2 states say spill deal is inadequate

A proposed settlement of claims relating to the 2010 Gulf of Mexico oil spill is insufficient for spill victims in Louisiana and Mississippi, the states have told a federal judge overseeing the deal.

The two states aren’t party to the proposed settlement between BP and a committee representing plaintiffs, and they aren’t asking U.S. District Judge Carl Barbier to throw it out.

But the states’ lawyers are challenging particular parts of the deal, arguing they have responsibilities to protect their states’ residents.

“I don’t think that is going to affect the court’s ultimate approval of the settlement, although it could result in some changes to certain portions,” said Blaine LeCesne, a torts law professor at Loyola University.

The federal government – also not a party to the proposed deal – filed documents earlier this month saying that the disaster resulted from “gross negligence” by BP and Transocean.

BP’s Macondo well 50 miles off the Louisiana coast blew out in April 2010, triggering an explosion that destroyed Transocean’s Deepwater Horizon drilling rig and killed 11 men. Millions of barrels of oil spilled into the Gulf of Mexico.

David Uhlmann, former head of the Justice Department’s environmental crimes section who now teaches law at the University of Michigan, said the state and federal governments are trying to protect their own civil claims.

They “want to make sure that Judge Barbier does not make any findings of fact that would undermine their ability to prove gross negligence in the civil penalty trial,” Uhlmann said in an email.

‘Impossible to evaluate’

Louisiana Attorney General Buddy Caldwell said in his recent filings that not enough evidence has been collected to measure economic and environmental damage.

“Without any unbiased information regarding the actual losses and the potential for future harm suffered by plaintiffs, it is impossible to evaluate the strength of their claims to determine whether the settlement is fair or reasonable,” Caldwell wrote.

Caldwell complained in particular about the agreement’s $2.3 billion cap on payments arising from damage to the fishing industry.

In a separate motion, a group representing Gulf fishermen contends that the settlement would divert funds from commercial fishermen to pay property damage claims, and that the allocation formulas are unfair.

Barbier has scheduled a November hearing on whether he should approve the settlement. Barbier has given it tentative approval, and a court-appointed claims payment system has begun making settlement offers to Gulf Coast individuals and businesses.

Prospective claimants have until Nov. 1 to decide whether to participate in the settlement.

The settlement does not address civil and possible criminal complaints by federal, state and local governments.

Mississippi Attorney General Jim Hood focused on provisions of the settlement that carve the region into zones, each with different paperwork requirements and different formulas for amounts claimants can receive.

In one zone, for example, the settlement stipulates that claimants who can prove damages need not prove the oil spill caused them, Hood said. In another zone, business claimants must show that their profits were lower in the year of the spill than afterward.

‘Not back to normal’

“The formula assumes that in 2011 everything was back to normal. “We are not back to normal. Water-related businesses have gone out of business, marinas have gone bankrupt, and marina/condominium developments have been canceled,” Hood wrote.

LeCesne said Barbier probably will take the various criticisms into account in determining whether the settlement is fair, the central issue in the November hearing.

“I don’t think any of the objections rise to the level of a fatal blow to the settlement,” LeCesne said. “You are not going to be able to satisfy all those who are potentially affected by the disaster.”

emily.pickrell@chron.com