Thinly veiled jabs refer to Lagasse claiming ‘fictional losses’
In an ad that ran in national newspapers this week, BP used thinly veiled language to make celebrity chef Emeril Lagasse the poster child for the hundreds of millions of dollars in “fictional losses” it says a federal court is incorrectly paying.
In the ad, BP blasts a celebrity chef’s restaurant company for collecting more than $8 million for alleged oil-spill losses when it actually made more revenue in the year of the spill than before it. BP says the real reason for the “loss” was that the chef started paying new licensing fees.
It doesn’t name Lagasse, but leaves no doubt it’s talking about him when it refers to a “celebrity chef with a national following,” most of whose restaurants are outside the Gulf Coast region and who made a deal more than a year before the 2010 oil spill to pay licensing fees to someone else to use his own trademark.
Lagasse, with only three of his 14 restaurants in New Orleans, famously agreed to sell his franchise of television shows, kitchen ware and cookbooks to Martha Stewart’s company in 2008.
After being implicitly outed by BP, Lagasse’s restaurant management company, Emeril’s Homebase, issued a statement.
“Emeril’s Homebase filed a claim in accordance with the settlement agreement that was set forth by BP and administered by the federal court in New Orleans,” wrote Emeril’s Brand vice president for communications, Paige Green. “We have not received any payment on the claim.”
The BP ad singles out Lagasse even though the chef has made several public statements praising BP for its response after the spill.
However, the oil giant’s sweeping ad campaign really takes aim at the federal court in New Orleans for the way it, through an appointed administrator, is implementing the settlement BP agreed to and fought for in 2012.
The ad claims the celebrity chef was “paid in full,” even though the oil giant is actually in the midst of a second appeal that has prevented the claims office from paying Lagasse’s company.
To a certain extent, the ad had the intended effect. Some residents responded by saying that even if a claim is legally correct, it doesn’t make it morally acceptable.
“I don’t like it because I don’t like anyone trying to game the system; we certainly haven’t,” said Nat Krasnoff, whose Harahan company Digital Designers got an award that Krasnoff says is only a third of its true spill loss, but can’t get the payment because of the settlement battle.
Blaine LeCesne, a Loyola Law School professor who has followed the settlement closely, said BP’s advertising campaign is trying to play on the public’s moral outrage, but it is BP that’s truly “insidious” in attacking Lagasse.
“He has nothing to apologize for,” LeCesne said of the chef. “There is no ethical dilemma implicated by his submission of a claim. It is BP’s own self-imposed, clumsy efforts to settle this case that generated these potential anomalies of which it is now complaining.”
Krasnoff said he sees BP’s ad as an attempt to distract the general public from the fact that the company agreed to set formulas that it knew would lead to both overpayments and underpayments.
“I still don’t see anything in here about perhaps thousands of companies that are being underpaid. It’s not in this ad,” he said. “This is a public relations ploy. If I were the plaintiffs’ attorneys representing people such as ourselves, I’d pool some of that money they’re earning off the work that they’ve done for us and I’d run some public relations ads. I would go to the New York Times with an ad that says, ‘Sin of omission: what BP’s not telling you.’ ”
Claims administrator Patrick Juneau defended his decision to pay Lagasse, saying he was bound to pay the claim under the terms of the settlement that BP signed and defended for months in open court.
“This claim satisfied those requirements agreed upon by BP and class counsel. BP appealed the program’s determination,” Juneau said in a statement. “Since the award amount was greater than $1 million, the appeal was presented to a three-person appeal panel as per the settlement agreement. The appeal panelists affirmed the determination of the program and concluded that the claim was correctly processed under the terms agreed upon by BP and the class counsel.”
On the other hand, claimants do have to sign forms that state that business claims are for companies that “assert economic loss due to the spill.” Whether that is tantamount to certification that all losses it claims were actually caused by the spill is unclear.
This is just the latest salvo in a fight that has raged since February, when BP first filed to block spill-damage payments to certain businesses. Since then, its challenge has expanded, even beyond what it apparently had planned.
In July, while arguing for a limited block on payments before the U.S. 5th Circuit Court of Appeals, BP’s lawyer argued with Judge Edith Clement about the oil giant’s decision to explicitly agree to pay for losses that were not directly caused by the spill. The BP lawyer said it was part of a compromise.
But when Clement signaled that the settlement should have excluded claims that aren’t really caused by the spill, BP changed course and demanded that “causation” be taken into account. That drew a stern rebuke from U.S. District Judge Carl Barbier, who said BP was trying to change its own agreement, not the court’s claims administrator. But Clement and another appellate judge later ordered Barbier to consider causation in the approval of business loss payments.
BP said it put out the ad to reassure its stockholders that it won’t stand for the way the claims are being paid.
“We hope that in focusing our stakeholders’ attention on the more than half-a-billion dollars in awards made by the claims program for alleged losses with no apparent relation to the spill, they will understand why the litigation over the settlement continues and the extent to which the company’s commitment to the Gulf is being twisted and exploited,” BP spokesman Geoff Morrell said in a statement. “We will continue to fight in court all interpretations of the settlement agreement that are inconsistent with the agreement’s language, the intent of the parties, and the law.”