BP should face test-case trials over Gulf oil-spill claims within a year, lawyers for victims seeking billions of dollars in damages said in court filings.
BP and other companies being sued over the April explosion of the Deepwater Horizon drilling rig should begin pretrial information exchanges next month, the lawyers told U.S. District Judge Carl Barbier in New Orleans.
“There is no reason to delay” getting cases prepared for 2011 trials, Stephen Herman, a lawyer for some of the victims, said yesterday in an e-mailed statement. “Justice delayed is justice denied.”
In its own filing, BP dismissed the victims’ push for early trials as “premature and overly ambitious.”
Barbier is overseeing about 400 oil-spill lawsuits seeking damages for everything from loss of business revenue to environmental cleanup costs. The judge is to hold a hearing today to begin organizing the litigation over the largest offshore oil spill in U.S. history.
Government scientists estimated the well has spewed more than 4 million barrels of oil into the Gulf of Mexico, making it the largest accidental maritime oil spill. The leak was about 16 times larger than the estimated 257,000 barrels lost by the tanker Exxon Valdez in a 1989 accident in Alaska.
BP has set aside $32.2 billion to pay spill costs and legal claims. The London-based company, which is selling assets, is replacing Chief Executive Officer Tony Hayward with an American executive Oct. 1. The company reported a second-quarter record loss of $17.2 billion.
Report on Cause
In a report this month, BP officials faulted their own engineers for the fatal blast at the company’s Macondo well and said contractors including Transocean Ltd., which owned the Deepwater Horizon rig, and Halliburton Co. share the blame.
All three companies were sued by spill victims over the explosion. Cameron International Corp., which made the blowout preventer used on the rig, also has been named as a defendant.
The companies are asking Barbier to require virtually all spill victims to have their economic-damage claims examined by administrator Kenneth Feinberg before they’re allowed to sue. BP is paying Feinberg to oversee the evaluation of claims outside court.
Requiring victims to first present their claims to the so- called Feinberg Fund, through which BP agreed to pay as much as $20 billion in damages, might delay litigation against BP for months while administrators sort out which claims qualify for payment, plaintiffs’ lawyers said in a Sept. 14 filing.
Push for Trial
The companies “want to delay substantive progress for six to eight months to see what has occurred in the BP Claims Facility, and then, perhaps, commence the litigation,” Herman said in the filing. Plaintiffs “believe the parties should be moving toward trial.” Herman is co-liaison counsel for the plaintiffs in the MDL along with James P. Roy, a maritime lawyer from Lafayette, Louisiana.
To expedite the handling of the cases, Herman and other victims’ lawyers want Barbier to divide the cases into four categories depending on the type of claim involved.
Families of workers killed or injured on the Deepwater Horizon rig should have their cases heard separately, as should business owners damaged by the spill’s fallout, according to the filing.
Cases brought by state and local governments over natural resource restoration or lost tax revenue should be heard separately from claims from businesses and individuals, the filing said.
U.S. Justice Department lawyers also are asking Barbier to set up “a special track for governmental claims” as part of the consolidated litigation, according to a court filing.
Possible U.S. Claims
“Although the U.S. has not yet filed a civil action related to the Deepwater Horizon oil spill, it has potential civil claims arising from the spill,” the government’s lawyers noted.
Suits spawned by the deaths and injuries of workers on the Deepwater Horizon rig, moored off the coast of Louisiana, deserve quick attention, said Kurt Arnold, a Houston lawyer representing some of the families.
“On the personal-injury and death claims, there’s not a lot of dispute because everybody knows who is liable,” Arnold said in a phone interview. “We need a trial-setting so there’s some incentive for the defendants to come to the table.”
If Barbier agrees to put cases into different categories, he’s going to have to decide whether to have separate judges preside over them, Edward Sherman, a Tulane University law professor, said in an interview.
“It would be unusual to have a judge assigned to each litigation track, but it has been done before,” said Sherman, who teaches class-action and complex litigation at the New Orleans-based school.
It also may be difficult to find federal judges in Louisiana free of potential conflicts of interest, Sherman added.
Six of 12 active judges assigned to the federal judicial district based in New Orleans removed themselves from spill- damage lawsuits before Barbier was named to oversee the litigation. The judges concluded they had conflicts tied to oil investments or personal relationships with lawyers or companies involved.
In June, Barbier said he sold his investment in companies linked to the disaster to avoid any appearance he might be biased. The U.S. Judicial Panel on Multidistrict Litigation, a committee of judges, selected him to oversee the consolidated BP cases last month.
Home for Trials
The process is designed to streamline the exchange of evidence and avoid duplication. Once pretrial proceedings are completed, the individual cases are sent back for trial in the courts where they were first filed.
Spill victims’ lawyers asked the judge to schedule a trial in September 2011 for a lawsuit by Transocean seeking to limit its liability. The company argues its financial liability for the spill should be capped at $26.7 million, citing a 159-year- old maritime law that limits a vessel-owner’s exposure to the value of its ship and cargo.
Eight other suits should be test cases for initial trials, including four under the Oil Pollution Act, two under maritime law, one-wrongful death claim and one personal-injury suit. Plaintiffs’ lawyers would determine which cases should serve as tests, they proposed.
The parties “should be moving toward trial of the limitation issue and a few test cases within a year,” Herman and Roy said in a Sept. 14 filing.
The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 2:10-md-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).
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