Legal ramifications of the Deepwater Horizon disaster live on 6 years later

By Vimbai Chikomo | Apr 23, 2016

BATON ROUGE -- Wednesday, April 20, marked the six-year anniversary of the fatal explosion of the Deepwater Horizon oil rig and subsequent spill that sent millions of gallons of oil gushing into the Gulf of Mexico. Six years later, the legal and environmental ramifications live on.

"This week marked the six-year anniversary of Deepwater Horizon—an important time to reflect on the 11 lives that were lost, and the thousands of residents and businesses that were impacted by the spill,” Melissa Landry, executive director for Louisiana Lawsuit Abuse Watch, told the Louisiana Record. “From a legal perspective, it also serves as reminder that lawsuit reform is desperately needed in Louisiana.”

The fatal 2010 blast killed 11 people, injured 115 others and dumped 4.9 million barrels of oil into the Gulf of Mexico for nearly three months.

The disaster is the worst oil spill in the history of the United States. It devastated the local environment and an untold number of businesses operating along the Gulf, tainted the public’s perception of offshore oil and gas drilling, and triggered an avalanche of lawsuits.

Earlier this month, U.S. District Judge Carl Barbier approved an estimated $20 billion settlement in a final BP settlement -- the largest settlement with a single entity in the history of the U.S. Department of Justice.

The settlement includes $5.5 billion in federal Clean Water Act penalties, $8.1 billion for natural resource damage and up to $1.1 billion for other claims.

The settlement will be paid over roughly 16 years.

In addition, BP will pay $4.9 billion to Gulf states (Alabama, Florida, Louisiana, Mississippi and Texas) and up to $1 billion to local government agencies.

BP pleaded guilty to 11 felony manslaughter charges in 2012 and has reportedly estimated its total cost for the disaster at an astounding $54.6 billion.

With the settlement comes criticism that plaintiffs’ attorneys will walk away with billions in legal fees for the settlement surfaced.

“In the immediate aftermath of this tragedy, personal injury trial lawyers flocked to the Gulf Coast from all across the country looking for ways to make money off of the accident,” Landry said. “In the following years, personal injury lawyers generated a slew of bogus claims in addition to all of the legitimate claims that were filed. Essentially, they turned the historic class-action settlement into an all-you-can-eat buffet and made our legal system the laughing stock of the nation.”

Landry said attorneys “continue to exploit the disaster for fun and profit still today.”

The Plaintiffs Steering Committee (PSC), a group of 17 trial lawyers overseeing the settlement, could receive more than $2.5 billion in legal and negotiating fees when all is said and done.

"Usually what happens when this happens is those people who are appointed take the majority of the money,” St. John the Baptist Parish plaintiff's attorney Daniel Becnel said in a July interview with the Louisiana Record.

Becnel has been an outspoken critic of the PSC and its treatment of the case.

“They wrote the plan, and they went and got the plaintiffs that fit the plan, and they made a fortune,” Becnel said of the PSC members.

Such a lucrative payoff, has left many wondering who the real beneficiaries of the Deep Horizon claims program are.

“Make no mistake about it, the legal battle over Deepwater may finally be over, but the image of Louisiana as a plaintiffs’ lawyer paradise will linger in the minds of job creators for a very long time,” Landry said.

Following the explosion, BP initially set up a Deepwater Horizon claims program to compensate victims affected by the disaster. The way the compensation system determining eligibility relied solely on documents, however, invited a host of fraudulent claims.

The sheer volume of claims prompted BP to establish a hotline to reward people who come forward to report fraudulent claims. Lawyers for BP also appeared before a New Orleans court in 2013, arguing that the terms of the compensation agreement were leading many to file fraudulent claims and asked Barbier to freeze payouts on tens of thousands of claims.

In one of its motions, BP alleged that a senior staff attorney, Lionel Sutton, from the Deepwater Horizon Court Supervised Settlement Program (CSSP) had improperly profited from claims and taken a $40,000 referral fee from the New Orleans-based Andry Lerner Law Firm, attempting to quickly resolve a claim worth just less than $8 million.

Former FBI Director Louis B. Freeh investigated the allegation. Freeh had been asked by Barbier to be a special investigator on the case looking into fraud allegations after claims administrator Patrick Juneau indicated an internal investigation into the recovery program showed potential conflicts of interest.

Barbier refused to halt the settlement payouts, determining there wasn’t enough evidence to support widespread fraud. Barbier added that he was "offended by what he saw as attempts to smear the lawyer administering the claims.”

BP also filed a motion to have Juneau removed as claims administrator after BP alleged Juneau was improperly calculating business economic loss claims resulting in payments larger than what the claimants were entitled to. The U.S. Fifth District Court of Appeals later found Juneau was misinterpreting the settlement agreement concerning those claims and ordered him to change the way the claims were calculated.

The following year, BP tried once again to remove Juneau by filing a motion in September 2014 claiming Juneau had a conflict of interest stemming from his work for the state of Louisiana prior to being named claims administrator. BP also claimed Juneau lied to Freeh when asked about his prior involvement in the case and expedited the claims of friendly plaintiffs’ attorneys.

Juneau fired back in motion, accusing BP of “revisionist” history and pointed out in his filing that at least six members of BP’s legal staff and administrative team were aware of his prior work with the state.

Though many claimants have received compensation for their losses, many others are still waiting for their day in court.

Attorney Brent Coon of Texas-based Brent Coon & Associates Law Firm Lawyers represents more than 3,000 clients who have yet to be compensated in their legal claims against BP. The plaintiffs declined BP’s settlement offer in 2012 to resolve thousands of private claims and have been in a state of uncertainty -- waiting for instructions on how to proceed from Barbier.

“Those guys are unfortunately sitting there," Coon told the Louisiana Record last October. "A lot of the business owners couldn’t outlast it. They were starving and couldn’t get any recourse, and some of them went under. Some of these folks are getting old, five years later. Some of them you lose — some of these people die off.”

Coon said approximately 10,000 litigants opted out of the 2012 settlement.

According to the claims administrators overseeing the settlement, a total of $5 billion had been paid to 91,984 claimants as of June 30, 2015. 

While many living outside the affected region have moved on with their lives, it is abundantly evident to those directly impacted by the oil spill that the devastation will continue well beyond the foreseeable future for generations to come.


Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Louisiana Lawsuit Abuse Watch State of Louisiana

More News

The Record Network