How Multidistrict Litigation Protects the Plutocracy
The BP Oil Well Blowout Medical Benefits Class Action Settlement Agreement
Plutocracy and Corporate Influence
The American landscape has seen a shift in its democratic contours. We now find ourselves facing an emergent plutocracy, where vast financial resources are strategically mobilized to secure political power. This power, once achieved, frequently extends its reach into the judiciary, working to safeguard the very corporate interests that set the wheels in motion. The classic republic, defined by representation and the common good, is being overshadowed by the machinery of wealth, which is ceaselessly driven to protect its own interests.
The BP oil well blowout multidistrict litigation (“MDL 2179”) is one of the most egregious examples of how the U.S. federal judicial system protects the plutocracy.
Introduction
The BP oil well blowout of April 2010 resulted in the largest environmental disaster in the history of the United States. An estimated 5.0 million barrels of crude oil gushed into the Gulf of Mexico.
The BP oil well blowout multidistrict litigation which commenced in August 2010 resulted in the largest federal judicial disaster in the history of the United States.
The U.S. Judicial Panel on Multidistrict Litigation (“JPML”) centralized all federal actions (excluding securities suits) in MDL 2179 pursuant to 28 U.S.C. § 1407. All cases relating to the BP oil well blowout were transferred to the Eastern District of Louisiana on August 10, 2010. The Honorable Carl J. Barbier, the transferee judge presiding over MDL 2179, knowingly limited the liability of BP, et al.
The Toxic Tort and the Medical Benefits Class Action Settlement Agreement
Cleanup workers and coastal residents who suffered exposure to crude oil and chemical dispersants resulting from the BP oil well blowout brought personal injury lawsuits against BP and other entities involved in this disaster.
The JPML found that centralization “will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation….eliminate duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel, and the judiciary.”
Accordingly, the JPML ordered these personal injury lawsuits brought against BP and other entities involved in this disaster to be transferred to the MDL 2179 court and assigned to the Honorable Carl J. Barbier “for coordinated or consolidated pretrial proceedings.”
The MDL 2179 PSC members and BP negotiated a Medical Benefits Class Action Settlement Agreement which the MDL 2179 court approved on January 11, 2013.
During the Fairness Hearing in November 2012, Robin L. Greenwald stated that she believed approximately 200,000 people, cleanup workers and residents, could belong to the Medical Benefits Settlement Class. Ms. Greenwald, a partner at the law firm Weitz & Luxenberg, P.C., served as a member of the MDL 2179 PSC. Ms. Greenwald specifically served as a negotiator of the Medical Benefits Settlement and also played a major role in Medical Settlement approval, implementation, administration, the post-settlement Chronic SPC dispute, and the BELO CMO.
The Medical Benefits Class Action Settlement Agreement divided the claims into two phases. Under the first phase, each class member with adequate affidavits or medical records was to be compensated for a Specified Physical Condition (“SPC”) according to the list of tables known as the “Matrix,” which specified medical conditions, times of physical manifestation of the condition, and proof required for compensation. Under the second phase, known as the Back-End Litigation Option (“BELO”), a class member with a “later-manifested physical condition” (“LMPC”) diagnosed after the cut-off date of April 16, 2012, was to be allowed to litigate the claim in court.
Claim processing and administration was the responsibility of the Garretson Resolution Group (“Garretson” or “Claims Administrator”).
Unfathomably, the MDL 2179 court agreed with BP and Garretson in finding that a class member who was diagnosed with a chronic condition after April 16, 2012 was excluded from asserting an SPC claim, and could only assert a LMPC claim under the BELO.
Specified Physical Condition
To be compensated for a SPC, claimants had to submit a Proof of Claim form to Garretson no later than one year after the “effective date” of February 12, 2014 or they would lose their right to be compensated.
Allegedly, depending on the type of medical condition suffered because of exposure and the level of proof presented, claimants could qualify for one of five levels of compensation (A1, A2, A3, A4, or B1). Acute conditions are compensable under levels A1, A2, A3, and A4. Chronic conditions are compensable under level B1.
The lowest level of compensation was the A1 level ($1,300 for cleanup workers and $900 for zone residents). Here, a claimant had to declare the manifestation of a medical condition within a prescribed timeframe (within seventy-two hours of exposure).
To qualify for the A2, A3, and A4 levels of compensation (a lump sum between $2,700 and $12,350), a claimant had to present supporting medical records that Garretson evaluated “based on the totality of the evidence…. whether that evidence more likely than not supports the assertions made in the declaration.”
To qualify for the B1 level of compensation ($60,700 for cleanup workers and $36,950 for zone residents), a claimant had to present relevant medical records establishing ongoing care for a chronic condition as well as “indicate that exposure was considered by either the claimant or the medical professional to be related to the condition(s) or symptom(s).”
The only way to claim compensation above the basic A1 level ($1,300 for cleanup workers and $900 for residents) was for a claimant to have a medical diagnosis of his or her condition. This was disastrous for many class members who did not have health insurance and could not pay for the costly medical tests required to get diagnosis.
Ms. Greenwald admitted during the Fairness Hearing, there was “no fund set up for people….to go to a doctor and get their diagnoses” and there was “no place that they [could] go before they file[d] their claim form to find out what they ha[d].”
If a claimant could not afford medical diagnosis - a process which included not only a visit to a primary care physician, but also multiple visits to and costly medical tests from a specialist - such a claimant was arguably precluded from receiving compensation higher than the A1 level. These claimants, some with multiple conditions, will now have to participate in the litigation phase that was originally intended for class members with medical conditions manifesting years after the exposure, including leukemia and other cancers.
In order to limit BP’s liability, the MDL 2179 Court and lead counsel knowingly ignored the fact that public policy dictates that a toxic tort is a strict liability tort. Many SPC claims were uncompensated or undercompensated. Garretson has absolute and unreviewable power to determine whether claims are valid or not and what level of compensation is due to each claimant. Seventy-eight percent (78%) of SPC claims submitted to Garretson received either a “Request for Additional Information” or a “Notice of Defect.”
In the end, only 20% of claimants received any compensation. These claimants were forced to accept the lowest payment of $1,300 because they could no longer wait for the money to cover their medical expenses. A very successful “Delay, Deny, Defend” strategy was employed to limit BP’s liability.
Back-End Litigation Option
To be compensated under the BELO, a plaintiff must first submit to Garretson a written Notice of Intent to Sue (“NOIS”) and identify particular diagnosed medical conditions that the plaintiff will allege in the BELO claim. Garretson is required to review the NOIS and transmit it to BP within ten days. Then, BP has thirty days to choose whether to mediate the claim. If BP chooses not to mediate, the plaintiff acquires the right to file a BELO action, provided it is filed within six months of the date Garretson informs the plaintiff of BP’s decision not to mediate.
BELO claims are only for compensatory damages. Plaintiffs may not assert any claims in a BELO lawsuit for punitive damages, exemplary damages, multiple damages, and other non-compensatory damages or penalties of any kind.
If a plaintiff who claims a LMPC is determined by the MDL 2179 court to have failed to comply with the procedures set forth in Section VIII of the Medical Benefits Class Action Settlement Agreement, and such determination is final and not subject to further appeal, he or she shall be barred from bringing a BELO lawsuit and all of his or her claims related to that LMPC shall be deemed released and discharged with prejudice.
Justice for the victims of one of the greatest environmental disasters in U.S. history was never a consideration.
Additional Reading: