If there is a settlement the public will be denied knowing much critical information about what lead to the Deepwater Horizon/Macondo catastrophe. That doesn't bode well for moving forward in preventing the next one.
I guess we had best put the popcorn deliveries on hold until we learn more.
Sunday, February 05, 2012, 7:01 AM
Some leading analysts and legal observers believe the highly anticipated "trial of the century" over the 2010 Gulf of Mexico oil spill, set to begin in three weeks, will end before it starts. BP and negotiators for federal and state governments are frantically working to confect a settlement so they won't have to leave the fate of billions of dollars in potential pollution fines and spill damage payments in the hands of U.S. District Judge Carl Barbier.
The experts all agree any settlement would have to be a "global settlement" -- one that will resolve federal civil fines under the Clean Water Act, Endangered Species Act and other laws; compensate federal and state governments for damages to natural resources; and settle any criminal violations as well.
A whole other settlement effort deals with the thousands of private claims that are also part of the sweeping litigation, but those claims, expected to amount to a few billion dollars at most, are a relatively small part of the case.
David Uhlmann, a University of Michigan law professor who headed the Justice Department's Environmental Crimes Section for seven years, predicts there's a 70 percent to 80 percent chance that BP will settle with the government before Feb. 27, for both criminal and civil violations, for between $20 billion and $25 billion.
…
Uhlmann believes it would be foolish for BP to fight a government that also regulates a huge chunk of its business.
"BP decided to continue drilling in the Gulf (after the oil spill) and in fact is looking to expand its footprint in the Gulf," Uhlmann said. "BP cannot be successful if the company is in a legal war with the government that controls drilling leases. Making peace with the federal government is of enormous value to BP's business model."
And if the case does go to trial, embarrassing evidence is sure to come out in depositions and internal BP memos that will remind the public how BP cut corners while drilling and sealing the well in an effort to save money and time.
It isn't only BP that wants to avoid trial. The government does not want to risk the chance an unfavorable judge or appellate court will slash the fines it stands to collect.
Alabama Attorney General Luther Strange, the point man for a coalition of states suing BP, rig owner Transocean, contractor Halliburton and others, said Justice Department officials, states attorneys general and BP met in Washington last month to sketch out a settlement.
…
In terms of settling with the government, there are three main types of claims: civil penalties, mostly under the Clean Water Act; environmental costs under the Natural Resources Damage Assessment; and criminal fines if the Justice Department charges companies or individuals with environmental crimes or manslaughter for the 11 crew members killed.
…
People like Blaine LeCesne, a tort law professor at Loyola University who has been following the litigation closely, say that would be selling the Gulf Coast short.
"Louisiana stands to gain a huge amount from this, which is why I don't want it to settle," LeCesne said. "It's ironic that the worst environmental damage that Louisiana has ever endured at the hands of an oil company could be its salvation."
…
The Obama administration made an unusual show in 2010 of announcing a criminal probe into the spill, and in this election year, the president will be under pressure from his Democratic base to get tough on Big Oil's poster children. It's unclear, though, whether those political realities favor a trial -- which might impose more pain on the oil companies, but probably not before the election -- or a near-term settlement that yields criminal guilty pleas and possibly smaller monetary penalties.
…
Also in the consolidated lawsuit are more than 100,000 private plaintiffs seeking compensation and punitive damages. The committee of lawyers representing them say they are going to trial Feb. 27 whether the government plaintiffs are with them or not.
The question is, how many of those suing claimants still have legitimate cases in court?
BP says that before claimants can seek relief in court under the Oil Pollution Act, they must formally present their claims through a separate process run by mediator Kenneth Feinberg. Appointed by BP and the White House, Feinberg has settled claims from 192,000 individuals and businesses, collecting releases from them that render them ineligible to collect any more from BP or other defendants.
…
"My understanding is that a lot of the claims that haven't settled are fairly weak," said Ed Sherman, a Tulane law professor who studies complex litigation and has attended many of the pretrial hearings. "There's every incentive for them to stay in the (litigation), but the truth is that those claims may not amount to a lot."
Uhlmann agreed, but noted that even a small group of strong plaintiffs could easily have claims totaling $1 billion. If Barbier agrees that they deserve punitive awards as well, it would be well worth the lawyers going to trial, Uhlmann said.
If BP settles with the government but not the rest of the plaintiffs, it will still have to endure the embarrassment, the uncertainty and the cost of a trial, meaning the oil giant might be motivated to settle the private claims, too.
...
Even given the powerful incentives to settle, the obstacles are formidable. Time is short. There is an incredible number of parties to the case, each with its own interest. Uhlmann said there are "too many" Justice Department divisions involved, not to mention five Gulf states. And on the defense side, BP has settled with investment partners and some smaller contractors, but is still fighting with rig owner Transocean, cementer Halliburton and blowout preventer manufacturer Cameron over how much fault they share.
On the plaintiffs' side, there's plenty of discord. Several key lawyers who weren't appointed by Barbier to a plaintiffs steering committee routinely blast this leadership group in court filings. They don't think the committee deserves a cut of their clients' awards, and they are threatening to opt out of any settlement the committee might strike.
"There are 130 lawyers in our consortium representing tens of thousands of plaintiffs that would opt out," said Danny Becnel, who has settled hundreds of cases with Feinberg but won't settle any more now that Barbier has ruled that his clients must share 6 percent of any Feinberg payments with the steering committee. "I'm going to trial with the ones I have left, unless BP agrees to settle with my clients individually for top dollar."
Sherman thinks all that complexity, along with the lack of any true precedent in the case, makes settlement before Feb. 27 unlikely.
..
But Uhlmann is convinced it won't go that far, at least not on the government side.
"A global settlement will be difficult to reach. It will not occur until the eve of trial, but it will get done," he said.