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Leading the News
Barton blasts White House BP "shakedown," then retracts under GOP pressure.The CBS Evening News (6/17, lead story, 4:00, Couric) reported that there was "a very strange start to a pretty contentious hearing. ... The last thing BP's Hayward probably expected to get from Congress today was an apology, but that's exactly how the hearing started," and "it came from, of all people, the top Republican on the committee that oversees oil companies." Rep. Joe Barton: "I apologize. ... I do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong is subject to a shake-down." According to CBS, "The shake-down, Barton said, was President Obama asking BP to set up a $20 billion fund for claims. Barton, by the way, has received more than $300,000 from the oil and gas industry in donations since 2007." CBS went on to note that Barton "took so much flak from Democrats and fellow Republicans, including Gulf state governors, that he later came back and apologized for his apology." Bachmann, Price made comments similar to Barton's this week. The Hill (6/18, O'Brien, Geman) reports that Speaker Pelosi "said Barton's comments were part of a Republican pattern. 'I think it's important to note that it was not inconsistent with comments made by the chairman of the Republican Study Committee, part of the Republican leadership, Rep. Tom Price [Ga.],' Pelosi said at her weekly press conference. In a Wednesday statement, Price said, 'BP's reported willingness to go along with the White House's new fund suggests that the Obama administration is hard at work exerting its brand of Chicago-style shakedown politics."' The Hill (6/17, Geman) also noted that on Wednesday, Rep. Michele Bachmann "warned the Obama administration against using oil giant BP as a 'permanent ATM card' and more broadly alleged there are increasing federal efforts to 'take over private industry. ... 'We don't think it's a good idea for the federal government to see private industry as essentially a piggy bank for the federal government,' she said." Analysis: escrow demand showcases Obama's view of government power. David Sanger, writing for the New York Times (6/18), says President Obama's "successful move to force BP to establish a $20 billion compensation fund...may have been the most vivid example of what he recently called his determination to step in and do 'what individuals couldn't do and corporations wouldn't do.' With that display of raw arm-twisting, Mr. Obama reinvigorated a debate about the renewed reach of government power, or, alternatively, the power of government overreach." Sanger adds, "The question is whether the cumulative effects of these actions create an impression that, over the long run, may make it harder to persuade both American and foreign corporations to cooperate with Mr. Obama's program to reinvest and reinvigorate the American economy." Experts say fund could help BP in the courtroom. The Wall Street Journal (6/18, Searcey, King) reports that legal experts say BP's agreement to create a $20 billion damage claims fund could help the company avoid lengthy litigation and perhaps even earn goodwill from federal prosecutors. The experts also point out that this sort of fund is unprecedented because it will be established by agreement with the government before there is any actual litigation in court. WSJournal warns escrow account sets unfortunate precedent. The Wall Street Journal (6/18), in an editorial, seconds Rep. Joe Barton's description of BP's dealings with the White House as a "shakedown." The Journal says that although BP likely had no option but to agree to fund the $20 billion escrow account, it still failed to reassure investors that its liabilities will be limited to that amount since the Administration has not given such assurances. The Journal suggests that the escrow fund, along with BP's agreement to pay workers idled by the Administration's drilling moratorium, will now serve as an extra-legal precedent for similar government demands in the event of another major industrial disaster. Some Gulf residents say $20B pledge is already too late. Mark Guarino, writing for the Christian Science Monitor (6/18), says, "The promise of $20 billion in recovery money for lives disrupted by the BP oil spill is meant to boost not just the financial health of affected businesses, but possibly the spirits of those who run them. But to some people making a living in coastal communities along the Gulf of Mexico, Wednesday's pledge from Washington did not arrive soon enough. ... There are doubts that whatever money businesses can claim will not arrive fast enough to save local businesses from closing their doors as early as next month." BP lawyer calls fund "sensible and thoughtful." The National Law Journal (6/18, Greene) reports, "BP's top outside lawyer called the company's new $20 billion fund for oil spill damage claims 'a sensible and thoughtful step.' Jamie Gorelick, the partner at Wilmer Cutler Pickering Hale and Dorr who is spearheading BP's defense, said in an interview that the company 'tried mightily to set up from scratch a claims processing system.' But she said that it had become 'quite evident it would be helpful to have some independence in the claims program to give people an assurance of fairness.'" BP, Nalco sued over dispersant. Bloomberg News (6/17, Fisk) reported, "BP Plc and a Nalco Holding Co. unit, the maker of a chemical dispersant used to deal with the Gulf of Mexico oil spill, were sued by Louisiana residents claiming the product is four times more toxic than the oil itself." The plaintiffs "claim BP used the dispersant to save money 'and lessen the public reaction to the oil spill' by forcing it to the bottom of the Gulf. The lawsuit, filed today in federal court in New Orleans, is a proposed class action that would include all workers and Gulf Coast residents claiming harm from the chemical," and seeks "at least $5 million in actual damages and unspecified punitive damages." DOJ seeks consolidation of BP suits in New Orleans. Bloomberg News (6/17, Feeley, Fisk) reported, "BP Plc, the target of more than 220 federal-court lawsuits over the Gulf of Mexico oil spill, should face a consolidation of the litigation in New Orleans, the US government said. Justice Department lawyers, in a June 10 filing made public today, urged a panel of judges to gather all the suits before a single judge in New Orleans for pre-trial proceedings." BP officials "have asked that the cases be sent to US District Judge Lynn Hughes in Houston." BP rig supervisor says he was fired for noting safety concerns. Lucia Graves, writing for the Huffington Post (6/18), says Ken Abbott, "a former project control supervisor on BP's Atlantis deepwater oil rig, was fired in 2009 after expressing concerns about the safety of the operation." Abbott is quoted as saying, "I got a lot of pressure from the lead engineers and from the managers saying, 'Don't do that; don't push so much; we don't want to mess with that.' I feel like the real reason I was fired was because I was trying to raise a safety issue, and you know BP has a long history of getting rid of people who try to raise safety issues. I was one of those victims." Graves writes that "for months," Abbott "worked to obtain BP engineer-approved drawings with little, if any, progress. 'The more I insisted that we had to develop or obtain them, the more unpopular I became,' he said," and "hostilities mounted until he was fired on February 5, 2009." Oil lobbyists hold fundraisers following rig explosion, spill. Meanwhile, the Washington Post (6/18, Leonnig) reports regarding lobbyists who represent BP, of the their "53 known fundraising parties for lawmakers and candidates since 2008, 11 took place this calendar year -- and four were held since the explosion and oil spill at a BP-run drilling rig in the Gulf of Mexico, according to an analysis by the Sunlight Foundation, a government watchdog group." However, the article points out that "lobbyists typically represent multiple clients, and it is unknown how many of the events were intended to advance BP's interests." Besides BP, "other oil and gas concerns have raised cash for lawmakers, too, sometimes with uncomfortable timing." Oil rig support workers feel economic effects of drilling moratorium. The New York Times (6/18, Zeller) reports that "in addition to the fishermen and hoteliers whose livelihoods have been devastated by BP's hemorrhaging undersea oil well, another group of Gulf Coast residents is beginning to suffer: the tens of thousands of workers...who run the equipment or serve in support roles on deepwater oil rigs in the Gulf of Mexico." President Obama and BP announced on Wednesday "that the company had voluntarily agreed to create a $100 million fund to compensate such rig workers," but critics say "that's a modest sum...given the potential economic losses. Each rig job supports roughly four additional jobs for cooks, supply-ship operators and others servicing the industry," altogether representing "total monthly wages of at least $165 million, according to estimates by a Louisiana oil industry group." However, "the full economic impact of the drilling moratorium is still unclear, since many of the layoffs are just beginning and no one knows how long the ban will last." Analysts contend BP bankruptcy is still unlikely. The AP (6/18, Condon, Liedtke) reports BP "holds enough oil in its reserves to single-handedly supply the United States for two years," has "little debt for a company of its size and makes more money than Apple and Google combined. So when the White House arm-twisted its executives into setting aside $20 billion for the Gulf oil spill, investors weren't worried it would bankrupt BP." According to AP, "Analyst estimates of BP's total cost range from $17 billion to $60 billion," but although "such a big bill...would drive many companies under," analysts "said BP probably won't have to go to that extreme unless it wants to wall off liabilities from the rest of its operations to attract potential suitors." Government, BP won't say how much shoreline has been fouled by oil. ABC World News (6/17, story 2, 3:10, Sawyer) reported, "For four days, we've been trying to get an answer to one question -- how much total shoreline has been impacted by the oil since the spill started? But the united command of the government and BP has steadfastly refused to answer our question. All they will say is that as of tonight, 52 miles of shoreline are currently impacted." Hayward faces House outrage over BP's role in Gulf spill. As expected, BP CEO Tony Hayward's appearance before a House panel generated a huge amount of media coverage (including the lead stories on all three network news broadcasts last night), all of it very nearly 100% negative in its description of Hayward's testimony as well as his manner in general. The CBS Evening News (6/17, lead story, 4:00, Couric) reported, "He might be the most reviled CEO in America." Hayward "faced a barrage of criticism and questions from members of congress who conveyed the nation's anger over that oil spill in the Gulf of Mexico. Hayward said he is deeply sorry, but he left committee members exasperated when he refused to answer questions about whether BP cut corners to save money, saying he was not involved in decision making about the deepwater horizon rig." Hayward: "My compensation last year I think was recorded at $6 million." CBS added. "Yet BP's six-million-dollar man made it appear as though practically everyone knows more about the accident than he does." According to the New York Times (6/18, Broder, Robbins), "Try as they did, members of Congress failed to elicit much explanation from Mr. Hayward about his own role in the disaster. ... About the only time Mr. Hayward seemed to go on the offensive during his testimony was when he criticized the technology of the failed blowout preventer, the device meant to shut off the well in the event of an explosion. The device is manufactured by an American company, Cameron. Mr. Hayward said that there was a need for 'a fundamental redesign of the blowout preventer, and that's something BP will take an active role on.'" Senators suggest BP intentionally underestimated spill's extent. McClatchy (6/18) reports BP "recovered 18,600 barrels of oil from its gushing Deepwater Horizon well on Wednesday, the most so far," which "underscores how wrong early estimates of the spill's size were and serves as a reminder of the weeks-long reluctance of both BP and the Obama administration to recognize the full extent of the disaster. ... Video from the well site on Thursday showed no apparent decrease in the amount of oil spewing from the well despite the higher collection rate." Sens. Robert Menendez, Charles Schumer, Patty Murray, Frank Lautenberg, Kirsten Gillibrand, Bill Nelson, and Sheldon Whitehouse asked Attorney General Holder "to open a criminal investigation into whether BP intentionally underestimated the size of the spill to avoid hundreds of millions, if not billions, of dollars in fines."
Civil Justice SystemGround Zero settlement may hinge on compensation for workers who did not fall ill.The Wall Street Journal (6/18, A17, Barrett) reports that the proposed settlement to pay Ground Zero workers for their illnesses requires the approval of 95% of the plaintiffs, but thousands of people who did not fall ill may also receive compensation under the agreement. The proposal would divide workers into four categories, taking into account the degree that each person suffered. Some estimate that most people making claims did not suffer health problems, but they fear they may someday, or their minor illnesses may not be tied to Ground Zero. The workers have three months to decide whether they want to accept the proposal. Judge dismisses some 9/11 suits against charities, financial institutions.The New York Times (6/18, A22, Weiser) reports, "A federal judge in Manhattan who was criticized by families of victims of 9/11 for taking too long to decide motions in lawsuits they had filed has handed down a ruling dismissing claims made against many of the defendants." Judge George B. Daniels of Federal District Court "has overseen a group of lawsuits" seeking "to hold charities, financial institutions and individuals responsible for providing money and other support to Al Qaeda." Judge Daniels, "in his ruling made public on Thursday, cited jurisdictional grounds in dismissing dozens of defendants." California family still waiting for compensation after trucker's death.In a column in the Los Angeles Times (6/18), Hector Tobar writes that the family of Ricardo Cibrian Baltazar, who "burned to death in a horrific chain-reaction crash involving 34 vehicles in a tunnel on the southbound 5 Freeway south of Santa Clarita," are struggling to receive compensation for their loss. "The pretrial wrangling has become a legal pile-up," and "now a judge has imposed a stay that prohibits all the parties from moving the case forward." It's "the job of our civil courts to apportion responsibility and order monetary compensation for the victims' families. But the courts are being cruel to this grieving California family." Employment/Workplace SafetySCOTUS rules employers can look at workers' electronic messages.USA Today (6/18, Biskupic) reports, "The Supreme Court ruled Thursday that a California police department's review of provocative text messages a SWAT team officer sent his wife and, separately, his mistress on a department pager did not violate the officer's privacy rights." This "unanimous" ruling, adds USAT, "generally allows government employers to look at workers' electronic messages if employers have reasonable, work-related grounds," reversing "a broadly written ruling by a San Francisco-based US appeals court that said the city of Ontario breached Officer Jeff Quon's constitutional right to privacy when department officials read the messages, some of them sexually explicit, during an audit of the officer's texts and character-limits." The Washington Post (6/18, Barnes) notes that "the case is City of Ontario v. Quon," and the New York Times (6/18, Liptak) reports that "the decision represented only a preliminary effort to define public employees' Fourth Amendment rights in the digital era, and Justice Anthony M. Kennedy, writing for the court, took pains to say that it was narrow and closely tied to the facts." Kennedy "said the court was uncomfortable fashioning comprehensive legal rules, given the pace of technological and cultural change." The Chicago Tribune (6/18, Savage) also covered the story. Suit alleges age discrimination at Fried, Frank.The American Lawyer (6/18, Lowe) reports, "We now know of a fourth ex-staffer of Fried, Frank, Harris, Shriver & Jacobson suing the firm for discrimination. This case, an updated version of which was filed Wednesday in federal court in Manhattan, makes broader claims about how the firm decided on which secretaries to lay off in August 2008, court records show. Judith Cuttler, a former Fried Frank secretary in her early 60s, alleges that Fried Frank discriminated against older secretaries and those who had taken family or medical leave when the firm laid off at least eight secretaries in the summer of 2008, according to court records." Product SafetyFlorida couple seeks $4.3M in damages for Chinese drywall.The AP (6/17) reported that Armin and Lisa Seifart, "a Florida couple driven from their home by foul-smelling, corrosive Chinese drywall, should get at least $4.3 million in damages, their attorney said Thursday in the nation's first jury trial over the defective building materials. The jurors quit after deliberating about four hours and will resume Friday." The case, which targets Banner Supply Co, "could have legal implications for similar lawsuits filed by thousands of people, mostly in Florida, Virginia, Mississippi, Alabama and Louisiana - states where large quantities of defective wallboard was imported during the housing boom and after a string of 2005 hurricanes." Virginia judge schedules Chinese drywall trials against local firms.The Hampton Roads Virginian-Pilot (6/17, Brown) reported, "A circuit court judge overseeing scores of local lawsuits involving the use of Chinese-made drywall on Wednesday scheduled the first trial involving four homeowners to begin in January. More than 80 homeowners have sued numerous builders, contractors and a local drywall supplier that imported more than 150,000 sheets of the wallboard." Judge Mary Jane Hall also "set trials for February, March and April, each involving about five homeowners. While a federal court in New Orleans is handling hundreds of complaints against the manufacturers of the product, separate lawsuits filed by the homeowners against the local companies have been playing out in local courts." Target recalls children's belts.The Minneapolis-St. Paul Business Journal (6/18) reports, "Target Corp. recalled over 100,000 children's belts due to excessive lead levels in the buckles, the US Consumer Product Safety Commission reported Thursday. The recall applies to 105,150 units of Cherokee-brand boys' and Circo-brand girls' belts, which sold exclusively in Target stores and on its website from December 2008 to December 2009." Robinson, co-lead plaintiffs' attorney in Toyota suits, profiled.The Los Angeles Times (6/18, Pfeifer) reports, "In a legal career spanning nearly four decades, attorney Mark P. Robinson Jr. has won multimillion-dollar verdicts against carmakers Ford, General Motors, Nissan and Hyundai. Now, the Newport Beach lawyer has been tapped to play a big role in the massive legal battle involving Toyota Motor Corp., which faces potentially billions of dollars of liability from lawsuits involving the alleged sudden unintended acceleration of its vehicles. Robinson, co-lead plaintiffs' attorney in the wrongful death and personal injury cases pending against Toyota in federal court, is known for going to unusual lengths to build evidence that can swing a case." SecuritiesCongressional panel agrees to let investors sue ratings agencies.The Wall Street Journal (6/18, Neumann) reports that this week, a Congressional panel agreed to a new liability standard which would let investors sue credit ratings agencies which fail to properly investigate the securities they are rating. Also in the NewsOfficials begin testing soil, water near California hazardous waste landfill.The AP (6/18) reports officials investigating a string of birth defects in rural Kettleman City, CA, "started taking samples of the air, water and soil" Thursday, while "grieving parents" testified before state legislators about "infant deaths and birth defects in an impoverished farm town next to the biggest hazardous waste landfill in the West." Residents blame "toxic waste dump for the grouping of cleft palates and heart problems," but Waste Management officials "have said there is no evidence linking the...landfill to the deformities." The company received approval to expand the 1,600-acre facility despite opposition from the residents. The expansion is pending results of state and federal environmental investigations. | |||||
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