Judge Urges BP Oil Disaster Litigants to Settle, Avoid Trial

September 17, 2010

The U.S. judge overseeing the hundreds lawsuits filed by shrimpers, restaurateurs and others against BP Plc and its partners as a result of the Gulf of Mexico oil spill urged the parties on Thursday to consider an agreement to avoid a trial.

Most of the cases were sent from around the United States last month to U.S. District Judge Carl Barbier in New Orleans. He will oversee what is expected to be among the costliest and most complex litigation in U.S. history.

Over 400 people packed the courtroom and two overflow rooms for the hearing, court security said, to hear Barbier talk about the types of legal proceedings in play, including potential civil and criminal lawsuits from the U.S. Department of Justice.

“It’s never too early to settle,” Barbier said at the close of the first major hearing in the case.

He singled out personal injury and wrongful death claims stemming from the April explosion of the Deepwater Horizon oil rig, which set off the worst oil spill in U.S. history. Eleven workers died in the disaster, which led to a ban on commercial fishing and closed beach resorts.

“One of the tasks we will have will be how to organize and structure and coordinate all the related things going on,” Barbier said.

It will take time to obtain evidence in the cases and to sort through the environmental and maritime laws that will come into play.

The judge set aside the months of October and November in 2011 for the first major trial in the case, which will be to determine how liability will be shared among the parties.

The two sides went to court on Thursday having agreed to break the lawsuits into bundles, such as lawsuits by injured rig workers and claims by businesses.

Barbier faces the task of stitching together widely divergent interests, including those of the companies involved.

BP has set up a $20 billion fund to pay claims stemming from the spill, and hired the Obama administration’s former executive pay czar, Kenneth Feinberg, to administer it.

People suing the companies have urged the court to move to trial as quickly as possible. They want BP and its co-defendants, including Transocean Ltd and Halliburton Co., to turn over evidence such as contracts and e-mails in the coming weeks.

A group of attorneys mostly from Texas who represent injured rig workers have broken away from the other plaintiffs and wants the court to move even faster, but Barbier rejected their accelerated schedule.

The defendants have argued that people who lost income or business from the spill cannot sue until they give BP’s fund a chance to pay their claims.

The U.S. government has asked that any lawsuits it brings be hived off from the rest, but environmentalists want those lawsuits grouped with theirs.

In addition to the tactical issues, values must be set on claims.

The case in U.S. District Court, Eastern District of Louisiana is In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico April 20, 2010, No. 10-MDL-2179.

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