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BP Refresher for the Supreme Court

3 comments

With BP’s Petition for a Writ of Certiorari pending with the Supreme Court, rather than rehashing the reams of material which necessitate denial of the writ, I will attempt to narrow this SCOTUS refresher to the highlights.

If anyone lacks standing, it is BP

BP argues that the Settlement Agreement’s causation standards violate the “cases and controversies” requirement of Article III. This is not the argument BP made below to either the District Court or the 5th Circuit Court of Appeals.

In furtherance of the Settlement Agreement’s approval, at various times BP told Judge Barbier of the Eastern District of Louisiana that the causation standards were “more than reasonable,” “more than fair,” “objective,” “transparent,” “standardized,” “economically appropriate,” “consistent with . . . economic reality,” and an “efficient” method of establishing causation.

Then to 5th Circuit Court of Appeals Judge Edith Clement, BP counsel Ted Olson said:

“This is a Settlement, and with respect to the causation issue, that is not the issue that is before this court . . . [The] settlement agreement with respect to … causation … was a compromise, which every settlement agreement is.” (emphasis added)

One may ask, why then did BP appeal approval of the Settlement’s causation standards if the company itself drafted them, lobbied for their approval in the District Court and defended them in front of the 5th Circuit? Answer: BP did not appeal the Settlement’s causation standards. I repeat, BP did not appeal the District Court’s approval of same. That means that BP is not even an Appellant in the instant Supreme Court case. For that reason alone the petition should be denied.

BP flouts American judicial system, rule of law

BP has consistently said one thing while doing another. To call BP a bully is too kind. Some have questioned BP’s, ahem, veracity. Judge Barbier, who has been in the trenches of this litigation, knows all too well BP’s skill at “redirection.” To his credit, he is having none of it.

“BP accuses the Claims Administrator of ‘rewriting’ and ‘systematically disregarding’ the Settlement Agreement. To the contrary, when it talks about causation, if anyone is attempting to rewrite or disregard the unambiguous terms of the Settlement Agreement, it is counsel for BP.

“Frankly, it is surprising that the same counsel who represented BP during the settlement negotiations, participated in drafting the final Settlement Agreement, and then strenuously advocated for approval of the settlement before this Court, now come to this Court and the Fifth Circuit Court of Appeals and contradict everything they have previously done or said on this issue. Such actions are deeply disappointing.” – Judge Carl Barbier, Order, November 22, 2013

Then just this week BP attempted to sneak in hundreds of pages of “evidence” in a matter dealing with the retention of the Settlement Program’s Claims Administrator. This despite Judge Barbier’s earlier admonition that no additional evidence was to be submitted. Of this tactic, Barbier said “regrettably, this is not the first time that BP has attempted to flout this Court’s briefing orders.”  I assume he was referring to this episode?

Reaching the merits, BP’s petition fails

There is no issue of constitutional import at play here. In fact, as BP counsel Ted Olson told 5th Circuit Judge Edith Clement during oral argument:

“[T]he important thing, and the issue that we’re talking about here, is, … what everyone agrees in this case. This appeal presents a straight forward question of contract interpretation.” (emphasis added)

“Contract interpretation,” not exactly the stuff of Supreme Court lore.

And what of the purported circuit conflict? While the federal circuits have applied two slightly differing tests to determine Article III standing, known as Denney and Kohen, the 5th Circuit, when hearing BP’s arguments below, said:

“This case is not a vehicle, however, for us to choose whether Kohen, or Denney articulated the correct test. For the purposes of the present case, these questions are entirely academic because BP’s standing argument fails under both the Kohen test and the Denney test.”

In a related opinion, 5th Circuit Judge Leslie Southwick concluded that “there is nothing fundamentally unreasonable about what BP accepted but now wishes it had not.” Fellow 5th Circuit jurist, Judge Eugene Davis concurred saying “ … the reason that BP has identified no [legal] authority for [its] proposition is that it is nonsensical.”

If you settle, you don’t litigate

Lest we forget, this is a Settlement (SET-TLE-MENT):

“Like any settlement, the settlement that has been reached to resolve this litigation is a compromise, a yielding of the highest hopes in exchange for certainty and resolution. The settlement stands alone, however, in its substantive generosity to the class members and in its procedural fairness.” – BP Lead Attorney, Richard Godfrey, Fall 2012

This brings us to why litigants choose to settle in the first place. In a litigation setting, both sides do the math, weigh the risks of trial and then choose to fish or cut bait. If they settle, they don’t litigate. When they don’t litigate, there is no trial. If the BP Settlement violates the Constitution because the Plaintiffs didn’t have the opportunity to prove their legal entitlements to a jury, then every settlement violates the Constitution.

I doubt that is public policy the Supreme Court wishes to endorse.

3 Comments

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  1. Eyeswideopen says:
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    So what does BP really want after 9 months of negotiating a settlement?

    Mr. Godfrey stated at the Fairness Hearing at 10:04 “ The settlement is working as we anticipated and as we negotiated with Mr. Rice and Mr. Fayard.”

    SEE Below:

    Fairness Hearing transcript:

    Mr. Roy 8:56am

    This settlement should amicably resolve considerably well in excess of a hundred thousand economic claims arising out of what is clearly the world’s largest oil spill disaster.

    The settlement before you today, Judge, creates a court-supervised settlement program to process and pay claims. It gives those businesses and individuals who suffered economic damages a way to quickly get a fair and objectively determined settlement and to avoid litigating for potentially 20 or more years, like what happened in the Exxon Valdez oil spill litigation.

    Mr. Roy 8:59am

    The settlement program mandates a claimant-friendly process. This is not a bunch of insurance
    adjusters trying to save money for BP. This program, if you approve it for finality, this program is bound, and BP agreed to this, to be claimant friendly;

    Mr. Roy 9:05am

    All of this while the negotiating team, for over six months, led by Joe Rice and Calvin Fayard, worked virtually daily all across this continent and England to negotiate this settlement with BP’ s counsel and principles, a very hard fought negotiation. Nothing was easy. It was a settlement that was built from the ground up, one module at a time.

    Mr. Roy 9:09am

    There is no cap on the amount BP will have to pay under this settlement. While BP has apparently publicly reported that it views the value of the economic settlement at around $7.8 billion, the truth of the matter, Your Honor, is that if it ends up paying 20, 25, 30 billion, BP has agreed to do that

    MR. GODFREY: 9:44am

    Good morning, Your Honor. I’m Rick Godfrey for BP.

    Good morning, Judge Shushan It’s always a pleasure to see you again. I’ve missed our daily meetings and calls throughout the course of the summer. Last spring, BP and the PSC announced yet another step that BP was taking to make good on its commitment to the citizens and communities of the Gulf Coast states.

    Specifically, BP agreed, after months of intense, indeed brutal negotiations around the clock, nine months and one day, over 145 face-to-face meetings, we agreed to enter into two comprehensive and historic settlement agreements designed to fairly and generously compensate the legitimate claims of those who were injured as a result of the oil spill in this tragic casualty.

    MR. GODFREY: 9:54am

    Point two, the settlement program has already issued over $1.3 billion in payment determinations, over $400 million in the transition process, $952 million as of Wednesday of this week. Ninety-five percent of the claimants who have been issued determinations have accepted them.

    MR. GODFREY: 10:04 am

    The settlement is working as we anticipated and as we negotiated with Mr. Rice and Mr. Fayard.

    Mr. Stuart Smith 11:16 – 11:41 am

    Lead objector Mr. Smith explains in details the problem with the settlement.

    Mr. Herman 12:47 pm

    We’re responsible, we’re accountable to Your Honor, and we’re accountable to the class. The truth is, no matter what anybody says, we always put the interest of the class first.

    Mr. GODFREY: 1:01 pm

    Respectfully, on behalf of BP, we would ask the Court to enter final approval of this settlement.

    More Class Members and Claims They Never Intended To Pay ?

  2. Thomas says:
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    A well-written summation of BP’s hypocritical and misguided attempts to defraud the American citizens harmed by this tragedy. We should not forget BP’s tarnished track record involving numerous DEADLY safety-related incidents which all occurred as a result of unsafe practices. BP is responsible for the wrongful death of fathers, sons, brothers, uncles, cousins. These people who died and the families who have had their lives uprooted from this disaster deserve closure. Well written sir.

  3. up arrow

    […] Juneau for that very position.  Remember that BP agreed to the structure of the settlement.  Remember that BP once praised not only Juneau but the functioning of the class action settlement program […]

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