Louisiana to receive several billion dollars as part of massive BP oil spill settlement with Gulf states _lowres

In this Monday, June 7, 2010 file photo, patches of oil from the Deepwater Horizon spill are seen from an underwater vantage, in the Gulf of Mexico, south of Venice, La. (AP Photo/Rich Matthews, File)

They were seeking $274 million. They settled for $500,000.

Two Louisiana university systems have quietly settled lawsuits filed against BP that sought to recover hundreds of millions of dollars for what the schools said was lost revenue tied to the 2010 Deepwater Horizon disaster.

Of their final $500,000 haul, 25 percent will go toward legal fees.

Attorneys for the University of Louisiana and Southern University systems disclosed last month that their claims for damages were unresolved despite BP’s record $18.7 billion settlement with the federal government and the five Gulf Coast states that were affected by the incident, which killed 11 men and spilled millions of barrels of oil into the Gulf.

On Friday, Kurt Offner, a Metairie lawyer handling the two systems’ claims, described the $500,000 figure as “a compromise” that was reached after discussions with state officials and amid concern that prolonging the litigation could derail Louisiana’s $6.8 billion share of the overall settlement — the largest amount for any of the states involved. Most of that money will go to coastal restoration and repairing the spill’s damage to wetlands and wildlife habitats.

“In lieu of the quarter-of-a-billion-dollar claim, the systems will receive minimal compensation from other settlement sources,” Offner said in a prepared statement. “The withdrawal and settlement is contingent on the approval of BP, and the payment of expenses incurred by the systems.”

The $500,000 settlement came at the recommendation of the court-appointed neutrals who handled the larger two-month settlement negotiations, he said. That roster included Lafayette lawyer Patrick Juneau, the administrator of a 2012 settlement for claims by businesses and individuals; U.S. Magistrate Judge Sally Shushan, who oversees some aspects of the federal oil spill litigation; and former FBI Director Louis Freeh, who was previously tapped to investigate allegations of wrongdoing in the claims process.

A BP spokesman in Houston declined comment Friday.

Louisiana Attorney General Buddy Caldwell’s office also declined comment.

The boards of both university systems last month unanimously passed separate resolutions accepting their diminished settlements.

The votes brought to a close a two-year legal battle that some of those involved had hoped would deliver a financial windfall for cash-strapped universities that have suffered years of sharp declines in state funding.

In a statement last month, Baton Rouge lawyer Winston DeCuir Sr. said the schools’ unresolved claims were “the subject of ongoing communications between the university systems and the court, the Louisiana attorney general and BP.”

Jimmy Faircloth, Gov. Bobby Jindal’s former executive counsel who was hired to represent the state in negotiations with BP, said the state “did not have any part in negotiating” the settlement of the two systems’ claims.

As the state calculated its total damages from the spill, it is unclear if or how it valued losses incurred by universities, which school officials said were the result largely of lower enrollment after the spill.

Faircloth declined to speculate on whether the state was made whole for the schools’ losses through its own piece of the settlement with BP, which included $1 billion to account for economic losses.

“There were a lot of claims,” he said. “The $1 billion figure was a compromise to settle the case. There was a lot that was factored into the state’s calculation of what the state’s economic damages were. There’s a lot of modeling that went into it to try to determine if we had to try this case.”

But, he said, the state backed the schools’ push to recover any perceived losses.

“We were cheering for them to do as well as they could,” he said. “There would be absolutely no reason for anyone in state government to not hope that the universities were assisted.”

In 2013, the university systems filed suit against BP to supplement the far larger claim that the state had filed. In doing so, the schools specified their claimed losses, which they said were exacerbated as local jobs disappeared after the spill and fewer families could afford to pay for a college education.

In a report accompanying the schools’ claims, their attorneys argued that “any detrimental impact on a regional economy will have both a direct impact and a diminishing indirect impact on every component of the community,” including “an inevitable loss of jobs throughout that community or region.”

With more than 15,000 students across five campuses, the Southern system said in its claim that its campuses were all in hard-hit areas. Using past enrollment figures, it estimated that 10,970 students did not enroll at the Southern University schools in the years after the spill.

The University of Louisiana System, with more than 100,000 students on eight campuses, said five of its universities were located in severely affected areas: the University of New Orleans, Nicholls State University in Thibodaux, McNeese State University in Lake Charles, the University of Louisiana at Lafayette and Southeastern Louisiana University in Hammond.

Although the systems’ claims were lumped in among more than 500 others that were filed against BP by local governments across the Gulf Coast, lawyers familiar with the process said the systems’ claims were different in nature from those submitted by parishes, cities, school boards and other agencies that claimed more direct losses.

Citing lost revenue, property damage, and civil and punitive damages, the University of Louisiana and Southern University systems claimed total damages from the spill of $274 million.

In the end, the Southern system received $100,000 while the University of Louisiana system received $400,000. Of that combined figure, $125,000 will go to attorneys who handled the claims on contingency, in exchange for a 25 percent cut of the settlement, school officials said.

The resolution passed by Southern’s board states that the school is accepting “a full and final settlement of all claims against BP and others resulting from the Deepwater Horizon oil spill.”

Follow Richard Thompson on Twitter, @rthompsonMSY.