Is BP Lying to the Courts and to the American People?

New Orleans, LA BP Disaster Lawyer

Let’s put aside, for a moment, the fact that BP pled guilty to lying to the U.S. Government, and its own shareholders, regarding the Macondo / Deepwater Horizon Spill, in this very litigation – not to mention eleven felony counts of seaman’s manslaughter, and criminal violations of U.S. Environmental Laws, paying over $4 Billion in criminal fines and penalties.  [For more details on BP’s fines and penalties, click here].

Let’s also put aside the fact that in the ten years preceding Macondo, BP was responsible for three previous disasters – Grangemouth, Texas City, and Prudhoe Bay – causing 15 deaths, 200 injuries, and the release of hundreds of thousands of gallons of gas and oil into the environment.  That, after each incident, BP pled guilty to criminal charges, and promised that it would never happen again.  But, four years after Texas City, had refused to make 270 of the safety improvements the company had agreed to, and was cited with 439 additional violations.  In all, the Government imposed more than $87 million in fines – the largest in OSHA history.  Indeed, from 2007-2010, BP’s 829 “willful” and “egregious” violations represented 97% of all flagrant violations in the industry.

Notably, and predictably, BP used the private Economic & Property Damage Settlement at its sentencing hearing as evidence that BP was honoring its commitment to make things right for the people and the businesses of the Gulf States.  Yet, within months, BP was attacking the Settlement, the Claims Administrator, the Claimants, and arguably the Court, and disavowing virtually everything the British company had previously agreed to and said.

So the question remains: Is BP lying?

In July of 2013, Steve Herman and other Class Counsel released The Truth About the BP Settlement, which pointed to the following:

1. BP selected and proposed Patrick Juneau to be appointed as Claims Administrator for the Court-Supervised Settlement Program.  Mr. Juneau is a long-time member of the corporate defense bar, who is universally respected, and has been appointed by courts all across the country to serve as special master or mediator in high profile litigation, including the Guidant MDL in Minnesota and the massive Toyota acceleration litigation in California.  At no time did BP ever suggest, request or otherwise propose that Mr. Feinberg be considered as Claims Administrator for the Court-Supervised Settlement Program.

2. Judge Barbier was selected by a panel of respected trial and appellate court judges from across the country to preside over the BP Oil Spill Litigation, one of the largest, if not the largest, consolidated cases in history. He has been universally praised by BP and others for his ingenuity, commitment and dedication to the efficient and effective management of this vast and complex litigation. Judge Barbier has served on the Federal Bench for well over a decade, and his integrity and judicial excellence have never been called into question.

3. BP selected and proposed PricewaterhouseCoopers (PwC) as a Program Vendor for the Court-Supervised Settlement Program.  PwC, one of the largest accounting firms in the world, had been previously hired by BP to assist Mr. Feinberg with the GCCF, and was therefore not only trusted by BP but also familiar with Oil Spill related claims.  PwC, the accounting giant that BP selected, implemented the Settlement Agreement exactly the same way that it was interpreted by Mr. Juneau and Judge Barbier.

4. BP also selected and proposed Postlethwaite & Netterville (P&N), an independent accounting firm that had not done any work for either plaintiffs or BP/GCCF, to serve as a Program Vendor.  P&N, the independent accounting firm that BP selected, also implemented the Settlement Agreement exactly the same way that it was interpreted by Mr. Juneau and Judge Barbier.

5. BP’s own Accounting Expert, Holly Sharp, studied the Settlement Agreement and submitted a sworn declaration to the Court in August of 2012 confirming that:

6. BP’s Counsel, in a letter to the Claims Administrator dated September 28, 2012, reiterated that:

7. Around the same time, attorney Michael Juneau, on behalf of the Claims Administrator, posed the following inquiry to the parties:

8. In response to the question and hypothetical, BP confirmed to the Claims Administrator that:

9. In the Joint Proposed Findings submitted by BP in support of approval of the Settlement in November of 2012, BP again confirmed in a Court filing that: “Once the causation tests are satisfied, all revenue and variable profit declines during the Compensation Period are presumed to be caused entirely by the spill, with no analysis of whether such declines were also traceable to other factors unrelated to the spill.”

10. On December 12, 2012, the Parties appeared before the Court, and BP’s Counsel, Richard Godfrey, again confirmed, to the Claims Administrator, to the PwC and P&N accountants who were present, to Class Counsel, and to the Court, that BP “agreed with the Claims Administrator’s objective analysis of causation with respect to his evaluation of economic damage claims, as previously set forth by Mr. Juneau.”

Around that same time, BP appeared before the U.S. Fifth Circuit Court of Appeals, and told the Court that it was not appealing the causation issue;  that the use of objective causation tests was a part of the overall settlement negotiation, to which BP agreed;  and that the consideration to BP was the total peace that BP was achieving via the broad class-wide release.

Click here to listen to BP Counsel’s Q&A with the Fifth Circuit judges.

To Read Unofficial Transcript, Click Here

Yet, within months, BP was back at the U.S. Fifth Circuit Court of Appeals seeking to enjoin the Claims Administrator from paying any business claim that could not satisfy BP’s new, additional, unstated, unspecified, and inherently subjected test for causation.

In an even more surprising move, BP went to the Court in a different appeal, and asked the Court to reverse approval of the class settlement, which BP had supported in the District Court with thousands of pages of expert testimony and hundreds of pages of briefing.  Having lost by a vote of the entire Fifth Circuit Court, BP then sought review from the U.S. Supreme Court.  On October 3rd, the Claims Administrator filed a response, not taking a position on BP’s request for review, but simply to correct the factual misrepresentations to the Supreme Court in BP’s briefs.  On December 5, 2014, the Supreme Court considered BP’s unusual request for review, which was correctly denied.

In the meantime, BP has spent a lot of time, money and effort to advertise the existence of allegedly “fraudulent” claims. Yet, by BP’s own account, less than one percent of the total claims emanating from Deepwater Horizon disaster have been identified by BP as “fraud”, and the vast majority of those claims are from the Gulf Coast Claims Facility – a program that BP itself controlled.  For the Facts, Click Here.

Steve Herman, Co-Lead Class Counsel, was asked to deliver a paper at the Admiralty Symposium in Houston regarding some of the potential ethical implications of BP’s post-settlement conduct, and other potential questions raised by the litigation.

The U.S. Supreme Court’s denial of BP’s Petition for Certiorari is a clear rejection of BP’s misleading and outrageous attacks on the Claims Administrator, Claimants, the Settlement, and the Court.  Hundreds of thousands of businesses and families along the Gulf Coast will continue to have their Claims independently evaluated under the transparent and objective criteria that BP agreed to in 2012.  A deal is a deal.  Enough is enough.  BP should now do what it promised:  stop fighting, and make it right.

Communications by or on behalf of the Parties and their respective Counsel regarding this Agreement with the public and media shall be made in good faith, and shall be consistent with the Parties’ agreement to take all actions reasonably necessary for preliminary and final approval of the Settlement.

The Parties agree to take all actions necessary to obtain final approval of this Agreement and entry of a Final Order and Judgment, including the terms and provisions described in this Agreement.

The Parties agree to support the final approval and implementation of this Agreement and defend it against objections, appeal, or collateral attack.

– Settlement Agreement, signed by BP, on April 18, 2012.