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$7.8B Settlement Reached By BP and Plaintiffs in Deepwater Horizon Gulf Oil Spill Claims subscribers may click here to access Related Court Documents, Including Briefs, Pleadings and Motions for the Gulf Oil Spill Litigation.

Offshore Oil Drilling Rig

NEW ORLEANS - (Mealey's) BP PLC and plaintiffs in the federal multidistrict litigation court in Louisiana for claims arising from the explosion of the Deepwater Horizon rig and ensuing oil spill in the Gulf of Mexico reached an agreement Friday wherein the company would pay $7.8 billion to resolve claims seeking compensation for economic loss and personal injuries, the company announced (In re:  Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico on April 20, 2010, MDL 2179, Case No. 10-md-2179, E.D. La.).

(Order adjourning trial available.  Document #08-120309-016R.)

The proposed settlement is subject to final approval by U.S Judge Carl Barbier of the Eastern District of Louisiana, who adjourned the start of the liability phase of the trial that was scheduled to begin March 5.  The judge said in his order that the settlement, which needs to be approved under Federal Rule of Civil Procedure 23, "would likely result in a realignment of the parties in this litigation and require substantial changes to the current Phase I trial plan."  Judge Barbier explained that adjourning the proceedings until a future date would allow the parties to reassess their positions.

According to BP, the $7.8 billion would be paid from the $20 billion Gulf Coast Claims Trust the company established in August 2010 and would include a commitment of $2.3 billion from BP to resolve economic loss claims related to the Gulf seafood industry.  The company explained that the proposed settlement would be broken down into two categories:  economic loss and medical claims.  Parties joining in the settlement are required to release and dismiss their claims against BP, and the company said that the settlement is not an admission of liability.

Settlement Plans

Under the economic loss settlement plan, the Gulf Coast Claims Fund (GCCF), which was headed by Kenneth Feinberg, would be dissolved, and the resolution of claims would be overseen by Judge Barbier.  As the transition occurs, the GCCF would continue to process claims that have already been submitted, BP said.

The proposed medical claims settlement would resolve claims based on a matrix for certain manifested physical conditions and include a 21-year medical consultation program for qualified individuals.  Some qualified plaintiffs could also pursue their medical claims through a mediator or litigation process, the company said, and it would provide $105 million to improve the availability, scope and quality of health care in the Gulf region.

 The proposed settlement does not affect claims brought by plaintiffs against Transocean Ltd., the owner of the Deepwater Horizon oil rig, and Halliburton Inc., which provided cement services.  The settlement also does not impact claims brought by the U.S. government and a number of Gulf states under the Clean Water Act and Oil Pollution Act of 1990.


BP is represented by Don K. Haycraft and R. Keith Jarrett of Liskow & Lewis in New Orleans; Richard C. Godfrey and J. Andrew Langan of Kirkland & Ellis in Chicago; Granta Y. Nakayam, Stuart A.C. Drake and Jeffrey Bossert Clark of Kirkland & Ellis in Washington, D.C.; Robert C. "Mike" Brock of Covington & Burling in Washington; and Joel M. Gross and Allison Rumsey of Arnold & Porter in Washington.

Stephen J. Herman of Herman Herman Katz & Cotlar in New Orleans; James Pakerson Roy of Domengeaux Wright Roy & Edwards in Lafayette, La.; Brian H. Barr of Levin Papantonio Thomas Mitchell Echsner & Proctor in Pensacola, Fla.; Robin L. Greenwald of Weitz & Luxenberg in New York; Jeffrey A. Breit of Breit Drescher Imprevento & Walker in Norfolk, Va.; Rhon E. Jones of Beasley Allen Crow Methvin Portis & Miles in Montgomery, Ala.; Elizabeth J. Cabraser of Lieff Cabraser Heimann & Bernstein in San Francisco; Matthew E. Lundy of Lundy Lundy Soileau & South in Lake Charles, La.; Philip F. Cossich Jr. of Cossich Sumich Parsiola & Taylor in Belle Chasse, La.; Michael C. Palmintier of deGravellew Palmintier Holthaus & Fruge in Baton Rouge, La.; Robert T. Cunningham of Cunningham Bounds in Mobile, Ala.; Paul M. Sterbcow of Lewis Kullman Sterbcow & Abramson in New Orleans; Alphonso Michael Espy of Morgan & Morgan in Jackson, Miss.; Scott Summy of Baron & Budd in Dallas; Calvin C. Fayard Jr. of Fayard & Honeycutt in Denham Springs, La.; Mikal C. Watts of Watts Guerra Craft in San Antonio; and Ervin A. Gonzalez of Colson Hicks Eidson in Coral Gables, Fla., are counsel for the plaintiffs.

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