By Margaret Cronin Fisk
BP Plc (BP/) and lawyers suing the company won preliminary approval of their proposed settlement of claims over the 2010 Gulf of Mexico oil spill.
BP in March agreed to pay an estimated $7.8 billion to resolve most private plaintiffs’ claims for economic loss, property damage and spill and cleanup-related injuries. The settlement establishes two separate classes, one for economic loss and the other for physical injuries related to the spill or the cleanup.
The proposed settlement is “fair, reasonable, adequate, entered in good faith, free of collusion, and within the range of possible judicial approval,” U.S. District Judge Carl Barbier, who has been overseeing the litigation, said in granting preliminary approval of the agreement yesterday.
Barbier set a fairness hearing where he will consider final settlement approval for Nov. 8. He didn’t act on a BP request to postpone any trial on liability for the incident until after the fairness hearing.
Separately, U.S. Attorney General Eric Holder said yesterday that the blowout at the Macondo well that caused the worst U.S. offshore oil spill may lead to additional criminal charges. A former BP Plc engineer, Kurt Mix, was arrested on April 24 on charges of intentionally destroying evidence requested by the U.S. about the size of the spill.
The proposed settlement, reached March 2, days before a scheduled trial on liability for the 2010 spill, doesn’t cover federal government claims and those of Gulf Coast states Louisiana and Alabama. It also excludes claims of financial institutions, casinos, private plaintiffs in parts of Florida and Texas, and residents and businesses claiming harm from the Obama administration’s moratorium on deep-water drilling prompted by the spill.
The deal will allow victims who aren’t satisfied with it to opt out and pursue lawsuits against BP. Plaintiffs not covered in the overall settlement, such as those claiming harm from the moratorium, can continue to pursue their claims.
Plaintiffs “who opt out or who possess reserved claims will be able to pursue those claims effectively outside” the settlement under the terms of the agreement, Barbier said in yesterday’s order.
Barbier said yesterday he considered objections to his initial approval of the accord and found they weren’t persuasive at this stage of his review of the settlement. “The court finds these objections do not warrant denial of preliminary approval,” the judge said.
Preliminary approval “is just a starting point, not an ending point,” Barbier said at an April 25 hearing on the agreement. Prospective claimants will receive notices of the settlement terms following his order.
BP and the Plaintiffs Steering Committee, a group of lawyers appointed by Barbier to handle the lawsuits, asked the judge to hold a Nov. 8 fairness hearing before granting final approval of the accord and to postpone any trial on liability until after the hearing.
BP has agreed to pay claimants before final approval of the settlement, Steve Herman, co-lead counsel in the PSC, said at the April 25 hearing.
No Trial Date
The blowout and explosion on the Deepwater Horizon drilling rig killed 11 workers and started millions of barrels of crude leaking into the Gulf. The accident prompted hundreds of lawsuits against London-based BP; Transocean Ltd. (RIG) (RIG), the Vernier, Switzerland-based owner and operator of the rig; and Halliburton Co. (HAL) (HAL), which provided cementing services.
The plaintiffs’ and government claims against BP’s contractors on the doomed Macondo well remain, and no new trial date has been set. A trial would cover federal and state government pollution claims, as well as cross-claims between BP and its partner companies in the Macondo site and rig.
Under the settlement, BP has assigned to the plaintiffs the company’s right to seek cleanup costs and the value of the lost oil from Transocean and Halliburton.
Halliburton spokeswoman Beverly Stafford didn’t immediately reply to e-mail or voice messages seeking comment on yesterday’s order. Scott Dean, BP spokesman, declined to comment.
“We are pleased with the court’s decisions to date and continue to have the utmost confidence in the strength of our case,” Lou Colasuonno, a Transocean spokesman, said in an e- mail.
Wyn Hornbuckle, a Justice Department spokesman, said the government had no comment on the judge’s ruling.
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