*** Please excuse all typos, as I am posting this from a mobile device. The source for this post is http://www.wwltv.com/news/Appeals-Court-denies-BPs-effort-to-keep-claims-payments-stopped-260815371.html ***
By way of background, in the wake of the catastrophic Deepwater Horizon oil spill, BP sought to buy its way out of thousands upon thousands of lawsuits brought under the federal Oil Pollution Act. BP knew that defense of many of those cases would be nigh on impossible, and would take literally decades and untold billions of dollars in legal fees. The beleaguered business owners of the Gulf Coast states, who'd seen their businesses throttled by BP's massive pollution, knew that protracted litigation would not serve their interests, either. After all, when your seafood restaurant in Jackson faces both a decline in sales due to a concern over safety and an increase in price for inferior replacement items, the prospect of money 5 years down the line is cold comfort.
Enter the class action settlement of all Business Economic Loss (BEL) claims.
Through thousands of hours of negotiations, and a false start with the Gulf Coast Claims Center, the class plaintiffs and BP entered into a binding contract regarding settlement, and sought approval from Judge Carl Barbier of the Eastern District of Louisiana, the judge to whom all oil spill cases had been assigned.
All was well for a short time. Claims were being paid, and BP appeared to be doing what it could to right their wrong. Then BP changed their tune.
Citing instances in which businesses allegedly not harmed by the spill were receiving settlement checks, BP began asking the court to let them out of the settlement agreement. At first, everyone sort if rolled their eyes. BP had not only agreed to the settlement program and the formula by which eligibility for settlement payments would be determined; they'd helped create the formula and specifically asked Judge Barbier to approve it.
But then a three judge panel from the 5th Circuit said that maybe the accounting rules needed to be clarified. (Cash-basis vs. accrual, etc.) And a stay was ordered to sort that out, meaning that there would be no further payments under the settlement until further order of the court.
Well, last week, BP completely struck out at the 5th Circuit. (The 5th Circuit is the intermediate appellate court that hears appeals from all federal courts in TX, LA, and MS, including Judge Barbier's court.). Essentially, the 5th Circuit held that BP was going to have to honor its word and make the payments under the settlement, just like they'd said they would. They also held that the mandate would issue on May 27th.
The stay, however, remained untouched until yesterday, when the 5th Circuit ruled that the stay would be over come June 3rd.
Here's where the nightmare begins for our Supreme Court, and frankly, our concept for the rule if law.
The United States Supreme Court is often asked to weigh in on injunctive matters. (Think mass murderer's last second appeal to the Supreme Court before his execution.) In order to effectively handle such matters, the Supreme Court has divvied up the Circuit Courts amongst themselves. Justice Antonin Scalia presides over these sorts of thing for the 5th Circuit, meaning that when BP asks the United States Supreme Court to extend the stay and continue to withhold settlement payments to Gulf Coast business owners, Scalia will be in charge.
Now, those of you who pay close attention to this sort of thing know already that that's bad news. Scalia is nothing if not a friend of business. (And by business, I mean Fortune 500 megacorporations, not you, local construction company, seafood distributor, or clothing store.) But it's worse than that. You see, Justice Scalia's son, Eugene, is a partner at the law firm Gibson Dunn. And Gibson Dunn is representing BP.
So when BP asks the Supreme Court to continue the stay and to deprive thousands of business owners of relief, they will be asking Justice Scalia through his own son.
If the American public has any faith left in its highest court, it will likely be destroyed by Scalia unless he recuses himself from this case. I'm not holding my breath.