With BP Oil Spill litigation class certification resolved, all eyes now turn to the Business Economic Loss (BEL) panel, which is considering the causation parameters of the economic settlement as set forth in Exhibit 4B. BP is arguing that the settlement agreement’s causation parameters require the Claims Administrator to factually trace a claim’s damages to the oil spill. The Fifth Circuit correctly determined that the manner in which claimants should be compensated is a question of contract interpretation – not an issue of class certification. Thus, the ultimate decision on causation will reside with the BEL panel. Even so, Judge Davis in the court’s opinion correctly noted that Exhibit 4B determines causation for a claim in the settlement. Indeed, nowhere in the settlement agreement is there a requirement that a claimant must meet a causation standard beyond the formulas in Exhibit 4B.
When faced with questions about the intent behind the formulaic parameters of Exhibit 4B, Judge Davis stated that BP never objected to Exhibit 4B’s application, nor did the company appeal or object to the interpretation that the frameworks would compensate claimants pursuant to the terms of the settlement “without regard to whether such losses resulted or may have resulted from a cause other than … oil spill” when questioned by the Claims Administrator.
Based on BP’s representations during settlement negotiations, as well as the mountain of evidence and BP’s own admissions to the Court and Administrator Pat Juneau, no plausible explanation exists other than that the Exhibit 4B formulas (along with the excluded businesses that BP ironically refused to compensate because the company claimed the businesses were not damaged by the oil spill) are the sole causation determinant. So what gives? Put simply, BP has manufactured a post-settlement causation argument, and the company is waging war in the media in hopes that public opinion sways its way. The company has attempted to bolster its argument with self-serving post-settlement declarations that completely contradict the company’s previous position and statements to Judge Barbier, and multi-million dollar smear ads in major news outlets.
The Fifth Circuit has gathered a significant amount of information on the settlement and has wisely sought clarification from Judge Barbier, who, along with Magistrate Judge Shushan, could not have been more hands on and closer to the parties’ negotiations as the settlement was negotiated and papered. While I suppose anything could happen, we are very confident that the Fifth Circuit will strike down BP’s arguments and put this settlement back on track to compensating claimants.
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