Vessels monitor a oil burn in the area of the Deepwater Horizon disaster on the Gulf of Mexico, Tuesday, July 13, 2010. BP officials have placed a containment cap over the leak in hopes that the flow of oil will be diminished. (AP Photo/Dave Martin)
President Barack Obama makes a statement after being briefed on the BP oil spill relief efforts in the Gulf Coast region, Friday, June 4, 2010, at Louis Armstrong International New Orleans Airport in Kenner, La. (AP Photo/Charles Dharapak)
Protesters gather outside of the BP offices in San Francisco on Wednesday, May 12, 2010 to demonstrate against the Gulf oil rig disaster. (AP Photo/Marcio Jose Sanchez)
This image from video provided by BP PLC early Sunday morning, June 13, 2010 shows oil continuing to pour out at the site of the Deepwater Horizon oil well in the Gulf of Mexico. The Coast Guard has demanded that BP step up its efforts to contain the oil gushing into the Gulf of Mexico by the end of the weekend, telling the British oil giant that its slow pace in stopping the spill is becoming increasingly alarming as the disaster fouled the coastline in ugly new ways Saturday. (AP Photo/BP PLC) NO SALES
This image from video provided by BP PLC early Sunday morning, June 20, 2010 shows oil continuing to gush millions of gallons a day, from the broken wellhead, at the site of the Deepwater Horizon oil well in the Gulf of Mexico. (AP Photo/BP PLC) NO SALES
GULF SHORES, AL - JUNE 08: Workers pick up oil patches and tar that washed up on the beach at Bon Secour National Wildlife Refuge from the Deepwater Horizon oil spill in the Gulf of Mexico on June 8, 2010 in Gulf Shores, Alabama. Early reports indicate that BP's latest plan to stem the flow of oil from the site of the Deepwater Horizon incident may be having some success. (Photo by Joe Raedle/Getty Images)
Oil floats in the Gulf of Mexico near Orange Beach, Alabama, U.S., on Friday, June 18, 2010. The BP Plc oil spill, which began when the leased Transocean Deepwater Horizon oil rig exploded on April 20, is gushing as much as 60,000 barrels of oil a day into the Gulf of Mexico, the government said. Photographer: Kari Goodnough/Bloomberg
Oil cleanup workers hired by BP pick up oil on the beach in Gulf Shores, Ala., Friday, July 2, 2010. Oil from the Deepwater Horizon incident is expected to come ashore over the July 4th weekend. (AP Photo/Dave Martin)
In this image taken from video provided by BP PLC at 18:17 CDT, a new containment cap, top, is lowered over the broken wellhead at the site of the Deepwater Horizon oil spill in the Gulf of Mexico, Monday, July 12, 2010. Deep-sea robots swarmed around BP's ruptured oil well Monday in a delicately choreographed effort to attach the tighter-fitting cap that could finally stop crude from gushing into the Gulf of Mexico nearly three months into the crisis. (AP Photo/BP PLC) NO SALES
This combo made from images taken from video provided by BP PLC shows oil flowing from two of three valves on the new 75-ton cap atop the site of the Deepwater Horizon oil spill in the Gulf of Mexico at 17:04 CDT Wednesday, July 14, 2010, left, and the top of the cap at 17:56 CDT on Thursday, July 15, minutes after the flow of oil was choked off. BP vice president Kent Wells said the oil stopped flowing into the water at 14:25 CDT after engineers gradually dialed back the amount of crude escaping through the last of three vents in the cap, an 18-foot-high metal stack of pipes and valves.(AP Photo/BP PLC) NO SALES
The view from an approaching helicopter shows the armada of drillships and other vessels surrounding the site of the blown out BP well in the Gulf of Mexico about 40 miles off the coast of Louisiana. Credit Brett Clanton / Chronicle
Oil gushes from a valve atop the failed blowout preventer (BOP) at the BP Deepwater Horizon oil spill site in the Gulf of Mexico off the coast of Louisiana, U.S., in an image captured by the Skandi remotely operated underwater vehicle (ROV) camera at 7:35 a.m. Central Standard Time (CST) on Tuesday, July 13, 2010. BP Plc installed a new cap on its leaking Gulf of Mexico oil well and will start testing today whether this will stop the gusher while work continues on a permanent plug. Source: BP Plc via Bloomberg
EDITOR'S NOTE: EDITORIAL USE ONLY. NO SALES.
GULF OF MEXICO, LA - JULY 27: (EDITORS NOTE: Distortion caused by heat.) Ships assist in clean up and containment near the source of the BP Deepwater Horizon oil spill July 27, 2010 in the Gulf of Mexico off the coast of Louisiana. Work continues to put a permanent plug on the well which has leaked an estimated three to five million barrels of oil. (Photo by Chris Graythen/Getty Images)
Hairdresser Karen Jackson wears a t-shirt that reads "We've been BPeed on!" on the front of the shirt and "Gulf Oil Disaster 2010-??" on the back Saturday, July 3, 2010, in Orange Beach, Ala. Jackson says she is worried about the effect the spill is having on her community and what will happen if local business continues to falter. "I would hate to have to leave this place. We love it here." She said her business is way off what it should be for the season, "down here we make all of our money in the summer," she says. Her husband's work as an electrician has dried up she says, so he has signed on to work cleanup for BP. ( Smiley N. Pool / Houston Chronicle )
A driver rolls down the highway with messages such as "$ave the Gulf Coa$t" and "Tony Hayward C.E. O of B.P. Give us out Live Back" while driving Sunday, June 27, 2010, in Pensacola, Florida. ( Smiley N. Pool / Houston Chronicle )
This still image from a live BP video feed shows a view from a submersible while checking the integrity of the well head on August 3, 2010 in the Gulf of Mexico. BP prepared Tuesday to plug the worst oil leak in history, although the Gulf of Mexico region will be counting the environmental and economic costs for years, perhaps decades, to come. Already delayed by a week due to Tropical Storm Bonnie, the long-awaited "static kill" was put off again at the last-minute when a leak was discovered on Monday in the cap that has been sealing the runaway well since July 15. US spill chief Thad Allen said the leak had been stopped overnight and that the operation to ram in heavy drilling fluids, known as mud, would commence as soon as "injectivity tests" had given the procedure the all-clear. AFP PHOTO / BP == RESTRICTED TO EDITORIAL USE / NO SALES / NO MARKETING / NO ADVERTISING CAMPAIGN == (Photo credit should read HO/AFP/Getty Images)(Photo Credit should Read /AFP/Getty Images)
In this image taken from video provided by BP PLC at 12:23 a.m. EDT, Saturday Sept. 4, 2010 Aug. 3, 2010 shows the blowout preventer that failed to stop oil from spewing into the Gulf of Mexico being raised to the surface. The blowout preventer wasn't expected to reach the surface until Saturday, at which point government investigators will take possession of it. (AP Photo/BP PLC) NO SALES
DAUPHIN ISLAND, AL. | JULY 4, 2010 : A cleanup worker, wearing a protective coverall and carrying a small scoop, punctuates an otherwise typical holiday beach scene as patrols the beach looking for tar balls on Independence Day. While exact numbers are elusive, tourist business along the Gulf Coast all reported feeling the sting of lost income from a noticeable dip in tourism this summer following the Deepwater Horizon spill.
GULF OF MEXICO | JUNE 26, 2010 : Streaks of oil are seen on the surface of the water near the site of the Deepwater Horizon spill in the Gulf of Mexico. The amount of oil spilled, and what happened to the oil remains in debate, but in August, the Department of Energy and United States Geological Survey announced, that it estimated a total of 4.9 million barrels of oil had been released from the BP Deepwater Horizon well.
GRAND ISLE, LA. | JULY 15, 2010 : Oil containment boom floats just off the pier as fishermen cast lines near the bridge leading to the island after sun sets on the first full day of fishing after a ban on sport fishing was lifted. Commercial fishing remained closed, but happy recreational fishermen flocked to the water on a beautiful evening. Most were BP contractors working on the cleanup. One was Bobby Walker of Houma, La., who said he had been coming to the island to fish for over 30 years and praised the great fishing and natural beauty of the island. "But who would have ever thought I would be here all summer working on the oil spill."
As settlement talks continue between the Plaintiff Steering Committee and BP over the Deepwater Horizon disaster, outside legal experts are speculating on the potential value of the plaintiffs’ cases.
The steering committee represents individuals and businesses that have sued.
Calculations may center around whether the sides believe BP would be found, in a court setting, to have acted negligently or grossly negligent.
The first would trigger compensatory damages for economic losses, while grossly negligent would add possible punitive damages for plaintiffs.
Blaine LeCesne, a torts law professor at Loyola University, who has closely followed the case, believes that the accident has strong potential for a finding of gross negligence. In his view, if plaintiffs were awarded punitive damages, the final amount doled out by the judge overseeing the case could be much higher than $14 billion, which Bloomberg News reported Monday as a possible settlement figure.
“I still think the plaintiffs have sold themselves a little short, because they could have doubled that with punitive damages,” said LeCesne.
Under federal maritime law, in the case of gross negligence, plaintiffs are eligible for both compensatory and punitive damages.
While compensatory damages are limited to the amount of the loss, punitive damages could double or even triple the amount of the compensatory losses, particularly if the court finds that the defendants’ actions were fiscally motivated. In the Valdez settlements, punitive damages were awarded at a one-to-one ratio with compensatory damages, but LeCesne believes that ratio could go higher in this case.
“They probably did some preliminary calculations with attorneys who have filed suits and didn’t want to take the chance of waiting years for punitive damages to be paid out,” LeCesne said. “Some of the plaintiffs are in pretty desperate straits and probably preferred to get on with their lives. They may have needed the funds sooner rather than later.”
LeCesne believes that if BP is able to broker a deal with the plaintiffs, it will make a huge push to resolve its case with the federal and state governments as well.
“I don’t think BP has the stomach for the trial, with good reason – the facts and law are clearly against them and they can’t win this one,” LeCesne said. “You have strict liability, multiple deep pocket defendants who can afford to pay the judgment, good prospects for punitive damages and billions of damages involved.”
Both the Clean Water Act and the Oil Pollution Act impose strict liability, meaning that a responsible party (in this case, for the well) has to pay damages in case of an accident, regardless of whether their actions were negligent or not.
LeCesne also speculates that a settlement with individual plaintiffs would strengthen the hands of two state governments, Louisiana and Alabama, suing BP.
“I think that if Louisiana were to name its price – say, five billion – BP would gladly write that check,” said LeCesne. “If they are successful, they will have gotten out cheap for 14 billion on the plaintiffs’ side. If the PSC settles with BP, it gives the remaining governmental plaintiffs a lot of increased leverage to name their own price to settle the remainder of the case.”