Lawyer who filed initial lawsuit against BP over Deepwater Horizon oil spill says settlement irreparably broken

By Kyle Barnett | Jan 22, 2015

NEW ORLEANS – Daniel Becnel is a longtime attorney working out of his offices in sleepy St. John the Baptist Parish, a rural suburb of New Orleans, where he has over the past 45 years built a thriving plaintiffs’ firm that has increasingly been involved in class action lawsuits, most notably the Deepwater Horizon oil spill class action which he now considers to be deeply flawed.

The self-proclaimed “King of Torts" has been a representative in several notable class actions including the Tobacco Master Settlement in 1998 that saw tobacco companies pay $365 million to a class of smokers. He also has been involved in the ongoing Chinese drywall class action, in which New Orleans Saints head coach Sean Payton is one of his clients. Becnel also leads cases against Toyota over the alleged sudden acceleration of certain vehicles.

However, none of those issues have come close to that of the massive Deepwater Horizon litigation, the largest class action lawsuit in history with tens of billions of dollars in damages that is supposed to make whole hundreds of thousands of plaintiffs.

Becnel was the attorney who initially filed suit in federal court only eight days after the oil rig exploded in the Gulf of Mexico, killing 11 crew members and setting off the largest accidental oil spill in history that went on for 87 days, and which significantly impacted those who make their living off the coast of Louisiana and other nearby states.

Just over a month after the oil spill was contained, BP began making payments through the Gulf Coast Claims Facility (GCCF) – an organization set up by BP and the U.S. government with $20 billion set aside to pay damages.

Fast forward four and a half years later, and Becnel bristles at the mention of the Deepwater Horizon litigation. After his initial filing, a group of 19 attorneys from across the country (now 18 after one of the attorneys dropped out over claims he filed up to 40,000 fraudulent claims that has resulted in a federal criminal investigation), a group that did not include Becnel, were named to a Plaintiffs’ Steering Committee (PSC). The PSC eventually engineered a settlement that the oil giant accepted in August 2012, which included a $660 million payday for the lawyers as well as a percentage of each claim paid out.

Becnel is unyielding in his criticism of the PSC. To Becnel the goal of the PSC has been obvious in the way he says they have handled the case from the beginning. He says their actions have imperiled the entire settlement and all claimants.

“In the BP case they were out to make money. And not a little bit of money, a lot of money. And I think what should happen, when you appoint a PSC you should not be allowed to solicit additional cases. You are fiduciary to all of the other class members, you are fiduciary to all of the other class counsel who handle the cases and you should not be able to do that,“ he said in an interview with the Louisiana Record last year.

While the Court Supervised Settlement Program apparently worked as planned for the first few months, soon fissures began to form between BP and the PSC. Most notably was what BP challenged as a miscalculation of payments by court-appointed Claims Administrator Patrick Juneau.  According to the oil giant, Juneau has paid millions of dollars in claims to businesses that could not show any direct connection between their loss of revenue and the oil spill.

Becnel contends the PSC knowingly wrote loopholes into the settlement agreement and conspired to expand claims to those who did not deserve them.

After twice being turned down by U.S. District Judge Carl Barbier in reviewing the payment method, the U.S. Fifth Circuit Court of Appeals agreed with BP that the claims payment calculation was faulty and ordered Juneau to amend how claimants are paid resulting in Policy 495, which greatly decreases payments for some claimants by creating new requirements for businesses seeking damages from the oil spill. However, the appeals court has refused to overturn the settlement, a ruling that was later denied at the U.S. Supreme Court.

One of the major problems as Becnel sees it is the introduction of Policy 495 over two years after the settlement agreement was made and after billions of dollars in claims paid out changes the entire process.

According to Becnel, if there was ever a class action settlement that begged for reconsideration to be overturned it was the Deepwater Horizon case. However, now that the U.S. Supreme Court has chosen not to rule on the settlement, Becnel and other attorneys like him -outside of the PSC and who number in the hundreds - have to live with the actions taken by the PSC as the claims program continues to roll out despite what many are calling tragic flaws.

(Editor’s note: This is the first of an installment or articles and accompanying video with attorney Daniel Becnel, who filed the original multi-district litigation against BP over the 2010 Deepwater Horizon oil spill.)

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