Exxon Valdez Lawyer: Louisianans, 'To Use A Legal Term,' Are 'Just F--ked'

Discussion in 'Politics & Religion' started by OPTIONAL777, Jun 8, 2010.

  1. Long after oil stops spilling from the Gulf and the ecological catastrophe caused by the spill begins to be cleaned up, the process of determining the extent to which BP owes the afflicted will be litigated in the courts.

    And while the case against the oil company seems fairly clear-cut (BP admits, after all, to being responsible for the worst environmental disaster in U.S. history), a lawyer with perhaps the most relevant experience on the matter at hand is painting a depressing picture about the litigation ahead.

    "f you were affected in Louisiana," said Brian O'Neill, an attorney with the firm Faegre & Benson, "to use a legal term, you are just f--ked."

    More than any attorney in the country, O'Neill personally understands the implications of that imprecise legal term. For more than two decades, he represented fishermen in civil cases related to the now second-most-damaging spill in U.S. history: the Exxon Valdez spill in 1989. And from it, he learned valuable lessons about how to sue an oil giant for the damages it has caused -- above all, to push for the best and plan for the worst.

    "In Valdez we had 32,000 legitimate claims -- that was a lot," he said in an interview with the Huffington Post. "I think there will be more claims in this one."

    "These big oil companies, they have a different view of time and politics than we do," he added. "The fact that BP hard-asses it a little bit for 5 to 10 to 15 years, despite all the bad publicity there may be between segments of society and BP as a result [of this spill]. Exxon sure weathered it really well. The market went up the next day for Exxon stock [after the settlement]. They just thrived despite treating an entire state poorly. And there is a lesson there for BP, and that is: it really doesn't matter whether you treat these people nicely or not. The only difference is if you extract oil. It sounds cynical but it might be true."

    The similarities between the two crises are telling in many ways. When Exxon's ship hit Prince William Sound's Bligh Reef -- in the process, releasing an estimated minimum of 10.8 million gallons of oil into the water -- the company pledged (like BP has done now) that they would cover the entire cost of the cleanup and all legitimate claims of damages. Two decades of litigation and appeals resulted in punitive damages being reduced from $5 billion to $500 million.

    The irony, as O'Neill tells it, is that the law Congress passed in the wake of that spill -- the Oil Pollution Act of 1990 -- may end up hindering the type of relief that Gulf residents can expect currently. Under that legislation, a $75 million cap was placed on economic damages that an oil company can pay as a penalty for a spill (this isn't true, O'Neill notes, in states that have passed their own liability caps -- of which Louisiana isn't one). Congress is currently trying to lift that cap. But there are constitutional questions about whether it can do so retroactively to cover BP.

    "Constitutionally, I don't know whether you can do that. I don't know whether it is ex post facto," O'Neill said. "It will likely be challenged. I would, if I was representing BP."

    There are other problems that the Exxon Valdez vet recognized when discussing the forthcoming courtroom battles for BP. There are questions, for starters, as to who actually can sue the oil company under the Oil Pollution Act law and whether, in fact, those 11 workers killed on the rig will have their settlements capped by the Death On the High Seas Act. Mainly, however, O'Neill is concerned over the pervasive influence that the oil industry has on all sector of governance -- which he predicts will weigh heavily on the legal process.

    "This is more important than banks," he said. "This is oil. And at some point in time, the administration and the states will resolve all their dealings and it will leave fisherman and the tourist industry to resolve their differences in the courts. It could be another 20 years till then because BP [is] going to defend this like Exxon did."
  2. "Flinty legal minds are dreaming up scenarios in which BP would file a prepackaged bankruptcy and separate the costs of the cleanup — and potentially billions of dollars in legal claims — into a separate corporate entity."

    BP bankruptcy ahead? Rivals 'licking their chops'

    Tue Jun 8, 2:40 pm ET

    Some have wondered whether BP can financially survive the disaster in the Gulf. Sure, the oil giant is a diverse, international money-making machine, but the Guardian reported Monday that BP had already spent $1.25 billion seven weeks into the oil spill, with no clear end in sight. The company will be dealing with an avalanche of lawsuits for years (a New Orleans attorney told me she expects that some local law school grads will spend the bulk of their careers working on spill-related cases) and the company's stock recently nose-dived. In spite of all this, BP CEO Tony Hayward has repeatedly insisted that his company will see the disaster through until the Gulf Coast is "made whole" again.

    But New York Times financial reporter Andrew Ross Sorkin notes that many industry watchers doubt BP can survive. Rivals Exxon and Shell are already circling like buzzards in anticipation that the company may stagger into oblivion. Or, as Sorkin puts it, they're "licking their chops" hoping to acquire a BP in bankruptcy: "Flinty legal minds are dreaming up scenarios in which BP would file a prepackaged bankruptcy and separate the costs of the cleanup — and potentially billions of dollars in legal claims — into a separate corporate entity."

    Sorkin reckons that the company's legal liability and long-term cleanup costs could work out to a red-ink tally of $15 billion to $40 billion. He writes: "The company has about $12 billion in cash and short-term investments, but there is already a debate about whether it should cut its dividend out of fear that it could run out of money. Of course, it could sell assets or seek loans, which in this environment is still not that easy."

    Sorkin notes that Wall Streeters are already talking about a "Texaco scenario" — a buyout from an industry rival akin to the deal struck allowing Pennzoil to take over Texaco after the former firm won a multibillion-dollar jury verdict against the latter in a dispute over the sale of Getty Oil. But that was the outcome of a bare-knuckled clash of corporate chieftains, and the BP catastrophe probably won't produce any such dramatic resolution overnight. After all, Exxon — the company responsible for the Alaska Valdez disaster, which had formerly been the largest oil spill in U.S. history — is now the most profitable and highest-capitalized corporation in the country.

    — Brett Michael Dykes is a national affairs writer for Yahoo! News.
  3. Louisiana ,Texas and Mississippi are solid Red States.The people and fishermen support drilling and The big business over the people Republic party.Sometimes you get what you ask for,and many of them will be fucked.No way will BP pay for the fishermen losses,tourism losses,clean up workers who will be getting cancer in the future etc

    I have a feeling the government will have to step in and cover some of those losses,Another case of corporate welfare but you wont hear the Republicans whining about that
  4. Scumbag oil companies...

    When the public interest is at stake, like oil spills, the government needs to take a strong hand to protect the public interest...

    Bush and Dick "Fuck You" Cheney are scum for allowing these oil companies to operate with relative impunity...
  5. The Oil Pollution Act of 1990 included an 8 cent per barrel tax for cleanup, where is that money?
  6. It went to secure the oil fields in Iraq...

  7. Great question. Another good question- all of the money that is swallowed year after year in the FEMA and disaster relief fund black hole. Another disasterous failure of the federal government...

  8. How in the heck did you know that?


    Or maybe Kuwait.

    You're probably right but I'm sure that was not the intended use.
  9. I'm not sure the Patriot Act and nation building, corporate welfare and lobby groups buying votes were in the vision of the founding fathers either...

    So we have that going for us...


  10. This is highly misleading, which is not surprising considering the source. The litigation in the Exxon case largely concerned punitive damages, which are designed not to compensate people for damages but to punish a wrongdoer. I am sure lawyers like O'Neill were frustrated at not being able to get their hands on a huge punitive damages award, but the Supreme Court ruled it was excessive. It had nothing to do with people being compensated for legitimate losses they actually suffered.

    As for BP, their chances of relying on the liability cap are slim indeed. The law removes the cap if gross negligence is proved, and it is hard to see how BP was not grossly negligent. Apparently, their man on the scene countermanded the strongly put views of the drilling contractor and insisted on a risky procedure, resulting in the blowout. Their chances of invoking the liability cap are slim.
    #10     Jun 8, 2010