BCA News (Deepwater)

BCA News (Deepwater) http://gulfcoastdisaster.com BCA News RSS Feed from Deepwater en-us All Rights Reserved. © Copyright IBCTV 2011 Thu, 19 May 2011 12:00:59 CDT Thu, 19 May 2011 12:00:59 CDT Deepwater BCA NewsRudy Lombergerrudy@opusviproductions.com Beaumont attorney files claims in BP oil spill lawsuit http://gulfcoastdisaster.com/site/bca_news?post_id=1089 Deepwater Beaumont attorney files claims in BP oil spill lawsuit 00:00 Beaumont attorney files claims in BP oil spill lawsuit Beaumont attorney Brent Coon has spent the last several months filing claims on behalf of the 5,000 Deepwater Horizon plaintiffs his firm represents. Coon said his firm is expecting litigation in some of the cases to come to a head next spring. Among those represented by Brent Coon & Associates are Gulf Coast boat owners who claim they were not paid for providing first responder services, people who worked in oyster or commercial fisheries or marinas, and business owners who lost customers because of the spill's lasting effects, Coon said. A federal judge last year chose several law firms, including Coon's firm, to take depositions and collect case documents in the massive federal lawsuit against BP and other companies accused of causing the largest oil spill in U. S. history. Coon oversaw most of the litigation against BP after the Texas City refinery explosion in 2005. The Deepwater Horizon drilling rig exploded in the Gulf of Mexico April 20, 2010, killing 11 people and dumping millions of barrels of oil into the Gulf. http://gulfcoastdisaster.com/site/bca_news?post_id=1089 Deepwater BP's Iris Cross starred in two disaster PR campaigns http://gulfcoastdisaster.com/site/bca_news?post_id=1088 Deepwater BP's Iris Cross starred in two disaster PR campaigns 00:00 BP's Iris Cross starred in two disaster PR campaigns Last fall, Iris Cross beamed into millions of homes, the friendly BP worker hailing from New Orleans who assured TV viewers that the oil giant won’t stop cleaning up the worst oil spill in U.S. history “until we make this right.” She became the very public face of BP, a soothing contrast to former CEO Tony Heyward, whose PR gaffes cemented public opinion against the oil company. This is not the first time Cross sought to soothe public anger from a BP disaster. One of her efforts in 2006 so angered a judge that BP was accused of jury tampering and threatened with fines and contempt charges. Court records reviewed by the Center for Public Integrity show that Cross and her boss admitted in testimony five years ago that they signed thousands of letters to Texans aimed at polishing BP’s image — just days before jury selection was to begin in a civil trial over a 2005 BP refinery explosion that killed 15 workers and injured scores more. The presiding judge, court transcripts show, derided the letter-writing campaign as a “stunt” clearly designed to influence jurors. “We have a jury panel coming in today. And it would take an absolute idiot not to figure that out,” Galveston County, Texas Judge Susan E. Criss chided BP during a hearing Nov. 6, 2006 called to address the impact of the letters on jury selection. “This is so far out of line,” Criss scolded. BP declined to allow the Center to interview Iris Cross. The tale of the 2006 BP public relations campaign was overshadowed by the devastation of the Texas City refinery and the subsequent litigation that forced BP to pay at least $2 billion to compensate victims and $137 million in federal fines. But one of the lawyers in the case says the 2006 and 2010 PR efforts provide an unprecedented window into the multimillion dollar efforts BP uses to gloss over the human, environmental and economic damages caused by the two massive disasters. “I wouldn’t let Charles Manson date my daughter because I don’t presume he’s rehabilitated and I’m not sure BP’s been rehabilitated either,” said Brent Coon, the lawyer who headed the civil suit against BP in the refinery case. “They had a corporate-wide culture that is deficient with respect to following the law and deficient with respect to safety.” The TV ads describe Cross as working for “BP Community Outreach.” Her current resume lists her as “General Manager, External Relations” with BP’s Gulf Coast Restoration Organization, but she has a long history as a public relations professional. Cross’s career began with oil company Amoco, where she had worked primarily in the public relations department from 1981 until the 1999 merger with BP. After the merger, she spent four years in BP’s Houston Westlake office as “director of community relations.” After taking two years off following a marriage, she returned to BP full time in June of 2005 as director of community relations for BP Texas City. Her appearance in at least two commercials was part of a PR campaign designed to repair BP’s public image in the wake of the worst oil spill in American history. Between the start of the spill and the end of August, BP spent over $93 million on advertisements, three times what the oil giant spent in April through July 2009. It’s a number that outraged lawmakers. “BP’s extensive advertising campaign that is solely focused on polishing its corporate image in the wake of the Deepwater Horizon blowout disaster is making people angry. As small businesses, fishermen, and mom and pop motels, hotels and restaurants struggle to make ends meet, they are bombarded by BP’s corporate marketing largess day after day,” Rep. Cathy Castor, D-Fla., said in September. “While BP certainly has the right to advertise, its approach has been insensitive to the taxpayers and business owners harmed by the Deepwater Horizon blowout.” It’s unclear exactly how much of that money was dedicated to ads featuring Cross, but they were regular features on TV throughout the late summer and early fall. “I was born in New Orleans. My family still lives here,” she says in one ad . “BP is going to be here until the oil is gone, and the people and businesses are back to normal — until we make this right.” Contentious hearing At the center of the 2006 controversy was a set of letters sent out by BP days ahead of jury selection in the refinery trial. The letters were addressed to either “BP Retiree” or “BP Texas City Neighbor,” including local businesses and community leaders. Although the letters shared identical language, some batches of letters were signed by Iris Cross while others were signed by Neil Geary, her supervisor. The one page letter sought to address “reports in the media about what happened at BP Texas City” and claimed that the company has “made substantial changes and improvements” at Texas City. “We have made substantial changes and improvements at BP Texas City and are in action on a program of multiple recommendations contained in BP’s final accident investigation report and other sources” the letter said. “BP has acknowledged that it was aware of infrastructure and safety culture problems at the refinery prior to March 23, 2005 and we have been in action in response. BP is working to improve plant integrity, safety culture and process safety management at all BP-operated facilities in order to prevent such accidents in the future.” Included with the letter was a “fact sheet” that addressed “key issues raised in media reports” and a copy of a company newsletter that Cross urged readers to share with their family. The fact sheet claimed that “Maintenance spending [at Texas City] also was higher than the industry average per barrel of throughput,” while also noting BP acknowledges that while there were safety risks at Texas City, “it is not accurate to say that BP was not addressing these issues.” The fact sheet concluded that “BP will spend http://gulfcoastdisaster.com/site/bca_news?post_id=1088 Deepwater BP's criminal negligence exposed http://gulfcoastdisaster.com/site/bca_news?post_id=1087 Deepwater BP's criminal negligence exposed 00:00 BP's criminal negligence exposed Ryan Lambert is enraged. The owner of a charter fishing business, he had always supported the oil industry in his home state of Louisiana. He previously trusted BP, and the rest of the oil industry, to do the right thing in case an accident happened. But not any more. "I'm seeing people starving to death and BP won't pay them," said Lambert. His business drop of 94 per cent in the last year has cost him more than $1.1mn, he told Al Jazeera, "They won't pay me, they owe me well over a million dollars just for last year, and all they do is send more papers to fill out." He continued: They know what they did is wrong and they still won't pay me. I'm done playing their games. All they are doing is starving people out and trying to get them to take the one-time $25,000 payment and give up their right to sue. I know thousands of people in the fishing industry, and I don't know one person who has been made whole yet. In the aftermath of BP's disaster that began on April 20 of last year, the oil giant promised those whose livelihoods had been damaged that they would be made "whole" and fully compensated for their losses. On June 1, 2010, upon the announcement that they were instituting a $20bn compensation fund to do this, BP board chairman Henric Svanberg stated: "[President Obama] is frustrated because he cares about the small people, and we care about the small people. I hear comments sometimes that large oil companies are greedy companies or don't care, but that is not the case in BP. We care about the small people." Lambert vehemently disagrees. "I want the entire country to know, you cannot trust what BP or [what] the oil industry promises you. I'm most definitely taking up litigation against BP," he added. Criminally negligent Lambert is not alone. The Centre for Biological Diversity (CBD) is a group that uses the law to protect the lands, waters, and climate that species need to survive. CBD has an unparallelled record of legal successes, with 93 per cent of their lawsuits having resulted in favourable outcomes. And, now they are suing BP for $19bn. "We have sued them under the Clean Water Act," Kieran Suckling, the executive director and founder of the CBD told Al Jazeera. "The way the Act works is it levies a fine based on the number of gallons [of oil] spilled and how malicious or criminal BP was acting when the spill occurred. So a big part of the suit is about determining how many barrels were spilled, and BP's level of negligence." Suckling explained that, depending on BP's level of negligence, the fine they face per barrel of oil released into the Gulf of Mexico, "could range from $1,300 to $4,300 per barrel if they are found criminally negligent." CBD believes BP released 5.5 million barrels of oil, and is awaiting the official estimate from the federal government, which has not been released yet. "BP will try to low ball the amount," Suckling added. "They are currently trying to argue that rather than being charged per barrel, they want to be charged per day of the spill, and they've come up with a ridiculously low number for that. If they have their way, their fine will be in the millions rather than the billions." So far, CBD has filed eight lawsuits and six notices of intent to sue to make sure BP and the federal government are held accountable. The fact that it's the largest environmental disaster in US history strengthens their case further. "The big issue will be what position the feds take, since we filed this suit because we do not trust the Obama administration to hold BP's feet to the fire," Suckling said, "so ultimately we will be fighting both of them." Blown out of the water Cyn Sarthough is the executive director of the Gulf Restoration Network (GRN), an environmental group active in all of the states that have a coastline on the Gulf of Mexico. GRN, like CBD, sues companies and government organisations that violate environmental laws, and has had much success in doing so over the years. "Much of our litigation is against the Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE), the group that was formerly the Minerals Management Service (MMS)," Sarthough told Al Jazeera. "There is also a challenge to BP's original oil spill response plan. We are engaged in this with several other claimants because what they had in place was inappropriate and failed to meet safety requirements because it grossly exaggerated BP's response capabilities." This month the CBD released a report titled, A deadly toll: The Gulf Oil Spill and the unfolding wildlife disaster. CBD estimates,"Approximately 6,000 sea turtles, 26,000 dolphins and whales, 82,000 birds, and countless fish and invertebrates may have been harmed by the disaster." One of GRN's lawsuits involves what Sarthough says is the failure of federal agencies, like the National Oceanic and Atmospheric Administration, as well as BP, to comply with the Endangered Species Act. "If you believe you are going to harass or injure them [endangered species] you have to get an Incidental Take Permit," she explained. "In the past, MMS would go in and get a sort of regional Incidental Take Permit that would cover the oil and gas industry. But in this instance, for reasons we are not clear on, there was no Incidental Take Permit agreement between the federal agencies, thus BP did not have one." This means that any harassment, injury, or death of an endangered species is in violation of the law. "We believe there should be compensation for this paid by BP, in fines," Sarthough said, "and this money is then put into restoration of the species that were impacted." Sarthough says that the now defunct MMS had found impact statements that showed there was no specific danger to species by work being done by the oil and gas industry in the Gulf. "They claimed there was no real risk of any significant action that would harm endangered species," she said, "we believe this needs to be redone because it is based on an assumption that no longer holds true. The BP disaster has blown that assumption of theirs out of the water. There needs to be a focus on the species that were impacted. That's what we want." Environmental effects This March, US interior secretary Kenneth Salazar approved the first deep water drilling exploration plan since BP's disaster, giving Shell Offshore the go-ahead to drill three exploration wells in water 2,950 feet deep, after his department's environmental assessment plan found there was "no possibility of significant environmental effects". Prior to this, CBD, GRN, the Natural Resources Defence Council, and the Sierra Club filed a formal notice of intent to sue Salazar for ignoring marine-mammal protection laws when approving offshore oil and gas activities in the Gulf. CBD has already filed suit against Salazar for concluding that oil drilling poses no possible risk of significant environmental effects. Furthermore, for failing to assess possible impacts on the Gulf of Mexico's endangered whales and sea turtles, his continued approval of offshore drilling plans in the Gulf without environmental review, and for his withholding emails, phone logs, and meeting notes documenting his interactions with oil-industry lobbyists since he became secretary of the interior. About the suit CBD is preparing to file against Salazar for ignoring marine mammal protection laws when approving offshore oil and gas activities in the gulf, Suckling is blunt: In the wake of the beginning of BP's disaster last year, it became apparent the Obama administration has not followed the Endangered Species Act, among other laws, so despite claims they've reformed the agency, they are still not following these Acts or the National Policy Act. So it's business as usual with a little window dressing. They are still not obeying the law. As for BP, Suckling feels the oil giant, "should be made to pay $19bn under the Clean Water Act and in so doing be found to be criminally negligent. That $19bn should be entirely new funds, not including anything they've already put out, and those funds should be dedicated to Gulf Coast restoration." Suckling, from the Centre for Biological Diversity also believes BP should be held liable for the killing of birds under the Migratory Bird Treaty Act, which brings separate fines, as well as BP being held liable for the widespread economic damage their disaster has wrought the Gulf Coast. "And BP should be found liable for the deaths of the 11 workers on the Deepwater Horizon, and that should go as high as Tony Hayward, as far as who should be held criminally liable." In the wake of the disaster and after a series of public gaffes that led to his ceding the CEO post to Bob Dudley, former BP CEO Tony Hayward grabbed headlines with a $17.9mn pension, $1.6mn payoff and $13mn in share options. Death and business The Gulf Coast-based law firm Brent Coon and Associates (BCA) is considered one of the world's foremost experts on BP, and has successfully sued the oil giant in the past. Brent Coon was the lead attorney in a case against BP for a 2005 explosion at their refinery in Texas that killed 15 workers. His firm forced BP to accept full responsibility and compensate the victims and their families. BCA now represents more than 5,000 claimants from BP's Gulf of Mexico disaster, and has been appointed by the Plaintiff's Steering Committee to head several key sub-committees relating to discovery. "We represent a cross section of claimants, who range from people who worked within the oil industry, to shrimpers, captains, deck hands, restaurant and condominium owners," Coon told Al Jazeera. "We want full restitution and reparations for harm done by BP." Coon said that in addition to BP, other companies that were involved in the disaster, like Halliburton and Transocean, need to be held accountable as well. "From what I've seen, after representing thousands of people who were made sick or died from petrochemical industry hazards over the years, companies like BP, Exxon, Citgo, Shell, and others do not mind killing people as the cost of doing business," Coon added, "even when it's their own employees. I've seen it time and time again." "Unless you criminally prosecute these people and make them pay for their decisions, they do not have a sufficient deterrent for the way they do business," he continued, "unless the government steps in and criminally prosecutes these bastards and hold them accountable, nothing is going to change." Coon, and the claimants his firm represents intend to do just that. Lambert, the charter fisherman, plans on fighting BP to the end. "Mr Feinberg recently told Dan Rather that the people in the Gulf who talk the loudest have the most dubious compensation claims," Lambert said."I challenge him to see if I have a dubious claim. I'll be the one yelling from the rooftops." http://gulfcoastdisaster.com/site/bca_news?post_id=1087 Deepwater BP Handling of Claims Slammed by Gulf Residents http://gulfcoastdisaster.com/site/bca_news?post_id=1086 Deepwater BP Handling of Claims Slammed by Gulf Residents 00:00 BP Handling of Claims Slammed by Gulf Residents By Dahr Jamail NEW ORLEANS, Louisiana, Apr 17, 2011 (IPS) - Attorney Kenneth Feinberg, paid by BP to administer the firm's 20-billion-dollar compensation fund, has become the focal point of anger for Gulf residents who are angry, frustrated and desperate for help following last year's massive oil disaster. "Most of the people I care about are hungry, they've lost their house, they're losing their cars," Cherri Foytlin, the co-founder of Gulf Change, a community organisation in Louisiana, told IPS. "I've met so many people who had red beans and rice for dinner last Christmas while this man's firm is getting 850,000 dollars a month for this," she said. "I saw people on their knees in these meetings begging this man. I don't know how he sleeps at night. He takes money from BP and claims to represent and care about people in the Gulf." Foytlin refers to Feinberg's firm being paid approximately one million dollars per month by BP to administer the compensation fund, money that BP claimed would be used to "make people whole" who have lost their livelihoods because of the months-long disaster that began on Apr. 20, 2010. Rudy Toler from Gulfport, Mississippi is a fourth generation fisherman. He submitted 62 pages of documentation to the Gulf Coast Claims Facility (GCCF), but says: "My claim got denied on Dec. 4, with about 100,000 other people." The GCCF, which also covers cleanup and remediation costs, has received nearly half a million claims and has paid about 3.6 billion dollars to approximately 175,000 claimants - about one-third of those who have submitted claims - in the last half year. A failing grade Most of the claims that have been paid are temporary emergency payments. "You've paid 30 percent of the claims," Gulf Shores City councilman Jason Dyken told Feinberg at a meeting earlier this year in Gulf Shores, Alabama. "Seventy percent of the claims have not been paid. Where I went to school, that's an 'F'." The amount paid out averages nearly 16,000 dollars per claimant. But according to the U.S. Department of Health and Human Services, the 2009 poverty threshold for a family of three was 18,310 dollars. With mounting problems from an escalating health crisis and decimated fishing and tourist industries, many consider this an inadequate amount of compensation for their loss of livelihood. While Feinberg admits that mistakes have been made in processing claims, he has also said that many claims lack sufficient documentation to warrant payment. "I'm trying to do the right thing," Feinberg has said. "This is an unprecedented job. There are thousands and thousands and thousands of claims. But we're getting through them, and the money is going out." During a visit to the Gulf earlier this year, Feinberg said: "I will bend over backwards to pay claims." But large numbers of Gulf residents and fishermen beg to differ. "I spoke up at the Town Hall meeting in Bay St. Louis, and Feinberg told me to give him my number and information and he would personally take care of it," Toler says. "Here it is a week later and I've not heard from him. You can't get answers from nobody. Nobody. Now, I'm 15 days past due on my rent. It don't seem right to me." Conflict of interest? Attorney Brian Donovan, with the Donovan Law Group in Tampa, Florida, believes Feinberg is simply doing what he is being paid by BP to do. "He's doing his job," Donovan told IPS. "Feinberg is a defence attorney representing BP. To think otherwise is being foolish. As a defence attorney, he's doing a great job for BP. But they are saying 'go with us, or sue us'." Donovan has written: "In lieu of ensuring that BP oil spill victims are made whole, the primary goal of GCCF and Feinberg is the limitation of BP's liability via the systematic postponement, reduction and denial of claims against BP. Victims of the BP oil spill must understand that 'Administrator' Feinberg is merely a defence attorney zealously advocating on behalf of his client BP." The criticism from angry residents, business owners and fishermen of Feinberg's handling of the GCCF has mounted over this last year, and there continues to be a simmering rage about it. At a Jan. 10, meeting in Grand Isle, Louisiana, resident and seafood worker Karen Hopkins handed Feinberg a petition demanding his resignation. "We need him to pay us the money that the company he's working for owes us," Hopkins said. "He's not working for our interests. He's working to save as much of that fund for BP as he can. If he was here to serve us, he'd give us a plan for long-term testing for the chemicals they've poisoned us with." The chemicals Hopkins referenced are the at least 1.9 million gallons of toxic dispersants BP has used to sink the oil from sight. At the same meeting, Feinberg said: "We've paid out one billion dollars in Louisiana alone. Somebody's getting money. It might be the wrong people, but somebody's getting money." Hopkins believes Feinberg is pressuring people to take the smaller, immediate payments, rather than pursue litigation in order to obtain appropriate levels of compensation. "He's saying to opt in to the fund, you'll come out with more money than if you litigate this," she says. "He's scaring these people. He's not our lawyer. But he's basically saying if you try to sue us, we'll f*** you up. He's condescending. He's completely crooked and corrupt. He's trying to pull every trick in the book on us." Multiple lawsuits Attorney Stuart Smith in New Orleans has assembled a working group of lawyers from Texas, Louisiana, Mississippi, Alabama, Florida and Pennsylvania to prosecute claims for those who have been affected by BP's disaster. His firm, Smith Stag LLC, along with the firm Sacks and Westin they are working with, have successfully litigated cases against every major oil company in the world. Smith's team has filed suit on behalf of their many clients, as has the Donovan Law Group, against BP. Another Gulf Coast-based law firm, Brent Coon and Associates (BCA), is also in the midst of litigation against BP. BCA is considered one of the world's foremost experts on BP, having led lawsuits against BP following BP's 2005 explosion at the company's Texas City Refinery that killed 15 people. BP, which is also being charged with manslaughter for the deaths of 11 workers on the Deepwater Horizon rig that exploded, is facing mountains of litigation. BCA has threatened the oil giant in no uncertain terms: "We have built the most comprehensive understanding of BP's corporate culture of any law firm in the United States. As Lead Counsel in the 2005 BP Texas City litigation, we reviewed seven million documents, taped over 10,000 hours of depositions from BP employees and industry experts, spent millions of dollars and took the fight to depose BP's CEO Lord John Browne all the way to the Texas Supreme Court. Now we're taking on the oil giant once again." The litigation process will most likely take years. http://gulfcoastdisaster.com/site/bca_news?post_id=1086 Deepwater 'Please, please don't give up': Locals urged to continue filing BP claims http://gulfcoastdisaster.com/site/bca_news?post_id=1080 Deepwater 'Please, please don't give up': Locals urged to continue filing BP claims 00:00 'Please, please don't give up': Locals urged to continue filing BP claims Mona Moore Daily News FORT WALTON BEACH — Don’t give up. You have people ready to help you fight BP. A handful of those people passed along that message to local residents and business owners Monday night at the Fort Walton Beach Municipal Auditorium. Included in that handful were state Rep. Doug Broxson and state Chief Financial Officer Jeff Atwater. “This isn’t a sprint; it’s a marathon,” Broxson said. “Please, please don’t give up.” He compared the Gulf Coast Claims Facility (GCCF) to a spaceship: Everyone recognizes what it is, but no one understands how it operates. Broxson said he is going to figure out this UFO, define it and understand it. “And if that doesn’t work, we’re going to destroy it,” Broxson said. Organized by the Northwest Florida Radio Broadcasters, the event began with a caveat that the night would not be about bashing BP because representatives from the company were not there. The caveat became a thing of the past when Brent Coon, a Texas attorney with a long history of fighting BP, took the podium. He said Ken Feinberg, head of the GCCF, should be forced to disclose the terms of his employment contract with BP because his recent $1.8 million raise was proof that he was biased. “They are not in the claims payment process. They’re in the claims denial process,” Coon said. He added that BP was stalling, hoping to wear out claimants until they gave up. He said that deadlines for filing lawsuits against the responsible parties were fast approaching. For example, the deadline to file a suit against rig owner Transocean is April 20, he said. Many claimants had received a $5,000/$25,000 letter. BP offered money to individual and business claims provided that claimants sign away any right to sue later. Broxson said the biggest issue has been BP’s inability to be consistent and clear in the rules for filing claims as well as the way they approve claims. The company started denying more and more claims last November because the GCCF had a limited amount of funds each quarter and the money ran out. The panel said those who had been denied should file again. The GCCF’s latest rules for claims has been to require a cover letter with each that spells out the loss and how BP is responsible for it. Atwater, the state CFO, collected names and addresses of those with claims issues. (A form is also available online at www.MyFloridaCFO.com/OilSpill.) Atwater said the state would defend the interests of Florida residents because the welfare of the state depends on the welfare of its people and businesses. “We have informed them that we’re sticking ourselves in the middle of this, so get used to it,” Atwater said. “You’re not in this alone. We will go to bat and fight for you.” http://gulfcoastdisaster.com/site/bca_news?post_id=1080 Deepwater BP Can Run More Tests on Deepwater Horizon Blowout Preventer http://gulfcoastdisaster.com/site/bca_news?post_id=1079 Deepwater BP Can Run More Tests on Deepwater Horizon Blowout Preventer 00:00 BP Can Run More Tests on Deepwater Horizon Blowout Preventer BP Plc (BP/) can conduct additional tests on the Deepwater Horizon drilling rig’s blowout prevention equipment now that government examiners have finished their own forensic testing, a judge ruled. “The additional BOP testing shall be performed in a manner that preserves the evidence to the maximum extent possible,’’ U.S. District Judge Carl Barbier said in his order, referring to the blowout prevention equipment. He ruled that other companies involved in the disaster could also now run additional tests, so long as everyone is allowed to monitor the procedures and share in the results. The 300-ton stack of valves failed to seal off BP’s runaway well last April, triggering a fatal rig explosion and the worst offshore oil spill in U.S. history. BP asked Barbier for permission to partially dismantle and conduct laser scans on the blowout preventer, which was recovered from the sea floor off the Louisiana coast last year. “BP is clearly looking for any liability they can pin on the BOP,” said Houston lawyer Brent Coon, one of the lawyers marshalling evidence for the consolidated oil-spill damages lawsuits against BP and other companies involved in the failed drilling operation, referring to the blowout preventer. “This is BP’s way of trying to shift more of the blame for the cleanup costs onto the other companies,” Coon said in a telephone interview. Contractors By law, BP is liable for all cleanup and restoration costs and some of the damages caused by oil spilled from its well. The company reserved more than $40 billion last year to cover these anticipated expenses, which include billions of dollars in government fines. U.S. law allows BP to recover some of that expense from its contractors on the well, if they are proven to be partly to blame. Transocean Ltd. (RIG) owned the Deepwater Horizon, while Halliburton Energy Services, Cameron International Corp. (CAM) and Weatherford International provided key supplies or services to the well. Government forensic investigators determined that the BOP’s ram shears failed to fully sever an off-center drill pipe that was trapped in the device, according to a report released March 23. The report didn’t assign blame for the accident to any particular company. The U.S. conducted more than three months of tests on the BOP without doing the specific additional tests BP requested on the hydraulic system, solenoids and annular rams, according to a March 4 BP court filing. Forensic Activities “BP, however, believes that performance of these forensic activities will add value to an analysis of why the BOP did not work as intended,” Don Haycraft, BP’s lead defense attorney, said in papers filed in federal court in New Orleans. Barbier ruled that custody of the BOP will remain with the government forensic team, which is comprised of investigators from the U.S. Coast Guard and offshore drilling regulators, who are coordinating with the Justice Department. The equipment isn’t to be moved from its present site at the NASA/Michoud assembly facility in eastern New Orleans. The additional tests will be conducted by either Norwegian contractor Det Norske Veritas, which ran the original tests, or by another third-party testing firm approved by the court. Barbier said the extra tests must be completed by June 15. He also instructed Cameron, which made the BOP, and Transocean, which was responsible for maintaining it, to share copies of their engineering drawings and specifications for the device, to aid in interpreting test results. Cameron had initially objected to BP’s request to hand over its blueprints. At a hearing in New Orleans today, Haycraft told Barbier the companies had worked out a compromise to allow the extra tests. The case is In Re: Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans). To contact the reporters on this story: Laurel Brubaker Calkins in Houston at <a href="mailto:laurel@calkins.us.com">laurel@calkins.us.com</a>; and Allen Johnson Jr. in New Orleans at <a href="mailto:allenmct@gmail.com">allenmct@gmail.com</a>. http://gulfcoastdisaster.com/site/bca_news?post_id=1079 Deepwater Report Foresees Quick Gulf of Mexico Recovery http://gulfcoastdisaster.com/site/bca_news?post_id=1073 Deepwater Report Foresees Quick Gulf of Mexico Recovery 00:00 Report Foresees Quick Gulf of Mexico Recovery Originally posted by John Schwartz - New York Times - February 1, 2011 The Gulf of Mexico should recover from the environmental damage caused by the enormous BP oil spill last year faster than many people expected, according to new estimates in reports commissioned by Kenneth R. Feinberg, the administrator of the $20 billion compensation fund. That prediction will be central to Mr. Feinberg’s plan for paying people who claim their livelihoods were devastated by the spill. It is certain to be controversial among those who believe the damage will be longer-lasting and therefore should result in higher payouts for the spill’s victims. Mr. Feinberg’s report, to be officially released Wednesday, will lay out for the first time the framework for deciding who gets final settlements for spill-related damage and how payments for future losses will be determined. Based on the work of environmental scientists, economists and other experts, the report acknowledges that “prediction is not an exact science” but estimates that the gulf should recover by the end of 2012. The hardest-hit oyster beds could take much longer to come back, it says. Based on those estimates, the damages paid out by the fund would be double the first year’s losses for most of those filing claims, less any money previously paid by the fund. Those whose living is tied to oyster beds would receive four times their 2010 losses. Mr. Feinberg, appointed in June by BP and the Obama administration, has given out more than $3.5 billion so far in emergency money to those affected by the spill. But Gulf Coast residents have become increasingly angry over what they say are shortcomings of the program, including inconsistent payments and an opaque process. The methodology for final settlements is meant to answer those criticisms. Mr. Feinberg has also been criticized by plaintiffs’ lawyers who have filed complaints with the judge in New Orleans who is overseeing federal spill litigation. They have accused the administrator of not being truly independent from BP, and asked the judge to exercise authority over the compensation process. On Tuesday, the governor and attorney general of Louisiana and the attorney general of Mississippi filed similar requests with the judge, Carl J. Barbier. A key document used to formulate plans for commercial fishermen making claims was a report by Wes Tunnell, a marine biologist at Texas A&M’s Harte Research Institute in Corpus Christi, who has extensive experience studying oil spills. The 39-page report acknowledges that any definitive assessment at this point is impossible, and that fully understanding the spill’s ecological effects will take years. But Dr. Tunnell concluded over all that regional 2011 catches for blue crabs, shrimp, oysters and fin fishes should be in line with catches before the spill. His report adds, however, that some oyster beds may not recover for 6 to 10 years, and that there will be fewer fish, shrimp and crabs in the nets in some areas. Dr. Tunnell was paid $225 an hour by the claims fund, which is in turn financed by BP. Under the new framework for claims, documentation requirements for spill-related damages are expected to be tougher than those under last year’s emergency program, but no one is automatically excluded from filing a claim. Wednesday’s announcement will be followed by a two-week comment period in which people can argue with the estimates and methodology. The comments will be available online. Payments will begin after the comment period. While the new report will define the parameters for future compensation, the settlements will be subject to negotiation. Some 85,000 people have already reached a settlement with the fund through a quick-pay option that provides $5,000 to individuals and $25,000 to businesses with no additional documentation. Those who might file claims and who believe that the damage will persist can wait to file for a settlement throughout the three-year life of the fund, and can receive interim payments while they watch and wait. People dissatisfied with the final settlement offer can, under the Oil Pollution Act, appeal to the Coast Guard. So far 507 appeals have been filed with the Coast Guard, which has so far consistently agreed with the estimates of the Feinberg fund. BP declined to comment. A lawyer with thousands of clients along the coast said the new framework would lead him and dozens of other lawyers to the negotiating table with Mr. Feinberg. “It’s in my clients’ interest to get this over with quickly,” said Daniel E. Becnel Jr., a Louisiana lawyer who represents many coastal resorts and condo owners. Stuart H. Smith, a lawyer in New Orleans who has said he would be interested in exploring settlements, said he had “serious concerns” about the plan. “I don’t think that it sufficiently takes into consideration the uncertainty factor,” Mr. Smith said. A coastal fisherman was blunt in his criticism. “This is typical BP trying to get off the hook,” said Ray Brandhurst, owner of a 47-foot shrimp boat. “I’m sure you’re going to hear people screaming from across the Gulf Coast.” According to the report, two factors reduced the expected harm. First, the oil gushed for a shorter time than did the Ixtoc I spill off Mexico, which began in 1979, and, second, it occurred during months of relatively calm seas. Also, the closing of fisheries during the crisis allowed marine populations not directly affected by oil to prosper. Marine experts differed over the conclusions of the Tunnell report. James Cowan, a biological oceanographer at Louisiana State University, said, “He may be right, and I hope he’s right.” But Dr. Cowan added: “It doesn’t sit well with me. I think it’s too soon to just write it off.” Dr. Cowan’s group has been working with shrimp and fish both offshore and near shore, and he said the group members had found troubling signs of apparent oil damage. They have seen reduced growth and higher death rates of shrimp in the marshes, Dr. Cowan said, and significant declines in catch rates for red snapper and other reef fishes. “In my mind, the long-term, indirect effects are going to be the most insidious and also the most difficult to ascertain,” he said. But another leading marine scientist applauded Dr. Tunnell’s work. Steve Murawski, former chief science adviser for the National Marine Fisheries Service, said Dr. Tunnell had “done a great job” in a situation requiring quick analysis so people can move forward. “Decisions have to be made,” Mr. Murawski said, “and sometimes they are made with imperfect information.” http://gulfcoastdisaster.com/site/bca_news?post_id=1073 Deepwater BP to sell Texas City refinery http://gulfcoastdisaster.com/site/bca_news?post_id=1072 Deepwater BP to sell Texas City refinery 00:00 BP to sell Texas City refinery Originally posted by Heather Nolan - Beaumont Enterprise - February 2, 2011 BP announced Tuesday it plans to sell its Texas City and Carson, Calif. refineries, cutting its U.S. refining capacity in half. Beaumont attorney Brent Coon, who represented plaintiffs in a lawsuit against BP after the company's 2005 Texas City refinery explosion, said it's not clear how the facility's ongoing probation status under a federal criminal settlement will impact the sale. BP agreed in 2007 to three years probation, which required the company to continue its cooperation with the government's ongoing investigation of the circumstances leading to the Texas City refinery explosion. Coon said the company and the U.S. Department of Justice struck a deal in October 2007, but the deal was not accepted until March 2009. It expires in 2012. Gary Beevers, international vice president for the United Steelworkers, which represents the roughly 1,200 union workers at the Texas City plant, said a sale likely won't impact employment at the refinery because a "successor clause" in the union contract says any future buyer has to honor the collective bargaining agreement in place. Read more: http://www.beaumontenterprise.com/default/article/BP-to-sell-Texas-City-refinery-990536.php#ixzz1CokGNcmU http://gulfcoastdisaster.com/site/bca_news?post_id=1072 Deepwater BP to divest half its U.S. refining capacity http://gulfcoastdisaster.com/site/bca_news?post_id=1071 Deepwater BP to divest half its U.S. refining capacity 00:00 BP to divest half its U.S. refining capacity Originally posted by Kristen Hays - Reuters - February 1, 2011 HOUSTON (Reuters) - BP Plc put half its U.S. refining assets up for sale on Tuesday, including the huge Texas City plant, a potentially prize asset but one that carries the stigma of a 2005 blast that killed 15 workers. The move is the latest shake-up of the U.S. refining sector and comes amid a years-long downturn in American refinery profits that has spurred big oil companies such as Marathon Oil Corp (NYSE: MRO - news) to rethink the value of owning refining assets. "They are basically trying to circle the wagon and protect the core assets. There's just not enough room in the portfolio for these two refineries," said Fadel Gheit, an analyst with investment bank Oppenheimer and Co. For BP, the largest oil producer in the United States and its fourth-largest refiner, the move represents a chance to raise cash to pay for the disastrous 2010 Macondo oil spill in the Gulf of Mexico. It will also be shedding a refinery that has been a long-standing target for critics of the company's safety record. "It's past due in coming," said Brent Coon, a Beaumont, Texas lawyer who led blast-related civil litigation that cost BP $2.1 billion (1.3 billion pounds) in settlements. "I suspect a lot of people will say 'good riddance.'" BP will seek buyers for its 437,080-barrels-per-day (bpd) Texas City refinery -- the third-biggest in the United States -- and the 265,000-bpd Carson, California refinery by the end of 2012. The two refineries could bring in about $5 billion in total, according to analysts at Citi. Those processing capacities are according to the U.S. Energy Information Administration, but BP says the Texas City plant can process up to 475,000 bpd. BP has spent over $1 billion in plant modernization but said the facility "lacks strong integration into any BP marketing assets". The company said it plans to boost diesel production from its other U.S. plants, including at Whiting, Indiana and Cherry Point, Washington, where it can process a wider range of crudes including heavier grades. The company is seeking potential buyers and offered no financial details of the planned sales, which would mark BP's departure from more than half its U.S. refining assets. The plans would comprise the biggest restructuring of BP's U.S. portfolio since the Gulf spill. Valero Energy Corp (NYSE: VLO - news) spokesman Bill Day declined to comment on whether his company, the largest independent refiner, would be interested in either plant. Valero has refineries in the Los Angeles area and Texas City. Day said Valero was interested in refineries near water, with large capacities and ability for complex upgrading, and close to other refineries. Valero Chief Executive Bill Klesse told Reuters in 2008, when refineries were more profitable, that BP's Texas City plant would be a strategic acquisition. Michael Gayda, president of PBF Energy, which has bought two Valero refineries on the East Coast and is buying a third from Sunoco Inc (NYSE: SUN - news) in Toledo, Ohio, declined to comment on whether his company would bid for the BP plants. "Both are large, complex, very good refineries. But we don't comment on acquisition activity," Gayda said. SPILL COSTS Meanwhile, BP on Tuesday posted weaker-than-expected fourth-quarter results and a highly anticipated return to paying dividends. BP reported a loss of $4.9 billion during 2010, its first annual deficit in 18 years, and booked a charge of $41 billion related to the Gulf oil spill. The company earlier said it planned to sell up to $30 billion of assets to help pay for the spill costs. The company also plans to sell its fuel-marketing assets in California, Arizona and Nevada. Byron Grote, BP's chief financial officer, told analysts on Tuesday that while the company's trading division posted losses in 2010 amid a lack of volatility in natural gas prices, he believed trading would improve this year. The 2005 explosion at BP's Texas City refinery injured at least 180 people in addition to killing the 15. The blast happened when a tower in the isomerisation unit, which increases octane in gasoline, overflowed with flammable hydrocarbons during startup that spewed liquid and vapour from a blowdown stack. Alarms and gauges that would have sounded were not working. The vapor ignited. In addition to $2.1 billion spent to settle about 4,000 civil claims by the end of 2008, BP in March 2009 paid a $50 million fine to settle a felony criminal case centred on violations of the U.S. Clean Air Act. BP's division that oversees U.S. refineries also pleaded guilty to a felony and agreed to be on probation for three years. (Additional reporting by Joshua Schneyer, Selam Gebrekidan and Janet McGurty in New York (Xetra: A0DKRK - news) ; Editing by Dale Hudson) http://gulfcoastdisaster.com/site/bca_news?post_id=1071 Deepwater Gulf Oil Spill: Then and Now http://gulfcoastdisaster.com/site/bca_news?post_id=1070 Deepwater Gulf Oil Spill: Then and Now 00:00 Gulf Oil Spill: Then and Now Originally posted by Mary Anne Medina - PropertyCasualty360.com - January 31, 2011 The Gulf Oil Spill of April 20, 2010, was an unprecedented catastrophic event caused by man. It has taken a toll on the environment, the previously ravaged Gulf Coast, and the livelihood of its people. The enormity of the impact is still being determined as the claim process continues, which begs the question: What is happening now with the key players involved in paying claims? Darryl Willis This event was the first time in history that a U.S. President became involved in a catastrophic event in that President Obama actually made a statement ordering BP to make use of a third-party administrator in order to expedite the payment of claims. BP named Daryl Willis to manage the claims, who previously spoke candidly about his role in the claims process. Mr. Willis advised that BP had hired the Worley Group to handle claims. He had confidence in their abilities and their resources to meet the growing needs of those affected by the spill. Mr. Willis also said that he and BP would be around “as long as it takes to make things right.” Mr. Willis was contacted for a follow-up interview but could not be reached. He still works out of the Houston, Texas office for BP. Worley Catastrophe Shortly after the spill in 2010, Worley Catastrophe’s CEO Mike Worley said he was positive about his company’s ability to get the job done after having been selected to handle claims stemming from the oil spill. He also said that if a natural disaster struck during the 2010 storm season that his company would be adequately staffed in order to service existing clients. As we know, this would not become an issue, since the 2010 hurricane season had very few land-falling hurricanes. When contacted recently, Worley advised that his company currently has 800 adjusters staffing the Gulf Coast Claims Facility (GCCF). When asked what he had learned from handling an event of this magnitude and nature, his said: “Every assignment requires adjustments that yield greater efficiency, and this event was not an exception,” said Worley. “The magnitude and nature of this event have required rapid deployment along with establishing a physical and technological infrastructure on a scale that this industry has never before attempted. I expect that the adjustments made in facilitating this event will yield greater capacity and capabilities, which will be more evident in future catastrophe responses.” Worley advised that since the event and the assumption of duties by Mr. Ken Feinberg, who created and oversees the GCCF, BP’s role in the claims handling process has been removed. However, Worley Catastrophe Response remains in constant contact with the administrators of the GCCF. They work closely with GCCF to maintain communication with state and local government entities. Mr. Worley also said his company’s involvement in the Deepwater Horizon incident and the GCCF claims process “increased our exposure within the industry in a positive manner and contributed to the additional growth of our adjuster base and management team. This, in turn, will likely increase our capacity and capabilities for servicing future clients and events.” Ken Feinberg When I first spoke to Ken Feinberg, the pay czar appointed by President Obama to handle the Gulf oil spill claims payment process, he struck me as someone who willing to take on a seemingly insurmountable task with knowledge, past experiences, and a real determination to get the job done. He was unfaltering in his answers as to what was going to take place with the processes he has since put into action. Back in 2010, Feinberg estimated that it would take three years to handle all of the claims stemming from the disaster. He also stated that his plan was to make the process more “transparent.” He was complimentary of the job that had been done at that point by Worley Catastrophe but said, “They deserve credit for what they have done, but it is not efficient enough. The process needs to be quicker.” He had criticism for the handling of the business claims at that point, and he was in the early days of putting his plan into place. When revisited, Mr. Feinberg discussed the developments since then, including his release of the “final payment instructions,” for which he came under harsh scrutiny. He carefully explained the process and how he arrived at the payment options he set forth. A payment of $5,000 to individuals or $25,000 to businesses is being offered to the 168,000 claimants who were previously approved for an emergency claim that was submitted. If the quick settlement of $5,000 or $25,000 is accepted, there will be no requirement for further documentation. Turnaround time for payment of the claims is two weeks. GCG — formerly known as Garden City Group — is responsible for issuing checks to claimants. If a quick payment settlement is made, a will-not-sue waiver is required to be signed. The 232,000 claims that have been previously denied are not eligible for the quick settlement; only those that were previously paid claims. Mr. Feinberg further explained that if the quick settlement option is not accepted, claimants may ask to receive quarterly interim payments. This option does not require a waiver to be signed. The interim payments will run through August 2013. Mr. Feinberg states that the claims operation has paid out about $2.5 billion to claimants since Aug. 23, 2010, when he took over. He stated that he is also going to offer free legal advice to those who may need assistance. When asked how he would go about offering aid, he said that he is interviewing and negotiating with local and state level pro bono legal assistance in order to offer this option to claimants. Mr. Feinberg stated that Worley Catastrophe is still maintaining the Gulf Coast Claim Facility’s offices. He is also assisted in this process by GCG (a subsidiary of Crawford & Company), Brown Greer, PLC, and PricewaterhouseCoopers. The fees for these companies and their services are paid by BP and are not paid out of the $20 billion fund previously established by the company. Mr. Feinberg maintains that he is “cautiously optimistic that the fund will cover all of the losses presented.” He said he is in constant contact with BP as to the status of the claims and payment process. He still believes that the claims will be concluded within three years of the spill. At the time of this article, according to claims facility data, 70,000 quick pay claims have been filed. About 300 lawsuits have been filed over the spill; more than 150 of them in federal court and many of them class actions. Plaintiffs include the families of the 11 rig workers who were killed when the rig exploded, injured workers, landowners, fishers, hotel owners, shareholders, and environmental groups. Their claims range from wrongful death and personal injury to property and environmental damage. It will likely take years to determine fault for damages. Defendants now include, but are not limited to: British Petroleum PLC, which leased the rig; Transocean Ltd., the owner of the rig; Cameron International Corp., which made the blowout preventer that was supposed to avert a spill; and Halliburton Energy Services, which performed cementing operations, among others. Legal Reaction “It’s probably the largest economic disaster our country has ever faced,” said Brent Coon of Beaumont, Texas, whose law firm is handling several hundred cases related to the oil spill. Mr. Coon has been critical of the process implemented to handle the claims that have arisen from the oil spill. He believes that “the issues involved in these claims are complicated scenarios,” and that there are going to be many frustrating issues. He believes that Mr. Feinberg is a “hired gun” that the government, large corporations, and other entities rely on to come in when they do not have the infrastructure set up to handle claims. “They rely on him to develop and set up a claims handling process and infrastructure,” said Coon. “[Feinberg] grossly underestimated the complexity of setting the system into play that you would need to evaluate cases. The fact that there is no cap on it creates more problems and issues with the tort system, and the fact that the damages are ongoing adds to the complications.” On a positive note he states that “at least [BP and the GCCF] have gotten some money in the hands of some people in acknowledgement that there would be other issues to evaluate. “ He also believes that the will-not-sue waiver will stand up but he does not believe that the $20 billion fund will be sufficient. For the insurance, claims, and legal industry this event has brought new challenges, including but not limited to: risk assessment, environmental issues, coverages, licensing, processes, claims handling, bad faith, damages, jurisdictions, litigation, and policy. On the national level, the spill has prompted the government to push for regulation of off shore drilling to make oil companies more financially responsible for the spills that they cause. The National Oil Spill Commission unanimously endorsed 15 recommendations to the oil industry, Congress, and the Obama administration for preventing another large-scale oil spill. Most require action by Congress, but some could be done independently by the Obama administration. Congress "must take action this year to prevent another catastrophic spill through smart regulation, and by giving regulators the tools and resources they need to do their jobs effectively," said Senate Majority Leader Harry Reid. He has endorsed the raising of liability caps on oil companies, which BP waived after the Gulf disaster. He stated that it was "to ensure that taxpayers are never again on the hook for the damages caused by BP or any other oil company's missteps." http://gulfcoastdisaster.com/site/bca_news?post_id=1070 Deepwater Gunning for BP http://gulfcoastdisaster.com/site/bca_news?post_id=1069 Deepwater Gunning for BP 00:00 Gunning for BP Originally posted on January 27, 2011 - Petroleum Economist - Miles Lang Brent Coon is on the warpath over the Deepwater Horizon disaster. Miles Lang talks to the Texan lawyer as he resumes hostilities with an old foe, BP. HE RIDES a Harley, plays guitar in a rock band and goes skydiving. But Brent Coon's name is known for something else: suing BP. And that's ok with him. With Coon leading many of the lawsuits against BP following the Texas City refinery disaster of 2005, which killed 15 workers and injured more than 100, the settlements ran to more than $3bn. Deepwater Horizon promises a much larger pot for the plaintiffs. The explosion aboard the rig last April killed 11 men and caused the biggest oil spill in US history. Coon's firm, Brent Coon Associates, is representing thousands of claimants, with a docket going well into the hundreds of millions of dollars. He wasn't surprised by the accident. Whatever Tony Hayward and other BP executives say, Coon doesn't think the company's spots had changed since the earlier accident at Texas City, when it was proved to have disregarded the safety of its refinery workers. It's just not in the nature of big industrial corporations to take those risks seriously, he says, summing up the approach as: "All that'll happen is a bunch of people will die and we'll have to pay a fine." Criminal charges, not just financial penalties, ought to be thrown at companies that behave this way, he argues. In the wake of Texas City, his firm pushed the US Department of Justice (DOJ) and other agencies to go after BP and its executives, saying that "in the absence of individual criminal indictment, the risk of those people continuing along the same lines just increases". Without indictment before a Grand Jury, he argued then, BP would learn nothing from Texas City. Indeed, his version of events before Deepwater Horizon offers a story of scant compliance with rules by BP and weak federal oversight. BP, says Coon, failed to live up to the terms of its probation over Texas City, which involved fixing the deficiencies at the refinery by September 2009. "By the deadline, the external committee found hundreds of deviations. It was so bad it would have taken four years just to get into compliance," says Coon. BP paid a fine of $80m. So Coon pressed the DOJ to reopen the case against BP. The DOJ refused. Over a number of months, Coon says, he sent several letters restating his case, but received no response. "A month later Deepwater Horizon blew up. The first thing I did was call the lead prosecutor in the case and say: 'I told you so.' I had warned him." All of this is sure to get another airing in the courts in the coming months and years, with proceedings against BP, Transocean, Halliburton and others involved in Deepwater Horizon sure to drag on. Brent Coon's name will be in lights again. He cuts a dash in and out of the courtroom. As well as running his busy multi-office legal practice, his business interests include concert and entertainment management, golf courses and other property development. Playing guitar for hard-rock band Image 6 also keeps him busy. His musical influences are Aerosmith, ZZ Top and Led Zeppelin. His MySpace page lists his most recent favourite quotation as: "Life should not be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways, chocolate in one hand, martini in the other, body thoroughly used up, totally worn out and screaming: 'WOO HOO, what a ride!'" It's a daunting motto for the lawyers from BP who will face him in US courts. And, believes Coon, they've got another think coming. While BP reckons its liabilities to be around $40bn, Coon says they could exceed $100bn. BP has already been making voluntary, quarterly contributions of $1.25bn into a fund to pay short-term claims. But the figure is arbitrary, says Coon, and has not been enough to pay all of the claims. Nor has the duration of the damages been taken into consideration. Businesses have so far claimed just short-term losses, he says, but these will multiply with time. About 460,000 hardship claims have been made, says Coon. But the number could rise to around a million. Of those 460,000, he says, only a quarter were paid before the fund ran out. "So that's $2.5bn right there, and they've arbitrarily denied three out of four claims." And of those that were paid, says Coon, claimants received "on average 20-25% of their claim". Coon warms to his subject. "Let's do the math. Somewhere between 25% and 100% is the fair payment. Say it's only 50%. That already doubles what BP pays. That's $5bn. Then add in just one of the three out of four claims that were ignored, which were largely the bigger ones. That doubles it. You're talking at least $10bn. And remember that I expect another half a million claims. On top of that, the longer this goes on, the bigger the claims will become, because the damage to these businesses only deepens with time." A $100bn bill According to Coon's model, even if half of the claims are ignored, over two or three years the total could reach $50bn. And that excludes health claims and criminal penalties attached to the estimated 4.9m barrels of oil spilled into the Gulf. Taking these into consideration, Coon's $100bn estimate is possible. If he's right, BP's efforts to move beyond the disaster – it has sacked former boss Tony Hayward and other executives, sold several assets to raise cash, published its own study of the accident and, last month, announced a new deal with Russia's Rosneft – look tricky. Trailed by lawyers in a notoriously litigious country, BP's court battles in the US could consume the UK major for the next decade, predict some analysts. Coon is famous for saying that he won't be happy until some of those personally responsible for Deepwater Horizon are put in jail. "I stand by that," he says. "I did at the time of Texas City and I do now." It's the only way, he says, to stop bad corporate behaviour putting more lives and the environment at risk. "I blame the DOJ, the Texas Attorney General's office and the District Attorney's office for not being more aggressive in holding individuals accountable for what happened at Texas City. This should have been used as an example, as a clear deterrent." Last month, a commission appointed by President Barack Obama to investigate the accident opened the net of accusations even wider, citing poor federal oversight and inadequate regulation among the root causes of the disaster, too. It's enough to keep Coon and his firm busy in the coming years. But Coon says he'd rather be put out of business. "After all, what I do for a living is hold corporations accountable for hurting and killing people." BP declined to comment on the statements made and opinions expressed by Coon. http://gulfcoastdisaster.com/site/bca_news?post_id=1069 Deepwater Half-Baked Justice? Corporate Prosecutions Are All Over the Map http://gulfcoastdisaster.com/site/bca_news?post_id=1066 Deepwater Half-Baked Justice? Corporate Prosecutions Are All Over the Map 00:00 Half-Baked Justice? Corporate Prosecutions Are All Over the Map Originally posted bu Sue Reisinger - Law.com - December 23, 2010 The initials BP are by now a household word. It is a name that in the public mind at least has become synonymous with longtime legal, environmental, and safety issues. The story starts two days after Christmas in 1965, when the oil rig Sea Gem collapsed and killed 13 crew members in the icy waters of the North Sea. Then came 40 years of toxic waste dumping, and oil and gas price manipulations, followed by the disastrous Texas City oil refinery blast of 2005 that left 15 workers dead and 270 injured. Also See: <a class="linelink" href="http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202475893157" target="new">BP Chronology</a> The federal government ordered the company to fix some 300 safety problems at the refinery. BP paid a record $21 million fine and hired a new chief executive who vowed to make safety his top priority. But in 2009 the government cited BP again for failing to repair more than 200 of those violations and imposed another record fine. Then, last April, faulty equipment at the refinery allowed thousands of pounds of cancer-causing chemicals to leak into the air for 40 days. Worse, no one told residents in the surrounding communities — or even BP's own workers — that they were breathing toxic air. Then came what may be its worst and most costly disaster yet. Last spring, BP's Macondo oil well exploded in the Gulf of Mexico, killing 11 workers and causing the largest marine oil spill in history. Now the British company formally known as <a class="linelink" href="http://www.bp.com/bodycopyarticle.do?categoryId=1&contentId=7052055" target="new">BP p.l.c.</a> faces a criminal investigation and more than 300 civil suits over the spill. And that's not all — a growing chorus of victims, their families, and their lawyers are calling for executives to be jailed and the company shut down if it doesn't change. BP North America general counsel John "Jack" Lynch declined to be interviewed for this story. But Lynch previously committed BP to take responsibility for the cleanup. The company also has set aside a $20 billion fund to pay damages claims, and it may sue other contractors on the rig for their alleged negligence. Through the years BP has operated in an endless cycle of accidents, promises to do better, and record financial penalties. But the promises and costly punishment haven't seemed to change how BP runs. That leaves legal scholars and prosecutors pondering: How should the criminal justice system punish — or reform — the BPs of the world? The answer is critical to in-house counsel. That's because when companies keep doing bad things, Congress generally steps in to "fix" the problem by imposing more work on the lawyers and costly reforms on their companies. That's what happened in 1989, when Congress reacted to the savings and loan crisis by passing the <a class="linelink" href="http://en.wikipedia.org/wiki/Financial_Institutions_Reform,_Recovery_and_Enforcement_Act_of_1989" target="new">Financial Institutions Reform, Recovery and Enforcement Act</a> that dramatically changed the industry and its regulation. It happened again after the <a class="linelink" href="http://www.enron.com/" target="new">Enron Corp.</a> scandal, when Congress passed the <a class="linelink" href="http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act" target="new">Sarbanes-Oxley Act</a> of 2002, which set enhanced standards for all U.S. public companies and accounting firms. More recently, in 2010, Congress reacted to the financial meltdown and its excesses by passing the sweeping <a class="linelink" href="http://www.opencongress.org/bill/111-h4173/show" target="new">Dodd-Frank Wall Street Reform and Consumer Protection Act</a>, parts of which also apply to all public companies, not just banks in trouble. And that's an issue that in-house counsel must bear. Larry Thompson, general counsel for PepsiCo, Inc., and former deputy attorney general in the Department of Justice, recently spoke at a legal symposium where he noted that reactive laws punish the innocent companies along with the guilty. "No matter how gold-plated your compliance efforts, no matter how hard one tries, large corporations today are walking targets for criminal liability," Thompson complained. But Houston lawyer Brent Coon doesn't see it that way. The founder of Brent Coon & Associates represented plaintiffs in the BP refinery blast, and now represents others in the Gulf oil spill. And he is outraged that the company keeps doing business as usual. "Throw some of these bastards in jail, and in particular the corporate executives that make the decisions," he urged. Just to be clear, BP isn't the only repeat offender. For example, before American International Group, Inc.'s risky behavior helped throw the world's economy into chaos in 2008, the government knew that AIG was a company operating on the legal edge. It had already reached two settlements with prosecutors over wrongdoing — including a nonprosecution agreement in 2006 following a deferred prosecution deal in 2004, both of which imposed a corporate monitor, for all the good it did. Former AIG chief executive Maurice "Hank" Greenberg, who was kicked out, always denied any wrongdoing. The New York attorney general's office criminally charged Greenberg, but later dropped the charges in favor of civil litigation. He agreed to pay a $15 million civil penalty. Then there's GlaxoSmithKline plc. A Glaxo associate general counsel <a class="linelink" href="http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202474622014" target="new">was indicted in November</a> on charges related to off-label drug use. Before that the drug giant had already reached at least three separate settlements with prosecutors for alleged wrongdoing in 2003, 2005, and as late as October. In the October deal, which cost Glaxo $750 million in penalties, a subsidiary in Puerto Rico also pleaded guilty to a criminal charge for manufacturing contaminated drugs. The government has periodically imposed corporate integrity agreements on the drug company, without altering its behavior. After the October settlement, Elpidio "PD" Villarreal, GSK's head of global litigation, said Glaxo regrets how it operated its manufacturing facility. "Our commitment to compliance is demonstrated by the fact that we have not received an FDA warning letter at any plant since the [now-closed] facility was cited in July 2002," Villarreal said. Three weeks later, the associate GC was indicted. There are dozens of other examples of recidivist companies. But the pattern is clear. From fatal explosions to global financial meltdowns to health threats tied to drug company wrongdoing, prosecutors have settled for huge financial penalties and paper promises. Then the company returns to business as usual. Meanwhile, innocent companies are caught up in the consumer and government reactions. So far, there is little evidence to show that higher fines and stricter monitoring are making the too-big-to-fail corporations change their behavior. And now, driven by recent corporate scandals and their consequences, critics are coming at the Justice Department from all sides. http://gulfcoastdisaster.com/site/bca_news?post_id=1066 Deepwater Transocean ordered to turn over audits and records on all of its Gulf of Mexico vessels http://gulfcoastdisaster.com/site/bca_news?post_id=1065 Deepwater Transocean ordered to turn over audits and records on all of its Gulf of Mexico vessels 00:00 Transocean ordered to turn over audits and records on all of its Gulf of Mexico vessels Originally posted by Rebecca Mowbray - Times Picayune - December 18, 2010 U.S. District Court Judge Carl Barbier ordered Transocean Ltd. Friday to give safety audits and other materials on all of its vessels in the Gulf of Mexico to government investigators, and not just material related to the Deepwater Horizon rig. The decision at Friday's monthly status conference meeting in the consolidated oil spill litigation was a win for government investigators. Sharon Smith, an assistant U.S. Attorney in New Orleans working on the case, said that the government is charged with not only finding out what went wrong aboard the Deepwater Horizon, but trying to look at whether there are systematic problems that need to be dealt with through statutory or regulatory changes. For that reason, investigators need to see the actual reports and audits behind safety certifications for all of Transocean's vessels in the Gulf. Smith said that Transocean has turned over some information on the Deepwater Horizon, but has been stalling on the broader request. Richard Hymel, an attorney for Transocean, said the company was fighting it because it believes that the government needs to prove why it was relevant to get material on the entire Transocean fleet in the Gulf of Mexico. But Barbier agreed with the government and told Transocean to comply with the subpoena. "They have a broad scope of inquiry," he said. Meanwhile, fact-finding continues in other aspects of the case. Depositions will begin in January, with ten days of testimony being taken that month and 15 days every month after that until they're completed. Most will take place in New Orleans or Houston. Testing of the blowout preventer continues and should be completed by late February or early March, Justice Department attorney Mike Underhill said. Halliburton, meanwhile, turned over cement samples on Nov. 16, and is supposed to suggest protocols for testing the cement in early January. Other subsea equipment from the oil disaster is in the process of being recovered and inspected, the Justice Department said. In a surprise appearance that wasn't on the agenda, Texas lawyer Brent Coon, the lead plaintiff attorney in the litigation over the March 2005 explosion of the BP refinery in Texas City, Texas, which killed 15 workers, showed up and gave Steve Herman, the plaintiff liaison counsel in the oil spill case, a hard drive with 7 million documents from the Texas litigation. Deborah Kuchler, an attorney for Anadarko and MOEX, the minor partners in the well, jumped up and said if the plaintiffs were getting copies, her clients wanted them, too. And Andrew Langan, an attorney for BP, raised questions about the confidentiality of certain documents. "I don't know what just happened here," he said, to laughter in the courtroom. Herman pledged to maintain the confidentiality of the documents, and attorneys on different sides of the case said they'd figure out an appropriate way to deal with them. At Friday's hearing, BP attorney Don Haycraft gave an update of the Gulf Coast Claims Facility, the $20 billion fund being administered by Washington attorney Kenneth Feinberg to compensate victims of the oil spill. As of Tuesday, Feinberg had received 465,912 claims and had paid $2.5 billion. "The numbers continue to increase," Haycraft said. While Coon had the podium, he took the opportunity to contradict Haycraft and rail against the Feinberg fund, which Coon said has been arbitrary in paying one shrimper but not another, or paying a shrimper, but not the shrimp processing plant that's lost millions. "I would disagree with the comments about the success of the Gulf Coast Claims Facility," Coon said. As the hearing was wrapping up, the attorneys general from Louisiana, Mississippi, Alabama and Florida issued a joint press release urging people not to take final payments or quick final payments from Feinberg because they require people to waive all future rights. Louisiana Attorney General Buddy Caldwell and his counterparts are concerned because anyone who accepts a final payment must agree that they can never recover any additional money from BP or other parties responsible for the oil spill. Many individuals or businesses may have trouble knowing what the true state of their losses is at this point, and if a future hurricane washes more oil on shore or the local fish population fails to recover, or if people get sick, they will be unable to collect any additional money if they accept a final payment from Feinberg. "Due to the speculative nature of estimating final claim value and the breadth of the GCCF release, the Attorneys General advise claimants against accepting any form of final payment or signing any release without first thoroughly reviewing and understanding the GCCF's terms," Caldwell and the other attorneys general wrote. If people only file interim claims to recover damages that are currently known, they don't have to sign a release. http://gulfcoastdisaster.com/site/bca_news?post_id=1065 Deepwater Disaster Cleanup Firm Claims BP Stiffed It http://gulfcoastdisaster.com/site/bca_news?post_id=1064 Deepwater Disaster Cleanup Firm Claims BP Stiffed It 00:00 Disaster Cleanup Firm Claims BP Stiffed It Originally posted by Cameron Langford - Courthouse News Service - December 7, 2010 HOUSTON (CN) - As BP struggled to control the worst oil leak in U.S. history, it asked JESCO, a Mississippi-based disaster services firm, to supply "boats, barges, containers, decontamination operations, oil supply boats, fuel tanks, oil storage barges and lengths of boom to BP on an as-needed basis," JESCO says. So, JESCO says, it spent $1 million getting 11 boats ready for the job - and BP never hired them, won't pay the $1 million, and now it denies they ever had an agreement at all. JESCO sued BP in Harris County Court, alleging breach of contract, fraud, negligent misrepresentation and other charges. JESCO claims it had a "longstanding business relationship" with BP, even before the April 20 explosion of the Deepwater Horizon oil rig. As early as April 21 "JESCO was in contact with BP representatives, offering to help by providing supplies and services," JESCO says. On May 17 BP executive Stephen Richards and JESCO owner John Shavers executed a contract for JESCO to supply "boats, barges, containers, decontamination operations, oil supply boats, fuel tanks, oil storage barges and lengths of boom to BP on an as-needed basis," according to the complaint. Though JESCO representatives repeatedly asked BP for a copy of the contract, "such copy was never provided," the complaint states. But BP assured JESCO's agent that the parties "did indeed 'have a contract,'" JESCO says. In late June, Richards told JESCO "that BP needed a specific fleet of vessels with certain capabilities, and crews for each vessel, to participate in its much-ballyhooed 'Vessels of Opportunity' program," JESCO says. "This program was intended to provide employment opportunities to Gulf vessel owners whose business ground to a half after the spill, and recruit such vessels into BP's cleanup and decontamination operations," the complaint states. JESCO says that after Richards met with Shavers to discuss the number of vessels BP needed, Richards told him, "Mobilize immediately. I give you my word that the paperwork will follow." JESCO drafted a proposal "specifically describing eleven vessels, training and crew required, in response to Mr. Richard's requests and sent it to BP on July 5, 2010," JESCO says. That same day Richards and his supervisor filled out a "resource request form" that incorporated JESCO's proposal "and agreed to the day rates listed therein for eleven specific vessels and crews," according to the complaint. To comply with the contract JESCO says it retrofitted some vessels, rented others, and hired crews for the vessels. "Additionally, JESCO put all its field employees through HAZMAT (hazardous materials) and HAZWOPER (hazardous waste operations and emergency response) training," JESCO says. "Overall, JESCO spent over $1 million in the process." (Parentheses in complaint.) In mid-July BP "successfully placed a temporary cap on the blown-out well and stemmed the flow of oil up to its collection vessels," JESCO says. Despite this news, "Mr. Richards told JESCO to keep its vessels and crew 'on standby' for cleanup and contamination," JESCO says. During this time Shavers repeatedly called Richards and told him JESCO's "vessels were crewed and ready to go at a moment's notice in shipyards in Alabama, Mississippi and Louisiana," according to the complaint. Richards told Shavers BP "knew where to find him" should it need a vessel, JESCO says. But Richards was transferred back to BP's Houston office, JESCO says, and BP did not pay the monthly invoices JESCO submitted from July to October for having the vessels ready. While trying to get payment over the ensuing weeks, JESCO "dealt with one billing contractor after another hired by BP to manage under its VO program, each of whom eventually passed off JESCO's claim to someone else," JESCO says. Finally, on Sept. 29 a BP executive informed JESCO that the order Richards signed for JESCO to place the 11 boats on call "was an 'internal document' that was inappropriate for placing orders with outside contractors, and that it was not a 'work order' on which JESCO should have relied in obtaining, retrofitting and crewing vessels for BP," JESCO says. A letter from another BP executive arrived at JESCO's offices on Oct. 1, denying the existence of an agreement between the parties: "To date we have not discovered any documentation that would support an agreement exists between BP and JESCO or that JESCO has performed any work on behalf of BP in the response." Adding more confusion, on Sept. 30 and Oct. 1, "JESCO received two wire transfers of $225,000 totaling $450,000 from 'Amoco 6481' with no obvious explanation of what such monies were intended to pay for," JESCO says. JESCO presumes it's the Amoco owned by BP. JESCO demands more than $1 million in damages. It is represented by Jessica Juren with Brent Coon and Associates. http://gulfcoastdisaster.com/site/bca_news?post_id=1064 Deepwater