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Thursday, September 5, 2013 - 2:30pm

BP Wants To Halt Deepwater Horizon Claims Process

Updated: 1 year ago.
Crude oil leaked from the Deepwater Horizon oil rig sits on the surface of the Gulf of Mexico in April 2010.

BP is fighting the settlement it agreed to last summer that let the oil company avoid thousands of potential lawsuits over the 2010 Gulf of Mexico oil spill.

Just after the spill, when oil was still gushing into the Gulf, BP touted the $20 billion it set aside for claims. But now it says the claim process is corrupt and is hoping a court will overturn the settlement that established the claims fund.

Ending the claims would mean stopping a well-oiled machine.

Claims are processed at the Deepwater Horizon Claims Center, a warehouse about 50 miles from New Orleans. Hundreds of people work on economic and property claims against BP, 8:30 a.m. to 10 p.m.

According to Shandy Garr of Garden City Group, the company BP pays to run the claims center, the center receives a few thousand pieces of mail a day, down from about 100,000 a day it got early on.

Settling Claims

BP has set up a new hotline people can use to report fraudulent Deepwater claims. Billboards advertise the hotline number along the highway, the word "fraud" as tall as a person. BP has also taken full-page ads in The New York Times, shaming claimants and their lawyers for what it calls "outrageous windfalls."

U.S. attorneys have prosecuted several fraud cases involving people who pretended to lose jobs they never had or businesses they didn't own. But it's tiny compared with the hundreds of thousands of claims.

In response to questions about fraud, BP declined to be interviewed but released a statement: "We are defending our rights, shining a light on abuses and keeping people informed."

New Orleans lawyer Melvin Albritton sees it differently. "I would call it a smear campaign," Albritton says.

On a map, he draws a thick black line around vast areas of Florida and Texas, and the entire states of Louisiana, Mississippi and Alabama. Anyone who lost money in these places after the 4 million-barrel spill is eligible.

"I've heard a lot of commentary, people reminding us that Huntsville [Alabama] is a really long way away from the Gulf of Mexico, and while I appreciate that geography lesson, it's one they should've given to BP's attorneys before they recommended this settlement," he says.

Albritton says BP didn't count on so many people filing. Now it wants to scare them off before next April's deadline for claims. "Folks who were on the fence about it, after seeing the campaign, hearing the news media, they've changed their mind," he says.

The administrator of the BP settlement is 75-year-old lawyer Patrick Juneau from Lafayette, La. He's run other huge settlements, like the Vioxx pharmaceutical case. His refrain: "When in doubt, file a claim."

"We don't have any dog in this fight. It's an open process, there's no closed doors, there's nothing hidden here. And if you qualify, you can and should get paid," he says.

BP's official complaint is not that Juneau has paid false claims. It's that he's paid too much.

'The Money Is There'

His office has sent checks for about $5 billion already. BP expected to pay about $7.8 billion total in individual claims. The settlement will be a lot more. But, he says, that's the deal BP made.

"People have got to understand, there's no cap. Ninety-nine percent of cases that I've seen, you put a cap. And however that prints out, then that's what I've got to do, to implement what they agreed to," Juneau says.

BP asked a federal judge to remove Juneau and halt claims. The judge dismissed that request, twice. Now BP is trying to scrap the settlement altogether.

Down the road from the Deepwater Horizon Claims center, Brenda Harris owns a gas station and sells fresh seafood. She and her husband assumed they didn't qualify for a BP claim. But a few months ago, they filed.

"Well, different businesses said 'You really should do it because the money is there, it's got to be disbursed,' " she says.

Harris heard about BP's efforts to stop claims. She just hopes hers goes through. If others get paid, she says, why shouldn't she?

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