The Fifth Circuit Court of Appeals, in a 2-1 decision, issued a much-anticipated decision on class certification, and upheld the multi-billion dollar economic and property damages settlement agreement reached between BP and the Plaintiffs’ Steering Committee (PSC) in 2012. As we have written in previous articles, BP has mounted a ferocious multi-million dollar smear campaign in an attempt to gain public support and undo a settlement the company crafted and agreed to just a few years ago. The company has argued that the settlement agreement is impermissibly compensating claimants that did not suffer actual losses from the oil spill and, as a result, the Agreement should fall. Time and time again, however, the appeals panel has disagreed.
Judge Eugene Davis, writing for the majority, stated that while BP made numerous arguments, they all centered on BP’s assertion that claimants were receiving compensation even though they allegedly could not trace their economic damages to the oil spill. Judge Davis noted that the settlement agreement included rules requiring those wishing to be paid to “meet the descriptions of one or more” damage categories listed in the Settlement. Indeed, “both the named plaintiffs and the absent class members contemplated by the class definition include only persons and entities who can allege causation and injury in accordance with Article III,” Judge Davis said.
BP argued that a class settlement could not go forward without a thorough review of the merits of each claim. Considering that argument, in the order Judge Davis stated:
BP has cited no authority – and we are aware of none – that would permit an evidentiary inquiry into the Article III standing of absent class members during class certification and settlement approval under Rule 23 … It would make no practical sense for a court to require evidence of a party’s claims when the parties themselves seek settlement under Rule 23(e). Logically, requiring absent class members to prove their claims prior to settlement under Rule 23(e) would eliminate class settlement because there would be no need to settle a claim that was already proven.
The Davis majority also rejected a common tactic utilized by BP after the oil giant learned that it has undervalued the Settlement Agreement – to manufacture new evidence and ignore the factual path to the settlement. This was in the form of post-settlement expert declarations to support its contentions. The panel’s decision on that issue reads:
Although BP made no objection to the district court’s order certifying the class and approving the settlement agreement, BP asks this court to find an intraclass conflict of interest because the claimants allegedly include persons and entities that have suffered no injury. In support of this allegation, BP presents us with a series of economists’ declarations that had not been provided to the district court when the class was certified.
The Fifth Circuit’s decision was a major victory for businesses and individuals throughout the Gulf Coast. Perhaps more important, however, is the fact that the decision holds BP accountable for its promises it clearly made to the Gulf Coast. The company may very well appeal, but deep down in its corporate heart, BP has to know the right and only decision was reached by the Fifth Circuit.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.