BP’s unrelenting attacks against how the Gulf oil spill civil settlement it agreed to is being handled aims to win over the public, but the strategy risks antagonizing a key constituent who is following every word — the federal judge overseeing the case.
Legal experts question the wisdom of BP’s biting newspaper ads, social media commentary, television interviews and newspaper opinion pieces at a time when U.S. District Judge Carl Barbier in New Orleans is weighing whether the British oil giant should face billions of dollars in punitive damages.
“It’s very dangerous litigation-wise to engage in that kind of hyperbole,” said Blaine LeCesne, a law professor at Loyola University in New Orleans who has followed the case.
BP said in a statement that it is simply informing its employees, shareholders and the general public that while it remains committed to paying legitimate claims arising from the 2010 disaster, it shouldn’t have to pay “claims tainted by misconduct or submitted by businesses that did not suffer losses.”
LeCesne and other legal experts don’t expect Barbier to factor the public relations campaign into his ruling on whether BP was grossly negligent in connection with the disaster. Barbier is viewed in the legal community as a level-headed judge who is able to stay above the fray.
But he scolded the company at a hearing earlier this month for BP CEO Bob Dudley’s “offensive” comments in a TV interview about claims administrator Patrick Juneau. Dudley had accused Juneau of “hijacking” the settlement.
Despite the tongue-lashing from the judge, the company’s strongly worded accusations have continued unabated since the hearing.
Last Thursday, for instance, BP’s public relations chief for the U.S., Geoff Morrell, wrote an op-ed piece in an Alabama newspaper that described the handling of the Gulf oil spill settlement as a “monument to plaintiffs’ lawyers’ greed.” The same day, the company ran an ad in The New York Times and Wall Street Journal that painted BP as a victim in the claims dispute and included public statements from business leaders attacking the claims process.
The latest salvos follow months of similar public statements about the settlement dispute. And they seem to have intensified in recent weeks as a federal appeals court weighs BP’s challenge of Barbier’s decision to uphold the method by which Juneau is paying claims.
BP’s public criticism hasn’t attacked the judge directly. But it is Barbier who approved the settlement; Barbier who approved Juneau’s interpretation of how business economic loss claims should be paid; and Barbier who denied BP’s efforts to suspend the spill payments while its complaints are investigated.
The three-judge federal appeals panel that heard oral arguments in BP’s appeal also questioned BP’s legal arguments. While BP’s publicity campaign has centered on its contention that businesses not harmed by the spill are getting money, the settlement did not require claimants to prove a direct link.
The legal question before the appeals court involves how damages are calculated, not what caused them.
“I think ultimately there’s not much benefit in doing this,” Tulane University law professor Edward Sherman said.
He said BP is either taking a risk in hopes the media blitz somehow might help the company in the future claims process regardless of the legal outcome, or perhaps just doing it for public relations. In either case, he said the strategy could backfire.
Sherman said BP’s maneuvering appears to be a calculated move, and the company probably believes that even if Barbier gets angry from time to time he won’t hold it against the company. Sherman said that may be right.
“The fact that the lawyers may criticize one aspect or another in how he handles the case I don’t think is going to affect him,” Sherman said.
Barbier has some big decisions ahead of him.
Among them, he must decide whether BP, Transocean and Halliburton were grossly negligent in connection with the April 20, 2010, rig explosion and oil spill off Louisiana. Eleven workers were killed and millions of barrels of oil spilled into the sea before BP’s well a mile beneath the sea was capped nearly three months later.
A gross negligence finding could open the companies up to billions of dollars in punitive damages to private plaintiffs and Gulf states. For BP, such a finding also would hold the potential of having to pay maximum fines under the Clean Water Act, which could add billions of dollars more to its oil spill tab.
With so much at stake, and the possibility that Barbier could rule anytime, legal experts say BP would be wise to be more cautious in its public relations offensive against the civil settlement claims process.
“It’s bizarre and counterproductive and ultimately it is going to hurt them,” LeCesne said of BP’s current strategy. “They are getting some very questionable advice in embarking on that path.”