It’s a settlement that hasn’t ended litigation. In fact, it appears to be triggering a good deal of courtroom drama. Two years ago, BP reached a deal that would pay out private claims from the Deepwater Horizon disaster, the Gulf Coast–polluting oil spill that killed 11 people. Thousands of residents and businesses have lined up with claims, and BP has already paid out billions. But the company is now contesting some of the claims (and the way they’ve been approved) and has embarked on a tough new litigation strategy, which may land some of the issues in question at the U.S. Supreme Court.
In this month’s issue, The American Lawyer’s Susan Beck, who has been covering litigation issues for the magazine for more than 25 years, examines the settlement and the subsequent wrangling over the case She spoke with ALM Editor in Chief David Brown about the article and BP’s litigation strategy.
David Brown: Susan, you’ve been reporting on litigation for many years. In your experience, how would you rank the BP case in terms of scale and importance?
Susan Beck: Aside from the 1998 Tobacco Master Settlement Agreement, this is one of the biggest, most complex collections of cases I’ve ever seen. As for importance, I think BP wants to make this case into their version of Citizens United—a ruling that changes the legal landscape. I don’t think it’s any coincidence they hired Theodore Olson of Gibson, Dunn & Crutcher, who argued Citizens United before the Supreme Court. It’s possible that the future of class action law could be altered by this case.
Brown: As you note in the article, the settlement seemed designed to help prevent the BP litigation from becoming another Exxon Valdez—with claims and suits continuing for decades. In light of your reporting, do you see the BP case now dragging on and on?
Beck: I can see this dragging on for a year to two, but not much longer. At some point in the next two years I think we’ll have a definitive ruling on the scope of the settlement, and the parties will have to abide by it.
Brown: One of the most interesting aspects of this story is how the company seems to be pushing back at the federal judge overseeing the case. The dangers of angering a judge seem fairly evident. What are the possible advantages?
Beck: This strategy is risky: Even if BP is focused on winning on appeal, I don’t imagine all the judges on the [U.S. Court of Appeals for the] Fifth Circuit appreciate its strategy of attacking court officials in the media.
One advantage, however, is that they’re probably scoring points with segments of their investor community, which is likely cheering it on. Remember, BP is a British company, and the British generally think the U.S. tort system is out of control.
Brown: What litigation lessons do you see here for other big companies—and their lawyers?
Beck: By being relentlessly aggressive, BP has prevailed on some important issues. But the company also faces the possibility of a big backlash from the courts. The Fifth Circuit issued a ruling in January that was quite harsh on BP, and the judges seemed perturbed by its arguments and tactics.
Brown: What should we expect in the months ahead?
Beck: In the Fifth Circuit, there are two key upcoming developments. The circuit will be deciding whether to grant BP’s request for an en banc hearing on its argument that the settlement is unconstitutional. In another appeal, a three-judge panel will decide if BP can contest the method being used to determine which plaintiffs qualify for an award.
And in the district court, a trial will likely be held sometime this year on how much BP will have to pay in civil suits brought by the federal and state governments. Its exposure there is huge, possibly as much as $17 billion, or even higher.