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BP’s New Defense??!!

July 1, 2010

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.

20 Comments leave one →
  1. July 2, 2010 12:02 am

    I am a lawyer and I regret that I did not focus on areas of the law that would enable me to play a role in sorting out this fiasco. Or at least understand our prospects a little better.

    Meanwhile, your humorous treatment of the problem is effective. I find myself thinking (partly tongue-in-cheek, but also with some self-criticism) that BP might consider suing me for using too much oil. I encouraged them.

  2. July 2, 2010 12:03 am

    I’m so tired of dumb lawsuits. I still remember the person who sued McDonalds because she was stupid enough to put a cup of hot coffee on the seat between her legs and got burned. She said they didn’t warn her that it was hot and she could get burned. Back then I don’t think anyone was selling Iced Coffees so all coffee was hot. Why wouldn’t you expect to be burned if it spilled.

    I can’t wait to see how this BP thing all plays out. You would think that if you were drilling off shore that you would have a contingency plan to cap it that would actually have to work. Isn’t that what contingency plans are for?

  3. July 2, 2010 3:02 am

    I’m preparing a law suit against WordPress for loss of income. I wasn’t properly warned that my time spent blogging or commenting on other people’s blogs is time not spent on looking for a job. In fact, my law suit may include all blogmasters whose blogs I have visited in the past year.

  4. July 2, 2010 3:27 am

    I’m looking for a way to early retirement. I’m sure I never saw a disclaimer on the WordPress site about loss of income for lack of work or loss of sleep for a new obsession resulting in less productivity at work. Maybe you could start a class action suit. They seem to be popular these days.

    • July 2, 2010 8:01 am

      Great ideas. Plus Peter I’m sure that your other BP experience will generate some good lawsuit ideas!

  5. July 2, 2010 7:08 am

    This is terrible. That George Black is Canadian, I mean. We want to be able to say “only in America” when we hear stories like that, and now Canadians are doing it.

    I’ve learned to begin reading your posts with growing anticipation of a hilarious pictures hidden toward the end. Running butts, for example. This peeing bee is fantastic. Where did you get that one?

    • July 2, 2010 7:39 am

      It’s from a joke that has been going around:

      A man was driving down the road and ran out of gas. Just at that moment, a bee flew in his window. The bee said, “What seems to be the problem?” “I’m out of gas,” the man replied.

      The bee told the man to wait right there and flew away. Minutes later, the man watched as an entire swarm of bees flew to his car and into his gas tank. After a few minutes, the bees flew out. “Try it now,” said one bee.

      The man turned the ignition key and the car started right up. “Wow!” the man exclaimed, “what did you put in my gas tank”?

  6. Darius permalink
    July 2, 2010 2:06 pm

    I enjoy reading your blog.

    I disagree with your characterization of Pres. Obama’s action. I don’t think he showed leadership. I think he strongarmed BP into putting that $20 B into an escrow fund. I don’t think it was his place to do that. I don’t think he’s shown any leadership.

    Usually I like corporations and I stick up for them when people talk about them “ripping us off”. I think most corporations do much more good than harm. I think BP should be raked over the coals, twice. This isn’t their first “accident”. Four years ago about seven people died in a refinery explosion in a town near Houston. I’m pretty sure there was another accident at a BP plant fairly recently.

    The victims can’t be compensated. A fifth-generation Louisiana fisherman said he can’t teach his son to fish like his father taught him, and his father taught him, etc.


    • July 2, 2010 6:43 pm

      Hi Darius–good to hear from you.

      I haven’t been reading the US news but overseas the perception is that Obama has shown leadership and stood up to BP on behalf of the American people. What sorts of things do you think he should be doing in order to show leadership?

      I doubt if BP would behave any differently than AH Robbins or Union Carbide given half a chance. And you can look at the banks and investment companies for additional evidence of where corporation’s interests lie. So although I agree that corporations do a lot of good, they are essentially motivated by profits and shareholder return and those things aren’t necessarily consistent with being good citizens.

      • Darius permalink
        July 3, 2010 11:17 am

        I don’t know what I would do to show leadership but from what I know here’s what Pres. Obama has done: He has chatted with the BP CEO, he has gotten BP to put away $20B, and he ordered a halt to off-shore drilling.

        I don’t think the chats are anything to write home about, I think he circumvented due process in getting BP to escrow the money, and I think he went way too far (as in overstepping his bounds) in ordering a halt to off-shore drilling. As a private citizen I actually agree with the escrow account and the halt to off-shore drilling but it’s not the president’s place to do either of them.

        I don’t like the idea of the pres. ignoring due process. As a private citizen I cheer both actions but I think the courts should have done both things.

        From what I’ve heard many of these “problems” were preventable if the government had done its job and inspected rigs and cracked down on violations. I think the parallels between this disaster and the WV coal mine disaster are huge and the idea that both were preventable make me sick. The WV coal mine company had been cited MANY times for violations and were made to only pay relatively small fines. Now that coal miners have lost their lives we pay attention to it. Where was the govt. BEFORE those poor men died? I think the federal government is into a lot of things they should not be into but they don’t do the things the Constitution calls on them to do (like provide for the common defense).

        I think corporations benefit society by doing what you said they do and that is generating profit and giving billions of people jobs and generating shareholder return thus generating returns on investment. I don’t think they’re perfect and just doing those things well don’t make them good citizens.


        • July 9, 2010 6:57 am

          Thanks for that response Darius, I totally agree. It is not the place of the President to decide on his own who pays out and who recieves money. It sets a very dangerous precedent, especially in an administration that has already advocated an extreme redistribution of wealth. Would everyone be applauding Obama if he strongarmed Sears to pay $20 to whomever the President suddenly feels Sears has disinfranchised? I hope not, because that is the model the President in the past has backed.

  7. July 3, 2010 1:11 am

    I can see John Grisham writing his little wasp ass off right about now, with the BP thing. He’s been waiting for an apocalyptic lawsuit to write about since he wrote The Rainmaker.

    If I were a Louisiana attorney I’d be signing as many of the fisherman, restaurant owners and small business that I could and go for a mass tort/break the BP bank bombshell.

  8. July 6, 2010 12:33 am

    BP should sue the Darwin Family. If Charles Darwin hadn’t developed his theory of evolution in the 1800’s, all those dinosaurs wouldn’t have died millions of years ago so we wouldn’t have oil for them to spill.

    • July 6, 2010 7:20 am

      Great idea! But lawyers for the Darwin family have issued a press release saying that it’s not their fault. They, in turn are suing the cosmos for sending the asteroid that wiped out the dinosaurs. It is reported that BP is filing an amicus brief.

  9. July 6, 2010 5:59 am

    Ah, those fine outmoded concepts: “responsibility,” “apology” (as opposed to the spurious construction “I’m sorry that you feel so bad about this”), “duty.” That last notion has been assigned to some cartoonish misimpression of Victorian values.

    • July 6, 2010 7:23 am

      Sad but true. All of the things you mention are part of an unfortunate shift from a community centered to a me centered set of social norms.

  10. July 14, 2010 3:36 am

    Yup! Poor me syndrome masking as stupidity, arrogance and entitlement.

  11. July 22, 2010 7:49 pm

    Question for lawyers: Could a court action to accomplish the setting aside of the reasonable amount of $20 billion to compensate Gulf residents have taken such a long time that such imposition to injured Gulf residents could justify the president’s action, which presumes that when court action is taken, $20 billion will be the minimum BP would eventually be adjudged to pay? I find it disconcerting when the president sets aside due process, unless the situation is so dire that a reasonable intervention is necessary and prudent. I am not a lawyer and I don’t know the answer. I am not asking because I want to make a point but rather to get a better grip on this for myself. Thank you to anyone shedding some light on this for me.

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