Schexnaydre Law Firm, LLC

UPDATE: Judge Barbier's Ruling to Lift Stay Sends Message to BP

by David Schexnaydre, Esq.

Judge Barbier's recent ruling to lift the stay on construction, agricultural, and professional services BP claims sends a message to BP that the time for negotiating a settlement is over.  Basically, Judge Barbier ruled that the Settlement Agreement says what is says and should be applied as it is written. The time for changing the terms of the Settlement Agreement was during the negotiation process, not now during the implementation of the settlement framework.

Put simply, BP tried to change the way construction, agricultural, and professional services claims were being evaluated because BP realized that applying the agreed-upon methodology could lead to claims that were much larger than BP probably anticipated.  Too bad.  Just because claims are larger than anticipated does not allow you to go back now and try to change the rules.

For whatever it is worth, I happen to agree with Judge Barbier's ruling.  The Settlement Agreement sets forth a specific, objective, straight-forward method for calculating Business Economic Loss claims.  There is no need to now add additional, subjective, and more complicated rules so BP can reduce the amount of the claims.

I have seen personally BP employ this tactic in the appeal phase of this BP Claims process.  And, unfortunately, BP benefitted from it because the small business who was basically being bullyed by BP decided to take a little bit less ($50,000 less) for its claim, rather than risking the loss of much more.  The issue had to do with the categorization of "supplies."  The BP Settlement Agreement clearly puts Supplies in the Fixed Expenses category.  But, for this claim by a Florida restaurant, BP appealed the award calculated by the Claims Administrator and argued that while BP did agree that Supplies would be considered Fixed Expenses, Supplies really are variable in nature since the use of supplies goes up and down depending on the amount of business the restaurant is doing.  While that may be true, the time for making such an argument was during the settlement negotiation process, not after you have already agreed that Supplies are Fixed Expenses.  

To me it is just an example of BP's disingenuousness.  Unfortunately, it worked to BP's advantage against a small restaurant.  But with Judge Barbier's recent opinion, BP may think twice about trying those kinds of tactics again.  Lawyers and claimants should use this decision to their advantage during the appeals process when BP tries again to change the terms of a settlement to which they have already agreed.

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