Louisiana Seeks Jury Trial on $1 Billion Claim Against BP

Louisiana asked a federal judge to order a separate jury trial against BP Plc over the $1 billion in economic oil-spill losses that the state claims BP has stopped paying.

Louisiana Attorney General Buddy Caldwell asked the judge in New Orleans to make an exception that would allow the state to proceed with a solo trial over economic losses it suffered as a result of BP’s 2010 oil spill in the Gulf of Mexico. Economic losses include claims for lost tax revenue, royalties and fees in more than a dozen categories.

U.S. District Judge Carl Barbier, who is overseeing more than 600 lawsuits by thousands of coastal businesses, fishing interests and property owners, has blocked all government damages claims from going forward until he determines liability for the spill.

“This has emboldened BP to the point that it is simply ignoring its legal obligations to pay interim claims” under the Oil Pollution Act, or OPA, which requires interim damage payments to oil spill victims, Caldwell said in the filing. “Because proceedings on damages resulting from the Deepwater Horizon oil spill are stayed, Louisiana essentially has no recourse through the legal process.”

Louisiana said in yesterday’s filing that London-based BP has stated in nonpublic court filings and closed-door meetings that the company is entitled to offset future damage payments by any income the state earned from increased economic activity caused by the massive mobilization to contain and clean up the spill.

‘Claim Splitting’

“We will respond to the motion as directed by the court,” BP spokesman Scott Dean said in an e-mail today. “But we believe this issue was already addressed when the court found in September that Louisiana’s request was ‘claim splitting’ and ‘inconsistent with the schedule for the preparation and trial of Phase One and Phase Two.’”

Dean didn’t comment on Louisiana’s allegations about offsets.

At a September conference between the judge and lead lawyers involved in the spill litigation, BP argued that “post-2010, the state may have benefited from the disaster, and after an analysis of the state’s ‘net losses,’ Louisiana may owe BP money,’” Caldwell said in the filing, repeating a comment he attributed to a BP lawyer.

‘Willful Polluter’

“A willful polluter may not rewrite that claim or create an offset,” the attorney general said. “BP’s assertion that payment must wait until all future economic losses have been presented is simply incorrect. Further, nothing in the text of OPA provides for a calculation of net losses.”

If the judge doesn’t dismiss BP’s “offset defense” on legal grounds, Caldwell said, Louisiana will ask the court to order BP to produce evidence backing up the company’s “public assertion that it has spent over $22 billion to fund response operations, clean-up and claims” throughout the Gulf Coast region.

He asked Barbier to consider permitting a stand-alone trial on Louisiana’s claims as a test case for future trials over spill-related economic losses sought from BP by dozens of state and local governmental entities.

Caldwell also asked permission to try Louisiana’s economic-loss claims before a jury rather than the judge. Barbier has scheduled a nonjury trial for January to determine fault for the spill and apportion liability among BP and other companies involved in drilling the ill-fated well.

Spill Victims

BP and a committee of lawyers representing spill victims reached a proposed settlement in March that would pay an estimated $7.8 billion to compensate private parties for economic losses, property damage and injuries from the spill. Government claims were among the categories of damages specifically excluded from that deal, which is awaiting approval by Barbier.

Louisiana isn’t seeking to try its natural-resources damages claims in the jury trial it proposes, Caldwell said. He said the state would like to include in that trial its claims for losses resulting from the deep-water drilling suspension the Obama administration instituted shortly after the spill. BP has denied it’s responsible for moratorium losses.

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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