In re Deepwater Horizon

Louisiana residents (residents) (plaintiffs) sued British Petroleum Exploration and Production (BP) and others (defendants) for economic damages they sustained after an explosion on the Deepwater Horizon Drilling vessel caused millions of barrels of oil to spill into the Gulf of Mexico. After the cases were transferred to federal court, a Plaintiffs’ Steering Committee (PSC) was established. The PSC and BP engaged in negotiations that eventually resulted in a proposed class-wide settlement. The court appointed a claims administrator and held a preliminary hearing, after which the PSC and BP moved to certify a settlement class and for final approval of the settlement. The court ordered approval of the settlement and certified the settlement class. Later, BP objected to the claims administrator’s interpretation of the settlement, in which the administrator stated that claims for economic loss would be compensated regardless of whether the losses were caused by the oil spill. BP moved to vacate the court’s order approving the settlement and certifying the class on the grounds that the settlement as interpreted by the claims administrator violated Article III standing and the Rules Enabling Act because residents not harmed by the oil spill had no standing to be included in the class, violated Rule 23(a)(2) because the inclusion of residents who suffered injury and those who did not in the same class defeated commonality, Rule 23(a)(4) because intraclass conflict existed, and Rule 23(b)(3) because the common questions of law or fact did not predominate over individual issues of damages.