Tempers are growing short along the Gulf Coast, with Mississippi Attorney General Jim Hood firing the latest round, saying his state "will not take a dime less" than it is entitled to from the claims process established by BP to compensate victims of the massive oil gusher that is fouling the waters of the Gulf Coast.
He warned the company not to try an end-run around the states.
On Monday, Louisiana Attorney General Buddy Caldwell filed a Petition for Discovery and Investigation against British Petroleum in state court in Plaquemines Parish.
Hood said his experience with Hurricane Katrina demonstrated that an open claims process is essential to keeping Gulf Coast businesses and individuals from succumbing to bankruptcy and foreclosure. "Victims need money now to stay afloat," Hood said.
In initial meetings between Gulf Coast attorneys general and BP, Hood said he demanded -- and BP agreed -- that no claimants would be required to sign a waiver of their right to sue later and that BP waiver the statutory liability cap of $75 million. The company agreed to both and, so far, has paid $5.5 million in claims to Mississippi residents and businesses.
But Hood said that he is concerned the company's strategy is to go to federal court in an attempt to make an end run around the states.
"BP and Transocean have revealed their legal strategy by filing actions before federal judges in Houston, Texas, in an attempt to drag all claims by individuals, businesses, and the state and federal governments into a foreign jurisdiction," Hood said. "We want the claims made by the state of Mississippi to be decided by a Mississippi state court."
A hard lesson
Hood said Mississippi learned a hard but valuable lesson after Katrina.
"The insurance industry abused the federal court system to delay the state court suit which my office filed within two weeks of Katrina. It took Mississippi four years to bring the issue before our Mississippi Supreme Court, where it rightfully belonged. Just this past October, the Court ruled in our favor nine to zero," he said.
But Hood said it was a "hollow victory" because by the time of the state court decision most cases had already settled.
"I will fight to make sure the oil companies do not abuse the federal system to delay justice due the people of Mississippi," he said. "If the 11th Amendment to our United States Constitution has any meaning left, it is that state claims should be litigated in our state courts."
The 11th Amendment basically recognizes that states have a certain degree of sovereign immunity and are not totally subordinate to the federal government.
Louisiana petition
The Louisiana petition alleges that BP has failed to cooperate and share important information with the State, specifically information requested repeatedly by the Louisiana Workforce Commission and the Louisiana Department of Social Services regarding all claims data collected by ESIS, the third party administrator for claims, and for information about workers hired by BP. The purpose of the petition is to gather information as part of the State's investigation as to the causes of the spill and impacts to the state.
"Today's filing was a last resort in trying to get information from BP that the Department of Social Services and the Louisiana Workforce Commission have requested repeatedly from BP since May 3 regarding the BP claims process," Caldwell said.
Louisiana, Caldwell says, has made several requests for information and/or further explanation but has not received an adequate response. Despite promises that BP would cooperate and coordinate its response with the State, Caldwell says he has seen little evidence.
"Today's petition is a request for a court to order BP to produce information that the State needs to monitor BP's claims process to ensure that our citizens are being treated fairly and receiving proper assistance," Caldwell said. "As Attorney General, be assured that I will take any and all necessary legal actions to safeguard the interests of those citizens and other entities of Louisiana who elect to file or are considering filing claims through the process BP has established."
Over the weekend BP announced that it was capturing most of the oil leaking from the ocean floor, though Obama administration officials conceded the oil might continue to link well into the Autumn months. BP said the cap it attached to the top of the leaking well siphoned off 10,500 barrels of oil out of an estimated 12,000-19,000 barrels a day leaking from the wellhead.
The spill's costs continue to escalate and now have exceeded $1.25 billion, according to BP's estimates. BP has set aside $350 million to pay for construction of sand barriers along the Louisiana coastline, to protect environmentally sensitive marshlands.
Mississippi Warns BP Against Seeking Refuge in Federal Court...