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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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