Deepwater Horizon BP Oil Spill: Class Action Settlement Provides Health Care Funding

When the Deepwater Horizon offshore oil drilling rig exploded five years ago today, it was impossible to imagine that anything positive could result from that tragic event. Innocent people died, the environment was decimated by more than 134 million gallons of oil spilling over four months, multiple thousands of businesses were ruined or put on the brink of ruin, and nearly 100,000 people — mostly residents of the Gulf — were exposed to the toxic fumes of BP’s oil during the cleanup of the oil from wildlife, beaches and wetlands.

Gulf Region Health Outreach Program (GRHOP)

One positive outcome of this disaster, however, is the Gulf Region Health Outreach Program (GRHOP), a component of the BP Medical Benefits Class Action Settlement designed to improve the many facets of health care that are lacking in the Gulf. The GRHOP, funded with $105 million by BP as part of the settlement, brought together four Gulf states and four health-related programs that share a common thread: the growth and sustainability of quality health care facilities and services in the Gulf region most impacted by the oil spill.

The GRHOP disburses funds over five years to the following institutions and for the following projects:

1. Louisiana Public Health Institute for the Primary Care Capacity Project to expand and improve access to quality health care;
2. A quad-state consortium of Gulf state universities for the Mental and Behavioral Health Capacity Project designed to address behavioral and mental health needs of coastal citizens and provide mental health services;
3. The University of South Alabama for the Community Health Worker Training Project for the training of community health workers who help Gulf residents understand and maneuver within the health care system; and
4. Tulane University School of Public Health for the Environmental Health Capacity and Literacy Project, which focuses on expanding and improving environmental health understanding and expertise.

In addition to the GRHOP, the medical settlement includes:

• Compensation for acute and chronic injuries from exposure to the oil
• The right of class members to a health consultation visit every three years for a maximum of 21 years
• Streamlined litigation procedures in the event a class member suffers a later-manifested physical condition that he or she alleges is from exposure to the oil.

Class members include all individuals who worked as BP oil spill cleanup workers, as well as residents of certain coastal and wetlands areas of Louisiana, Mississippi, Alabama and the Florida Panhandle. The GRHOP’s target beneficiaries are residents, especially the uninsured and medically underserved, of the17 coastal counties and parishes in the above-listed states. The majority of class members directly benefit from the GRHOP.

GRHOP’s Benefits to Class Members and the Gulf Coast

The GRHOP’s benefits to the class, and to coastal communities across the Gulf generally, are too numerous to mention. This area of the country had seen countless natural disasters and the BP oil spill, coming on the heels of these disasters, simply tipped the balance for many. The negotiators of the medical settlement, of which I was one, recognized this vulnerability and the need for improvements in, and in some areas availability of, primary care, as well as mental and behavioral health services. These services are now available where none before existed.

GRHOP funding, for example, has resulted in new or enhanced facilities in 17 community health centers, with a total of 60 individual clinical sites, across the impacted Gulf region. In Louisiana alone, there are now three fully-funded health care facilities that previously had buildings but no operational budgets to provide health services in the poorest of parishes. A fourth facility had an operating budget, but no clinical building in which to provide services, until the GRHOP funding provided that structure. The GRHOP funds are also credited with more than 60,000 individuals receiving mental and behavioral services, including behavioral health screenings and assessments, consultations, psychiatric and psychological treatment, telepsychiatry, supportive services in schools and communities, and education and training in Louisiana parishes impacted by the oil spill. None of this existed before the medical settlement was negotiated.

GRHOP Should Not Be Viewed as Cy Pres

We successfully argued before the District Court that the funds for GRHOP were not cy pres. The BP medical settlement had few objectors, and even among those objectors only one argued that the GRHOP was illegal cy pres. Cy pres is an equitable doctrine that permits the distribution of settlement funds to non-class members when those funds go unclaimed or are left over. [1] The GRHOP provided $105 million to fund Gulf health-related programs, but the district court held that it was not cy pres. Instead, it found that the GRHOP provides a direct benefit to all class members, is not a distribution of unclaimed funds, and does not detract from class members’ fair compensation under the settlement.[2]
GRHOP complements the other class benefits by enhancing class members’ access to available and quality health care, which enables them more easily to access other aspects of the medical settlement, such as the 21-year periodic medical consultation program and the discovery of conditions that may be subject to lawsuit against BP at a future time for later-manifested diseases. According to the district court, elimination of the GRHOP would not benefit the class, but instead result “in the loss of additional funding that will strengthen the health care infrastructure across the Gulf Coast, directly benefitting both Class Members and their communities.” [3] That decision is correct and should be followed by other courts when funds, such as the GRHOP, are included in class settlements.

GRHOP Settlement Type Should Be Allowed

But what if the GRHOP were cy pres? Shouldn’t a court still approve such a program in lieu of a few extra dollars to class members when such benefits aid the entire class in ways additional payments cannot?

Consider the BP medical settlement without GRHOP: class members would receive compensation if they are able to prove their acute or chronic injury, but they might not have a health care facility within 25 miles of their home to receive their periodic medical consultation, or there might not be a physician in their vicinity who understands the health consequences of chemical exposure, such as to oil. These and many other benefits have become a sustainable reality due to the GRHOP.

Some courts consider cy pres awards inferior distributions because they provide class members with an indirect benefit, even in circumstances when they promote the lawsuit’s underlying objectives.[4] But when they directly and positively impact the very harm caused by the defendant, and otherwise do not cut into class members’ compensation, they should be allowed and even encouraged.
True, not every cy pres award benefits the class. But where they do provide benefits like the GRHOP, courts should not discourage parties from negotiating cy pres awards in appropriate circumstances.

Classwide Program Benefits Potential Standard for Settlements

I encourage counsel in class settlements, especially when class members disproportionately comprise vulnerable segments of the population, to consider negotiating a portion of the settlement funds for a program designed to benefit class members on classwide basis that relates to the underlying injuries plaintiffs suffered from the defendants’ wrongdoing.

Such an award should not substitute for adequate compensation for economic and noneconomic losses of class members, but rather it should enhance, or complement, that compensation. In another oil spill, for example, if a certain fishery will no longer be available for fishermen to fish, such a settlement program could fund a vocational program for those no longer able to engage in their lifelong profession.

In a non-oil spill context, for example, a class action involving data breach, a settlement program could fund informational sessions and consultation with experts for securing and protecting private information that has been compromised. While not necessarily appropriate in all contexts, it is worth considering in any class action settlement whether a program designed to address the root effect of the defendant’s wrongdoing is not only appropriate but actually a direct, and oftentimes critically important, benefit to class members.

Such programs can be every bit as valuable as actual financial compensation. It is my belief that the GRHOP meets that test.

Sources:

1. Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 473-74 (5th Cir. 2011); In re Baby Prods. Antitrust Litig., 708 F.3d 163, 169 (3d Cir. 2013) (contrasting cy pres awards with “direct distributions to the class”).
2. In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Plaisance, et al. v. BP Exploration & Production Inc., et al., MDL 2179, 295 F.R.D. 112, 138-39 (E.D. La. 2013).
3. Id.
4. Klier, 658 F.3d at 475; In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679, 682 (8th Cir. 2002) (explaining that cy pres funds should adhere as nearly as possible to the lawsuit’s overall aims).