bp settlement - introduction

8/2/2019 BP settlement - introduction

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George W. ConkAdjunct Professor of Law & Senior Fellow, Stein Center for Law &

Ethics

Certified Civil Trial Attorney

Room 409

[email protected]

212-636-7446Torts Today tortstoday.blogspot.com

OtherwiseCommentari es on Law, Language & Poli tics

Blackstonetoday.blogspot.com

Fall 2013

Fordham Law School

BP Settlement

BP settlement 1
mailto:[email protected]:[email protected]


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8. Public nuisance resulting in pure

economic loss Restatement 3rd 9/3/13

An actor whose wrongful conduct harms

or obstructs public property or a public

resource is subject to liability for resulting

pure economic loss if the claimants losses

are distinct from those suffered bythe

public at large.

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Admiralty law preempts state

common law of tort Louisiana v. M/V Testbank, 752 F.2d 1019

(5th Cir. 1985)

Applying maritime law and rejecting state-law claims for nuisance by plaintiffsseeking to recover for economic lossessustained in connection with an oil spill

from a vessel on the Mississippi Riverwhich is federal water

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Oil Pollution Act 1990 33 U.S.C.. 2702

Elements of liability

(a) In general

each responsible party for a vesselor a facility from which oil isdischarged into or upon thenavigable waters or adjoiningshorelines or the exclusive economic

zone is liable for the removal costsand damages that result from suchincident.

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33 U.S.C.. 2702. Elements of liability

(A) Natural resources

Damages for injury to, destruction of, lossof, or loss of use of, natural resources...

(B) Real or personal property damage

(C) Subsistence use

(D) Revenues

Damages equal to the net loss of taxes,etc. ...by the Government of the UnitedStates, a State, or a political subdivisionthereof.

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33 U.S.C.. 2702. Elements of liability

(E) Profits and earning capacity

Damages equal to the loss of profits orimpairment of earning capacity... due tothe injury, destruction, or loss of real

property, personal property, or naturalresources...

(F) Public services

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FRCP 23 Class Actions

(a) Prerequisites.

(1) the class is so numerous that, joinderof all members is impracticable

(2) there are questions of law or fact

common to the class, (3) the claims or defenses of the

representative parties are typical of the

claims or defenses of the class; and (4) the representative parties will fairly

and adequately protect the interests of the

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Economic loss zone

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Proposed class action

settlements

Economic loss complaint

Medical benefits complaint

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Class definition: Natural Persons and

Entities who lost earnings, income, or

profits

Anyone living in Louisiana, Mississippi,Alabama or specified counties in Texasand Florida

Crew on vessels homeported or fishing inGulf waters

Owners of real estate

Commercial fishermen, vessel owners

Oyster leaseholders

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Exclusions

Claims for Economic Damage by Entitiesor Individuals based on employment in theBanking,Gaming, Financial, Insurance, Oil& Gas, Real Estate Development, andDefense Contractor industries, as well asEntities selling or marketing BP-brandedfuel (including jobbers and branded

dealers)

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Exclusions

Bodily Injury Claims BP Shareholder Claims

Moratorium Loss Claims

Claims relating to menhaden (or pogy)fishing, processing, selling, catching, orharvesting

Claims for punitive damages againstHalliburton and Transocean.

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Categories of recognized economic

harm claims

Individual Loss of Wages

Business Economic Loss

Multi-Facility Business Economic Loss

Start-Up Business Economic Loss

Failed Business Economic Loss

Failed Start-Up Business Economic Loss

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Property Damage

Loss of Use/Enjoyment of Real

Property

Coastal Real Property Damage

Wetlands Real Property Damage

Realized Real Property Sales Loss

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Special Categories

Vessels of Opportunity

Vessel Physical Damage

Subsistence Damage

Seafood Compensation Program

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For business losses

Compensation

framework

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Compare actual profit during post-spill

period to profits claimant might haveexpected

Step 1 Benchmark period minus 2010

loss period profits

Step 2 compensates for incremental

profits or losses relative to the benchmark

period

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Compensation & Benchmark Periods

The Compensation Period

Selected by the Claimant

- three or more consecutive monthsbetween May and December 2010

The Benchmark Period:

Pre-DWH Spill period claimant chooses asthe baseline for measuring its historicalfinancial performance.

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Compensation & Benchmark Periods

The claimant can select among the three

Benchmark Periods:

2009

2008-2009 average; or

The average of 2007-2009

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BPs lament expenses and

income do not match

Administrator has interpreted

revenue as cash received and

expenses as cash

Disbursed

Causal link of Business losses must

be shown

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5th Circuit October 2, 2013

Unjustifiable claims may be paid

The District Court must clarify how cash-basis claims are treated

Unlike `accrual accounting cash basisaccounting shows positive or negativecash flow but does does not demonstrateprofit and loss

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Causation reqts for business

economic loss claims NO causation evidence required for ZoneA businesses, Landing sites, commercialwholesale or retail dealer or primary

seafood processors

Zones B and C

V shaped pattern: 8.5 % or moredownturn compared to benchmark

Upturn of 5% or more in 2011 comapredto 2010

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Risk transfer premium RTP

Businesses added to 2010 losses

Tourism Zone A 2.5; zone B 2.0, Zone C2.0, Zone D 1.25

Charter fishing 2.5 in Zones A,B, or C

Zone D-1.25

Primary seafood processors of

shrimp/crab/oyster 3.0 (any zone) Other seafood 2.25

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RTP individuals

Tourism employees zones A, B, C 2.0,zone D 1.25

Charter fishing 2.5 Zones A, B, C

Zone D 1.25

Landing site 2.25 (all zones)

Non-tourism, non seafood Zone A 1.5 Zone B 1.25 Zones C, D 0.25

Individual periodic vendors 1.0

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Class action

Medical benefits

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Amchem v. Windsor (1997)

"Class members were exposed to different

asbestos- containing products, fordifferent amounts of time, in differentways, and over different periods. Some

class members suffer no physical injury orhave only asymptomatic pleural changes,while others suffer from lung cancer,

disabling asbestosis, or frommesothelioma . . . . Each has a differenthistory of cigarette smoking, a factor thatcomplicates the causation inquiry.

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Amchem v. Windsor (1997)

"The [exposure only] plaintiffs especially

share little in common, either with eachother or with the presently injured classmembers. It is unclear whether they will

contract asbestos-related disease and, ifso, what disease each will suffer. They willalso incur different medical expenses

because their monitoring and treatmentwill depend on singular circumstances andindividual medical histories."

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Medical Benefits Class

Claims for compensatory and punitivedamages and declaratory relief, broughtunder federal and maritime law fornegligence, negligence per se, gross

negligence, willful misconduct, and strictliability for personal injury and/or bodilyinjury, later-manifested injury, progression

of existing injury, damage, disease,mental or physical pain or suffering,emotional or mental harm or anguish

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DEFINITIONS

CLEAN-UP WORKERS at any time betweenApril 20, 2010, and April 16, 2012;

Resided in ZONE A for at least sixty daysbetween April 20, 2010, and September

30, 2010 (ZONE A RESIDENT), anddeveloped one or more

Resided in ZONE B for some time on each

of at least sixty days between

April 20, 2010, and December 31, 2010

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Excluded

Opt-outs from this settlement

* BP employees

* persons on Deepwater Horizon on April20, 2010

* anyone who has signed a release forsuch claims

* long-term (5 year) workers cleaning,loading, unloading or storinghydrocarbons, petrochemicals, or nuclearmaterials

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Remedies

Compensation for Specified Physical

Conditions claimed to be caused byexposure to oil and/or dispersants

Comprehensive Periodic Medical

Consultation Program providingregular medical examinations andtests to class members every three

years over a 21-year period

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Remedies

* Preservation ofclass members

rights to sue BP for compensatorydamages for physical conditions thatmanifest at a later date

* A transparent and efficient claimsadministration process.

* Establishes Gulf Region Health

Outreach Program

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Conditions

acute ocular, respiratory,

ear/nose/throat, dermal, and

neurophysical/neurological/odor-

related conditions

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Compensation

Clean-Up Workers Zone A and Zone B Residents

Enhancer for Overnight Hospitalization

and Payment of Actual Hospital Expenses, if applicable

Lump sum payments plus enhancers

$1,300 to $60,700

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bp settlement - introduction

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