NEW ORLEANS – Judge Carl Barbier bristled often at BP and ruled in favor of the administrator paying oil spill damage claims in federal court Friday, summarily rejecting BP’s attempts to reinterpret last year’s multi-billion-dollar settlement.
New documents filed by claims administrator Patrick Juneau likely sealed BP’s fate – and could make the oil giant’s latest appeal to the U.S. 5th Circuit even more difficult.
BP lawyer Rick Godfrey argued in the district court Friday that BP had been surprised in September and October to find Juneau paying millions to certain types of businesses that don’t always pay expenses at the same time they earn corresponding revenues. He contended that BP hadn’t realized until the fall that Juneau was interpreting the settlement so that businesses that actually made more money in 2010 than before the spill were able to collect for “fictitious losses.”
But Juneau filed testimony by accountant Mark Staley, who said he specifically warned both BP and the plaintiffs in April 2012, before they signed the agreement, that the language of their proposed settlement created just that kind of scenario for many “variable profit” businesses. (See affidavit)
And BP did not heed the warning so the language was not changed.
Godfrey spoke passionately in favor of the 1,000-page settlement when Barbier held a fairness hearing in November. It wasn’t until after Barbier gave final approval to the contract that BP started complaining.
Godfrey, a lawyer at Kirkland & Ellis in Chicago, has other concerns. He wrote an email last year that explicitly told the plaintiffs how BP thought a business’ net profits should be compared from before to after the spill. He said then that the phrase “comparable months” throughout the settlement document should mean the “same months.”
But he turned around last month and filed for an injunction against Juneau that argued the exact opposite: That the claims administrator was creating “absurd” results by always using the same months and never deviating from that formula for these “variable profit” businesses.
Asked how he can justify the apparently contradictory positions, Godfrey repeatedly declined to comment Friday.
BP has already said that Godfrey’s pre-settlement emails are not to be considered by Barbier because the language of the agreement is clear. Of course, it wasn’t clear enough for BP to be able to agree with the judge, the administrator or the plaintiffs on what it means.
“It seems to me they’re trying to have their cake and eat it too,” said Tom Young. “Either it’s plain language or it’s not. It seems to be very plain language. And if they want to say it’s not plain language, let’s go outside the four corners of the agreement, which would include emails like the one from Mr. Godfrey, to see what the language was really intended to be.”
Young, an attorney from Tampa, Fla., representing 1,500 claimants, has started a petition at Change.org/BrokenPromise calling on BP to "stand by its commitment to the business owners the company gave its word to."
“For the last 12 months or so they have been saying that they will abide by this agreement. In fact, they’ve been fully behind it,” Young said. “But their actions certainly speak louder than their words.”
Steve Herman, lead counsel for the class plaintiffs, also took aim at BP’s actions. He showed documents in court in which BP was appealing Juneau's awards to businesses by saying their specific type of business couldn't possibly have suffered losses due to the spill -- even though they were businesses that were included in the settlement.
Those same appeals also seemed to threaten the claimants with perjury charges if they say their losses are "due to the spill" and BP can show they actually weren’t. That's contrary to the terms of the settlement, which says tourism and seafood claimants almost anywhere south of I-10 do not have to prove the cause of their losses.
Barbier's skepticism was on full display throughout the hearing Friday. When Godfrey said Juneau’s calculations led to “absurd results,” the judge shot back: “The results are only absurd in your view because you don’t agree with the outcome. If the agreement says this is how you calculate it, then that’s how you calculate it and it’s a loss."
He called BP's lawsuit against Juneau a "belt and suspenders" attempt to get the case to the appels court, then questioned whether the 5th Circuit even had jurisdiction over such interpretive questions.
The judge even referred to an Eyewitness News report from Wednesday when I showed how BP was trying to deny world-famous chef and packaged-seafood maker John Folse's claim by saying his company isn't a seafood processor.
That’s in spite of the fact that BP brought Folse and his packaged seafood to London for an event at last year's Olympics. And the chef appeared, both at his Donaldsonville manufacturing plant and in England, proudly wearing a BP chef’s coat.
The courtroom broke out in laughter when the judge said, "Are you seriously saying he's not a seafood processor.... That sounds strange to me."
Godfrey said he hadn’t looked closely at Folse’s claim, even though it was one of just two highlighted by name in the plaintiffs’ official response to BP’s motion for an injunction. He also complained that he was restricted by confidentiality rules that the plaintiffs and others weren’t.
BP responded to the courtroom defeat by saying it still thinks the judge is wrong and vowed to fight his ruling at the 5th Circuit Court of Appeals, which is just across the street from the U.S. District Court.
"BP continues to believe that the Claims Administrator’s interpretation of the Settlement Agreement as to business economic loss claims is contrary to the agreement and has produced unjustified windfall payments to numerous business claimants for non-existent, artificially calculated losses.
BP believes that such a result is completely at odds with the parties’ stated intent in reaching a settlement last year," BP spokesman Scott Dean said.