BP Plc (BP/)’s multibillion-dollar deal to settle private economic damage claims from the 2010 Gulf of Mexico oil spill should let victims who agreed not to sue in exchange for early payments participate in the new settlement, Mississippi Attorney General Jim Hood said in a court filing.
BP should “nullify the illegal, illegally-obtained and unconscionable” releases victims signed with the Gulf Coast Claims Facility, which administered spill-damage claims for BP, Hood said in a filing today in federal court in New Orleans.
Hood seeks to void hundreds of millions of dollars in so- called quick-pay settlements given to spill victims. Individuals received $5,000 and businesses got $25,000 through the quick-pay claim system, regardless of the magnitude of damages they suffered from more than 4.1 million barrels of oil that spewed from BP’s well off the Louisiana coast in 2010.
Many of the 200,000 spill victims who gave up their right to sue for actual and future damages did so “as a result of economic duress,” because they didn’t have the economic staying power to wait for a court resolution of their claims, Hood said.
Hood seeks to void any releases signed by the 2,600 claimants whose cases were identified as having been resolved in error in an audit of the claims facility. The audit was requested by the U.S. Justice Department after Hood and other state attorneys general complained about unfairness and delays in the claims-payment process.
Ellen Moskowitz, a BP spokeswoman, didn’t immediately return e-mail or phone messages left after regular business hours seeking comment on the Mississippi attorney general’s filing.
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. U.S. District Judge Carl Barbier in New Orleans is considering whether to approve that settlement.
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).
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