A New Orleans federal judge will receive an update Friday on the mountain of litigation surrounding the 2010 Gulf of Mexico oil spill, amid a surge of complaints about a proposed class-action settlement of some of the lawsuits.
In the days leading up to the Friday status conference with U.S. District Judge Carl Barbier, the attorneys general of Louisiana and Mississippi, among others, have filed court documents objecting to various aspects of the deal.
They want Barbier to rule on their objections before a hearing scheduled to begin Nov. 8 on the fairness of the proposed settlement between British oil company BP and a steering committee representing thousands of individuals and businesses harmed in the oil spill that followed the blowout of BP’s Macondo well.
The settlement establishes a court-supervised center for collecting and evaluating the claims and proposing payouts using complex formulas based on such factors as where claimants lived and the damages they suffered.
The blowout led to an explosion that killed 11 men aboard the Deep-water Horizon drilling rig, but the settlement does not cover injury or wrongful death claims related to the rig disaster. It also doesn’t settle civil and possible criminal action by governments, suits among various companies over culpability for the accident, or claims against companies other than BP.
Mississippi Attorney General Jim Hood has asked the court to examine an earlier process BP set up, the Gulf Coast Claims Facility. His motion refers to “illegal and illegally obtained” quick-claims through which some plaintiffs received offers of cash settlements in exchange for releasing defendants from further claims.
Louisiana Attorney General Buddy Caldwell has raised objections to the settlement’s calculations for compensation to people in the seafood industry, and its assessment of economic and environmental damage to the Gulf Coast.
Groups representing seafood workers question a cap on their potential compensation.
While Barbier is not expected to make rulings at the status meeting, it will give him a chance to consider what further information he will need for the November hearing.
“The parties proposed a solution, and he found it reasonable. Now the judge is in the position of receiving evidence to determine whether it is actually working,” said Chris Dean, a Houston attorney for several spill plaintiffs.
BP has said it believes the settlement is working as intended when it was agreed upon by the company and the Plaintiffs’ Steering Committee.
“As anticipated in the schedule set by the court, and as is common in any class-action settlement approval process, some class members have filed objections to the settlement,” said Scott Dean, a BP spokesman.
“BP’s and the PSC’s responses to these objections are due Oct. 22, 2012. As we have said repeatedly, BP and the PSC believe that the settlement agreements, which received preliminary approval by the Court on May 2, 2012, are fair, reasonable and adequate under the law.”
Plaintiffs’ Steering Committee representatives were unavailable for comment.
After Barbier tentatively approved the deal in May, the Deepwater Horizon Claims Center began accepting claims. But that process has moved slowly.
Last week, the claims center said that it has made 38 settlement offers in response to more than 25,000 economic claims from businesses and individuals, and has made no payments.
Plaintiffs’ lawyers, government officials and claimants themselves have complained that without offers, claimants have no basis for deciding ahead of a Nov. 1 deadline whether to opt out of the settlement and pursue their own litigation.
“The problem with this settlement is that claimants won’t know what they are getting until the settlement is complete,” said Brent Coon, a Beaumont attorney representing about 15,000 spill clients. “When that number finally pops up, they will have already waived their right to complain.”