By Mike Sacks and Amanda Bronstad, From The National Law Journal
BP PLC has agreed to pay $20 billion in fines—the largest in U.S. history—for the Deepwater Horizon disaster spill and cleanup of 3.1 million barrels of oil that spilled into the Gulf of Mexico and onto the shores of coastal states, the U.S. Justice Department announced Monday.
The agreement, detailed by Attorney General Loretta Lynch at a press conference and in a consent decree filed in a New Orleans federal court, includes $5.5 billion to be paid for civil claims under the Clean Water Act, $7.1 billion in natural resources damages under the Oil Pollution Act, $4.9 billion to the five Gulf Coast states, and up to $1 billion to local governments.
The overall amount is larger than the tentative $18.7 billion settlement announced in July.
“Once approved by the court, this agreement will launch one of the largest environmental restoration efforts the world has ever seen,” Lynch said.
The consent decree, submitted to Judge Carl Barbier in the Eastern District of Louisiana, makes official the terms BP detailed in a July statement that said the company had set aside $18.7 billion for payments.
The larger amount announced on Monday factors in “amounts of money the company provided for the restoration to the gulf,” Lynch said, calling the $20 billion figure “a more exact number.” According to the court filing, BP would complete compensation by 2031.
BP offered additional clarification in a statement released after the announcement.
“Today we are another step closer to finalizing the settlement we announced on July 2, fulfilling our commitment to help restore the Gulf economy and environment. The filing of the consent decree does not reflect a new settlement or any new money. It covers the same payments—and same amounts—disclosed by BP when we announced this agreement in July. The government has announced a number that includes amounts previously spent or disclosed by BP,” the company wrote.
Some 80 percent of the Clean Water Act penalty will go toward environmental restoration work mandated by the Restore Act of 2012. A trustee council—including representatives from the U.S. Environmental Protection Agency, the departments of Commerce, Interior and Agriculture, and the states of Alabama, Florida, Louisiana, Mississippi and Texas—will guide the projects funded by the $7.1 billion in natural resources damages, $1 billion BP committed under an earlier framework agreement and $700,000 set aside for “adaptive management and unknown conditions.”
“Taken as a whole, this restoration is strong and fitting,” Lynch said. “BP is receiving the punishment it deserves, while also providing critical compensation to the damage to the gulf region.”
Washington lawyers Daryl Libow of Sullivan & Cromwell and Brian Israel of Arnold & Porter represented BP and the company’s oil and exploration subsidiary, respectively. Neither were immediately reached for comment.
BP’s legal fees
The record decree, which is subject to objections during the next 60 days, is unlikely to face many challenges, said David Logan, a professor at Roger Williams University School of Law.
“The chance of it being at this point unraveled by the judge strikes me as pretty small,” he said. “This is the last chapter in a book that’s had many chapters.”
Judge Barbier in New Orleans has scheduled a March 23 hearing on final approval of the deal.
Separately, Barbier on Monday approved legal fees and costs that BP has agreed within 30 days to pay plaintiffs attorneys who assisted in the case, including those who represented attorneys general. Those payments include:
►$40 million to a general common-benefit fund for lead plaintiffs attorneys in the litigation against BP.
►$52 million to Panama City, Florida’s Harrison, Rivard, Duncan & Buzzett for its representation of the state of Florida.
►$20 million to the state of Louisiana, which was represented by New Orleans-based Kanner & Whiteley.
In a statement on Monday, Louisiana Attorney General Buddy Caldwell said BP has agreed to reimburse the state for all of its expenses, including legal fees and all litigation costs, in addition to the $6.8 billion amount in the settlement.
“I am especially pleased that we have a firm commitment from BP that all of Louisiana’s costs, including litigation expenses and attorneys’ fees, will be paid by BP,” Caldwell said in a statement. “No part of Louisiana’s recovery will be used to fund any of these reimbursements. Therefore, this entire case was handled on behalf of Louisiana at absolutely no cost to taxpayers.”
►$10 million to the Alabama attorney general’s office.
The fees include $6.2 million to Montgomery’s Beasley, Allen, Crow, Methvin, Portis & Miles. Beasley Allen principal Rhon Jones said the firm spent “many, many thousands of hours” on the case. “Beasley Allen worked very hard on behalf of the state, on behalf of the governor, for this,” he said.
Other firms that represented Alabama were New Orleans-based Lewis, Kullman, Sterbcow & Abramson; Breit Drescher & Imprevento in Virginia Beach, Virginia; and Mobile’s Cunningham Bounds.
Another $10 million went to the attorney general’s in-house legal staff, according to a spokesman for Attorney General Luther Strange.
“Today’s outcome is due in large part to the hard work of more than 20 state attorneys and staff,” Strange said in a statement on Monday. “Thanks to the thousands of hours they expended on this task, my office was able to secure $10 million in legal fees from BP, all of which will go to fill a hole in our current budget created by a funding shortfall from the Alabama legislature.”
►$5 million to the Mississippi attorney general’s office, which was represented by Mike Moore Law Firm in Flowood, Mississippi.
►$1 million to the state of Texas.
The settlement caps five years of litigation over the spill, but a few loose ends remain. Lead plaintiffs lawyers in a separate $9.9 billion deal to resolve economic damages claims from individuals and businesses have petitioned the U.S. Court of Appeals for the Fifth Circuit to reverse changes to the way claim amounts are calculated.
Former FBI director Louis Freeh, acting as special master, has continued to seek the return of settlement payments to individuals and businesses based on allegedly false claims.
The BP consent decree is posted at the link below.
IMAGE: Dr. Brian Stacy, NOAA veterinarian, prepares to clean an oiled Kemp’s Ridley turtle, as part of ongoing animal rescue and rehabilitation efforts.
Photo: NOAA’s National Ocean Service via Wikimedia Commons
For more on this story go to: http://www.nationallawjournal.com/id=1202738941155/BP-Gets-Punishment-it-Deserves-Feds-Say-in-Record-20B-Settlement#ixzz3nu1p9RZW