I just read a scary article about the totally legal means that BP has to skate away from the Gulf problem with as little financial responsibility as possible. Sure, they’re probably on the hook for the $20 billion that President Obama got them to grudgingly agree to. But if he hadn’t shown leadership and put the hammer on them, I doubt if they’d volunteered. And beyond the twenty billion, they might be able to get away fairly lightly.
My first thought was yeah, they can probably afford fancy lawyers to figure stuff like that out.
But that’s not what the article said. You don’t have to be a lawyer. You just have to be able to read the history of how other companies have dealt with liability problems.
The article started with Exxon and the Exxon Valdez hiccup. The initial settlement was for $10 billion. But they got it reduced to a billion. And they get to pay it out over 20 years. That’s not a bad deal—after all they made $20 billion after tax last year. At that rate, they could set aside the whole amount today, buy an annuity and make money on the deal.
The article went on to talk about how BP could put all the liabilities into one company, declare bankruptcy, or spin off that company which would then be acquired by another company who would say “what oil spill?” These techniques were developed and perfected by A.H. Robbins after the Dalkon Shield problem and by Union Carbide after Bhopal. The end result is basically that a lot more money stays with the company rather than going to compensate the victims.
Anybody out there think BP will do it differently?
But then I saw another item which made me realize that BP doesn’t need to do a lot of corporo-legal legerdemain to get out from under this thing. All they need is what I call the “George Black Defense.”
In case you haven’t heard, George Black is a Canadian guy who was playing softball a month or so ago. He was playing third base and if you know anything about baseball you know that the third baseman often has to deal with screaming line drives.
On the day in question, a line drive came straight at George. He put up his glove but failed to stop the ball. He broke two fingers and then the ball impacted his face.
He was wearing glasses which of course were pretty well destroyed and he ended up with 20 stitches. I feel sorry for him. That’s one of the reasons I never played third base. The other, of course, being that I was always exiled to right field where, again if you know anything about baseball, I was least likely to do damage to myself or my team’s chance of winning.
Anyway, George recovered enough to look at the bright (green) side of the incident and he found a lawyer. If George had done the expected thing he would have sued the batter or the league sponsor or the baseball glove manufacturer. Or his parents. But all that’s been done before and anyway, none of that would have helped BP.
George decided that the most culpable party was the company that built the baseball field.
You heard right. His argument is that the reason he got smoked by the liner was because he “lost it in the sun.” On that basis, he believes that the company was negligent because (1) they didn’t build a screen to protect players from the sun and (2) failing that, they didn’t “warn of the dangers of the sun at the particular time of day.” Mr. Black himself has been quoted as saying “There have been no instructions in avoiding the sun.”
Mr. Black wants $1.5 million to make it all better.
I don’t know about you, but I’m kind of glad that they don’t build baseball fields with instruction manuals that say “The sun may be shining when you are playing. You might want to wear sunglasses.”
But the case is going to trial and BP should be closely monitoring its progress. After all, if you can sue the guys who build a ball field because they didn’t tell you that the sun might get in your eyes, you should be able to sue, well, a lot of people if your offshore oil well just blows up.
Obviously they can sue the people who built the rig. “You never told us it could blow up and spew oil.” They can sue the government. “You didn’t tell us that we’d have to clean up a spill. No fair.” Why not sue the people who live on the Gulf. “You never told us you would get all hissy if oil washed up on your beaches. If we’d only known . . .” In fact, they can even sue all of us. “Hey, we were just doing what you wanted us to do. You never told us you wanted us to do it safely.”
Be ready to settle out of court.