James Gill: BP execs show sharp sense of humor

BP, alleging it is being forced to pay bogus Deepwater Horizon claims, is hoping to get the public on its side through national newspaper ads.

This just goes to show that multinational corporations can have a sense of humor. It is hard to imagine any circumstances in which we could be outraged on BP’s behalf. Here, where BP is trying to weasel out of a legal settlement it helped confect, we can only snicker in disbelief.

BP, having repeatedly lied about how much oil was spewing into the Gulf after 11 men died in the rig explosion, did finally secure some measure of goodwill by agreeing to pay whatever it cost to compensate businesses for their losses. But when the claims came in higher than expected, BP’s attorneys commenced to complain and quibble in court.

Buying space in the public prints to bolster its case is a tactic that legal scholars say is unprecedented. And no wonder, because it is almost certain to backfire, not only leaving newspaper readers to scratch their heads but quite possibly riling Carl Barbier, the federal judge chiefly responsible for figuring out how much BP will have to shell out for visiting America’s worst environmental disaster upon us.

The newspaper ads feed into a familiar knock on Louisiana. Just as after Katrina much of the country feared we would razoo the relief, now BP alleges it has been forced to meet “fictitious, exaggerated and excessive” claims. BP argues it should be required to compensate only those businesses that actually suffered losses caused by the spill.

BP must assume readers of the newspaper ads will see that as a reasonable view and bristle with indignation at Louisiana freeloaders. No doubt the spill did mean a windfall for many a shifty character, but that does not mean BP is getting a raw deal. Whatever might be awry is of BP’s own doing.

Claims are paid under the terms of a settlement BP reached with attorneys representing plaintiffs in a class-action lawsuit. In practically begging Barbier to approve the settlement, BP acknowledged it would benefit businesses that had experienced no losses because of the spill. For businesses in the zone closest to the coast, any loss was assumed to be caused by the spill. The same went for companies in certain industries, such as seafood, in more distant zones.

Other claimants could qualify by demonstrating revenue fluctuations within a time period of their choice around the time of the spill. The requirements were thus pretty loose, but that was a small price to pay for a settlement that avoided litigating thousands of individual claims. In May 2012, Barbier approved the settlement after BP’s experts testified it was “fair,” “reasonable,” “objective,” “standardized” and “transparent.” No cap was placed on the damages BP agreed to pay, but they are now projected to reach $8 billion or so.

What BP once regarded as a model settlement is now portrayed in both its ads and legal briefs as a boondoggle and a rip-off. BP, which once assured Barbier the settlement encompassed an “irrebuttable presumption” that economic losses hereabouts were spill-related, believes claimants should be required to prove it. Barbier has declined to tinker with the settlement, noting the doctrine of estoppel forbids BP to take a position diametrically opposite to what it argued earlier in the same proceeding.

Barbier was reluctant to opine on what lawyers term the “causation” question, because a panel of the appeals court is set to consider it. He intervened at the behest of a different appeals court panel that ordered some accounting changes in the handling of Deepwater Horizon claims. Or rather, Barbier intervened at the behest of one of the panel’s members, Judge Edith Brown Clement. Judge Jim Dennis vigorously dissented and the other member of the panel, Leslie Southwick, did not join that part of the ruling, which, Barbier noted, was therefore not legally binding. It will require a lot of fancy talk in court if BP is ever to renege on this deal.

Meanwhile, in newspaper ads, BP whines about “mounting problems” with Barbier’s claims administrator. Whatever BP winds up paying for business losses, it is unlikely to come anywhere near the amount Barbier will impose in fines under the Clean Water Act. Let’s see some ads trying to enlist public support for BP on that issue.

James Gill’s email address is jgill@theadvocate.com.