In re Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010
| Decision Date | 21 December 2012 |
| Docket Number | MDL 2179,No. 12-970,12-970 |
| Parties | In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010 This document relates to: Bon Secour Fisheries, Inc., et al. v. BP Exploration & Production Inc., et al. and All Actions |
| Court | United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana) |
[Granting Final Approval of the Economic and Property Damages Settlement Agreement]
On April 20, 2010, a blowout, explosion, and fire occurred aboard the Deepwater Horizon, a semi-submersible offshore drilling rig, as it was engaged in drilling activities on the "Macondo Well" on the Outer Continental Shelf off the coast of Louisiana. These events led to eleven deaths, dozens of injuries, and a massive discharge of oil into the Gulf of Mexico that continued for nearly three months. On August 10, 2010, the Judicial Panel on Multidistrict Litigation ("JPML") centralized all federal actions (excluding securities suits) in this Court pursuant to 28 U.S.C. § 1407. Eventually, hundreds of cases with thousands of individual claimants would be consolidated with this Multidistrict Litigation.
On October 19, 2010, the Court issued Pretrial Order No. 11, Rec. Doc. 569 ("PTO No. 11"), creating pleading bundles for various types of claims. Relevant here is the "B1 bundle," whichencompasses all private claims for economic loss and property damage. In accordance with PTO No. 11, the PSC filed the B1 Master Complaint on December 15, 2010, Rec. Doc. 879, and a First Amended B1 Master Complaint on February 9, 2011, Rec. Doc. 1128. Numerous Defendants filed motions to dismiss the First Amended B1 Complaint. On August 26, 2011, the Court issued an Order and Reasons granting in part and denying in part these motions. Rec. Doc. 3830. BP subsequently answered the First Amended Complaint on September 27, 2011. Rec. Doc. 4130.
On September 14, 2011, the Court issued Amended Pretrial Order No. 41 (Case Management Order No.3), governing the scope and structure of Transocean's Limitation of Liability trial. Rec. Doc. 4033. Phase One of the trial, originally scheduled to commence on February 27, 2012, would address "issues arising out of the conduct of various parties, third parties, and non-parties allegedly relevant to the loss of well control at the Macondo Well, the ensuing fire and explosion on the MODU DEEPWATER HORIZON on April 20, 2010, and the sinking of the MODU DEEPWATER HORIZON on April 22, 2010, and the initiation of the release of oil from the Macondo Well or DEEPWATER HORIZON during those time periods." Id. at 2.
Following the JPML's centralization order, the parties engaged in an extraordinary amount of discovery within a compressed time period to prepare for the Phase One Trial. This included taking 311 depositions, producing approximately 90 million pages of documents, and exchanging more than 80 expert reports on an intense and demanding schedule. Depositions were conducted on multiple tracks and on two continents. Discovery was kept on course by weekly discovery conferences before Magistrate Judge Shushan. The Court also held monthly status conferences with the parties.
In February 2011, settlement negotiations began in earnest for the proposed Economic and Property Damages Settlement (sometimes referred to as "Settlement Agreement" or "Settlement").1 Talks intensified in July 2011, occurring on an almost-daily basis. In late 2011, Magistrate Judge Shushan became involved in the negotiations as neutral mediator. The parties report that over 145 day-long, face-to-face negotiation meetings took place, in addition to numerous phone calls and "WebEx Conferences." On February 26, 2012, the eve of the Limitation and Liability Trial, the Court adjourned proceedings for one week to allow the parties to make further progress on their settlement talks. Rec. Doc. 5887. On March 2, 2012, the Court was informed that BP and the PSC had reached an Agreement-in-Principle. Consequently, the Court adjourned Phase One of the trial, because of the potential for realignment of the parties in this litigation and substantial changes to the current trial plan. Rec. Doc. 5955.
The parties continued to work on finalizing the details of the Settlement. On March 8, 2012, at the parties' request, the Court entered an order creating a process to facilitate the transition from the Gulf Coast Claims Facility ("GCCF")2 to the Court-supervised settlement program envisioned by the Settlement. Rec. Doc. 5995. The order also appointed a Transition Coordinator and Claims Administrator. The Transition Process concluded on June 4, 2012 (although processing of some claims continued for some time afterwards) and ultimately paid approximately $405 million on nearly 16,000 claims. Rec. Doc. 7900 at 4; Monger Decl. ¶ 26. The Court also appointed a neutral party to preside over the seafood component of the Settlement. Rec. Doc. 5998.
On April 16, 2012, the PSC filed a new class action complaint to serve as the vehicle for the proposed Settlement. See No. 12-970, Bon Secour Fisheries, Inc., et al. v. BP Exploration & Production Inc., et al.3 The Settlement Agreement was completed, signed, and filed into the Court's record on April 18, 2012. Rec. Doc. 6276. That same day, the parties filed a joint motion for preliminary approval of the Settlement Agreement. Rec. Doc. 6266. The PSC simultaneously moved for preliminary and conditional class certification. Rec. Doc. 6269. The following week, BP filed a conditional non-opposition to the PSC's class certification motion. Rec. Doc. 6348.
On April 25, 2012, the Court held a preliminary approval hearing. See Minute Entry, Rec. Doc. 6366. On May 2, 2012 the parties filed a joint motion to approve a slightly amended Settlement Agreement. See Rec. Doc. 6414. On May 2, 2012, the Court granted the joint motion, preliminarily approved the Settlement Agreement, and preliminarily and conditionally certified the class for purposes of settlement only. See Rec. Doc. 6418 ("Preliminary Approval Order").4 The Preliminary Approval Order also approved the Class Notice and Class Notice Plan proposed by the parties, and appointed Hilsoft Notifications as Class Notice Administrator. See Rec. Doc. 6418 at 36-39. Hilsoft Notifications thereafter implemented the Notice Program, which was substantially completed by July 15, 2012, allowing class members adequate time to make decisions before the objection (Sept. 7) and op-out (Nov. 1) deadlines. The Preliminary Approval Order also scheduled a Final Fairness Hearing for November 8, 2012.
On August 13, 2012, BP moved for final approval of the Settlement Agreement. Rec. Doc. 7114. That same day, Class Counsel filed a memorandum seeking final approval of the Settlement Agreement and final class certification, which the Court has treated as a motion for final approval and final class certification. Rec. Doc. 7104. The Court received oppositions from objectors, which were filed into a special docket, No. 10-7777. BP and Class Counsel filed replies to these objections. Rec. Docs. 7731, 7727.
On September 11, 2012, the Court issued an order governing the conduct of the Final Fairness hearing. See Rec. Doc. 7358. In accordance with common practice and authority, the Court decided to "limit presentations by any objector on the grounds of being duplicative, cumulative, or because the objection was adequately covered in written submissions," and "issue a supplemental order prior to the hearing designating objectors to be heard." Id. at 4. These procedures were designed to enable the Court to obtain the benefit of the widest spectrum of objections without duplication and best inform its independent judgment of the Settlement's fairness, adequacy, and reasonableness under Rule 23(e) standards and the Fifth Circuit's Reed factors. On November 1, 2012, the Court issued a supplemental order designating representative counsel to present argument on certain topics. See Rec. Doc. 7819. The Court then presided over a fairness hearing held on November 8, 2012. See generally Rec. Doc. 7900; Nov. 8 Fairness Hr'g Tr., Rec. Doc. 7892.
The Court has reviewed and considered all arguments.
The proposed Settlement resolves certain claims for economic loss and property damage resulting from the "Deepwater Horizon Incident."6 If final approval is granted, then, in exchange for the remedies summarized below, BP would obtain a broad classwide release as well as a signed Individual Release from each claimant that accepts a payment pursuant to the Settlement Agreement. An unusual feature of the Settlement Agreement, however, is that class members have been able to submit claims and receive payments prior to the Court's grant of final approval, provided that they sign an individual release.
To effectuate the settlement, Class Counsel seek to certify a class pursuant to Federal Rule 23(a) and (b)(3) for settlement purposes only. The putative class consists of private individuals and businesses defined by (1) geographic bounds and (2) the nature of their loss or damage. Both criteria must be met in order for the person or entity to be within the settlement class. Claims of non-class members are unaffected by the settlement. Where a class member has multiple claims,some falling within the Settlement and some outside the Settlement, the latter are unaffected by the Settlement.
The geographic bounds of the Settlement are Louisiana, Mississippi, Alabama, and certain coastal counties in eastern Texas and western Florida, as well as specified adjacent Gulf waters and bays. Generally, "[t]o be a class member, an individual within the geographic area must have lived, worked, or owned or leased property in the area between April 20, 2010, and April [16], 2012, and businesses must have conducted activities in the area during that same time frame." Klonoff Decl. ¶ 20. The Settlement recognizes six...
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