

“If anyone is attempting to rewrite or disregard the unambiguous terms of the settlement agreement, it is counsel for BP,” Judge Barbier asserted.

“Frankly it is surprising that the same counsel who represented BP during the settlement negotiations, participated in drafting the final settlement agreement, and then strenuously advocated for approval of the settlement before this court now come to this court and the Fifth Circuit and contradict everything they have previously done or said on this issue.”

Some legal experts and analysts have questioned BP’s wisdom in declaring war on the judge who continues to oversee litigation that could cost BP several billion dollars in fines under the Clean Water Act. Judge Barbier’s assessment on the degree to which BP was negligent in causing the spill – a conclusion he will make without a jury, will make the difference between BP paying as little as $4.5 billion or as much as $17.6 billion in the per-barrel-spilled fines. The judge has already agreed to subtract 810,000 barrels that BP recovered during the cleanup process from the equation.

Sources:

Bloomberg Businessweek
Reuters