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BP loses twice in federal court

Published: 
Tuesday, March 4, 2014

Oil giant BP plc’s (BP) request to a federal judge to delay oil spill compensation payments to seafood workers was denied. BP had appealed to US District Judge Carl Barbier to put on hold the second phase of payments under the US$2.3 billion Seafood Compensation Fund. Per the lawsuit, alleged Texas lawyer Mikal Watts, fraudulently claimed to represent 40,000 deckhands in the seafood compensation programme, apart from using fake Social Security numbers and other fake documents that calls for prompt suspension of all payments. However, the argument by the Plaintiff’s Steering Committee was that Watts and his clients—real or not—signify a small portion of overall claims and have insignificant impact on the ultimate settlement. The plaintiff opposed to the delay, while the judge pushed BP lawyers to prove that claims from the deckhands, which Watts says he represents, are key to deciding the settlement value.

The judge was unconvinced and commented it would be several months before a second phase of payment is distributed if the seafood compensation plan is rejected at present. The attorney for the class suing BP also commented that people who may be due valid payments should not have claims delayed because of accusations against Watts. BP estimates the total payment under the spill compensation to exceed US$7.8 billion. Under a substantial settlement deal attained last spring, thousands of Gulf Coast businesses and residents hurt by the 2010 BP oil spill in the Gulf of Mexico have started to receive payments. As part of the first round of payments, the Seafood Compensation Fund has already processed 21,871 claims and handed out over US$1 billion in payments to claimants. The terms of the settlement states that any money remaining in the fund after the first round of payments will be distributed among claimants in a second round.

In another case, a federal court ruled on Friday that the oil giant is not entitled to see confidential documents used by a court-appointed investigator who has alleged that some attorneys acted improperly in the claims process arising from the 2010 Gulf oil spill. The investigator, former FBI director Louis Freeh, has said some private attorneys improperly used a lawyer who once served on claims administrator Patrick Juneau’s staff to expedite a US$7.9 million claim. Freeh has recommended that the court consider disallowing the claim. He also recommended sanctions against the lawyers and improvements on controls in the claims process. Freeh’s investigation also noted a potential conflict of interest and breach of confidentiality by an appeals administrator in the claims process, who has resigned. BP had asked US District Judge Carl Barbier to order Freeh to turn over various documents from the probe. But Barbier on Friday said BP has shown no reason why it should see the confidential documents. In rejecting BP’s bid for the documents, Barbier noted that Freeh’s findings in the probe have not been adverse to the oil giant.
(Yahoo Finance)