Judge Approves Settlement In BP Class-Action Suit
A $20 billion trust will pay out an estimated $7.8 billion
December 22, 2012A federal judge signed off on BP's settlement with businesses and people hard hit by the 2010 oil spill in the Gulf of Mexico.U.S. District Judge Carl Barbier in New Orleans issued a 125-page ruling Friday night on a class-action suit. He gave the settlement preliminary approval in May and overruled questions and criticism of the agreement in his Friday ruling.
“None of the objections, whether filed on the objections docket or elsewhere, have shown the settlement to be anything other than fair, reasonable, and adequate,” the ruling said.
BP has estimated a settlement of about $7.8 billion paid from a $20 billion trust. The Plaintiffs' Steering Committee said, generally, there is no cap on the amount BP will pay to those who agree to the settlement. Thousands of businesses and individuals made economic and medical claims in the suit.
The company said it is pleased the court approved the settlement. It called the decision “another important step forward for BP in meeting its commitment to economic and environmental restoration efforts in the Gulf and in eliminating legal risk facing the company.”
“We believe the settlement, which avoids years of lengthy litigation, is good for the people, businesses and communities of the Gulf and is in the best interests of BP's stakeholders,” it said in a statement.
The oil spill -- one of the worst in U.S. history -- began after a rig explosion aboard the Deepwater Horizon in the Gulf. Eleven workers died.
Oil spewed into the sea for nearly three months before a cap was placed on the BP-owned Macondo well, nearly a mile beneath the surface.
The spill damaged coral reef formations, according to researchers. Scientists have previously confirmed that a plume of hydrocarbons from the well settled in the deep Gulf. The National Oceanic and Atmospheric Administration said about 59,200 barrels of oil a day flowed from the well.
Last month, Attorney General Eric Holder announced that BP will plead guilty to manslaughter charges stemming from the explosion and the spill. It agreed to pay $4.5 billion in government penalties.
Of those penalties, $4 billion will resolve criminal charges. An additional $525 million will be paid to resolve claims brought by the Securities and Exchange Commission that BP lied to investors by understating the amount of oil flowing into the Gulf.
Separate from the corporate manslaughter charges, a federal grand jury returned an indictment charging the two highest-ranking BP supervisors on board the Deepwater Horizon on the day of the explosion with 23 criminal counts.
The two men were charged with seaman's manslaughter and involuntary manslaughter for each of the 11 men killed in the blast, as well as a criminal violation of the clean water act.
The Justice Department in September also accused BP of gross negligence and a “culture of corporate recklessness” in a federal court filing, which expanded the company's liability. A major civil trial is set to take place in New Orleans in February.