BP 2012 Annual Report Download - page 170

Property Damages Settlement, commenced operation on 4 June 2012
under the oversight of Claims Administrator Patrick Juneau. The court
conducted a fairness hearing on 8 November 2012 in which to consider,
among other things, whether to grant final approval of the Economic and
Property Damages Settlement and the Medical Benefits Class Action
Settlement, whether to certify the classes for settlement purposes only,
and the merits of any objections to the settlement agreements. At the
fairness hearing, the parties and objecting class members presented
arguments for and against the approval of each settlement agreement and
the certification of each settlement class. On 21 November 2012, the
parties to the settlement filed a list of 13,123 individuals and entities who
had submitted timely requests to opt out of the Economic and Property
Damages Settlement Class and 1,638 individuals who had submitted
timely requests to opt out of the Medical Benefits Settlement Class. On
16 November 2012, the court extended the deadline from 5 November
2012 to 15 December 2012 for such excluded persons or entities to
request revocation of their requests to opt out of the settlement. As a
result of such revocations, the number of opt-outs for the Economic and
Property Damages Settlement and the Medical Benefits Class Action
Settlement is fewer than those reported figures.
Following the fairness hearing, both settlements were approved by the
district court. The Economic and Property Damages Settlement was
approved on 21 December 2012 in a final order and judgment, and the
Medical Benefits Class Action Settlement was approved by the district
court in a final order and judgment on 11 January 2013. Since 17 January
2013, eight groups of purported members of the Economic and Property
Damages Settlement Class have filed notices of appeal to the US Court of
Appeals for the Fifth Circuit of the final order and judgment approving the
Economic and Property Damages Settlement. Two groups of purported
members of the Medical Benefits Settlement Class have also appealed
from the final order and judgment approving the Medical Benefits Class
Action Settlement. Additionally, a coalition of fishing and community
groups has appealed from an order of the district court denying it
permission to intervene in the civil action serving as the vehicle for the
Economic and Property Damages Settlement and further denying it
permission to take discovery regarding the fairness of that settlement.
On 18 January 2013, a purported class action was filed in federal district
court in New Orleans seeking relief for all persons alleging losses caused
by the Incident who are excluded from or have opted out of the Economic
and Property Damages Settlement. On 8 February 2013, the action was
consolidated with MDL 2179.
On 11 July 2012, BP filed motions to dismiss several categories of claims
in MDL 2179 that were not covered by the Economic and Property
Damages Settlement. On 1 October 2012, the court granted BP’s motion,
dismissing (1) claims alleging a reduction in the value of real property
caused by the oil spill or other contaminant where the property was not
physically touched by the oil and the property was not sold; (2) claims by
or on behalf of entities marketing BP-branded fuels that they have
suffered damages, including loss of business, income, and profits, as a
result of the loss of value to the ‘BP’ brand or name; and (3) claims by or
on behalf of recreational fishermen, recreational divers, beachgoers,
recreational boaters, and similar claimants, that they have suffered
damages that include loss of enjoyment of life from the inability to use of
the Gulf of Mexico for recreation and amusement purposes. The judge did
not, however, lift an earlier stay on the underlying individual complaints
raising those claims or otherwise apply his dismissal of those categories
of claims to those individual complaints. This order was appealed to the
US Court of Appeals for the Fifth Circuit, but the appeal was dismissed for
want of prosecution on 28 January 2013. On 19 February 2013, the
appeals court granted appellants’ motion to reinstate the appeal, and BP
moved to dismiss the appeal for lack of jurisdiction.
On 15 September 2010, three Mexican states bordering the Gulf of
Mexico (Veracruz, Quintana Roo, and Tamaulipas) filed lawsuits in federal
court in Texas against several BP entities. These lawsuits allege that the
Incident harmed their tourism, fishing, and commercial shipping industries
(resulting in, among other things, diminished tax revenue), damaged
natural resources and the environment, and caused the states to incur
expenses in preparing a response to the Incident. On 9 December 2011,
the judge in the federal multi-district litigation proceeding in New Orleans
granted in part BP’s motion to dismiss the three Mexican states’
complaints, dismissing their claims under OPA 90 and for nuisance and
negligence per se, and preserving their claims for negligence and gross
negligence only to the extent there has been a physical injury to a
proprietary interest of the states. The court in MDL 2179 has also set a
schedule for targeted discovery and motions on the legal issue of whether
the Mexican States of Quintana Roo, Tamaulipas, and Veracruz have a
justiciable claim. BP, other defendants, and the three Mexican States filed
cross-motions for summary judgment on 4 January 2013 on the issue of
whether the Mexican States have a proprietary interest in the matters
asserted in their complaints, and the motions remain pending. On 5 April
2011, the State of Yucatan submitted a claim to the GCCF alleging
potential damage to its natural resources and environment, and seeking to
recover the cost of assessing the alleged damage. BP anticipates further
claims from the Mexican federal government.
On 18 October 2012, before a Federal District Court located in Mexico City,
a class action complaint was filed against BPXP, BP America Production
Company, and other companies affiliated with BP. The plaintiffs, consisting
of fishermen and other groups, are seeking, among other things,
compensatory damages for the class members who allegedly suffered
economic losses, as well as an order requiring BP to remediate
environmental damage resulting from the Incident and to provide funding for
the preservation of the environment and to conduct environmental impact
studies in the Gulf of Mexico for the next 10 years. Plaintiffs have not yet
properly served the BP entities named as Defendants.
Citizens groups have also filed either lawsuits or notices of intent to file
lawsuits seeking civil penalties and injunctive relief under the Clean Water
Act and other environmental statutes. On 16 June 2011, the judge in the
federal multi-district litigation proceeding in New Orleans granted BP’s
motion to dismiss a master complaint raising claims for injunctive relief
under various federal environmental statutes brought by various citizens
groups and others. The judge did not, however, lift an earlier stay on the
underlying individual complaints raising those claims for injunctive relief or
otherwise apply his dismissal of the master complaint to those individual
complaints. In addition, a different set of environmental groups filed a
motion to reconsider dismissal of their Endangered Species Act claims on
14 July 2011. That motion remains pending. On 31 January 2012, the
court, on motion by the Center for Biological Diversity, entered final
judgment on the basis of the 16 June 2011 order with respect to two
actions brought against BP by that plaintiff. On 2 February 2012, the
Center for Biological Diversity filed a notice of appeal of both actions.
Following oral argument, the Court of Appeals ruled in BP’s favour on
9 January 2013 in virtually all respects, though it remanded the Center for
Biological Diversity’s claim under the Emergency Planning and
Community Right to Know Act to the district court. On 22 January 2013,
the Center for Biological Diversity filed a Petition for Panel Rehearing in
the Court of Appeals, which was denied on 4 February 2013.
On 1 March 2012, the court in MDL 2179 issued a partial final judgment
dismissing with prejudice all claims by BP, Anadarko and MOEX for
additional insured coverage under insurance policies issued to Transocean
for the sub-surface pollution liabilities BP, Anadarko and MOEX have
incurred and will incur with respect to the Macondo well oil release. BP
filed a notice of appeal from the court’s judgment to the US Court of
Appeals for the Fifth Circuit and oral argument was conducted on
3 December 2012. On 1 March 2013, the appeals court reversed the
district court’s judgment, rejecting the district court’s ruling that the
insurance that BP is entitled to receive as an additional insured under the
Transocean insurance policies at issue is limited to the scope of the
indemnity in the drilling contract between BP and Transocean.
In addition, BP is aware that actions have been or may be brought under
the Qui Tam (whistle-blower) provisions of the False Claims Act (FCA). On
17 December 2012, the court ordered unsealed one complaint that had
been filed in the US District Court for the Eastern District of Louisiana by
one individual under the FCA’s Qui Tam provisions. The complaint alleged
that BP and another defendant had made false reports and certifications of
the amount of oil released into the Gulf of Mexico following the Incident.
On 17 December 2012, the DoJ filed with the court a notice that the DoJ
elected to decline to intervene in the action.
168 Additional disclosures
BP Annual Report and Form 20-F 2012