Sunday, March 4, 2012

More Information on the BP Settlement

As I've been sifting through news report on the BP class action settlement, I've noticed that it's hard to find information on the actual settlement terms.  From what reporters are describing, it sounds like the parties are requesting that Judge Barbier certify two Rule 23(b)(3) classes.  The most comprehensive information comes from the BP Press release.  Here are a few of the most notable passages on the settlement's terms and conditions:

The proposed settlement is comprised of two separate agreements, one to resolve economic loss claims and another to resolve medical claims. Each proposed agreement provides that class members would be compensated for their claims on a claims-made basis, according to agreed compensation protocols in separate court-supervised claims processes. The proposed agreement to resolve economic loss claims includes the financial commitment for the Gulf seafood industry and a fund to support continued advertising that promotes Gulf Coast tourism. 

The proposed agreement to resolve medical claims involves payments based on a matrix for certain currently manifested physical conditions, as well as a 21-year medical consultation program for qualifying class members. It also provides that class members claiming later-manifested physical conditions may pursue their claims through a mediation/litigation process. Consistent with its commitment to the Gulf, BP would also provide $105 million to improve the availability, scope and quality of healthcare in Gulf communities. This healthcare outreach program would be available to all individuals in those communities, regardless of whether they are class members. It would include expanding capacity to address community health needs, including primary care, mental health services and access to environmental health specialists, as well as enhanced training and education related to Gulf Coast health issues.

Under the proposed settlement, class members would release and dismiss their claims against BP. The proposed settlement is not an admission of liability by BP. 

The proposed settlement also provides that, to the extent permitted by law, BP will assign to the PSC certain of its claims, rights and recoveries against Transocean and Halliburton for damages not recoverable from BP. 

The proposed settlement is subject to reaching definitive and fully-documented agreements within 45 days, and if those agreements are not reached, either party has the right to terminate the proposed settlement. Once there are definitive and fully-documented agreements, BP and the PSC would then seek the Court’s preliminary approval of the settlement. Under federal law, there is an established procedure for determining the fairness, reasonableness and adequacy of class action settlements. Pursuant to this procedure, and subject to the Court granting preliminary approval of both agreements, there would be extensive outreach to the public, including through advertisements and direct mail, to explain the settlement agreements, class members’ rights, including the right to “opt out” of the classes, and the processes for making claims. The Court would then conduct fairness hearings at which class members and various other parties would have an opportunity to be heard and present evidence. The Court would then decide whether or not to approve each proposed settlement agreement.
The proposed economic loss settlement provides for a transition from the Gulf Coast Claims Facility (GCCF) administered by Kenneth Feinberg. "Ken Feinberg has overseen the GCCF since it began operating in August 2010, and we thank him and his team for their dedication and professionalism," said Mr. Dudley. "During Mr. Feinberg's tenure, BP has paid approximately $6.1 billion to resolve more than 220,000 claims from individuals and businesses through the GCCF." 

A court-supervised transitional claims process for economic loss claims will be in operation while the infrastructure for the new settlement claims process is put in place. During this transitional period, the processing of claims that have been submitted to the GCCF will continue, and new claimants may submit their claims. 

Payments in class action settlements typically are not made until after final approval of a settlement, but BP has agreed not to wait for final approval of the economic loss settlement before claims are paid. The economic loss claims process will continue under court supervision before final approval of the settlement, first under the transitional claims process, and then through the settlement claims process established by the proposed economic loss agreement.


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Actually this isn't class actions. It's a complicated Multidistrict Litigation, sent to the Eastern District of New Orleans by an order of the MDL panel dated August 10, 2010, in
Docket No. MDL 2179. Judge Claude Barbier was appointed by that order. In his case management order of October 19, 2010, he grouped the various kinds of claims into "bundles". In an order on January 12, 2011, he clarified that all personal injury claims post-April 20, 2010 (the date of the Deepwater Horizon explosion) would be in the B3 bundle. Master comlaints were filed for each bundle on December 15, 2011. The B3 bundle master complaint contained a motion for certification as a class for all personal injury plaintiffs, but I don't believe Judge Barbier has ever ruled on it. Judge Barbier has proceeded to rule on dispositive motions by bundle. He ruled on motions to dismiss the B3 bundle on September 30, 2011.
One of the holdings in the September 30, 2011, order concerned medical monitoring costs. Judge Barbier held that there is no separate cause of action for medical monitoring costs in federal maritime law, though medical monitoring costs may be available as part of a remedy. Therefore, plaintiffs who had alleged actual physical injury from exposure to the crude oil or dispersant chemicals could also get medical monitoring costs; those who sought medical montoring costs without also pleading physical injury had not sufficiently pleaded a cause of action. Perhaps it is also worth noting that while the Oil Pollution Act of 1990 esalbishes several types of injury for which damages can be recovered, personal injury is not among them although economic injury is. The judge was therefore dealing entirely with state law (which he held to be preempted) and federal maritime tort law. In any event, the proposed settlement, to the extent I understand it, clearly goes beyond Judge Barbier's ruling on the B3 bundle in making medical monitoring costs (once every three years) available.

Posted by: Marc Poirier | Mar 6, 2012 10:55:16 PM

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