Download - BP-Econ Appeal Brief FINAL (Filed) 9-3-2013
No. 12-31155 c/w No. 13-30095 _____________________________________________________________
UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
______________________________________________________________
IN RE: DEEPWATER HORIZON – APPEALS OF THE ECONOMIC AND PROPERTY DAMAGE CLASS ACTION SETTLEMENT
_____________________________________________________________
LAKE EUGENIE LAND & DEVELOPMENT, INCORPORATED; BON SECOUR FISHERIES, INCORPORATED; FORT MORGAN REALTY, INCORPORATED; LFBP 1, L.L.C., DOING BUSINESS AS GW FINS; PANAMA CITY BEACH DOLPHIN TOURS & MORE, L.L.C.; ZEKES
CHARTER FLEET, L.L.C.; WILLIAM SELLERS; KATHLEEN IRWIN; RONALD LUNDY; CORLISS GALLO; JOHN TESVICH; MICHAEL
GUIDRY, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED; HENRY HUTTO; BRAD FRILOUX;
JERRY J. KEE, Plaintiffs – Appellees
v.
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION; BP PIPELINE COMPANY,
Defendants – Appellees
v.
GULF ORGANIZED FISHERIES IN SOLIDARITY & HOPE, INCORPORATED,
Movant – Appellant _____________________________________________________________
On Appeal from the U.S. District Court for the Eastern District of Louisiana
C.A. Nos. 2:10-md-2179, and 2:12-cv-970 ___________________________________________________________
PLAINTIFFS-APPELLEES’ BRIEF ON THE MERITS
___________________________________________________________
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Stephen J. Herman Herman, Herman & Katz LLC 820 O’Keefe Avenue New Orleans, Louisiana 70113 Telephone: (504) 581-4892 Fax No. (504) 569-6024 E-Mail: [email protected] Lead Class Counsel
James Parkerson Roy Domengeaux, Wright, Roy, & Edwards LLC 556 Jefferson Street, Suite 500 Lafayette, Louisiana 70501 Telephone: (337) 233-3033 Fax No. (337) 233-2796 E-Mail: [email protected] Lead Class Counsel
Samuel Issacharoff 40 Washington Square South, 411J New York, NY 10012 Telephone: (212) 998-6580 E-Mail: [email protected] Counsel on the Brief
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CERTIFICATE OF INTERESTED PERSONS
The undersigned counsel of record for Appellees certify that the Certificate
of Interested Persons as set forth by Appellants in their Briefs is complete.
Undersigned are not aware of any other interested persons under Fed. R. App.
Proc. 28.2.1.
/s/ Stephen J. Herman and James Parkerson Roy Co-Lead Class Counsel
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STATEMENT REGARDING ORAL ARGUMENT
Pursuant to Fifth Circuit Rule 28.2.4, Class Counsel respectfully submits
that oral argument will likely assist the Court in resolving the issues presented in
this appeal.
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TABLE OF CONTENTS
Table of Contents . . . . . . . . . . i Table of Authorities . . . . . . . . . iv Statement of Facts . . . . . . . . . . 1
A. Factual Background . . . . . . . . 1
B. Procedural Background . . . . . . . 7 C. Overview of the Approved Settlement . . . . . 9
1. Claims Categories . . . . . . . 10
2. Transparency, Objectivity and Independence . . . 12
3. Structural and Procedural Safeguards . . . . 12
4. Protections Against Future Risk . . . . . 14
5. Basic Compensation Frameworks . . . . . 15
6. Seafood Compensation Program . . . . . 17
7. Assignment and Other Class-Wide Relief . . . . 20
8. The Objectors . . . . . . . . 21
Summary of the Argument . . . . . . . . 22 Standard of Review . . . . . . . . . 27
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Argument . . . . . . . . . . . 28
I. The Pentz Appellants’ Arguments Are Unsupported, Fail to Address Their Own Claims, and Request Nothing More Than Remand to The District Court . . . . . . . . . 28
II. The Coon and GO FISH Appellants Have No Standing . . . 35
A. The Coon Appellants Lack Standing for Failure to Meet the District Court Filing Requirements . . . . . 36
B. GO FISH Lacks Standing for Both Substantive and Procedural Reasons . . . . . . . . 37
III. The Coon Appellants’ Arguments Demonstrate a Fundamental Misunderstanding of the Common Objective Guiding Principles of the Settlement . . . . . . . . . 43
A. The Common Source of Class Members’ Damages Support Commonality, Predominance, and the Superiority of the Class Action to Resolve their Claims . . . . 43 1. Commonality . . . . . . . . 45
2. Common Issues Predominate Over Individual Issues . . 48
3. The Class Action is Superior to Other Available Methods
for the Comprehensive Determination and Resolution of Claims in This Litigation . . . . . . 53
B. Class Counsel Were and Are Qualified to Manage the Settlement Class Without Conflicts . . . . . . . 56
C. Notice and Opt-Out Procedures Satisfied Rule 23(e) and Contemporary Best Practices . . . . . 58 1. The Settlement Notice . . . . . . . 58
2. Notice Does Not Include The Obligation to Create an
Opt Out Form . . . . . . . . 60
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3. Due Process is protected by having Claimants Themselves
Sign the Opt-Outs . . . . . . . 61
IV. The Palmer Appellants’ Arguments Concerning Real Property Damage Claims, Cy Pres, and Attorneys’ Fees are Fundamentally Flawed . . . . . . . . . . 62
A. The Coastal Real Property Class Representatives are Adequate . 63
B. There Is No Cy Pres in This Settlement . . . . . 67
C. The Settlement Was Not Fee-Driven . . . . . 69
V. The Bacharach Appellants’ Arguments Were Never Raised Before the District Court and Are Nonetheless Irrelevant to an Uncapped Settlement . . . . . . . . 72 Conclusion . . . . . . . . . . . 78 Certificate of Compliance with Type-Volume Limitations. . . . 82 Certificate of Electronic Compliance . . . . . . . 83 Certificate of Service . . . . . . . . . 84
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TABLE OF AUTHORITIES Page(s)
In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679 (8th Cir. 2002) . . . . . . . . . 67 Allapattah Services v. Exxon Corp., 333 F.3d 1248 (11th Cir. 2003) . . 52 Amchem Products v. Windsor, 521 U.S. 591 (1997) . . . 41, 49, 66 In re AOL Time Warner ERISA Litig., 2007 WL 4225486 (S.D.N.Y. 2007) . . . . . . . . . 28 Ayers v. Thompson, 358 F.3d 356 (5th Cir. 2004) . . . . . 10 Balentine v. Thaler, 626 F.3d 842 (5th Cir. 2010) . . . . . 72 Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708 (9th Cir. 2010) . . 51 Blatt v. Dean Witter Reynolds Intercapital, Inc., 732 F.2d 304 (2d Cir. 1984) . . . . . . . . . 70 In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935 (9th Cir. 2011). . 71 Butler v. Sears, Roebuck & Co., ___ F.3d ___, 2013 WL 4478200 (7th Cir. Aug. 22, 2013) . . . . . . . 49, 53, 76 Castano v. Am. Tobacco Co., 84 F.3d 734 (5th Cir. 1996) . . . . 50 Central States v. Merck-Medco, 504 F.3d 229 (2d Cir. 2007) . . . 66 Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013) . . . . . 53 Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012) . . . . 69 In re Diet Drugs Prods. Liab. Litig., 282 F.3d 220 (3d Cir. 2002) . . 62 Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015 (9th Cir. 2012). . . 50
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Feder v. Electronic Data Sys. Corp., 248 Fed.Appx. 579 (5th Cir. 2007) . . . . . . . . . 37 In re FEMA Trailer Formaldehyde Products Liab. Litig. (Mississippi Plaintiffs), 668 F.3d 281 (5th Cir. 2012) . . . 72 Gemelas v. Dannon Co., 2010 WL 3703811 (N.D. Ohio 2010) . . . 62 Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) . . . . 61 See In re: Foodservice, Inc., Pricing Litig., No. 12-1311,
___ F.3d ___ (2d Cir. Aug. 30, 2013) . . . . . . 49 In re Holocaust Victim Assets Litigation, No.96-4849,51 2000 WL 33241660, 2000 U.S. Dist. LEXIS 20817 (Nov. 22, 2000), aff’d, 413 F.3d 183 (2d Cir. 2005) . . . 51 In re Initial Public Offering Securities Litigation, 721 F.Supp.2d 210 (S.D.N.Y. 2010) . . . . . . . . . 28 In re Insurance Brokerage Antitrust Litigation, 579 F.3d 241 (3d Cir. 2009) . . . . . . . . . 52 Juris v. Inamed Corp., 685 F.3d 1294 (11th Cir. 2012), cert. denied, 133 S.Ct. 940 (2013) . . . . . . 41 In re Katrina Canal Breaches Litig., 628 F.3d 185 (5th Cir. 2010) . 29, 42 Klier v. Elf Atochem N. Am., Inc., 658 F.3d 458 (5th Cir. 2011) . 67, 69 Mangone v. First USA Bank, 206 F.R.D. 222 (S.D. Ill. 2001) . . . 68 Maywalt v. Parker & Parsley Pet. Co., 67 F.3d 1072 (2d Cir. 1995) . 26, 70 In re Monumental Life Ins. Co., 365 F.3d 408 (5th Cir. 2004) . . . 27 Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620 (5th Cir. 1999) . 27, 45 In re Nassau County Strip Search Cases, 461 F.3d 219 (2d Cir. 2006) . 47
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Newby v. Enron Corp., 394 F.3d 296 (5th Cir. 2004) . . . . 73 Pederson v. La. State Univ., 213 F.3d 858 (5th Cir. 2000) . . . . 27 Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999) . . 41, 53 Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) . . . . 60 In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283 (3d Cir. 1998) . . . . . . . . . 70 Puffer v. Allstate Ins. Co., 675 F.3d 709 (7th Cir. 2012) . . . . 73 In re Royal Ahold N.V. Sec. & ERISA Litig., 461 F.Supp.2d 383 (D. Md. 2006) . . . . . . . . . 28 Seijas v. Republic of Argentina, 606 F.3d 53 (2d Cir. 2010) . . . 47 Silverman v. Motorola Solutions, Inc., ___ F.App’x ___, 2013 WL 4082893 (7th Cir. Aug. 14, 2013) . . . . . 38 Strong v. Bellsouth Telecommunications, Inc., 137 F.3d 844 (5th Cir. 1998) . . . . . . . . . 71 Sullivan v. DB Investments, Inc., 667 F.3d 273 (3d Cir. 2011), cert. denied, 132 S. Ct. 1876 (2012) . . . . 41, 49, 55, 56 In re TFT-LCD (Flat Panel) Antitrust Litig., 289 F.R.D. 548 (N.D. Cal. 2013) . . . . . . . . . 62 Taubenfeld v. AON Corp., 415 F.3d 597 (7th Cir. 2005) . . . 28, 72 Tolbert v. LeBlanc, 512 F. App'x 401 (5th Cir. 2013) . . . . 73 Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632 (5th Cir. 2012) . . . . . . . . 27, 52, 71 U.S. ex rel. Mathews v. HealthSouth Corp., 332 F.3d 293 (5th Cir. 2003) . . . . . . . . . 38
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U.S. ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375 (5th Cir. 2003) . . . . . . . 38 In re Visa Check-MasterMoney Antitrust Litigation, 280 F.3d 124 (2d Cir. 2001) . . . . . . . . . 51 Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011) . . . 45, 53 In re Wal-Mart Wage and Hour Employment Practices Litig., MDL No. 1735, 2010 WL 786513 (D. Nev. 2010) . . . . 28 In re Warfarin Sodium Antitrust Litigation, 391 F.3d 516 (3d Cir. 2004) . . . . . . . . . 49 Waters v. Int’l Precious Metals, Corp., 190 F.3d 1291 (11th Cir. 1999) . . 70 Wortman v. Sun Oil Co., 755 P.2d 488 (Kan. 1987) . . . . 60 Young v. Nationwide Mutual Insurance Co., 693 F.3d 532 (6th Cir. 2012) . . . . . . . . 60, 61 Oil Pollution Act of 1990, 33 U.S.C. §§2701 et. seq. . . . . 51 33 U.S.C. §2702 . . . . . . . . . 22 33 U.S.C. §2703(a)(3) . . . . . . . . 47 33 U.S.C. §2704(a) . . . . . . . . 47 33 U.S.C. §2704(c)(1) . . . . . . . . 47 33 U.S.C. §2705(a) . . . . . . . . 47 33 U.S.C. §2713 . . . . . . . . . 22 33 U.S.C. §2717(f) . . . . . . . . 32 33 U.S.C. §2717(h) . . . . . . . . 32
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American Law Institute, Principles of the Law of Aggregate Litigation, §1.03 (2010) . . . . . . . . . 55 Class Action Notices Page, THE MANUAL FOR COMPLEX LITIGATION, FOURTH (Federal Judicial Center 2004) . . . . . 60 Samuel Issacharoff and Theodore Rave, The BP Oil Spill Settlement and the Paradox of Public Litigation, http://ssrn.com/abstract=2278378 . . 35
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STATEMENT OF FACTS 1
A. Factual Background
On April 20, 2010, a blowout, explosion, and fire occurred aboard the
Deepwater Horizon drilling vessel as it was preparing to conclude operations on
BP’s Macondo Well on the Outer Continental Shelf off the coast of Louisiana.
The Deepwater Horizon Incident resulted in eleven deaths, multiple injuries, and a
massive discharge of oil into the Gulf of Mexico that continued for 87 days.2 The
Incident disrupted economic activity in the Gulf region for many months.
Numerous individual and class claims of property damage and economic loss were
filed in the Federal Courts of the Gulf States.
The District Court took early charge of the case, and, on August 10, 2010,
the Judicial Panel on Multidistrict Litigation assigned all federal cases to the
1 Record cites will generally contain both the District Court Document Number and this Court’s Record Cite as [Dist. Ct. record; Fifth Cir. record]. Where the material is included in Appellees’ Record Excerpts, the R.E. cite will come first: [Record Excerpt page; Dist. Ct. record; Fifth Cir. record]. Capitalized terms are generally used as they are defined in the Economic and Property Damages Settlement Agreement [Rec. Doc. 6430-1; 6261]. 2 The Settlement Agreement defines the Deepwater Horizon Incident as “the events, actions, inactions and omissions leading up to and including (i) the blowout of the MC252 Well; (ii) the explosions and fires on board the Deepwater Horizon on or about April 20, 2010; (iii) the sinking of the Deepwater Horizon on or about April 22, 2010; (iv) the release of oil, other hydrocarbons and other substances from the MC252 Well and/or the Deepwater Horizon and its appurtenances; (v) the efforts to contain the MC252 Well; (vi) Response Activities, including the VoO Program; (vii) the operation of the GCCF; and (viii) BP public statements relating to all of the foregoing.” ECONOMIC AND PROPERTY DAMAGES SETTLEMENT AGREEMENT, at 100, §38.43 [Rec. Doc. 6430-1; 6360].
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District Court pursuant to 28 U.S.C. §1407.3 Since that time, the District Court has
actively managed all Macondo-related actions asserting claims (primarily under
maritime law and the Oil Pollution Act) by and on behalf of those whose
businesses, livelihoods, properties, and lives have been affected by the Deepwater
Horizon Incident, including Transocean’s Limitation Action and the individual
suits, class actions, and joinders filed in the Eastern District of Louisiana and other
districts.
On October 19, 2010, the District Court issued Pre-Trial Order No. 11 [Rec.
Doc. 569; 1413], organizing the pleadings and categorizing the claims and issues
by creating pleading bundles for various types of claims. The “B1 bundle”
encompasses all private claims for economic loss and property damage [PTO 11,
¶III(B1)]. The Plaintiffs’ Steering Committee (“PSC”) filed the original B1 Master
Complaint on December 15, 2010 [Rec. Doc. 879; 1439], and a First Amended B1
Master Complaint on February 9, 2011 [Rec. Doc. 1128; 1938]. Numerous
Defendants filed motions to dismiss, and, on August 26, 2011, the District Court
issued an Order and Reasons granting in part and denying in part these motions
[Rec. Doc. 3830; 2139].4 BP answered the First Amended Complaint on
3 See In re Oil Spill By The Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010 (MDL No. 2179), 731 F.Supp.2d 1352 (J.P.M.L. 2010). 4 These Order and Reasons (8/26/2011) [Doc 3830; 2139] are reported at In re Oil Spill by the Oil Rig Deepwater Horizon, 808 F.Supp.2d 943 (E.D. La. 2011).
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September 27, 2011 [Rec. Doc. 4130; 2178]. Phase One of a multi-phase common
issues trial centered around Transocean’s Limitation Action (No. 10-2771) was
conducted from February 25 to April 17, 2013. Phase Two of the common issues
trial, focusing on quantification (how much oil escaped from the Macondo well)
and source control (why did it take 87 days for BP to close the well), will
commence on September 30, 2013 and is scheduled to last approximately four
weeks.
Following the JPML’s centralization order, the parties engaged in extensive
discovery and motion practice to prepare for the multi-phase trial. They took over
390 depositions, produced approximately 120 million pages of documents, and
exchanged more than 80 expert reports, on the intense and demanding schedule
appropriately set by the District Court to keep this massive litigation on course.
Depositions were conducted on simultaneous multiple tracks, on two continents.
Discovery was managed and kept on schedule by weekly discovery conferences
before Magistrate Judge Shushan and by monthly status conferences held by the
Court.
In February 2011, against this backdrop of intensive discovery and pretrial
proceedings, the parties began to explore settlement opportunities. Given the
nature and extent of the claims, the mutually perceived need for ongoing judicial
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supervision, and the procedural due process protections unique to Rule 23, the
class action was selected early on as the most appropriate structure for any
comprehensive resolution. Settlement discussions intensified in July 2011,
thereafter occurring on an almost-daily basis. In late 2011, Magistrate Judge
Shushan became involved in the settlement negotiations, at the request of the
parties and designation by the Court. In all, over 145 day-long, face-to-face
negotiation meetings took place, in addition to numerous phone calls and WebEx
conferences.5
In negotiating the Settlement Agreement, the parties followed a rigorous
protocol: rather than negotiating a total settlement figure for an aggregate class
settlement, the parties determined, at arm’s length, the strength and value of each
separate type of claim. Without regard to the potential total payout figures, the
parties negotiated these specific claims frameworks, programs, and processes,
including the types of documentation or other proof that would be required for
claimants to receive a settlement benefit, what categories of claims would be paid,
whether certain claimants would benefit from causation presumptions, and how
settlement benefits would be calculated.6 The negotiations were exclusively
5 See Transcript, at 83 (April 25, 2012) [Rec. Doc. 6395; 5802]. 6 See generally Declaration of John C. Coffee, Jr. (“Coffee Declaration”) (submitted jointly by BP and Class Counsel), ¶¶ 26-28 [Rec. Doc. 7110-3; 10243]; Declaration of Geoffrey P. Miller (“Miller Declaration”) (submitted by BP), ¶¶ 22-27 [R.E. 5.006; Rec. Doc. 7114-16;
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focused, from the outset, on producing claims frameworks that could be
administered fairly, objectively, transparently, and consistently, based on the
merits of the underlying claims.7
During this process, PSC members and other Plaintiffs’ counsel familiar
with each of the claims were consulted by the negotiators to help ensure that the
frameworks reflected the actual situations faced by people and businesses affected
by the spill. For example, attorneys representing seafood restaurants contributed to
the development of the business economic loss framework, which details the steps
by which businesses recover for losses due to the spill. So, too, did attorneys
representing employees inform the development of the individual lost wages
framework; attorneys representing wetlands owners the property damage
framework; attorneys representing homeowners the real estate sales loss
framework; and so on.8
10737]; Herman Declaration [Rec. Doc. 7104-5; 9908]; Rice Declaration (Negotiations) [Rec. Doc. 7104-6; 9913]; Issacharoff Decl. ¶¶ 7-14 [Rec. Doc. 7104-4; 9895]. 7 A major goal of the settlement was to address and correct widespread claimant dissatisfaction with the Gulf Coast Claims Facility (“GCCF”), a program established and conducted by BP outside court auspices. See Order and Reasons (Feb. 2, 2011) [Rec. Doc. 1098; 1923]. 8 Appellants raise the “potential” allocation question hypothetically faced by Class Counsel: “should the compensation for one subclass be raised and correspondingly that for another lowered?” Palmer Appellants’ Br., at 28-29 (quoting Coffee, Class Wars 95 Colum. L. Rev. 1343, 1443 (1995)). Yet, that type of decision was never made during these negotiations. Rather, the Parties were careful to ensure that Class Counsel were never placed in a position of having to make that type of trade-off. And Class Counsel never did. See generally Coffee Declaration ¶¶ 23-34 [Rec. Doc. 7110-3]; Herman Declaration [Rec. Doc. 7104-5; 9908];
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With the exception of the Seafood Compensation Program, there is no limit
or “cap” on the amount to be paid by BP under these frameworks. Rather, all
claims that meet the criteria will be paid in full. Claimants may submit claims in
multiple categories to recover on all demonstrable losses arising from the
Deepwater Horizon Incident. The Seafood Fund has a guaranteed sum of
$2.3 billion, a figure representing more than four times the total yearly seafood
revenues in the entire Gulf, allocated by a court-appointed neutral.9
On February 26, 2012, the literal eve of the Limitation and Liability Trial,
the Court adjourned proceedings for one week, at the parties’ request, to enable
further progress on the settlement talks. [Rec. Doc. 5887; 3459.] On March 2,
2012, the Court was informed that the parties had reached an Agreement-in-
Principle on the proposed settlements. The Court adjourned Phase I of the trial,
because of the potential for realignment of the parties and potential changes to the
trial plan. [Rec. Doc. 5955; 3460.]
Rice Declaration (Negotiations) [Rec. Doc. 7104-6; 9913]; Issacharoff Declaration ¶¶ 7-17 [Rec. Doc. 7104-4; 9895]; Miller Declaration ¶¶ 22-28 [R.E. 5.006; Rec. Doc. 7114-16; 10737]. 9 Mr. Perry was appointed by court order. [Rec. Doc. 5998; 3492.] The detailed 85-page Seafood Compensation Program he developed can be found as EXHIBIT 10 to the SETTLEMENT
AGREEMENT [Doc 6276-22; 4390] (amended at REC. DOC. 6415-5; 6139).
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B. Procedural Background
While work continued finalizing the details of the settlement, the Court
entered, at the parties’ request, an Order facilitating a transition from the GCCF to
the Court Supervised Settlement Program, and appointed a Transition Coordinator
and Claims Administrator. [Rec. Doc. 5995; 3487.] On April 16, 2012, the PSC
filed a new class action complaint to serve as the vehicle for the proposed
Economic and Property Damage Settlement. This action, Bon Secour Fisheries,
Inc., et al. v. BP Exploration & Production Inc., et al., was amended on May 2,
2012 [Rec. Doc. 6412; 5854]. On April 18, 2012, the PSC and BP filed the
proposed Economic Settlement [Rec. Doc. 6276; 4008] and Motions for
Preliminary Approval and Class Certification [Rec. Doc. 6266; 3554] [Rec. Doc.
6269; 3908] [Rec. Doc. 6414; 6000], which were granted, after a multi-hour
preliminary approval hearing conducted on April 25, 2012.10
On November 8, 2012, after extensive notice, the District Court conducted
the fairness hearing. Numerous expert reports, declarations, exhibits, and
extensive briefing were submitted by Class Counsel and BP. These included
expert declarations addressing the interrelated issues of class certification and
settlement approval submitted by BP’s expert Geoffrey P. Miller, Plaintiffs’ expert
10 See Preliminary Approval Order (May 2, 2012) [Rec. Doc 6418; 6208].
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Robert H. Klonoff, and the parties’ joint expert, John C. Coffee, Jr.11 The District
Court heard extensive argument from BP, Class Counsel, and the objectors.
At the time, the District Court had before it the best objective indicia of
whether the Class was objectively defined with predominantly common issues of
law and fact subject to a superior procedural mechanism for claim resolution – i.e.
the operation of the Settlement Program, which had been accepting, processing,
and paying claims for five months. BP was thrilled with the manner in which the
claims were being processed, as its counsel Richard Godfrey represented: “The
settlement is working as we anticipated.” [Rec. Doc. 7892 at 62; 15736.] BP’s
Counsel also noted that, in reaching the Class Settlement Agreement, BP and the
Plaintiff Steering Committee:
[w]ent out and retained the nation’s leading legal experts, Professors Coffee, Miller, Klonoff and Issacharoff.
* * * They have provided the Court with their own declarations on both the structure, the propriety, the analysis under class action law, and the fairness, reasonable and adequacy of the settlement. Those declarations are well worth considering because these are our nation’s leading experts in this field.12
11 The District Court attached an index of all declarations to its decision, [R.E. 1.117; Rec. Doc. 8138, at 117; 19962], as well as another index that identified the Class Definition, id. at 119-25 [R.E. 1.119-25; 19964]. 12 Fairness Hearing Transcript, at 52 [Rec. Doc. 7892; 15726].
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On November 19, 2012, BP and Class Counsel submitted detailed joint
proposed findings on each element of settlement approval and class certification,
referencing their respective and joint experts, and the operation of the Settlement
Program.13
On December 21, 2012, the District Court issued its 116 page Order and
Reasons, [R.E. 1.001; Rec. Doc. 8138; 19846] and its 15 page Order and Judgment
[R.E. 2.001; Rec. Doc. 8139; 19971] certifying the Settlement Class and granting
full approval to the settlement. The decision extensively reviewed the factual and
procedural history, id. at 1-5, provided an overview of the Settlement, id. at 6-19,
addressed the Rule 23(a) and (b)(3) criteria, id. at 24-55, determined the Settlement
was fair, reasonable and adequate, id. at 55-74, and overruled each of the Objectors
arguments, id. at 74-116.
C. Overview of the Approved Settlement
The Settlement is designed to resolve claims by private individuals and
businesses for economic loss and property damage resulting from the Deepwater
Horizon Incident. The “Economic Loss and Property Damage Settlement Class”
certified for settlement purposes pursuant to Federal Rule of Civil Procedure
13 Class Counsel’s and BP Defendants’ Joint Proposed Findings of Fact and Conclusions of Law in Support of Final Approval of Deepwater Horizon Economic and Property Damages Settlement, etc. [Rec. Doc. 7945; 16008]. The joint submission includes 44 pages of proposed findings regarding the satisfaction of Rule 23(a)(1)-(4) and (b)(3) requirements.
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23(b)(3), consists of individuals and entities defined by (1) geographic bounds and
(2) the nature of their loss or damage.14 If both criteria are not met, or the plaintiff
opts out, that individual or entity is not within the settlement class and the claims
are completely unaffected by the Settlement. Where a person or entity has
multiple claims, some falling within the settlement and some falling outside of the
settlement, only the former claims are included. In several cases, claims falling
outside of the Settlement are Expressly Reserved.15
The class is objectively defined by geographic bounds: Louisiana,
Mississippi, Alabama, and certain coastal counties in eastern Texas and western
Florida, as well as specified adjacent Gulf Waters, such as estuaries, inlets and
bays. Individuals must have lived, worked, owned property, leased property, etc.,
in these areas between April 20, 2010 and April 16, 2012. Entities must have
conducted certain business activity in these areas between April 20, 2010 and April
16, 2012.16
1. Claims Categories
The Settlement, described in detail in the District Court’s Final Approval
Order and Reasons recognizes six basic categories of damage:
14 The Class Definition is incorporated as Appendix A to the Order of Judgment [R.E. 2.007-13; Rec. Doc. 8139, at 7-13; 19977]. 15 See generally SETTLEMENT AGREEMENT, §§ 3, 8.2.3 & 10.2 [Rec. Doc. 6276-1; 4027]. 16 See generally Order of Judgment Appendix A [R.E. 2.007-13; Rec. Doc. 8139, at 7-13; 19977].
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(1) Economic Loss (including frameworks for individual loss of wages,
business economic loss, multi-facility businesses, start-up businesses, failed
businesses, and failed start-ups)
(2) Property Damage (including frameworks for coastal property,
wetlands, and realized sales losses)
(3) Vessel of Opportunity (“VoO”) Charter Payment Claims
(4) Vessel Physical Damage and Decontamination
(5) Subsistence
(6) Commercial Fishing Losses (i.e. the Seafood Compensation Program)
Certain individuals, entities and claims are specifically excluded from the
Settlement.17 Substantial claims are reserved to claimants, who can be
compensated for their included claims under the Settlement while also preserving
and pursuing the reserved claims outside of the Settlement Class. Class Members
may submit multiple claims and receive compensation for multiple categories of
damage.18
17 Exclusions from the Economic Class Definition are listed in Section 2 of the Settlement Agreement, (e.g., casinos, banks, real estate developers, and members of the oil and gas industry). The rights of these excluded claimants are unimpaired, as their economic loss claims may continue to be prosecuted in this litigation or elsewhere. 18 See SETTLEMENT AGREEMENT, §4.4.8 [Rec. Doc. 6276-1; 4038].
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2. Transparency, Objectivity, and Independence
Regarding the importance of objective and transparent criteria for class
inclusion and claim compensation, and the shortfalls of the GCCF, the District
Court observed:
Full disclosure concerning the relationship between the responsible party and the third party acting in accordance with OPA is consistent with the policy underlying other court-overseen claims resolution facilities — such as class actions or other settlement funds and bankruptcy trusts — and is consistent with the transparency policies of many defendants. The legitimacy of a third-party claims-resolution facility is derived in no small part from the claimants’ ability to learn, comprehend, and appreciate how that facility is operated so that the claimants can fully evaluate the rationale behind the communications made to them by the facility. Full disclosure and transparency can insure that the reality of the operation of a third party will be consistent with any publicity concerning that entity. Full disclosure can also give protection to the responsible party from possible future legal attacks on the validity of the evaluation, payment, and release of claims.19
Judicial supervision of the settlement process under the formal structure of Rule 23
ensures that these objectives are realized throughout the claims process.
3. Structural and Procedural Safeguards
The Settlement Agreement contains a detailed series of objective
frameworks and criteria, which were negotiated at arm’s length and “shall apply
19 See Preliminary Approval Order and Reasons, at 7-8 [Rec. Doc. 6418; 6233].
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equally to all Claimants” under ongoing Court supervision,20 and overseen by an
independent Claims Administrator with a fiduciary duty to the claimants.21 Per the
Settlement:
The Settlement Program, including the Claims Administrator and Claims Administration Vendors, shall use its best efforts to provide Economic Class Members with assistance, information, opportunities and notice so that the Economic Class Member has the best opportunity to be determined eligible for and receive the Settlement Payment(s) to which the Economic Class Member is entitled under the terms of the Agreement.
SETTLEMENT AGREEMENT, §4.3.7 (emphasis supplied).22
The Claims Administrator Vendors shall evaluate and process the information in the completed Claim Form and all supporting documentation under the terms in the Economic Damage Claims Process to produce the greatest economic damage compensation amount that such information and supporting documentation allows under the terms . . . .
SETTLEMENT AGREEMENT, §4.3.8 (emphasis supplied) [Rec. Doc. 6276-1; 4037].
20 See SETTLEMENT AGREEMENT, §4.4.7 [Rec. Doc. 6276-1; 4037]. See also id. at §4.3.1 (providing for court appointment and supervision of the Claims Administrator); id. at §4.3.4 (providing the court with final dispute resolution authority of policy decisions); id. at §6.6 (providing the court with final dispute resolution to review appeals of claims); id. at § 18.1 (providing the court with continuing jurisdiction over the Settlement). 21 See SETTLEMENT AGREEMENT, § 4.3.1 [Rec. Doc. 6276-1; 4037]. 22 See also SETTLEMENT AGREEMENT, §4.4.9 (providing that no negative presumption would apply to any claims previously denied by the GCCF); id. at §§ 4.4.14 & 6.1.2.1.1 (providing that each class member is entitled to their entire claims file, including calculations and worksheets).
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With the exception of the Seafood Compensation Program, (a guaranteed
$2.3 billion fund), there is no limit on the amount to be paid by BP. Further, BP is
responsible for satisfying the class members’ common benefit fee obligations, and
reimburses claimants for accounting services required for the preparation and filing
of their claims. BP provides a $57 million Gulf Coast Tourism and Seafood
Promotional Fund, a Transocean insurance proceeds fund, and a $5 million
supplemental publicity campaign, and assigns its claims against Transocean and
Halliburton to the class.
4. Protections against Future Risks
In addition to baseline compensation payments, most claims also will
receive a Risk Transfer Premium (or “RTP”), which is a multiple enhancement of
the baseline compensation. RTPs range from .25 to 8.75, and are added to the
baseline Compensation Amount, for an effective multiplier of 1.25 to 9.75 under
the Proposed Settlement.23 The RTP enhancements are meant to compensate class
members for pre-judgment interest, the risk of oil returning, consequential
damages, inconvenience, aggravation, the risk of future loss, the lost value of
money, the liquidation of legal disputes about punitive damages, and other factors.
23 See RTP Chart (Ex. 15) [Rec. Doc 6276-33; 4898]; Seafood Compensation Program (Ex. 10) [Rec. Doc 6276-22; 4390].
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5. Basic Compensation Frameworks
Individual economic losses under the Proposed Settlement are calculated as
the estimated difference between a claimant’s expected earnings during May to
December of 2010 and the claimant’s actual earnings during that claim period. To
that base compensation amount is added any applicable RTP. Causation is
presumed for claimants in geographic proximity to the spill, and for many tourism
and seafood category claimants, whose losses from the spill are categorically more
direct and less conjectural; other claimants must demonstrate that a loss is due to
the oil spill based not on individualized, subjective, or inconsistent criteria, but on
the objective criteria set forth under the terms of the settlement.
For existing businesses, economic loss claims are determined using a two-
step process. Step One calculates the value of the business’s reduction in profit
during a claimant-selected loss period (any three or more consecutive months of
the eight-month period following the spill). Step Two accounts for expected
profits by estimating the business’s growth trend along with a general, economy-
wide growth factor. The sum of Step One (loss calculation) and Step Two
(expected profit but-for the spill) results in the business claimant’s base
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compensation amount.24 This amount is generally enhanced by an RTP and/or
offset by prior payments received, depending on the type of business and location.
The Settlement also includes additional or alternative frameworks for multi-
facility businesses, failed businesses, start-up businesses, and failed start-up
businesses.
Coastal Real Property claimants are compensated for loss of use and
enjoyment by multiplying the “2010 Applicable Property Tax” (defined as 1.18%
of the County Appraised Value) by 30%-45%, depending on the presence of oil and
the environmental sensitivity of the property. This amount is enhanced by an RTP
of 2.5. Additional compensation is available if claimants establish physical damage
from response operations.
Wetlands Real Property compensation is based on whether parcels were
directly affected with oil. Oiled parcels are paid a minimum of $35,000 per acre.
Where no oil was observed, compensation is a minimum of $4,500 per acre.
Wetlands Real Property claims are enhanced by an RTP of 2.5.
The Settlement provides compensation for certain individuals and entities
that realized sales losses as a result of the spill. The compensation amount is 12.5%
of the sale price.
24 There is currently pending before this Court a challenge by BP to the application of the business loss calculation, an issue not raised by any party at settlement approval or in the notices of appeal. See In re Deepwater Horizon, U.S. Fifth Circuit No. 30315.
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Subsistence claimants — those individuals who fish, hunt, or harvest Gulf of
Mexico natural resources to sustain the basic needs of themselves and their
families—are entitled to compensation for the total value of lost subsistence
natural resources plus an RTP enhancement of 2.25.
The Vessels of Opportunity (“VoO”) Charter Compensation provisions
compensate those who chartered their vessels to assist with the cleanup, with 26
days of additional payments under the applicable rates provided in their charter
agreements, while class members who executed charter agreements but were never
formally dispatched receive three days of compensation at the applicable charter
rate. Vessel owners whose vessels were physically damaged as a result of the oil
spill or cleanup operations may recover the lesser of repair or replacement costs.
6. Seafood Compensation Program
The parties attempted to negotiate separate frameworks for commercial
fishing and oyster leaseholder claims for a number of months. The lead
negotiators for the plaintiffs frequently consulted with other attorneys, stakeholders
and industry representatives to gain insight and achieve consensus and support for
the models being discussed with BP. While these frameworks, like the others,
were being negotiated within the context of an uncapped or “evergreen” structure,
the plaintiff negotiators, through the course of these discussions, came to have a
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good understanding of the overall picture with respect to commercial fishing in the
Gulf and the documented effects of the spill on the industry.
When, therefore, BP moved the discussion to a non-reversionary fund that
would satisfy all class commercial fishing claims, the $2.3 billion that BP was
willing to guarantee to the seafood claimants was almost five times the entire
revenue of annual catch landed in the Gulf Coast Areas, and significantly more
than the total of the projected aggregate pay-outs under the separate shrimp, oyster
harvester, oyster leaseholder and deckhand compensation models under discussion
by the stakeholder constituencies.25 Given the negotiating dynamic, (in which
Magistrate Judge Shushan was participating as an active mediator), and the
available evidence,26 Class Counsel believed, as has become evident, that a
25 “2.3 billion replaces the entire catch in affected areas of the Gulf of Mexico for seven years, buys a 15 year supply of fuel, ice and food for every affected vessel, and is 22 times the 2010 loss caused by the spill. Split fairly, the Seafood Program should be enough to protect fishermen even in the worst case situation, total fishery collapse.” Objector GO FISH counsel Joel Waltzer, Statement to the Press (March 19, 2012) [Rec. Doc. 7104-1; 9789]. 26 The NOAA ALS data comparing averages for 2007-2009 with the average for 2010 and preliminary estimates for 2011 show a 16.5% decline in the volume of shrimp landings, a 23.85% decline in the volume of blue crab landings, a 34.39% decline in the volume of oyster landings, and a 14.66% decline in the volume of finfish landings. The Seafood Program developed by Mr. Perry, by comparison, compensates the plaintiff for an annual 35% loss of shrimp and blue crabs, an annual 40% loss of oysters, and an annual 25% loss of finfish. In terms of overall revenue, the Seafood Program would account for an approximate 480% loss to the industry, in annual terms. [Rec. Doc. 7104-1; 9789.]
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guaranteed $2.3 billion fund would provide significantly more compensation to the
class than could be achieved under frameworks separately negotiated with BP.27
Out of an abundance of caution, and in order to prevent any perception of
potential intra-class conflict, the parties asked the Court to appoint noted mediator,
John W. Perry, Jr., to determine the allocation.
Mr. Perry’s independent research and determinations lend further support to
the conclusion that $2.3 billion is more than sufficient to fully compensate the
participants in the Seafood Program.28 Specifically, the Seafood Compensation
Program frameworks, which are themselves conservative, are projected to pay out
an initial amount of approximately $1.9 billion, in full and fair compensation to the
relevant class members, leaving an approximate $400 million reserve. In addition
to this $400 million “head room”: (i) more than $700 million was already paid to
commercial fishermen by the GCCF; (ii) BP assumes full responsibility for up to
17.5% opt-outs; and (iii) class members’ punitive damage claims, as well as the
BP-assigned claims, against Transocean and Halliburton are reserved.29
27 See Herman Declaration, ¶11 [Rec. Doc. 7104-5; 9911]; Declaration of Joseph F. Rice (Seafood Program) [Rec. Doc. 7104-6; 9925]. 28 See Plaintiffs’ Exhibit A (in globo) re the Seafood Compensation Fund [Rec. Doc. 7104-1; 9789]; Declaration of John W. Perry, Jr. [Rec. Doc. 7110-5; 10299]; Declaration of Daniel J. Balhoff [Rec. Doc. 7110-2; 10217]. 29 See generally Perry Declaration [Rec. Doc. 7110-5; 10293]; Balhoff Declaration [Rec. Doc. 7110-2; 10217]; Herman Declaration, ¶11 [Rec. Doc. 7104-5; 9911]; Rice Declaration (Seafood Program) [Rec. Doc. 7104-6; 9925].
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Within the Seafood Compensation Program frameworks developed by Mr.
Perry, captains and vessel owners are generally awarded a base compensation
amount derived from historical benchmark earnings, taking into account the vessel
size and predetermined cost factors, price increases, and loss factors generally
experienced by the relevant species. With the exception of shrimpers who can
elect an “expedited” (or “reduced expedited”) lump sum payment, these base
compensation amounts for captains and vessel owners are enhanced with
substantial RTPs. The Seafood Compensation Program provides for a per-acre
compensation payment to oyster leaseholders, and a separate formula to
compensate holders of Individual Fishing Quota (“IFQ”) shares. Finally, the
Program provides varying levels of compensation to crew members, based on the
level and quality of their supporting documentation.
7. Assignment and Other Class-Wide Relief
Under the Settlement, BP pays compensatory damages (including those that
might be attributed to the fault of Transocean or Halliburton), but at the same time
allows the plaintiffs to continue to seek punitive damage recoveries from
Halliburton and Transocean.30 The Settlement also assigns certain of BP’s claims
30 SETTLEMENT AGREEMENT, § 3.6 [Rec. Doc. 6276-1; 4027]; id. at § 10.2 [Rec. Doc. 6276-1; 4027].
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against Transocean and Halliburton to the class.31 BP additionally provides a $57
million fund to promote tourism and seafood on the Gulf Coast,32 and a fund of up
to approximately $150 million in recoveries from Transocean insurance proceeds.33
8. The Objectors
Contrasted with over 200,000 class members who have filed claims into the
Court-Supervised Settlement Program, only five groups of objectors from the
District Court filed appellate briefs. None of them complain of their compensation
calculations, identify what compensation they are entitled to under the Settlement,
or define what other or greater compensation they believe they should receive. Of
the six settlement claim categories, only one part of the property claim (coastal real
property), and one aspect of the business claims is challenged on appeal. The
Seafood Program draws but a single contingent and premature challenge that
depends on the second round distribution, which has not yet occurred. None of the
individual, subsistence, VoO, or vessel damage frameworks are directly challenged
by any Appellant.
31 BP, for example, assigned its claims against Transocean and Halliburton relating to the repair, replacement and/or re-drilling of the Macondo Well, the costs BP incurred to control the well and/or to clean up the spill, and for punitive damages. SETTLEMENT AGREEMENT, Exhibit 21, ¶1.1.3 [Rec. Doc. 6271-1; 4066]. 32 SETTLEMENT AGREEMENT, §5.13 [Rec. Doc. 6276-1; 4027]. 33 SETTLEMENT AGREEMENT, Exhibit 21, ¶1.1.4.2 [Rec. Doc. 6276-39; 4971].
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SUMMARY OF THE ARGUMENT The Deepwater Horizon Incident, the most devastating oil spill of modern
times, is also the largest to have occurred since enactment of the Oil Pollution Act
of 1990 (“OPA”), 33 U.S.C. §§2701 et. seq. BP early acknowledged its statutory
status as OPA “responsible party,” which extends its potential liability for
economic loss far beyond the limitations of traditional maritime law. OPA
provides a single statutory framework to determine the ultimate bounds of this
liability—the predominant common question facing all claimants—but of itself
provides no automatic answer. Notably, OPA’s statutory policy favors resolution,
preferring an accelerated comprehensive settlement program be implemented as an
alternative to seriatim litigation.34
The GCCF, BP’s initial attempt, lacked the features of court authority: the
consistency, transparency and predictability that class action settlements ensure. It
provided immediate compensation to some affected parties, but proved unable to
fulfill OPA objectives of final resolution on an equitable and consistent basis. The
class settlement, by contrast, achieved negotiated answers to common questions,
within a structure suited to fulfill OPA resolution policy. As BP’s pre-class
settlement experience proved, the sheer scope of the disaster and its unprecedented
34 See 33 U.S.C. §2705(a) (“The responsible party shall establish a procedure for the payment or settlement of claims for interim, short-term damages.”).
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impact on the Gulf economy generated a volume and variety of claims beyond the
ability of informal or piecemeal settlements to address.
Like the Deepwater Horizon Incident itself, this Settlement is historic in size
and uniqueness. As of the latest official report to the District Court, approximately
200,000 claims had been filed, and 139,000 claim notices had been issued,
including 53,300 eligibility notices totaling over $4.4 billion in determinations.35
$3.16 billion has actually been paid with an additional $1.15 billion remaining in
the Seafood Compensation Fund.36 Nothing can better gage the “fairness,
reasonableness, and adequacy” of a settlement than the track record developed
over the past year.
To achieve this feat, the District Court appointed an independent Claims
Administrator who oversees over 150 accountants, an even larger administrative
staff, and operates with a quarterly budget exceeding $100 million.37 Completion
of the administration infrastructure was accomplished with less than a three month
lead-time from the date of interim appointment (March 8, 2012) to the first day
claims were accepted for processing (June 4, 2012).
No matter how many claims from any of the different six claim categories
are deemed payable, no claims compete against each other for payment. While the
35 Claims Administrator Status Report No. 12, at 10-11 [Rec. Doc. 11008]. 36 Id. See also 11008-1 at 3. 37 [Rec. Doc. 11179.]
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Seafood Compensation Fund is the lone exception, its guaranteed fund of $2.3
billion has proven more than sufficient to meet the objective formulae used for
payment.
Against this backdrop stand a paltry few objectors who raise the narrowest
of concerns, which are either speculative, irrelevant to the actual class and
settlement structure, or contradicted by the record.
For perspective purposes, over 69,000 business economic claims have been
filed;38 while only two lawyers, representing less than 15 businesses, have
objected, voicing only the narrowest of a single concern. However, not one
business has complained of the value or compensation method of these claims. No
Appellant is challenging the methodology or fairness of the 32,282 individual
claims, the 25,592 subsistence claims, the 8,468 VoO claims, or the 1,297 vessel
claims that have been filed.39
The foundation that binds the Rule 23(a) prerequisites of numerosity,
commonality, typicality, and adequacy with the Rule 23(b)(3) requirements of
“predominance” and “superiority” is, at the end of the day, one of feasibility –
whether a district court can manage the class action in terms of functionality, with
fairness and efficiency. Here, because this class is one for settlement purposes, its
38 Claims Administrator Status Report No. 12, at 10 [Rec. Doc. 11008]. 39 Id.
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feasibility and manageability is found in the settlement itself. And, because it has
been in effect for 14 months, the Settlement’s manageability has been on full
display. It has worked. Of the 200,000 claims that have been filed, Class
Members have only appealed 731 claims, less than 0.3%.40
The challenges by the Appellants are remarkably narrow. For example, not
one of the Appellants states exactly what amount it believed would have been fair,
as opposed to what the Settlement methodologies dictate. Not one of the
Appellants argues that the Settlement is vague, subjective, or opaque. Each of the
Appellants had the ability to calculate the value of their claim and decide whether
to make a claim or opt out. In this historic settlement, in which the Settlement
Program was fully operational for months before the opt-out deadline, some
claimants had the opportunity to receive a determination letter prior to the opt-out
date, and all could determine on a fully informed basis what course was in their
best interest.
The only claims that are specifically challenged – business, property, and
seafood – are not even frontally challenged on the merits of the damage calculation
or on causation. Even the challenge to the Seafood Program does not argue that it
40 Id., at 17.
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unfairly or unreasonably compensates claims; just that everyone needs to wait for
the second round distribution to cure whatever issues may or may not exist.
The damage frameworks, developed over months of intense negotiation,
objectively quantify the losses suffered in the wake of the Deepwater Horizon
Incident in 2010, and in most cases add an RTP, which further compensates for
unknown and future effects, punitive damage exposure, the time value of money,
and other legal uncertainties. The differences within these frameworks, developed
through arms-length negotiation, are rationally related to the relative strengths and
merits of similarly situated claims.41 The causation presumptions are generally
afforded to the types of business and/or geographical locations most likely to have
been impacted by the spill, while the higher compensation offered through the
RTPs are generally afforded to industries and locations which face the greatest risk
of ongoing loss and/or are most likely to have claims for punitive damages.42
41 Magistrate Judge Shushan played an important supervisory role in facilitating and mediating the agreement. Her evenhanded, daily (and often minute-by-minute) efforts throughout the last three months of negotiations strongly counsel in favor of approving the settlement. See, e.g., Maywalt v. Parker & Parsley Pet. Co., 67 F.3d 1072, 1079 (2d Cir. 1995) (“The supervision of settlement negotiations by a magistrate judge, as occurred here, makes it less likely that . . . [class counsel have promoted] their own interests over those of the class”). 42 The members of the settlement class will receive additional individualized and collective benefits, including: reimbursement of reasonable claims preparation expenses, SETTLEMENT AGREEMENT, at 25 [Rec. Doc. 6276-1; 4056]; a $57 million Gulf Tourism and Seafood Promotional Fund, id. at 51; the class-wide assignment of BP’s claims against Transocean and Halliburton, id. at 75; the satisfaction by BP of all common benefit costs and fees, id. at 78; a Transocean insurance proceeds reserve fund, id. at 53; and an express reservation of punitive damage claims against Transocean and Halliburton, id. at 12.
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STANDARD OF REVIEW
This Court reviews class certification and settlement approval orders for
abuse of discretion. Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632,
638 (5th Cir. 2012). The District Court “maintains great discretion in certifying
and managing a class action,” Pederson v. La. State Univ., 213 F.3d 858, 866 (5th
Cir. 2000), because the certification inquiry is an inherently fact-based endeavor
best left to the trial court’s “inherent power to manage and control pending
litigation,” In re Monumental Life Ins. Co., 365 F.3d 408, 414 (5th Cir. 2004). An
abuse of discretion “occurs only when all reasonable persons would reject the view
of the district court,” Union Asset Mgmt., 669 F.3d at 638, or where the district
court “applied incorrect legal standards in reaching its decision,” Mullen v.
Treasure Chest Casino, LLC, 186 F.3d 620, 624 (5th Cir. 1999).
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ARGUMENT
I. The Pentz Appellants’ Arguments Are Unsupported, Fail to Address Their Own Claims, and Request Nothing More than Remand to the District Court. The Pentz Appellants’ brief is reflective of the flighty, irresponsible actions
of habitual objectors, untethered to the realities of the cases they enter, with no
responsibility for the welfare of the affected class.43 First, they argue that because
Texas businesses are treated dissimilarly from some Louisiana businesses, the
matter should be remanded “for further explanation for the disparate treatment.”
Pentz Appellants’ Brief, at 10. Second, the Pentz Appellants question the District
Court’s evaluation of the Court Supervised Settlement as compared to the Gulf
Coast Claims Facility (“GCCF”). Id. at 11-14.
43 See, e.g., In re Wal-Mart Wage and Hour Employment Practices Litig., MDL No.
1735, 2010 WL 786513 at *1 (D. Nev. 2010) (sanctioning Pentz and finding Pentz and associates have “a documented history of filing notices of appeal from orders approving other class action settlements, and thereafter dismissing said appeals when they and their clients were compensated by the settling class or counsel for the settling class”); In re: Initial Public Offering Securities Litigation, 721 F. Supp. 2d 210, 215 (S.D.N.Y. 2010) (sanctioning Pentz and finding Pentz and associates have engaged in “a pattern or practice of objecting to class action settlements for the purpose of securing a settlement from class counsel”); Taubenfeld v. AON Corp., 415 F.3d 597, 599 (7th Cir. 2005) (finding Pentz made unsupported “conclusory assertions” in class settlement objections); In re AOL Time Warner ERISA Litig., 2007 WL 4225486, at *3 (S.D.N.Y. 2007) (calling Pentz’s arguments “counterproductive” and “irrelevant or simply incorrect”); In re Royal Ahold N.V. Sec. & ERISA Litig., 461 F. Supp. 2d 383, 386 (D. Md. 2006) (noting that Pentz is a professional objector who “attached himself” to a plaintiff and holding his objection “not well reasoned and was not helpful”); Barnes, 2006 U.S. Dist. LEXIS 71072 (same).
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Notably, the Pentz Appellants challenge neither the causation analysis nor
the damages calculations. They make no claim that their compensation (or anyone
else’s) is inappropriate. Instead, Pentz relies on In re Katrina Canal Breaches
Litig., 628 F.3d 185 (5th Cir. 2010), a limited fund settlement in which the proceeds
were grossly insufficient, to argue that, as compared to other claimants, their
compensation may be lower. Yet, in the context of an uncapped settlement, where
no claimant is taking from another, the comparative value argument does not cut
across Rule 23 pre-requisites or Rule 23(b)(3) standards. Simply put, the issue is
simply whether that particular claim value is reasonable and fair. The Pentz
Appellants never explain what more they should receive under the settlement (as
weighed against the risks and delays of litigation).
The Pentz Appellants’ contention that the class fares more poorly under the
settlement than under the GCCF is wholly unsupported by the record.44 The
District Court, with ample knowledge of the GCCF’s operations and performance,
found the opposite.45 At every level, the Settlement Program is demonstrably
superior to the GCCF.
44 The Pentz Appellants also attempt to adopt the arguments BP raised in its appeal in No. 13-30315. Pentz Appellants’ Brief, at 14. Those issues are already fully addressed in the pending appeal, were never raised below to the District Court, and concern interpretation of a contract, not class certification issues. See, infra, discussion of Bacharach Appellants’ arguments. 45 Order and Reasons, at 51-55, 109-110 [R.E. 1.051-55, 1.109-110; Rec. Doc. 8138; 19896, 19954].
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To begin with, the GCCF was a unique and solitary mechanism, designed
and operated by BP. To the extent claims remained unresolved, there was no
independent enforcement mechanism to ensure that the GCCF would actually
comply with its own stated policies or the requirements of OPA. Hence, a court-
supervised settlement generally, and the Court Supervised Settlement Program in
particular, are fundamentally different from the unilateral, unregulated and
inherently limited BP Gulf Coast Claims Facility.
This Settlement is also quantitatively superior to the GCCF in at least the
following ways:
$ Provides the class members with more flexible Benchmark Periods from which to establish loss and, where necessary, causation.46 $ Replaces a vague baseline “loss of income” (LOI) determination with concrete and objective methods to establish base compensation loss, under a two-step process that accounts for both (i) losses, as compared to benchmark earnings periods, and (ii) the difference between 2010 profit and what the business would have earned but for the spill. $ Identifies specific “fixed” versus “variable” costs to be applied in the compensation calculations.
46In particular, the GCCF generally used 2008-2009 as a benchmark. See generally Plaintiffs’ Exhibit B to Motion for Final Approval [Doc 7104-2; 9798]. Under the Settlement Program, by contrast, class members can generally go back to 2007. In addition, class members have the flexibility to use different sets of benchmark months to establish Causation versus the months they use to establish the amount of Base Compensation Loss sustained.
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$ Allows for causation presumptions based on industry and location, and, with respect to other class members, provides various alternative methods of establishing, by objective means, that the business or individual suffered a loss caused by the spill. $ Compensates class members for Coastal and Wetlands Property Damages, VoO Charter Compensation, Real Estate Sales Losses, and other damages which were not being compensated by GCCF.47 $ Includes RTP enhancements that are in virtually all cases equal to or greater than the “multipliers” under the GCCF stated methodology.48 $ Provides a multi-level internal appeals process with review by court-appointed panelists who are experienced mediators, attorneys and retired judges. $ Guarantees independence, transparency, Court supervision, consistent, objective and predictable treatment of similar claims, and no “special deals”.
All of these points and many more form part of the district court record and are
unaddressed by Pentz.49
47 Class Counsel had been informally advised that some property damages claims might have been recognized by the GCCF, but these claims were certainly not paid by the GCCF in any routine or systematic way. 48 In general, the GCCF claimed to apply a multiplier of two (i.e. an RTP of 1) to most claims. At some point, the GCCF announced that it would apply a multiplier of four (i.e. an RTP of 3) to shrimper, crabber and shrimp and crab processing claims. A multiplier of four (i.e. an RTP of 3) was generally applied to oyster harvesters, while at some point a Future Risk Multiple raging from 1 to 7 was to applied to oyster leaseholder income claims. See generally Plaintiffs’ Exhibit B to Motion for Final Approval [Rec. Doc. 7104-2; 9798]. Compare RTP Chart, Exhibit 15, [Rec. Doc. 6276-33; 4898] with Seafood Compensation Program, Exhibit 10, at 24, 30, 33, 34, 36, 38, 49, 61, 63 [Rec. Doc. 6276-22; 9798].
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The Settlement is also qualitatively superior to GCCF in providing for the
extension of time periods for presentment and filing. Specifically, a claim under
OPA must generally be both presented and filed within three years. 33 U.S.C. §§
2713 and 2717(f).50 While plaintiffs will undoubtedly have various arguments
based upon tolling theories, dates of accrual, and/or the discovery rule, prudence
would dictate that all OPA claims would have been both presented and filed by
April 20, 2013.
While the GCCF announced that it would accept claims up until August 23,
2013, there was no enforcement mechanism to ensure that the GCCF would do so,
no assurances that the submission of a claim, either before or after April 20, 2013,
would constitute “presentment” under OPA,51 nor any assurances that GCCF
claimants not fully compensated as of April 20, 2013 would thereafter be permitted
to file claims in court (or with the Oil Spill Liability Trust Fund) despite the three-
year statute of limitations.
49 See also Declaration of Jeffrey June, ¶31 [Rec. Doc. 7710-2; 14700] (“The settlement provides substantially more compensation to commercial shrimpers than the GCCF offered, even after the GCCF increased its amounts.”); Declaration of Robert Mosher, ¶21 [Rec. Doc. 7710-3; 14706] (“The historical revenue model is a substantial improvement over the GCCF model.”). 50 See also 33 U.S.C. §2717(h) (providing for three-year statute of limitations on claims for damages against the Oil Spill Liability Trust Fund). 51 While BP formally stipulated that presentment to the GCCF would constitute presentment to BP as the Responsible Party, (Order (Oct. 22, 2010) [Rec. Doc. 594; 1431]), BP had never formally stipulated or conceded that a claim submitted to the GCCF would, in fact, constitute “Presentment” under OPA.
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Indeed, there is little reason to believe that the tens of thousands of claims
that remained unresolved after eighteen months in the GCCF (and/or were perhaps
yet to be filed when the Transition Order was entered on March 2, 2012) would
have been resolved in the GCCF prior to April 20, 2013 – if ever:
$ As far back as April of 2011, the GCCF stated that it had paid or was in the process of paying “every single legitimate individual and business claim where the claimant can document economic loss due to the oil spill.”52
$ In June of 2011, Mr. Feinberg said that the process was “winding down” as the GCCF had already processed 80% of the claims.53
He further indicated that all of the claims that he considered to be “eligible” would be resolved by October 2011.54
$ As of November of 2011, the GCCF began to assume that claims from the Florida peninsula and
52 Exhibit D to Motion for Final Approval, [Giardina, “Are Stall Tactics Delaying BP Payments?” WLOX.com (April 20, 2011)] [Rec. Doc. 7727-3; 14964]. 53
Exhibit D to Motion for Final Approval, [“GCCF Claims Process Winding Down” Disenfranchised Citizen (June 1, 2011) [Rec. Doc. 7727-3; 14964] (citing Blackden and Mason, “BP’s Oil Victim Fund Closes Some Offices as it Pays Out Just a Fifth of the $20bn Total,” Telegraph (5/29/11) [Rec. Doc. 7727-3; 14962] (Feinberg “told The Telegraph that he does not believe there will be many more fresh claims” and “has processed more than 80pc of the claims submitted”); see also Mason, “BP Not Meeting Gulf of Mexico Spill Obligations, US Report Claims” Telegraph (June 2, 2011) [Rec. Doc. 7727-3; 14966] (“Mr. Feinberg is in the process of scaling back operations, closing eight regional offices.”)]. 54
Exhibit D to Motion for Final Approval, [Hammer, “Claims Czar Kenneth Feinberg Says Pace of Payments Quickens” Times-Picayune (June 20, 2011)] [Rec. Doc. 7727-3; 14966].
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Texas were not “legitimate” unless they were commercial fishing claims.55
$ “The job was done” at the time of the Transition.56
The Class Settlement allows Class Members to submit claims to the Court
Supervised Settlement Program until April 22, 2014, or six months after finality,
whichever is later.57 The Settlement further assures that submission of a claim to
the Settlement Program will constitute “presentment” under OPA.58 Finally, the
Settlement tolls the statute of limitations for class members until at least 90 days
after the Settlement is terminated, should it be disapproved by the Court or
terminated for any reason.59
Sometimes, one picture is worth a thousand words. The following summary
chart, prepared by counsel for independent publication from the publicly available
record, shows that at every level of compensation, Settlement recoveries are
superior to the GCCF.
55 Exhibit D to Motion for Final Approval, [Hammer, “Ken Feinberg Expands Oil Spill
Claims Payments for Shrimpers, Crabbers” Times-Picayune (Nov. 30, 2011)] [Rec. Doc. 7727-3; 14971]. 56
Exhibit D to Motion for Final Approval, [Shactman, “Managing the BP Oil Spill Fund - No Small Task” CNBC (4/19/12)] [Rec. Doc. 7727-3; 14972]. 57
SETTLEMENT AGREEMENT, § 5.11.8 [Rec. Doc. 6276-1; 4056]. (The one exception to this is that all Seafood Program claims were to be submitted within 30 days of final approval in the District Court. Id. at § 5.11.9.) In the event that the Class Settlement does not achieve final approval, the Settlement Program will continue to process and pay all claims submitted up to that point in time. Id. at § 21.3. 58
Id. at §7.3.2; Stipulation [Rec. Doc 7130-1; 11210]. 59
SETTLEMENT AGREEMENT, §7.3.1.
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This is not a conflict; this is a major achievement for the entire class.60
II. The Coon and GO FISH Appellants Have No Standing.
Each group of Appellants failed to satisfy the reasonable procedural standing
requirements imposed by the District Court to ensure that only class members
submitted objections. The Coon Appellants failed to include proof of residency,
property ownership, or business interest. GO FISH does not have standing because
it is not an affected party and because the source of its complaint is speculative and
not yet ripe.
60 The BP Oil Spill Settlement and the Paradox of Public Litigation, Samuel Issacharoff and Theodore Rave, http://ssrn.com/abstract=2278378.
7
4 4 4
2 2 2 2 2
4
2 2 22
22 2 2 2
9.759.25
8.25
7 76.5
65.5
3.254
3.25 3.53
2.25
3.5
2.1252.5
2.251.25
0
2
4
6
8
10
12
Maximum GCCF Multiplier
Effective Class Multiplier
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A. The Coon Appellants Lack Standing For Failure to Meet the District Court’s Filing Requirements.
The District Court ordered that any person or company that desired to object
needed to provide:
(a) a detailed statement of the Economic Class Member’s objection(s), as well as the specific reasons, if any, for each objection, including any evidence and legal authority the Class Member has to support each objection and any evidence the Class Member has in support of his/her/its objection(s); (b) the Economic Class Member’s name, address and telephone number; (c) written proof that the individual or entity is in fact an Economic Loss and Property Damage Class Member, such as proof of residency, ownership of property and the location thereof, and/or business operation and the location thereof; and (d) any other supporting papers, materials or briefs the Economic Class Member wishes the Court to consider when reviewing the objection. Any Class Member who fails to comply with these provisions shall waive and forfeit any and all rights to object to the Proposed Settlement, shall be forever foreclosed from making any objection to it, and shall be bound by all the terms of the Proposed Settlement and by all proceedings, orders and judgments in this matter.61
The Coon Appellants produced no proof of residency, ownership of
property, or ownership of any business for their objectors. Instead, Mr. Coon filed
an objection, purportedly on behalf of approximately 10,000 class members, but
with only a list of people and businesses, some with addresses, others with phone
61 Preliminary Approval Order, ¶ 38 [Rec. Doc. 6418; 6246].
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numbers, but none with proof of residency, proof of business ownership, or proof
of property ownership. [Rec. Doc. 7224; 11716.] The Coon Appellants must have
realized these deficiencies because they attempted to supplement the record the day
before the Fairness Hearing. [Rec. Doc. 7863; 15634.] However, the District
Court denied their late filing and struck whatever they were trying to supplement
from the record. [Rec. Doc. 7870; 15645.] That order was not challenged on
appeal.
Failure to follow the District Court-imposed filing requirements results in a
lack of standing to pursue this Appeal. Feder v. Electronic Data Sys. Corp., 248
Fed.Appx. 579, 581 (5th Cir. 2007) (unpublished) (finding a lack of standing where
support of class membership was not provided because “[a]llowing someone to
object to a settlement in a class action based on this sort of weak, unsubstantiated
evidence would inject a great deal of unjustified uncertainty into the settlement
process”).
B. GO FISH Lacks Standing for Both Substantive and Procedural Reasons.
The GO FISH Appellants’ lack of standing has been affirmatively found by
the District Court. The Magistrate denied GO FISH’s motion to intervene for lack
of standing, [Rec. Doc. 7480; 14335], and the District Court affirmed. [Rec. Doc.
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7747; 15456].62 See also Silverman v. Motorola Solutions, Inc., ___ F.App’x ___,
2013 WL 4082893, at *1 (7th Cir. 8/14/13) (a class action objector must have an
“interest in the outcome”). GO FISH implicitly concedes that the organization has
no standing.63 Two weeks after the District Court affirmed the Magistrate’s Order,
GO FISH attempted to cure its standing defect by filing a “Notice of Joinder” into
the organization’s objection. [Rec. Doc. 7867; 15638.] These two new individuals,
Thien Nguyen and Donald Dardar: (1) failed to make the requisite showing of class
membership; and (2) failed to properly file a timely objection in the first instance.64
The GO FISH Appellants’ standing also suffers from a second fatal flaw.
GO FISH does not challenge the settlement recovery under the Seafood Program.
Instead, it appeals prematurely to contest the manner in which the second round
distribution of benefits under the Seafood program might be conducted. But that
determination necessarily awaits completion of the first round of distribution and
62 See also Final Approval Order, at 77 [R.E. 1.077; Rec. Doc. 8138; 19922]. 63 See, e.g., GO FISH Appellants’ Brief, at 46 (“[Thien Nguyen] may be the only [Seafood Class Member] before this Court who has not released his claims individually”). 64 Mr. Nguyen’s “notice” of joinder in GO FISH’s objection was filed on November 7, 2012, [Rec. Doc. 7867; 15638], two months after the September 7, 2012 deadline to file objections, [Rec. Doc. 7225; 11963]. Because the deadline had passed, Mr. Nguyen should have moved for leave. Failure to do so nullified his purported objection and joinder ab initio. U.S. ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375, 387 (5th Cir. 2003) (“A party who neglects to ask the district court for leave to amend cannot expect to receive such a dispensation from the court of appeals”). Federal Rules of Civil Procedure Rule 15(a) does not apply because leave was never sought for the joinder. U.S. ex rel. Mathews v. HealthSouth Corp., 332 F.3d 293, 296 (5th Cir. 2003) (“failing to request leave from the court when leave is required makes a pleading more than technically deficient. The failure to obtain leave results in an amended complaint having no legal effect”).
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an order from the District Court. Neither has occurred and, accordingly, there is no
order of the District Court from which GO FISH seeks relief. Even were this
Court to determine that GO FISH does have standing, its current appeal should be
dismissed as premature. (And even if it were considered now, it fails on the facts
already established.)
In the District Court, GO FISH conceded that “2.3 billion dollars . . . should
be enough to provide all fishermen both duration and parity”65 and the alleged
“problems” can be solved within the confines of the Settlement’s terms by
determining a fair “Round Two” distribution from the Seafood Fund.66 Therefore,
because “the Settlement was amended to allow the Court appointed neutral to
change the allocation formulas to attain fairness on the second distribution of SCP
funds,”67 GO FISH did not object to the Settlement Agreement; rather, it raised
concerns that the Court-Appointed Neutral might make a Round Two allocation
different from what some – but not other – GO FISH members might want or
desire.
Indeed, GO FISH has acknowledged the non-ripeness of its appeal to this
Court: “GO FISH believes that, at least with respect to the SCP claimants, the
implementation of the Settlement is sufficiently uncertain that review may be
65 Go Fish Objection, No. 10-7777, at 3 [Rec. Doc. No. 226; 10715].
66 Id. at 2-3.
67 Id. at 3.
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premature.”68 GO FISH Appellants’ Brief, at 54. See also id. (“GO FISH would
prefer this Court stay its decision regarding the fairness of the Settlement and the
reasonableness of the class as certified.”); id. (“Because the Round Two formulae
are not yet determined, the substantive inequities noted in this Brief may actually
change.”).
GO FISH’s tentative arguments are misguided in two critical ways. First,
the settlement frameworks were designed by the Court-Appointed Neutral, from
the bottom up, to provide full compensation to each Class Member participating in
the Seafood Compensation Program.69 That same process will be repeated in the
second round distributions, subject to formal notice and an opportunity for each
participant or representative to provide input, prior to final approval by the Court.70
Second, GO FISH’s suggestion that the Seafood Compensation Fund
participants should have been (or, alternatively, should now be) divided into
multiple formal sub-classes disregards the fact that shrimpers also fish for crab;
crabbers also harvest oysters; IFQ holders own oyster leases; and they are
68 See also GO FISH Appellants’ Brief, at 53 (“GO FISH believes that the Settlement can and should be saved . . . .”) 69 See Second Perry Declaration, at 2 [Rec. Doc. 7726-7; 14852]; Second Balhoff Declaration, at 2 [R.E. 8.002; Rec. Doc. 7726-2; 14757]. 70 See Second Perry Declaration, at 3 [Rec. Doc. 7726-7; 14852]; Second Balhoff Declaration, at 3 [R.E. 8.003; Rec. Doc. 7726-2; 14758].
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represented by many of the same attorneys.71 Courts have recognized, in this
regard, that formal subclasses are only one of several different methods to provide
the “structural assurances” that Amchem indicates are sometimes required to
address intra-class allocation of a negotiated fund. See, e.g., Juris v. Inamed Corp.,
685 F.3d 1294, 1323-24 (11th Cir. 2012), cert. denied, 133 S.Ct. 940 (2013)
(commenting that “Rule 23(a)(4) calls for some type of adequate structural
protection, which would include, but may not necessarily require, formally
designated subclasses,” and noting that both commentators and courts have
rejected the notion that Amchem and Ortiz impose a per se requirement of formally
designated subclasses) (emphasis in original); Sullivan v. DB Investments, Inc.,
667 F.3d 273, 326 (3d Cir. 2011), cert. denied, 132 S. Ct. 1876 (2012) (observing
that sub-classing can result in ‘Balkanization’ and deferring to the district court as
to whether formal sub-classes are required); Petrovic v. Amoco Oil Co., 200 F.3d
71 This is evident from the declarations submitted by GO FISH itself to the District Court: see, e.g., Waltzer Declaration, No. 10-7777, at 2-3 [Rec. Doc. 226-1; 10739] (“Because I had so many clients from many fisheries, I sat in almost all of the different group meetings”); Phillips Declaration, No. 10-7777, at 29 [Rec. Doc. 226-1; 10766] (“I shrimp, crab and harvest oysters . . . . I am also an oyster leaseholder”); Dardar Declaration, No. 10-7777, at 33 [Rec. Doc. 226-1; 10770] (“I am a shrimper, crabber, and an oyster harvester”); Encalade Declaration, No. 10-7777, at 22-23 [Rec. Doc. 226-1; 10759] (personally delivers shrimp, oysters and fish; describes how Go Fish, as an organization, “represents” a broad range of commercial fishing interests); Nguyen Declaration, No. 10-7777, at 9 [Rec. Doc. 226-1; 10746] (both crabs and shrimps); Guidry Declaration, No. 10-7777, at 5-7 [Rec. Doc. 226-1; 10742] (while currently a shrimper, notes that he was previously a fin fisherman, and appears to be advocating for charter boat operators and processors, whose claims do not even fall within the Seafood Program).
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1140, 1146 (8th Cir. 1999) (formal subdivision of the class is not required simply
because some class members stand to receive more than others).
Mr. Perry, as the Court-appointed neutral, looked at all of the available
information; reviewed all of the available evidence; listened to the viewpoints of
all of the various constituencies (including GO FISH and its members); and made
his own independent and impartial determination as to a fair and appropriate
allocation.72 (Which, unlike In re Katrina,73 was made on the front end and
provided to all potential Seafood Program participants as part of the Class Notice
process.) The utilization of a court-appointed neutral, and the surrounding
structural assurances, were far more effective in reaching a fair and reasonable
allocation of the Seafood Fund than formal sub-classing would have been.74
72 See Perry Declaration [R.E. 6.001; Rec. Doc. 7110-5; 10294]; Balhoff Declaration [Rec. Doc. 7110-2; 10217]; Herman Declaration, ¶11 [Rec. Doc. 7104-5; 9911]; Rice Declaration (Seafood Program) [Rec. Doc. 7104-6; 9925]. 73 See Katrina Canal Breaches Litig., 628 F.3d at 197 (notice of class settlement must provide reasonable information regarding the benefits to which they are entitled under the terms of the settlement). 74 See generally Coffee Declaration ¶¶ 29-34 [Rec. Doc. 7110-3; 10244]; Coffee Supplemental Declaration ¶ 19 [Rec. Doc. 7726-4; 14776]; Klonoff Declaration ¶¶ 33-37 [Rec. Doc. 7104-3; 9835]; Klonoff Supplemental Declaration ¶¶ 45-46 [Rec. Doc. 7727-4; 14995]; Issacharoff Declaration ¶¶ 15-17 [Rec. Doc. 7104-4; 9900]; Miller Declaration ¶¶ 32-36 [Rec. Doc. 7114-16; 10740]; Miller Supplemental Declaration ¶¶ 18-20 [7731-6; 15291]; Herman Declaration, ¶11 [Rec. Doc. 7104-5; 9911]; Rice Declaration (Seafood Program) [Rec. Doc. 7104-6; 9925]. These declarations and the ample overall compensation provided by the $2.3 Billion Fund demonstrate that the whole is greater than the sum of its parts, and that dividing the Seafood Program participants against themselves would most likely have resulted in less compensation to each and all. At the same time, the would-be objector’s complaint is hypothetical in light of the ample overall compensation and the absence of any beneficiary complaining about his (or anyone else’s) compensation.
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Paradoxically, GO FISH purports to speak for all of the affected fishing
communities at the same time that it assails the process that allowed (and continues
to allow) all of them direct input to achieve a fair and impartial allocation.
III. The Coon Appellants’ Arguments Demonstrate a Fundamental Misunderstanding of the Common Objective Guiding Principles of the Settlement. The Coon Appellants raise three general arguments: (i) the individual
damages of the class members defeat commonality under Rule 23(a) as well as the
predominance and superiority requirements under Rule 23(b)(3); (ii) Class Counsel
are unqualified to manage the Settlement Class and may have conflicts;75 and (iii)
the Class Notice was unfair because it did not include an opt-out form, and
claimant counsel were not permitted to sign opt-outs on behalf of their clients.76
A. The Common Source Class Members’ Damages Support Commonality, Predominance, and the Superiority of the Class Action to Resolve their Claims.
This economic and property damages class action raises none of the issues
which have troubled other Rule 23(b)(3) litigation and settlement classes in the
75 The Coon Appellants argument concerning alleged fiduciary violations regarding attorney fees is addressed, infra, in the section addressing the Palmer Appellants’ Brief. 76 Attorney Coon could face a significant adequacy of counsel issue with his own clients, as he has filed thousands of claims in the Settlement Program. Objecting to the settlement on behalf of some clients, while filing claims on behalf of others, would have created a significant problem for the latter group had the Settlement been rejected by the District Court. While, per Section 21.3 of the Settlement Agreement, all claims submitted to date will continue to be processed and paid under an Individual Release, appealing the settlement approval on behalf of some clients may be to the detriment of any clients who have yet to submit their Settlement Program claims.
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past. Although this Court does not have to wrestle with the issue of how the class
members’ claims could be tried to conclusion (as the proposal is that there be no
trial), this action does not present any of the issues which have prevented the
certification of “mass tort” litigation classes. The purely economic claims at issue
here arise from a single-source event, without the problems associated with long-
term or varying periods of exposure or accrual. There are no statute of limitations
issues, comparative fault issues, learned intermediary defenses, individual reliance
issues, multi-state choice-of-law issues, or Reexamination Clause concerns.
Unlike mass tort settlements which have thrown plaintiffs together in a
contest for limited funds, this class was negotiated at arm’s length on a claim-by-
claim basis, and sets forth specific, detailed and objective frameworks for
uncapped recovery by the plaintiffs. There are no unknown “future claimant”
issues, nor any yet-to-be-determined pay-outs left to a special master’s discretion.
Even with respect to the $2.3 billion Seafood Fund, a Court-appointed neutral
established specific, detailed and objective frameworks for distribution in advance,
and at the same time provided a procedural safeguard against potential intra-class
conflict with respect to allocation.
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1. Commonality
The Coon Appellants’ argument against commonality is limited to only one
counter-intuitive complaint: “Evidence of a lack of commonality among the
various claims in this case was never more evident than in the implementation of
the incredibly detailed Settlement Agreement that contained numerous
‘interpretation issues.’” Coon Appellants’ Brief, at 43. The Coon Appellants do
not identify a single specific implementation issue.
Yet complexity in the “interpretation” of a Settlement program does not
destroy commonality under Rule 23. Rather, commonality is met “when there is at
least one issue, the resolution of which will affect all or a significant number of the
putative class members.” Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620,
625 (5th Cir. 1999) (quotations and citations omitted). Under the Supreme
Court’s recent decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011),
even a single common question of sufficient import to all claims will suffice:
“claims must depend upon a common contention . . . of such a nature that it is
capable of class wide resolution—which means that determination of its truth or
falsity will resolve an issue that is central to the validity of each one of the claims
in one stroke.” Id. at 2551. “Even a single common question will do.” Id. at 2556.
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In this case, the common and strict liability imposed upon BP for the benefit
of all class members under OPA unites each and every class member with a
question whose answer is identical with respect to each and every member of the
Settlement Class. The class is further united as to numerous factual issues
regarding the underlying causes of the explosion and spill, with respect to the
assigned and reserved third-party claims. What happened (and did not happen)
during the design and planning process, at the well, and on the rig? Who is
responsible, and what is the level of culpability?77 The answers to these common
factual questions are the same for each and every member of the class. Moreover,
the common and class wide legal interpretation of causation under OPA is a
common question of law affecting the clams of the entire class. The District
Court’s final approval Order and Reasons comprehensively lists the significant
common factual and legal questions that unite the Class; none of which Appellants
challenge.78
77 The BP, joint, and Class Counsel experts agreed on the predominance of common questions arising from this single-instance disaster, both generally and at the granular level. For example: (i) Should BP have used a linerback, rather than a long string casing design? (ii) Whether BP properly converted the float collar? (iii) Whether BP should have used more centralizers? (iv) Whether BP should have run a full “bottoms-up” calculation? (v) Whether BP should have run a cement bond log? (vi) Whether Halliburton’s cement slurry was unstable? (vii) Whether the BOP was properly maintained? (viii) Whether Transocean should have activated the EDS? See Coffee Declaration [R.E. 3.001; Rec. Doc. 7110-3; 10228]; Klonoff Declaration [Rec. Doc. 7104-3; 9824]; Miller Supplemental Declaration ¶¶ 15-17 [Rec. Doc. 7731-6; 15289]. 78 See R.E. 1.038-44; Rec. Doc. 8138; 19883-19889.
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The questions of BP’s gross negligence, willful misconduct and/or violation
of a Federal Regulation under OPA are also common questions whose truth or
falsity have application to the claims of each and all class members, under 33
U.S.C. §2704(c)(1). The fact that BP may have, at some point, “waived” the
potential class-wide limitation under §2704(a) does not extinguish the legal
commonality shared by all Class Members, nor the common factual body of
evidence teeming with common liability questions. See Supplemental Coffee
Declaration, ¶¶ 2-11 [Rec. Doc. 7726-4; 14762].79
Further, the application of the third-party fault defense under 33 U.S.C.
§2703(a)(3) presents a common legal issue (with numerous attendant factual
issues) directly affecting the claims of each and all class members. These common
legal and factual issues have never been conceded or waived by the BP
Defendants.
Nor have the BP Defendants agreed (outside of the Settlement) to a legal
interpretation of OPA’s causation requirements under 33 U.S.C. §2702. The
79 See also Coffee Supplemental Declaration, ¶3 [Rec. Doc. 7726-4; 14763] (citing In re Nassau County Strip Search Cases, 461 F.3d 219, 227-228 (2d Cir. 2006) (“an issue is common to the class when it is susceptible to generalized, class-wide proof. That class-wide proof comes in the form of a simple concession rather than contested evidence ... does nothing to alter the fundamental cohesion of the proposed class, which is the central concern of the predominance requirement”) (emphasis supplied); Seijas v. Republic of Argentina, 606 F.3d 53, 57 (2d Cir. 2010) (“Even resolved questions of liability implicate whether a putative class shares the common nucleus of facts”)).
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question of the proper legal standard of causation – whether, for example, a
traditional “proximate cause” requirement should be read into the statute80 –
presents a common legal issue the resolution of which is shared by each and all
members of the Settlement Class, as would the common legal question of whether
BP could invoke a “superseding” or “intervening” cause defense, despite its
Responsible Party status.
2. Common Issues Predominate over Individual Issues.
The Coon Appellants’ predominance argument is vague, complaining not so
much that there is no predominance as that there was “no study explaining how the
compensation frameworks have been deployed in accordance with the various
claims of relief stated in the Class Complaint . . . .” Coon Appellants’ Brief, at 47.
Because claims are not paid unless they demonstrate compliance with the
Settlement’s negotiated compensation criteria, each claim is susceptible to multiple
calculations and to appropriate documentation. The Settlement has been in
operation for over 14 months. Presumably, if there were some significant
disconnect between a legal claim and settlement formula that affects any of the
Coon Appellants, they would have directed this Court’s attention to it.
80 See, e.g., Order, at 33 [Rec. Doc. 3830; 2127] (rejecting the application of a traditional “proximate cause” standard under OPA).
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When, as in this case, class certification is sought for settlement purposes
only, the Court need not inquire whether the case, if tried, would present
intractable management problems. Amchem Products v. Windsor, 521 U.S. 591,
620 (1997); Sullivan, 667 F.3d at 297.81 The focus of the predominance inquiry “is
on whether the defendants’ conduct was common as to all of the class members,
and whether all of the class members were harmed by the defendants’ conduct.”
Sullivan, 667 F.3d at 298; In re Warfarin Sodium Antitrust Litigation, 391 F.3d
516, 522 (3d Cir. 2004).82
Contrary to Appellants’ contention, these issues were briefed exhaustively in
the District Court, and supported by voluminous expert declarations submitted by
both BP and Class Counsel, addressing both class certification and underlying
economic issues.83
In this case, the BP Defendants’ conduct did not vary within the class. The
single unfolding disaster in which BP’s conduct was implicated was the same
81 See also, e.g., Butler v. Sears, Roebuck & Co., ___ F.3d ___, 2013 WL 4478200, at *5 (7th Cir. Aug. 22, 2013) (Posner, J.) (“If the issues of liability are genuinely common issues, and the damages of individual class members can be readily determined … in settlement negotiations … the fact that damages are not identical across all class members should not preclude class certification”). 82 See also, e.g., In re: Foodservice, Inc., Pricing Litig., No. 12-1311, ___ F.3d ___ (2d Cir. Aug. 30, 2013) (affirming class certification by, inter alia, finding that the alleged misrepresentations of fraud in a RICO case were common to the 75,000 class members and predominated over any individualized issues of causation). 83 Order and Reasons, Exhibit “A”, at 1-2 [R.E. 1.117-118; Rec. Doc. 8138; 19962] (listing the declarations).
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sequence of events, and gives rise to the same questions of law and fact, whether
the class member is a fisherman, a tourist guide, or a retail clerk. There are no
statute of limitations nor comparative fault issues. There are no personal injury
exposure or accrual issues, questions of individual reliance, or learned
intermediary defenses. There are neither multi-state choice-of-law issues nor
Seventh Amendment concerns.84
Moreover, commonality is confirmed by the ongoing common issue
Limitation and Liability Trial. Indeed, the eight-week Phase One Trial conducted
earlier this year,85 (including the 1,000-plus pages of proposed findings and other
post-trial briefing), is a testament to the existence of numerous common factual
and legal questions whose answers will be the same for each and every member of
the class.
Neither the number nor the complexity of the Settlement Frameworks
negates the predominance of common questions. All that remains is the
calculation of the settlement criteria for individual class members. Where “the
circumstances of each particular class member vary but retain a common core of
factual or legal issues with the rest of the class, commonality exists” within the
meaning of Wal-Mart. Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015,
84 Contrast with e.g., Castano v. Am. Tobacco Co., 84 F.3d 734 (5th Cir. 1996). 85 See Coffee Supplemental Declaration ¶11 [Rec. Doc. 7726-4; 14772] (citing Amended Trial Plan [Rec. Doc. 6592]).
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1029 (9th Cir. 2012); see also Young v. Nationwide Mutual Insurance Co., 693
F.3d 532 (6th Cir. 2012) (affirming for trial purposes a Rule 23(b)(3) class for a
series of statewide subclasses whose membership would be determined based on
the application of objective, albeit complex, criteria); In re Visa Check-
MasterMoney Antitrust Litigation, 280 F.3d 124, 145 (2d Cir. 2001); Bateman v.
Am. Multi-Cinema, Inc., 623 F.3d 708, 722 (9th Cir. 2010).
The need for complex formulas to determine compensation is best
accomplished through the class action procedure, where consistent treatment of
like claims and ongoing judicial oversight combine to ensure against random,
arbitrary, or dissimilar treatment of similar claims, thereby allowing claims to be
grouped objectively and ensuring fair treatment to all. See, e.g., In re Holocaust
Victim Assets Litigation, No.96-4849, 2000 WL 33241660, 2000 U.S. Dist.
LEXIS 20817 (Nov. 22, 2000), aff’d, 413 F.3d 183 (2d Cir. 2005) (approving
complex plan of allocation of settlement funds, whose development required over
one year of extensive historical and factual research, reflecting the myriad
complexities of allocating a $1.25 billion fund among five categories of victims of
the Nazi regime). Similarly, the Third Circuit approved a complex method of
distributing class action settlement funds, noting:
This method for distributing the fund, in which individuals and entities may have claims that span
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several of the allocation groups, did not produce a divergence of interest among the class members. Rather, regardless of the type of insurance at issue and the time period during which it was purchased, all of the class members shared a unified interest in establishing the . . . Defendants’ liability for engaging in anticompetitive conduct which increased the cost of premiums for all policyholders.
In re Insurance Brokerage Antitrust Litigation, 579 F.3d 241, 272 (3d Cir. 2009).
The class action structure is best designed for circumstances of such complexity:
“The Plan of Allocation was carefully devised to ensure a fair distribution of the
settlement fund to the various types of claimants and was allocated in such a way
that policyholders who likely incurred the most damages are entitled to a larger
proportion of the recovery than those whose injuries were less severe.” Id. at 273.
This Court and others have repeatedly rejected generic “complexity”
arguments in the class certification and class settlement approval context. For
example, in the settlement affirmed in Union Asset Management Holding A.G. v.
Dell, Inc., 669 F.3d 632 (5th Cir. 2012), the objection that the settlement would
“essentially require a mini-trial to determine whether each potential class member
was damaged” was rejected. See also Allapattah Services v. Exxon Corp., 333
F.3d 1248, 1261 (11th Cir. 2003) (“[N]umerous courts have recognized that the
presence of individualized damages issues does not prevent a finding that the
common issues in the case predominate.”); Petrovic, 200 F.3d at 1146 (“[A]
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settlement which contains class members who may recover different amounts is
acceptable”).
As Judge Posner recently observed, addressing Comcast Corp. v. Behrend,
133 S.Ct. 1426 (2013), the determination of liability on a claim-wide basis,
followed by determination of “the damages of individual class members, or
homogenous groups of class members, is permitted by Rule 23(c)(4) and will often
be the sensible way to proceed.” Butler v. Sears, Roebuck & Co., ___ F.3d ___,
2013 WL 4478200, at *4 (7th Cir. Aug. 22, 2013). “An issue central to the validity
of each one of the Claims in a class action, if it can be resolved in one stroke, can
justify class treatment.” Id. at *4 (quoting Wal-Mart v. Dukes, 131 S.Ct. at 2551).
As Butler recognizes, damages are usually not identical across the class, and may
be determined in “individual hearings” after common issues are decided, or
resolved by “settlement negotiations” as was done here. Id. at *5.
3. The Class Action is Superior to Other Available Methods for the Comprehensive Determination and Resolution of Claims in This Litigation.
The Coon Appellants’ two-page superiority argument is also limited to only
one issue – the manageability of the Settlement Program as “unwieldy”. Coon
Appellants’ Brief, at 49-50. The Coon Appellants do not identify a specific
problem or problems.
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In fact, the Settlement Program is operating as intended: publically and
transparently. Its internal review mechanisms have been utilized by both BP and
Class Members to address issues at the policy and individual claims levels. The
superiority of the class action mechanism compared to other available procedures
to resolve claims arising from one of the largest man-made environmental disasters
in American history is practically self-evident. Empirically, as discussed with
regard to the Pentz objection, the class settlement's Court-Supervised Settlement
Program has bested the prior GCCF effort in every measurable dimension.
By structuring the settlement as a class settlement, as both sides agreed to do
early on, the plaintiffs were able to negotiate additional levels of compensation and
other individual and class-wide benefits that could not have been achieved on a
piecemeal basis, in exchange for the certainty of a comprehensive class-wide
release to BP.
In addition, the class action procedure best promotes judicial economy,
providing for the expedited resolution of literally hundreds of thousands of claims.
The class settlement structure, in this regard, establishes definitive deadlines,
stipulations and other requirements, which significantly advance the litigation
towards conclusion. The class, moreover, is afforded the benefit of formal court
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supervision, approval, class representation, and the other safeguards and
protections provided by Rule 23.
As Judge Scirica pointed out in his concurring opinion in Sullivan, there
have been recent, successful, mass tort (personal injury) settlements that did not
utilize the formal class mechanism. Sullivan, 667 F.3d at 334 (Scirica, J.,
concurring) (describing the Guidant and Vioxx settlements). Nonetheless, as he
points out, outside of Rule 23, there is no prescribed independent review of the
structural and substantive fairness of a settlement, and less control over allocation
of settlement funds among class members, potential conflicts of interest, and the
evaluation of attorney’s fees. Id. In class actions, the class members do know what
their rights are, the scope and nature of the court’s authority is clear, and Due
Process protections ensure fairness to claimants. Sullivan, 667 F.3d at 334-35.
The BP settlement, as a class settlement, achieves the aims of equitable
aggregate litigation, as formulated by the American Law Institute:
Aggregation should further the pursuit of justice under law by advancing the following goals:
(a) enforcing substantive rights and responsibilities; (b) promoting the efficient use of litigation resources; (c) facilitating binding resolutions of civil disputes; and (d) facilitating accurate and just resolutions of civil disputes by trial and settlement.
Principles of the Law of Aggregate Litigation, §1.03 (2010).
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In some mass torts, involving injuries of long latency or uncertain causation,
with claims scattered across the country, arising under many states’ laws, the non-
class aggregate model has been determined to be compatible with these principles.
See Klonoff Declaration, ¶¶ 54-58 [Rec. Doc. 7104-3; 9846]. In this litigation,
however, the Rule 23(b)(3) settlement class structure corrects the perceived
inadequacies and deficiencies of the GCCF, fulfills BP’s ongoing obligations as an
OPA responsible party, fully vests the District Court with the ongoing supervisory
powers to ensure a transparent and effective application of uniform and objective
standards, and satisfies the settling defendants’ legitimate interests in “finality,”
while at the same time delivering to plaintiffs “redress of their claimed injuries
without the burden of litigating individually.” Sullivan, 667 F.3d at 339.86
B. Class Counsel Were and Are Qualified to Manage the Settlement Class Without Conflicts.
Although not raised below, the Coon Appellants now suggest that the
District Court failed to scrutinize Class Counsel’s qualifications.87 In fact, the
District Court found that Class Counsel have class action experience and have
86 See generally Klonoff Declaration, ¶¶50-61 [Rec. Doc. 7104-3; 9844]; Coffee Declaration, ¶¶57-62 [Rec. Doc. 7104-3; 10259]; Supplemental Klonoff Declaration, ¶¶ 41-43, 47 [Rec. Doc. 7727-4; 14993]; Supplemental Coffee Declaration, ¶¶ 2-11 [Rec. Doc. 7726-4; 14762]; Miller Declaration ¶¶29-42 [R.E. 5.008; Rec. Doc. 7114-16; 10739]. 87 See, infra, section addressing the Bacharach Appellants’ Brief, for the argument that appellants are estopped from raising an argument for the first time on appeal.
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“taken seriously its fiduciary obligations in the best interests of all claimants, both
private and governmental.”
After a rigorous, public vetting process before their initial appointment in
2010,88 the PSC has managed one of the largest cases in the history of the United
States. Over 90 million documents were exchanged, more than 130,000 claims
have been filed, over 390 depositions were taken, a Phase One Trial has been
concluded, and countless motions have been heard.89 Over 11,000 filings have
been made in the district court docket with tens of thousands more in three
“dummy dockets” created to handle the claim filings in the Limitation Action and
the objections.90 As addressed in detail by Professor Coffee, Class Counsel were
able to “utilize the broad expertise possessed by the highly experienced, ‘all star’
members of the PSC.”91
The inescapable fact is that the class is reaping the rewards of the Settlement
Program, while the objections are limited to a couple of professional objectors, a
88 See Pre-Trial Order No. 1, ¶ 17 (8/10/10) [Rec. Doc. 2; 1089]; Pre-Trial Order No. 6 (8/27/10) [Rec. Doc. 110; 1148]; Pre-Trial Order No. 8 (10/8/10) [Rec. Doc. 506; 1296]. The District Court has since re-appointed them twice. Pre-Trial Order No. 46 (10/5/11) [Rec. Doc. 4226; 2512]; Pre-Trial Order No. 53 (9/10/12) [Rec. Doc. 7350; 13868]. 89 Order and Reasons, at 2 [R.E. 1.002; Rec. Doc. 8138; 19847]. 90 The District Court created Docket Nos. 10-8888 and 10-9999 to receive the more than 130,000 claims in the Limitation Action, and docket No. 10-7777 to receive objections to the Settlement. 91 Coffee Supplemental Declaration ¶27(b) [Rec. Doc. 7726-4; 14780]; see generally Coffee Supplemental Declaration ¶¶ 28-41 [Rec. Doc. 7726-4; 14781]; see also, e.g., Herman Declaration, ¶¶ 3-4, 6, 8 [Rec. Doc. 7104-5; 9908]; Rice Declaration, ¶ 2 and Ex. A [Rec. Doc. 7104-6; 9914].
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nonprofit group without any authority to speak to the recovery of its putative
members, and one disaffected lawyer who was unwilling or unable to comply with
the procedural requirements of the court below.
C. Notice and Opt-Out Procedures Satisfied Rule 23(e) and Contemporary Best Practices.
The Coon Appellants argue that the Settlement Notice was inadequate
because pre-printed opt-out forms were not provided and counsel were precluded
from signing opt-outs on behalf of their clients. However, the Notice was one of
the most comprehensive notices in the history of class action litigation, involving
every manner of media and communication available. Opt-outs were accepted in
every shape, size, and language so long as the name was identified and the intent
expressed. For a lawyer to quibble about not being provided with a ready-made
form hardly qualifies as an error, much less a fatal one.
1. The Settlement Notice.
The notice protocol submitted jointly by the parties, approved by the Court,
and thereafter fully implemented, complied with all requirements pertaining to
both the manner of distribution and the contents of class notice. Individual notice
was mailed to every plaintiff who filed any lawsuit consolidated into the MDL or a
short-form joinder into the B1 Master Complaint, as well as GCCF claimants, and
all available lists of potential class members. To ensure that no individuals were
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unintentionally omitted, all addresses were checked against the National Change of
Address Database. To the extent that records indicated that potential class
members were represented by counsel, individual notice was also mailed to their
attorneys. Further, the parties conducted a massive, nationwide multi-media effort
that included television, radio, internet, newspaper and magazine advertising and
publication. As of July 31, 2012, a total of 365,250 individual notices had been
mailed, and 56,136 individual notices transmitted via e-mail; it was further
estimated that 95% of the adults in the Gulf Coast were exposed to class notice
materials on average 10.3 times, and 83% of U.S. adults were exposed on average
4 times each.92
In addition to the formal notice program, Class Counsel conducted nine free
full-day seminars to almost 2,000 attorneys and accountants across the Gulf Coast
Area to explain the Settlement, and established a physical office in New Orleans
with a toll-free number and e-mail system that has dialed provided additional
information and assistance to class members since the Settlement Program
commenced.
92 See Declaration of Cameron R. Azari, ¶¶ 9, 10, 77 [Rec. Doc. 7110-1; 9997].
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2. Notice Does Not Include The Obligation to Create an Opt Out Form.
Attorney Coon does not complain that his clients did not receive or
understand the notice sent to them; indeed, Mr. Coon has filed thousands of claims
on behalf of his clients with the Settlement Program.93
Instead, the objection is that there was no opt-out form attached to the
notice. Neither the Federal Judicial Center nor the Manual for Complex Litigation
recommends providing an opt-out form. See fjc.gov, Class Action Notices Page,
THE MANUAL FOR COMPLEX LITIGATION, FOURTH (Federal Judicial Center 2004).
Nor does the Supreme Court’s decision in Phillips Petroleum Co. v. Shutts, 472
U.S. 797 (1985), which merely requires “at least an opportunity to opt out of the
class.” Id. at 810-11. The other case cited, Wortman v. Sun Oil Co., 755 P.2d 488
(Kan. 1987), pertains to the notice required for out-of-state class members for a
final Judgment entered by the court long after a class had been certified. Id. at 492.
In fact, the Wortman Court specifically noted that opt-out forms were not provided
to class members. Id. at 490.
93 Order and Reasons, at 64 [R.E. 1.064; Rec. Doc. 8138; 19909].
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3. Due Process is protected by having Claimants Themselves sign the opt-outs.
Of note, Attorney Coon failed to submit any opt-out requests executed by his
purported clients. He argues instead that his failure to follow the clear opt-out
instructions provided in the Class Notice should be ignored because the District
Court erred as a matter of law in requiring that only the Claimant himself or herself
(not counsel) sign the opt-out request. There is no claim that any of Attorney
Coon’s clients were unable to sign an opt-out request, and there is no citation to
any law or authority to support the notion that such requirement is a “violation” of
Rule 23 or Due Process that could upend a settlement.
To the contrary: courts may, and do, reject such efforts with class members’
own rights under Rule 23. See, e.g., Hanlon v. Chrysler Corp., 150 F.3d 1011,
1024 (9th Cir. 1998) (rejecting efforts to opt out class members en masse, as
inconsistent with each class member’s right to make his or her own opt out
decision).94 While it may be reasonable for some courts to allow attorneys to sign
opt-out forms on behalf of their clients, there can be nothing objectionable about a
District Court adding a safeguard to ensure proper communication between
attorney and client, in order to protect the client’s right to make the individual
94 Mr. Coon seems to admit, in this regard, that he purported to opt out (and object to) the Class Settlement on behalf of clients with whom he never personally consulted. See Coon Appellants’ Brief, at 30, 33-34. In addition to Rule 23 concerns, this arguably raises issues under Rules of Professional Conduct 1.2(a) and/or 1.4.
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decision to participate in the settlement, object, or opt out. In re Diet Drugs Prods.
Liab. Litig., 282 F.3d 220, 241 (3d Cir. 2002) (“it was clearly within the district
court’s discretion to turn away attempts by lawyers to opt out en masse”).
IV. The Palmer Appellants’ Arguments Concerning Real Property Damage Claims, Cy Pres, and Attorneys’ Fees are Fundamentally Flawed. The Palmer Appellants raise three arguments distinct from those raised by
other Appellants.95 They contest the adequacy of representation for the Coastal
Real Property claims, the purported use of cy pres, and attorneys’ fees. Quite
candidly, these are trivial objections, unrelated to any real grievance by anyone
represented by Palmer or anyone else, and interposed solely to further an
unfortunate practice of professional objections seeking a pay-off to go away.96 No
95 The Palmer Appellants’ commonality, predominance, and superiority arguments were addressed supra in the Coon Appellants’ section. The Palmer Appellants’ arguments regarding the GCCF are addressed supra in the Pentz Appellants’ section. 96 See, e.g., Palmer Transcript and Orders [Rec. Doc. 7727-11; 15039] (Arthur v. Sallie Mae, No. 10-cv-198 (W.D. Wash. 2012) (finding that Mr. Palmer made misrepresentations to the Court, including untrue statements in his declaration for attorney's fees, and false certification in a pro have vice application that he had not been the subject of formal discipline by a state bar association, when in fact he had been suspended from the Colorado Bar Association, the State Bar of Arizona, and the State Bar of California as a result of a Colorado felony conviction); Herfert v. Crayola, LLC, No. 11-cv-1301, Doc. 74 (W.D. Wash. 2012) (denying Mr. Palmer’s pro hac vice application); In re: Uponor, No. 11-MD-2247, Doc. 132 (D. Minn. 2012), at 3 (characterizing Mr. Palmer as a “serial objector to other class-action settlements”)); see also Gemelas v. Dannon Co., No. 1:08 CV 236, 2010 WL 3703811, at *1, 3 (N.D. Ohio 2010) (same); In re Dell Sec. Litig., No. A-06-CV-726-SS, ECF No. 342 (W.D. Tex. 2011) (describing Palmer’s serial objections as “absurd” and “showing little respect for the intelligence of [that] Court”). Mr. Palmer was sanctioned as recently as February 2013 for vexatious conduct. In re TFT-LCD (Flat Panel) Antitrust Litig., 289 F.R.D. 548 (N.D. Cal. 2013).
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such payments have been or will be made in this case, so the objections will be
addressed.
A. The Coastal Real Property Class Representatives are Adequate.
The Palmer Appellants contend that the Class Representatives are
inadequate due to the alleged absence of a representative within the Coastal Real
Property Framework who has standing to assert a general maritime claim. There
is, however, no actual or potential “conflict” between or among class members in
this regard.
Indeed, the Coastal Property Framework, whose contours fall almost entirely
along the water, provides for an increased award if oil was found on the property,
according to the objective SCAT reports. For each eligible property, the 2010
appraised value of the property is multiplied by a property tax rate of 1.18%, and
the base compensation amount then varies between 30% and 45% depending upon
whether oil was observed on the property and whether the shoreline of the property
includes environmentally sensitive areas. Base compensation is increased by the
RTP of 2.5.97 Because oiled properties are eligible for greater amounts of base
97 See Dent Decl., ¶¶ 24-27 [Rec. Doc. 7114-4; 10453]; Taylor Decl., ¶ 59 [Rec. Doc. 7114-20; 10963].
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compensation, the difference of compensation is increased several times over by
the application of the RTP.98
Additional factors guarantee the ample recoveries available under the
Coastal Framework for those with both OPA and maritime claims. First, with
regard to any contamination on a parcel within the coastal zone, the Coastal
Framework specifies that nothing in the framework alters, reduces, or expands
“BP’s obligations for cleanup, removal, spill response, and remediation of real
property under applicable federal, state, or local laws, regulations, orders, or
agreements.” SETTLEMENT AGREEMENT, Ex. 11A, § 4A [Rec. Doc. 6276-23; 4495].
Second, to the extent class members in the coastal zone sold their residential parcel
between April 20 to December 31, 2010, they may be eligible to recover under the
Real Property Sales Framework for actual loss of value. Id. at Ex. 13 [Rec. Doc.
6276-30; 4804]. Third, any parcels inadvertently excluded from the Coastal
Property framework based on incomplete SCAT lines can be included if
appropriate documentation is provided. Dent Decl., ¶ 23 [Rec. Doc. 7114-4;
10453]; Taylor Decl., ¶¶ 47-49 [Rec. Doc. 7144-20; 10959].
The Palmer Appellants fail to identify, argue, or cite to any support that the
Coastal Real Property Framework does not provide adequate compensation for
98 Dent. Decl., ¶ 24 [Rec. Doc. 7114-4; 10453].
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Coastal claims that arise under both OPA and maritime law. While they are
correct that maritime law may confer a greater benefit than OPA, the Settlement
provides enhanced compensation. The Palmer Appellants abjectly fail to provide
any greater quantification of that benefit as it compares either with the
compensation framework generally or themselves specifically.
The Palmer Appellants do state that an oiled Coastal claim may be twice as
valuable as a non-oiled Coastal claim, but completely fail to compare the value of a
coastal claim in the Settlement with the value of a coastal claim in real-world or
litigation terms. Palmer Appellants’ Brief, at 26. Without such data, no
comparison can be made. The Palmer Appellants are merely arguing the value of a
legal claim versus the value of another legal claim without ever tying it to the value
of the Settlement. All Coastal Real Property claims were settled at a premium –
maritime or no maritime claims.
Both the structure of the negotiations and the terms of the Settlement
Agreement itself provide structural assurances of adequate representation. See
Supplemental Coffee Declaration, ¶¶ 19-27 [Rec. Doc. 7726-4; 14776].99 But, in
any event, and of greatest significance, none of these Objectors even attempt to
99 See also Coffee Declaration, ¶¶ 8-10, 23-34, 41-45 [R.E. 3.006; Rec. Doc. 7110-3; 10233]; Klonoff Declaration, ¶¶ 29-38 [Rec. Doc. 7104-3; 9833]; Issacharoff Declaration, ¶¶ 8-17 [Rec. Doc 7104-4; 9896]; Supplemental Coffee Declaration, ¶¶ 15-41 [Rec. Doc. 7726-4; 14774]; Miller Declaration ¶¶11-28 [R.E. 5.002; Rec. Doc. 7114-16; 10733]; Miller Supplemental Declaration ¶¶11-20 [Rec. Doc. 7731-6; 15288].
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explain how the differences between or within the frameworks are the result of
“conflicts of interest” between or among the members of the Class.100
Unlike Amchem, 521 U.S. at 601, in this regard, Class Counsel represented,
and the Class Representatives reflect, a broad cross-section of people and
businesses with all categories of claims. Class Counsel, therefore, from the outset,
had the incentive to maximize the recoveries of each and all of the Class Members.
The frameworks are the product of months and months of arms-length negotiation,
in which the recovery under each damage claim formula was sought to be
maximized by attorneys who represented people or businesses with those types of
claims.101 There is no question of a pre-negotiated fund thereafter being divided up
by conflicted counsel, unlike, say, Central States v. Merck-Medco, 504 F.3d 229,
235-37 (2d Cir. 2007) (striking down as improper the negotiation of a fund that
was then divided up by counsel).
In sum, the Settlement does provide higher compensation for oiled property
than non-oiled property. Those Coastal property class members with oil also retain
the benefit to have BP remove the oil. As such, no conflict exists between coastal
100 See Klonoff Declaration, ¶¶ 31-32 [R.E. 4.002; Rec. Doc. 7104-3; 9834]; Coffee Declaration, ¶¶ 8, 23 [Rec. Doc. 7110-3; 10242]; Issacharoff Declaration, ¶¶ 7-9, 12-13 [Rec. Doc. 7104-4; 9898]. 101 See Issacharoff Declaration, ¶¶ 7-11 [Rec. Doc. 7104-4; 9895]; Herman Declaration, ¶¶ 6-10 [Rec. Doc. 7104-5; 9909]; Rice Declaration (Negotiations), ¶¶ 6, 13 [Rec. Doc. 7104-6; 9913]; Coffee Declaration, ¶¶ 24-28 [Rec. Doc. 7110-3; 10242]; Miller Declaration ¶¶ 22-27 [R.E. 5.006; Rec. Doc. 7114-16; 10737].
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real property class members with OPA-only claims and those with both OPA and
maritime claims.
B. There is no Cy Pres in this Settlement.
The Palmer Appellants argue that the $57 million Gulf Coast Tourism and
Gulf Seafood fund (“Tourism Fund”) is an inappropriate cy pres award because the
class members are known and the money could be given to them in some fashion.
Palmer Appellants’ Brief, at 43.
As an initial matter, the amount of the fund is approximately .01% of the
amount awarded under the Settlement as of the date of this filing.
As a legal matter, cy pres is an equitable doctrine that permits the
distribution of a settlement fund’s residue that goes unclaimed. Klier v. Elf
Atochem N. Am., Inc., 658 F.3d 458, 473-74 (5th Cir. 2011). Such awards, when
they exist, should adhere as near as possible to the lawsuit’s underlying objectives,
the interests of class members and the interests of those similarly situated to class
members. In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679, 682 (8th
Cir. 2002) (citations and internal quotation marks omitted).
Fundamentally, the Tourism Fund is not a cy pres award because it is not a
distribution from unpaid settlement funds: the Settlement Fund payments do not
reduce or in any other way compromise class members’ recovery. That is because
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the Settlement is uncapped; there will be full and complete payment for all class
members who choose to participate in the Settlement, regardless of the number of
participants. See Mangone v. First USA Bank, 206 F.R.D. 222, 230 (S.D. Ill.
2001) (rejecting challenges to the cy pres fund because the class was to receive
“nearly 100% recoveries”).102
The funds identified for the Tourism Fund are not “left over” funds from any
part of the settlement. Simply put, there can be no “left over” funds because there
is no monetary cap to this settlement. Klonoff Supplemental Decl., ¶ 27 [Rec.
Doc. 7727-4; 14987] (“Because the settlement was designed with the goal of
providing full compensation, the additional funds allocated for the Gulf Tourism
and Seafood Promotion Fund are the proverbial ‘icing on the cake.’”). The
Tourism Fund is simply another uniform benefit to the Class as a whole as
promoting the general economy of the class area and, indirectly, supporting the
economy which the oil spill harmed. Id. at ¶ 29 (“A media campaign to bolster the
tourism and seafood industries in the Gulf Region relates directly to class
members’ interests.”).
Appellants rely principally on two inapposite cases to support their
contention that the Tourism Fund payments are impermissible cy pres awards. In
102 The Seafood Program does feature a guaranteed fund of $2.3 billion, more than ample to pay all Seafood claims in full; the remainder of that fund will be reallocated among the claimants themselves.
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both decisions, Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012), and Klier v.
Elf Atochem N. Am., Inc., 658 F.3d 468 (5th Cir. 2011), the settlements were
capped and the alternative award of money diminished the class recovery. In
Dennis, class members received at most $15 worth of coupons from a limited
$2.75 million fund; funds left over from this allotment were scheduled for donation
to a charity. Dennis, 697 F.3d at 862-64. In Klier, this Court invalidated a
settlement provision that permitted the claims administrator to distribute left over
settlement funds to a charity rather than dispersing those funds to the class. Klier,
658 F.3d at 476-77. In both instances, the distribution at issue was the remainder
from a limited fund to undertakings unrelated to the needs of the class; here, there
is no limited fund, no remainder, and, hence, no cy pres.
C. The Settlement was Not Fee-Driven.
The Palmer Appellants appear to argue that the Settlement was fee driven
for two general reasons: (1) the District Court used the BP estimate of $7.8 billion
in payouts to determine reasonableness; and (2) the District Court failed to analyze
whether the alleged benefits were obtainable through the GCCF.
Any appeal concerning the potential ultimate award of attorneys’ fees should
be dismissed without prejudice as premature. The simple fact is that there has been
no award of fees by the district court and, as a result, there is no order of the
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district court to which this putative appeal corresponds. Any arguments that the
recovery of the class is insufficient to justify an award of fees, or that any fee
award should be discounted by the benefits available under the GCCF should be
directed in the first instance to the District Court when it makes a fee
determination, and not before.103
Nor is the lack of an order on fees a matter of happenstance. Any
negotiation of fees was completely segregated from the substantive class relief.
Fees were not negotiated until after the terms of the Settlement were finalized and
the Settlement Agreement was delivered to the District Court.104 Class Counsel
sought permission from the United States Magistrate Judge Sally Shushan, who
oversaw settlement negotiations, before commencing any discussions of attorney’s
fees. See Maywalt v. Parker & Parsley Pet. Co., 67 F.3d 1072, 1079 (2d Cir. 1995)
(“[T]he supervision of settlement negotiations by a magistrate judge, as occurred
here, makes it less likely that . . . [class counsel have promoted] their own interests
over those of the class.”).
103 The Palmer Appellants may argue the decision of BP not to challenge any ultimate fee award below the negotiated amount (sometimes referred to as a “clear sailing” provision) is somehow disqualifying. That argument should also be directed to the District Court, even though this type of arrangement is common to massive settlements. See, e.g., Ayers v. Thompson, 358 F.3d 356, 367 (5th Cir. 2004); Blatt v. Dean Witter Reynolds Intercapital, Inc., 732 F.2d 304, 306-07 (2nd Cir. 1984); In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283, 329 (3rd Cir. 1998); Waters v. Int’l Precious Metals, Corp., 190 F.3d 1291, 1293 n.4 (11th Cir. 1999). 104 See Rice Decl., (Attorneys Fees) ¶ 5 [Rec. Doc. 7101-10; 9668].
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The segregation of the merits meant that fees could never be used as a
bargaining chip for negotiating Settlement benefits, and the separate funding of
fees meant that the Settlement fund could never be depleted by any fee obligation.
Klonoff Supplemental Decl., ¶¶ 35-37 [Rec. Doc. 7727-4; 14991].105
In the event that this class settlement is affirmed, BP will pay up to $600
million in common benefit costs and fees, if and as may be awarded at some future
time by the Court. The reasonableness of the fee will be determined by
comparison to the total payouts under a settlement. Here, the Claims Administer
has authorized payments of over $4.4 billion, and current payouts have exceeded
$3.2 billion, and are not finished. Claims Administrator Status Report No. 12, at
10-11 [Rec. Doc. 11008].106 As a result, not only are any fee-related appeals
premature, but the district court has yet to determine the total value of the
settlement that under this Court’s direction must serve as the predicate for any fee
award. See, e.g., Union Asset Management, 669 F.3d at 644-45.
105 Mr. Palmer seems to suggest that this Court’s decision in Strong v. Bellsouth Telecommunications, Inc., 137 F.3d 844 (5th Cir. 1998) establishes some sort of “rule” in this regard. But, quite to the contrary: Strong only addressed the propriety of an attorney fee award “under the atypical circumstances of [that] case.” Strong, 137 F.3d at 853. The Court never suggested that the representation of the class in Strong was inadequate, nor that approval the settlement should have been vacated. 106 By contrast, the Palmer objectors rely on In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 945 (9th Cir. 2011), a case in which the Ninth Circuit overturned a fee award that would have provided class counsel with 83% of the total recovery as fees – in other words, almost five times as much as the class itself recovered.
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V. The Bacharach Appellants’ Arguments Were Never Raised Before the District Court and Are Nonetheless Irrelevant to an Uncapped Settlement. In a miniscule brief with barely six pages of argument, the Bacharach
Appellants now decide to raise an issue never presented by them (or anyone else)
to the District Court. The Bacharach Objectors’ 15-paragraph objection to the
District Court focused only on attorney’s fees and canned language about Rule
23.107 There was no mention anywhere in that objection about payment to
businesses who allegedly suffered no loss. This omission deprived the District
Court of an opportunity to address the argument and the Bacharach Appellants are
estopped from raising it now.108
This Court is clear — arguments that are not made or developed in the
district court will not be considered for the first time on appeal. In re FEMA
Trailer Formaldehyde Products Liab. Litig. (Mississippi Plaintiffs), 668 F.3d 281,
290 (5th Cir. 2012).109 This Court has reiterated this rule in class action suits:
107 Bacharach Appellants’ Objection, No. 10-7777 [Rec. Doc. 233; 9865]. 108 The Bacharach Appellants’ one argument appears to have been lifted out of a separate appeal (No. 13-30315) pending before this Court regarding the interpretation of the Business Economic Loss compensation framework. That issue will be addressed in that appeal and concerns the implementation of the Settlement Agreement, not its approval. Moreover, the Appellant in No. 13-31315 is BP, one of the settling parties and a party that did not appeal settlement approval. 109 See also, e.g., Tolbert v. LeBlanc, 512 F.App'x 401 (5th Cir. 2013); Balentine v. Thaler, 626 F.3d 842, 848 (5th Cir.2010)(“The general rule is that arguments not raised before the district court are waived on appeal.”); Krzywonski, 9 F.3d 103 (5th Cir. 1993)(“We will not consider legal arguments that have not been presented to the district court and are raised for the
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“Objectors assert a crudely articulated due process objection . . . [and the] . . .
[f]ailure to raise a due process objection before a district court waives that
objection on appeal.” Newby v. Enron Corp., 394 F.3d 296, 309 (5th Cir. 2004).110
The Bacharach Appellants’ now claim to challenge the creation of “two
classes of beneficiaries, some of whom that were directly and proximately
damaged by the oil spill” and some of whom were allegedly not. Bacharach
Appellants’ Brief, at 13. Nowhere is there any claim that the Bacharach
Appellants themselves are affected by this distinction (if any). The only facts
Appellants assert is that they live in Texas and would have been classified
differently had they lived in Louisiana. Bacharach Appellants’ Brief, at 8. There is
no claim of how the purported defect in the Settlement affects the division of
claims between Louisiana and Texas, nor any claim of conflict or failure of
representation that had any effect on the drawing of lines between the different
recovery Zones.
first time on appeal.”); Hormel v. Helvering, 312 U.S. 552, 556 (1941) (“Ordinarily an appellate court does not give consideration to issues not raised below.”). 110 This rule is by no means unique to this Circuit. The Seventh Circuit has held that, because an objector failed to advance an argument in the district court regarding fee-setting methodology, the argument was waived and would not be considered by the court of appeals. Taubenfeld v. AON Corp., 415 F.3d 597, 599 (7th Cir. 2005) (“On numerous occasions we have held that if a party fails to press an argument before the district court, he waives the right to present that argument on appeal.... As we have made clear, it is axiomatic that arguments not raised below are waived on appeal”); see also Puffer v. Allstate Ins. Co., 675 F.3d 709, 719-20 (7th Cir. 2012) (“[I]ntervenors still ‘cannot change course on appeal to raise an argument different than the one presented to the district court’”).
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The attempt of the Bacharach Appellants to now mimic claims made by BP
in a separate appeal with regard to settlement interpretation and administration are
unrelated to any question of settlement approval for the class. The question for the
settlement is whether it is fair, adequate and reasonable to the class. The
Bacharach Appellants have not produced or cited to a single piece of evidence that
supports their proposition that they are not adequately compensated under the
settlement terms, nor have they put forward any argument as to the insufficiency of
the recovery for any other class members. Even if BP prevails on its claims about
the scope of the class recovery for Business Economic Loss Claims in its separate
appeal, there will be no effect whatsoever on the recovery of class members who
are within the redefined class. This is an uncapped settlement and the
compensation owed to the Bacharach Appellants (if any) is unaffected by the
dispute over the number of proper claimants.
Fundamentally, the Bacharach Appellants fail to recognize how a “loss of
income, earnings or profits suffered … as a result of the Deepwater Horizon
Incident” is determined. The Settlement Agreement itself defines such losses
according to the objective standards and frameworks set forth and “described in the
attached Exhibits 1A-15”111 (specifically, Exhibits 4B and 4C).112 Hence, whether
111 See SETTLEMENT AGREEMENT, § 1.3.1.
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a claimant suffered a loss as a result of the Spill is determined by objective,
transparent, mathematical calculation. Different classes are not created within the
Economic and Property Settlement Class because the ticket to compensation is one
and the same. Once a person passes the Causation test, he or she will be treated to
the same damages calculation as every other class member.
The settling parties’ separate and joint class experts opined in favor of this
objective class definition, with objective frameworks for establishing entitlement
to compensation.113
Further, because the Settlement is uncapped, no conflict is created between
the Bacharach Appellants’ “two” theoretical classes. Payment of hypothetically
unsupported claims would not disrupt the “fairness” of the Settlement to those
claimants who have traditional claims. Such claims will be paid a fair and
reasonable amount under the Settlement, and all such claimants were free to make
claims or to opt-out. The fairness or reasonableness of their compensation is no
way affected by a “fictitious” claimant who has not incurred any losses because
112 See SETTLEMENT AGREEMENT, § 5.3.2.1 (“The frameworks setting forth the documentation requirements governing Business Economic Loss Claims, and the standards for evaluating such claims, are set forth in Exhibits 4A-7 to the Agreement”); § 5.3.2.3 (Causation requirements “are set forth in Exhibit 4B”); § 5.3.2.4 (“The compensation methodology for Business Economic Loss Claims generally is set forth in Exhibits 4C-4E”). 113
See, e.g., Coffee Declaration, ¶¶ 17-22 [Rec. Doc. 7110-3; 10239]; Klonoff Declaration, ¶¶ 19-20 [Rec. Doc. 7104-3; 9830]; Miller Declaration ¶¶ 13-21 [R.E. 5.003; Rec. Doc. 7114-16; 10734]; Miller Supplemental Declaration ¶¶ 5-9, 12, 15 [Rec. Doc. 7731-6; 15285].
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such claimants do not reduce the recoveries to other class members. If a claimant
is deemed ineligible, either by the Claims Administrator or by a decision of this
Court in No. 13-31315, there is no impact on any other claimant save the one
deemed ineligible.
The objective eligibility and compensation frameworks, the products of
many months of intense negotiation, here replaced the hidden, shifting,
inconsistent and unilateral claims decisions of the GCCF, and places all individuals
and businesses within the defined class with an equal opportunity to make claims.
Under established and contemporary jurisprudence, class actions may be deployed
to litigate (or resolve) common liability questions, and then to separately
adjudicate, or resolve by settlement negotiation, more individualized questions of
causation and damages. Butler, 2013 WL 4478200, at **4-5 (citing, inter alia,
Comcast and Wal-Mart). Compensation within each of the frameworks, detailed in
Exhibits to the Settlement Agreement, use the same criteria and methodology. This
public, transparent, consistent system – the sine qua non of a fair settlement –
replaced the unreliable GCCF, and obviates the need for endless, ad hoc,
adversarial or subjective determinations to decide who is subjectively "worthy" of
payment, and in what amounts. That the class members themselves consider this
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system fair is demonstrated by their actions, in remaining within the class, filing
claims, and, for all but a handful, eschewing objections or appeals.
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Conclusion
For the above and foregoing reasons, for the reasons stated by the District
Court, and based on the evidentiary record and other proceedings before the court
below, the certification and approval of the Economic & Property Damages Class
Settlement should be affirmed.
This 3rd day of September, 2013.
Respectfully submitted,
/s/ Stephen J. Herman Stephen J. Herman HERMAN, HERMAN & KATZ LLC 820 O’Keefe Avenue New Orleans, Louisiana 70113 Telephone: (504) 581-4892 Fax No. (504) 569-6024 E-Mail: [email protected] Lead Class Counsel
/s/ James Parkerson Roy James Parkerson Roy DOMENGEAUX, WRIGHT, ROY, & EDWARDS LLC 556 Jefferson Street, Suite 500 Lafayette, Louisiana 70501 Telephone: (337) 233-3033 Fax No. (337) 233-2796 E-Mail: [email protected] Lead Class Counsel Samuel Issacharoff 40 Washington Square South, 411J New York, NY 10012 Telephone: (212) 998-6580 E-Mail: [email protected] Counsel on the Brief
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ADDITIONAL APPEAL COUNSEL Elizabeth J. Cabraser LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Office: (415) 956-1000 Telefax: (415) 956-1008 E-Mail: [email protected] Soren E. Gisleson Herman Herman & Katz LLC 820 O’Keefe Avenue New Orleans, LA 70113 Telephone: (504) 569-6024 Fax No. (504) 569-6024 E-mail: [email protected] ADDITIONAL ECONOMIC & PROPERTY DAMAGE CLASS COUNSEL
Joseph F. Rice MOTTLEY RICE 28 Bridgeside Blvd. Mount Pleasant, SC 29464 Office: (843) 216-9159 Fax No. (843) 216-9290 E-Mail: [email protected] Bian H. Barr LEVIN, PAPANTONIO THOMAS MITCHELL RAFFERTY & PROCTOR, P.A. 316 South Baylen St., Suite 600 Pensacola, FL 32502-5996 Office: (850) 435-7045 Telefax: (850) 436-6187 E-Mail: [email protected]
Calvin C. Fayard, Jr. FAYARD & HONEYCUTT 519 Florida Avenue, SW Denham Springs, LA 70726 Office: (225) 664-4193 Telefax: (225) 664-6925 E-Mail: [email protected] Robin L. Greenwald WEITZ & LUXENBERG, PC 700 Broadway New York, NY 10003 Office: (212) 558-5802 Telefax: (212) 344-5461 E-Mail: [email protected]
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Jeffrey A. Breit BREIT, DRESCHER & IMPREVENTO Towne Pavilion Center II 600 22nd Street, Suite 402 Virginia Beach, Virginia 23451 Office: (757) 670-3888 Telefax: (757) 670-3895 E-Mail: [email protected] Conrad S.P. “Duke” Williams WILLIAMS LAW GROUP 435 Corporate Drive, Suite 101 Maison Grand Caillou Houma, Louisiana 70360 Office: (985) 876-7595 Fax No. (985) 876-7594 E-Mail: [email protected]
Rhon E. Jones BEASLEY, ALLEN, CROW, METHVIN, PORTIS & MILES, P. C. 218 Commerce St., P.O. Box 4160 Montgomery, AL 36104 Office: (334) 269-2343 Telefax: (334) 954-7555 E-Mail: [email protected] Matthew E. Lundy LUNDY, LUNDY, SOILEAU & SOUTH, LLP 501 Broad Street Lake Charles, LA 70601 Office: (337) 439-0707 Telefax: (337) 439-1029 E-Mail: [email protected]
Philip F. Cossich, Jr. COSSICH, SUMICH, PARSIOLA & TAYLOR 8397 Highway 23, Suite 100 Belle Chasse, LA 70037 Office: (504) 394-9000 Telefax: (504) 394-9110 E-Mail: [email protected]
Michael C. Palmintier deGRAVELLES, PALMINTIER, HOLTHAUS & FRUGE’ 618 Main Street Baton Rouge, LA 70801-1910 Office: (225) 344-3735 Telefax: (225) 344-0522 E-Mail: [email protected]
Robert T. Cunningham CUNNINGHAM BOUNDS, LLC 1601 Dauphin Street, P. O. Box 66705 Mobile, AL 36660 Office: (251) 471-6191 Telefax: (251) 479-1031 E-Mail: [email protected]
Paul M. Sterbcow LEWIS, KULLMAN, STERBCOW & ABRAMSON 601 Poydras Street, Suite 2615 New Orleans, LA 70130 Office: (504) 588-1500 Telefax: (504) 588-1514 E-Mail: [email protected]
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Alphonso Michael “Mike” Espy MORGAN & MORGAN, P.A. 188 East Capitol Street, Suite 777 Jackson, MS 39201 Office: (601) 949-3388 Telefax: (601) 949-3399 E-Mail: [email protected] Ervin A. Gonzalez COLSON HICKS EIDSON 255 Alhambra Circle, Penthouse Coral Gables, FL 33134 Office: (305) 476-7400 Telefax: (305) 476-7444 E-Mail: [email protected]
Scott Summy BARON & BUDD, P.C. 3102 Oak Lawn Avenue, Suite 1100 Dallas, TX 75219 Office: (214) 521-3605 Telefax: (214) 599-1172 E-Mail: [email protected]
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CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS, AND TYPE STYLE
REQUIREMENTS
This brief complies with the type-volume limitation of Federal Rule of
Appellate Procedure 28.1(e)(2)(A), as modified by the Court’s Order of August 13,
2013 granting Appellees leave to file their brief of up to 21,000 words, because it
contains 18,899 words, as determined by the word-count function of Microsoft
Word 2010, excluding the parts of the brief exempted by Federal Rule of Appellate
Procedure 32(a)(7)(B)(iii) and Fifth Circuit Rule 32.2.
This brief complies with the typeface requirements of Federal Rule of
Appellate Procedure 32(a)(5) and the type style requirements of Federal Rule of
Appellate Procedure 32(a)(6) because it has been prepared in a proportionally
spaced typeface using Microsoft Word 2010 in 14-point Times New Roman font.
/s/ Stephen J. Herman and James Parkerson Roy Co-Lead Class Counsel
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CERTIFICATE OF ELECTRONIC COMPLIANCE
We hereby certify that that, on September 3, 2013, Appellee’s Brief was
transmitted to the Clerk of the United States Court of Appeals for the Fifth Circuit
through the Court’s CM/ECF document filing system, https://ecf.ca5.uscourts.gov.
We further certify that required privacy redactions have been made pursuant to this
Court’s Rule 25.2.13.
/s/ Stephen J. Herman and James Parkerson Roy Co-Lead Class Counsel
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CERTIFICATE OF SERVICE
We hereby certify that on September 3, 2013, an electronic copy of the
foregoing Appellee’s Brief was filed with the Clerk of Court for the United States
Court of Appeals for the Fifth Circuit using the appellate CM/ECF system.
We further certify that service will be accomplished by the appellate
CM/ECF system and via e-mail to the following:
Theodore B. Olson Miguel A. Estrada Thomas G. Hungar Scott P. Martin GIBSON, DUNN & CRUTCHER 1050 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 955-8500
George H. Brown GIBSON, DUNN & CRUTCHER 1881 Page Mill Road Palo Alto, CA 94304 (650) 849-5339
Richard C. Godfrey, P.C. J. Andrew Langan, P.C. Wendy L. Bloom Andrew B. Bloomer, P.C. R. Chris Heck KIRKLAND & ELLIS LLP 300 North LaSalle Street Chicago, IL 60654 (312) 862-2000
Jeffrey Bossert Clark Steven A. Myers KIRKLAND & ELLIS LLP 655 Fifteenth Street, N.W. Washington, D.C. 20005 (202) 879-5000
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S. Gene Fendler Don K. Haycraft R. Keith Jarrett LISKOW & LEWIS 701 Poydras Street, Suite 5000 New Orleans, LA 70139 (504) 581-7979
Robert C. “Mike” Brock COVINGTON & BURLING LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004 (202) 662-5985
Daniel A. Cantor Andrew T. Karron ARNOLD & PORTER LLP 555 Twelfth Street, NW Washington, DC 20004 (202) 942-5000
Jeffrey Lennard Keith Moskowitz DENTONS 233 South Wacker Drive Suite 7800 Chicago, IL 60606 (312) 876-8000
James J. Neath Mark Holstein BP AMERICA INC. 501 Westlake Park Boulevard Houston, TX 77079 (281) 366-2000
Attorneys for BP Exploration & Production Inc., BP America Production Company, and BP p.l.c.
Joseph Darrell Palmer LAW OFFICES OF DARRELL PALMER 603 N. Highway 101, Suite A Solana Beach, CA 92075 Telephone: 858-792-5600 Fax: 866-583-8115 Attorneys for Appellants James H. Kirby III, Mike Sturdivan and Patricia Sturdivan, Susan Forsyth, James H. Kirby IV
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Brent W. Coon BRENT COON AND ASSOCIATES 215 Orleans Beaumont, TX 77701 Tel.: 409-835-2666 Fax: 409-835-1912 Attorneys for Appellants identified on a list attached to the Notice of Appeal filed with the District Court [Rec. Doc. 8349-1] John J. Pentz 19 Widow Rites Lane Sudbury, MA 01776 Tel.: 978-261-5725 Fax: 978-405-5161 Attorneys for Appellants Cobb Real Estate, Inc., G & A Cobb Family Ltd. Partnership, L & M Investments, Ltd., MAD, Ltd, Mex-Co., Ltd., Robert C. Mistrot and Missroe, LLC N. Albert Bacharach, Jr. N. ALBERT BACHARACH, JR, PA 115 Northeast 6th Avenue Gainsville, FL 32601 Tel: 352-378-9859 Attorneys for Appellants Allpar Custom Homes, Sea Tex Marine Service, Inc., Ancelet’s Marina L.L.C., and J. G. Cobb Construction, Ltd. George Frazier 6122 Clara Street New Orleans, LA 70118 Telephone: 504-214-0836 Fax: 504-342-3626 Attorney for Appellants Gulf Organized Fisheries in Solidarity & Hope, Inc., Donald Dardar, and Thien Nguyen
/s/ Stephen J. Herman and James Parkerson Roy Co-Lead Class Counsel
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