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5 J. Legal Tech. Risk Mgmt. 1 (2010)

handle is hein.journals/jrlgtrkm5 and id is 1 raw text is: Journal ofLegal Technology Risk Management * Fall 2010 * Issue 5.1 0 1 CLASS ACTIONS AND THE LIMITS OF RECOVERY: THE GLASS JAW OF JUSTICE Part 1 of 2 By David J. Cook' ABSTRACT RIPPED FROM THE HEADLINES On April 20, 2010, the Deepwater Horizon drilling rig exploded, killing eleven workers and injuring seventeen others. The Deepwater Horizon burned and sank, starting a massive offshore oil spill in the Gulf of Mexico, now considered to be the largest environmental disaster in United States history. Transocean, Ltd., the owner of the drilling rig, leased the rig to BP p.l.c., who has accepted full financial responsibility for the losses despite the statutory $75 million cap on liability.2 Given the magnitude of the losses sustained by businesses and individuals in the Gulf area, class action lawsuits seeking billions of dollars in compensation for economic damages, environmental cleanup costs and other losses are now proliferating. These actions are all newly filed and, in all probability, the plaintiffs are in the midst of effectuating routine service of process upon BP and many others. The federal government has taken an active role in compelling BP to respond to legitimate damage claims. On June 16, 2010, President Obama and BP reached an agreement in which BP placed $20 billion in an escrow fund managed by Kenneth Feinberg who previously served as the arbitrator in administering the September 1ith Victims Compensation Fund. While the BP Oil Spill Fund will offset the losses sustained by many claimants, other claimants will pursue compensation through class actions or individual lawsuits. The time frame for payment under the BP Oil Spill Fund is unknown at this time, but, if 1 David Cook, Esq. Cook Collection Attorneys PLC 165 Fell Street San Francisco, CA 94102 Tel: (877) 989-4730 Fax: (866) 989-0491 cook@squeezebloodfromturnip.com I express my deep appreciation to Nathaniel L. Dunn, Esq., Robert Perkiss, Esq., and Matthew C. Baron, Esq., (Member, N.Y. Bar) for their scholarship, insights and comments. 2 The American public and members of Congress welcomed BP voluntary waived of the $75,000,000 damage cap which exposed BP to nearly $20 billion or in civil liability. Mutual funds, individual investors, health, retirement and medical trusts, governmental entities and other public investors who hold large blocks of BP stock had a different reaction when BP's common stock plummeted in value. In 2020 or sooner, legal and business academics might criticize BP in making a $20 billion plus gift and mortgaging its dividend for many years.

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