This story first appeared in USA Today.
WASHINGTON (AP) — The Food and Drug Administration is ordering genetic test maker 23andMe to halt sales of its personalized DNA test kits, saying the company has failed to show that the technology is backed by science.
In a warning letter posted online, FDA regulators say the Silicon Valley company is violating federal law because its products claim to identify health risks for more than 250 diseases and health conditions.
Only medical tests that have been cleared by the FDA are permitted to make such claims.
The letter follows years of back-and-forth between the government and Google-backed 23andMe, the most visible company among a new field of startups selling personal genetic information. The proliferation of consumer-marketed genetic tests has troubled many public health officials and doctors who worry that the products are built on flimsy science.
For years, 23andMe resisted government regulation, arguing that it simply provides consumers with information, not a medical service. But last year the company appeared to change course, submitting several of the disease-specific tests included in its test kit.
A spokeswoman for the Mountain View, Calif.-based company said 23andMe recognizes "that we have not met the FDA's expectations," for addressing questions about the submission.
"Our relationship with the FDA is extremely important to us and we are committed to fully engaging with them to address their concerns," said Kendra Cassillo in a statement.
The FDA letter suggests that regulators have gone to great lengths to try and work with the company. Regulators even mention "more than 14 face-to-face and teleconference meetings, hundreds of email exchanges, and dozens of written communications."
"However, even after these many interactions with 23andMe, we still do not have any assurance that the firm has analytically or clinically validated," its technology, the letter states.
The FDA warning takes issue with a number of claims the company makes for its saliva-based test kit, particularly calling it a "first step in prevention" against diseases like diabetes, heart disease and breast cancer. Regulators worry that false results from the test could cause patients to receive inadequate or inappropriate medical care. For instance, 23andMe says its test can identify women who carry the BRCA gene mutation that significantly increases the risk of breast and ovarian cancer. But a false result could lead women to undergo unnecessary screening, chemotherapy and surgery. The test also claims to predict how patients will respond to popular drugs, including the ubiquitous blood thinner warfarin, which is used to prevent blood clots. The FDA warns that an inaccurate reading there could "have significant unreasonable risk of illness, injury, or death to the patient," if they don't receive the appropriate drug dose.
23andMe was co-founded by Anne Wojcicki, who married Google co-founder Sergey Brin in 2007. Google confirmed in September that the two are separated, though Google and Brin have invested millions in the privately held company over the years.
23andMe executives have previously said that they first contacted the FDA in 2007, before launching their product. The agency did not take an interest in the technology until 2010, when it issued letters to several testing companies, stating that their products are considered medical devices and must be approved as safe and effective.
The FDA already regulates a variety of genetic tests administered by health care providers, such as those given to pregnant women to detect cystic fibrosis in a developing fetus. The FDA's concern with 23andMe appears to center on its commercial approach, which sidesteps doctors and health professionals.
Consumers order the company's product online. When the kit arrives by mail consumers are instructed to spit into a small tube, providing a saliva sample which is sent back to the company for analysis. 23andMe says the customer's DNA is analyzed to determine their likelihood of developing various diseases and responding to various drugs. The test also claims to provide information about ancestral background, though this information is not regulated by the FDA.
Tuesday, November 26, 2013
Rieder: Impasse Must End At Divided Philly Paper
This story first appeared in USA Today.
The bitter battle between dueling owners is poisonous for the Philadelphia region.
Talk about awkward.
On Friday, a judge reinstated fired Philadelphia Inquirer Editor Bill Marimow. That means that Marimow is once again working for a publisher who not only bounced him but has repeatedly insulted him, and for a bitterly split, dysfunctional ownership group in which one faction desperately wants him gone.
What's more, the losing side in the rancorous legal battle over the paper's newsroom says it's going to appeal, meaning yet more uncertainty about what lies ahead.
Which raises a question: Why would anyone want this job? In Marimow's case, the situation is complicated by the fact his contract expires next April 30. Why go through five more months of turmoil, then split the scene anyway?
The embattled editor says he's constrained from saying much about the tense, unusual situation, particularly since courtroom combat seems far from over. But he took a stab.
"I love the Philadelphia area," he says. "It's my hometown. I know the city, and the Pennsylvania suburbs, and the South Jersey suburbs and the Jersey Shore." And, he feels, the depth of that knowledge, forged through many years of journalism in the city, provides critical advantages when it comes to steering the ship.
Marimow grew up in the Philadelphia suburbs. (Disclosure: Marimow is a friend and a fellow Philly guy.) He worked at the Inquirer for 21 years, winning two Pulitzer Prizes as an investigative reporter during the paper's glory days as one of the nation's finest under the great editor Gene Roberts. After stints at the Baltimore Sun and NPR — both ended badly — Marimow, known for his commitment to ambitious, hard-edged (some might say old-school) reporting, returned to the Inquirer in the top newsroom post in 2006.
But when new owners took over the paper four years later — the Inquirer has had five, count 'em, five, owners in seven years — Marimow was demoted. The new regime felt he just wasn't a digital enough dude to run a paper in the current media landscape. So in 2011, Marimow decamped from his beloved Philly to run, yep, a digital journalism program at Arizona State University.
But the turbulence at the Inquirer continued, and the following year the paper was sold yet again, along with the Philadelphia Daily News and the website philly.com. The new owners were six wealthy Philadelphians, two of whom make up the management committee that runs the company, Interstate General Media.They asked Marimow to return to the Inquirer to once again oversee the its newsroom. He jumped at the chance.
But one of those management committee members, George Norcross, soon grew disenchanted with his new editor. Norcross is a major South Jersey political player and a wealthy businessman used to getting his way. Working through the pliant Publisher Bob Hall, he pressured Marimow to make changes, including cutting back sharply on editorial pages and local columnists. Finally, Hall ordered Marimow to fire five top editors.
Marimow did make some of the changes that Norcross and Hall wanted. But the editor demurred at firing his lieutenants, traditionally a decision made by the editor, not the business side. Marimow no doubt was counting on support from the other managing partner, Lewis Katz, a parking lot magnate and former owner of the New Jersey Nets. Katz's companion is Nancy Phillips, an award-winning reporter who is now the Inquirer's city editor — and a Marimow protege.
But, to everyone's surprise, on Oct. 7, Hall fired Marimow. Katz and fellow owner H.F. "Gerry" Lenfest sued to have Hall ousted and Marimow reinstated. They batted .500, as Judge Patricia McInerney ruled that Hall could stay but Marimow had to come back.
The forces of Norcross quickly came out with guns blazing. In an aggressive statement in which they said they'd appeal, they warned the ruling would mean "paralysis" at the Inquirer, dismissed Marimow as a lame duck and threw in a reference to Phillips as Katz's "girlfriend." (I asked spokesman Daniel Fee Monday if the Norcross group had anything else to say, and he said no.)
It's clear that besides the Philly guy thing, part of Marimow's determination to stay on is to block his rivals from having their way with the paper. "What really matters," he says, "is that the Inquirer be in the hands of people of journalistic integrity. That's more important than whether I'm there."
But is it even possible to function in such a poisonous atmosphere, with an owner and a boss so inimical to your reign? "My intention is to do the best possible job we can do in print and on the Web, It's my fervent hope the owners can resolve their differences." Good luck with that. He adds, correctly, "The readers suffer when there's a fractious relationship among owners."
Another possibility, of course, is for one side to buy out the other. Easier said than done, given that Norcross and Katz are powerful, strong-willed people who have shown no inclination to back down.
That's why the Katz/Marimow camp is said to be considering the possibility of going to court to dissolve the ownership agreement on the grounds that there is an insurmountable impasse. (Ya think?) The idea would be to have the company put up for sale. If it ended up with the papers, the group is thinking about converting the company into a non-profit.
However it plays out, one thing is obvious: The status quo is untenable. And it's the people of the Philadelphia region who are paying the price.
The bitter battle between dueling owners is poisonous for the Philadelphia region.
Talk about awkward.
On Friday, a judge reinstated fired Philadelphia Inquirer Editor Bill Marimow. That means that Marimow is once again working for a publisher who not only bounced him but has repeatedly insulted him, and for a bitterly split, dysfunctional ownership group in which one faction desperately wants him gone.
What's more, the losing side in the rancorous legal battle over the paper's newsroom says it's going to appeal, meaning yet more uncertainty about what lies ahead.
Which raises a question: Why would anyone want this job? In Marimow's case, the situation is complicated by the fact his contract expires next April 30. Why go through five more months of turmoil, then split the scene anyway?
The embattled editor says he's constrained from saying much about the tense, unusual situation, particularly since courtroom combat seems far from over. But he took a stab.
"I love the Philadelphia area," he says. "It's my hometown. I know the city, and the Pennsylvania suburbs, and the South Jersey suburbs and the Jersey Shore." And, he feels, the depth of that knowledge, forged through many years of journalism in the city, provides critical advantages when it comes to steering the ship.
Marimow grew up in the Philadelphia suburbs. (Disclosure: Marimow is a friend and a fellow Philly guy.) He worked at the Inquirer for 21 years, winning two Pulitzer Prizes as an investigative reporter during the paper's glory days as one of the nation's finest under the great editor Gene Roberts. After stints at the Baltimore Sun and NPR — both ended badly — Marimow, known for his commitment to ambitious, hard-edged (some might say old-school) reporting, returned to the Inquirer in the top newsroom post in 2006.
But when new owners took over the paper four years later — the Inquirer has had five, count 'em, five, owners in seven years — Marimow was demoted. The new regime felt he just wasn't a digital enough dude to run a paper in the current media landscape. So in 2011, Marimow decamped from his beloved Philly to run, yep, a digital journalism program at Arizona State University.
But the turbulence at the Inquirer continued, and the following year the paper was sold yet again, along with the Philadelphia Daily News and the website philly.com. The new owners were six wealthy Philadelphians, two of whom make up the management committee that runs the company, Interstate General Media.They asked Marimow to return to the Inquirer to once again oversee the its newsroom. He jumped at the chance.
But one of those management committee members, George Norcross, soon grew disenchanted with his new editor. Norcross is a major South Jersey political player and a wealthy businessman used to getting his way. Working through the pliant Publisher Bob Hall, he pressured Marimow to make changes, including cutting back sharply on editorial pages and local columnists. Finally, Hall ordered Marimow to fire five top editors.
Marimow did make some of the changes that Norcross and Hall wanted. But the editor demurred at firing his lieutenants, traditionally a decision made by the editor, not the business side. Marimow no doubt was counting on support from the other managing partner, Lewis Katz, a parking lot magnate and former owner of the New Jersey Nets. Katz's companion is Nancy Phillips, an award-winning reporter who is now the Inquirer's city editor — and a Marimow protege.
But, to everyone's surprise, on Oct. 7, Hall fired Marimow. Katz and fellow owner H.F. "Gerry" Lenfest sued to have Hall ousted and Marimow reinstated. They batted .500, as Judge Patricia McInerney ruled that Hall could stay but Marimow had to come back.
The forces of Norcross quickly came out with guns blazing. In an aggressive statement in which they said they'd appeal, they warned the ruling would mean "paralysis" at the Inquirer, dismissed Marimow as a lame duck and threw in a reference to Phillips as Katz's "girlfriend." (I asked spokesman Daniel Fee Monday if the Norcross group had anything else to say, and he said no.)
It's clear that besides the Philly guy thing, part of Marimow's determination to stay on is to block his rivals from having their way with the paper. "What really matters," he says, "is that the Inquirer be in the hands of people of journalistic integrity. That's more important than whether I'm there."
But is it even possible to function in such a poisonous atmosphere, with an owner and a boss so inimical to your reign? "My intention is to do the best possible job we can do in print and on the Web, It's my fervent hope the owners can resolve their differences." Good luck with that. He adds, correctly, "The readers suffer when there's a fractious relationship among owners."
Another possibility, of course, is for one side to buy out the other. Easier said than done, given that Norcross and Katz are powerful, strong-willed people who have shown no inclination to back down.
That's why the Katz/Marimow camp is said to be considering the possibility of going to court to dissolve the ownership agreement on the grounds that there is an insurmountable impasse. (Ya think?) The idea would be to have the company put up for sale. If it ended up with the papers, the group is thinking about converting the company into a non-profit.
However it plays out, one thing is obvious: The status quo is untenable. And it's the people of the Philadelphia region who are paying the price.
Monday, November 11, 2013
SHAW'S BEYONICS CLAIMS EX-CEO BRIBED TO DIVERT BUSINESS
This story first appeared in Bloomberg News.
Beyonics Technology Ltd., owned by Kyle Shaw’s private equity firm Shaw Kwei & Partners, sued its former chief executive officer claiming he took bribes to send a customer’s business to Korean competitors.
Goh Chan Peng, the former CEO of Singapore-based Beyonics, accepted payments from Nedec Co. and Kodec Co. to steer Seagate Technology Plc (STX) orders for hard-disk-drive parts to them, according to a lawsuit filed in the Singapore High Court. Seagate was Beyonics’s biggest customer, accounting for as much as 64 percent of revenue from 2009 to 2012, Beyonics said.
“The diversion enabled the Nedec/Kodec Group to develop a commercial relationship with Seagate and grow as a competitor,” Beyonics said in the lawsuit filed in August. A closed hearing is scheduled for Nov. 20.
Beyonics sought the return of lost profits, Goh’s salary from January to March and unspecified damages. Shaw Kwei, based in Hong Kong, acquired Beyonics in February 2012 for S$127 million ($102 million). The hard-disk-drive partmaker swung to a S$17.5 million loss on sales of S$1.33 billion for the fiscal year 2011 from net income of S$6.9 million a year earlier.
Goh, who resigned from Beyonics in January, said he had agreed to provide consulting services to Nedec and Kodec and the payments he received weren’t bribes. He also said the Korean firms had been supplying parts to Seagate since 2011, prior to the alleged diversion of business.
Tudor Shanghai
Goh countersued claiming he’s owed S$17,000 in unpaid salary, which Beyonics said he wasn’t entitled to because he failed to disclose that he breached his agreement with the company.
“My client’s position is the allegations are false and will vigorously defend against them,” said Goh’s lawyer Ng Lip Chih. Nedec and Kodec, which aren’t named as defendants in the lawsuit, didn’t bribe Goh, said Tony Lee, Chief Financial Officer at the Korean firms.
Kannan Ramesh, a lawyer representing Beyonics declined to comment.
Shaw, who had opened the Shanghai office of Paul Tudor Jones’s hedge fund firm Tudor Investment Corp. in 1994, founded his own private equity firm in 1999. Shaw Kwei invests in companies in Greater China and Southeast Asia.
Beyonics, in its lawsuit, also accused Goh of giving preferential treatment to Nedec and Kodec in the sale of one of its units, promising them in a 2012 e-mail a “friend price” of $40 million, while saying he would ask $50 million from a rival bidder.
Goh denied the allegation, saying the board had reviewed and approved the sale process.
Goh also claimed expenses which were unauthorized, including S$101,910 for wine, Beyonics said in seeking the return of most of the money.
The wines were given to customers as gifts and used at functions for Beyonics employees and suppliers, Goh said in his defense.
The case is Beyonics Technology Ltd. v Goh Chan Peng, S672/2013. Singapore High Court.
Beyonics Technology Ltd., owned by Kyle Shaw’s private equity firm Shaw Kwei & Partners, sued its former chief executive officer claiming he took bribes to send a customer’s business to Korean competitors.
Goh Chan Peng, the former CEO of Singapore-based Beyonics, accepted payments from Nedec Co. and Kodec Co. to steer Seagate Technology Plc (STX) orders for hard-disk-drive parts to them, according to a lawsuit filed in the Singapore High Court. Seagate was Beyonics’s biggest customer, accounting for as much as 64 percent of revenue from 2009 to 2012, Beyonics said.
“The diversion enabled the Nedec/Kodec Group to develop a commercial relationship with Seagate and grow as a competitor,” Beyonics said in the lawsuit filed in August. A closed hearing is scheduled for Nov. 20.
Beyonics sought the return of lost profits, Goh’s salary from January to March and unspecified damages. Shaw Kwei, based in Hong Kong, acquired Beyonics in February 2012 for S$127 million ($102 million). The hard-disk-drive partmaker swung to a S$17.5 million loss on sales of S$1.33 billion for the fiscal year 2011 from net income of S$6.9 million a year earlier.
Goh, who resigned from Beyonics in January, said he had agreed to provide consulting services to Nedec and Kodec and the payments he received weren’t bribes. He also said the Korean firms had been supplying parts to Seagate since 2011, prior to the alleged diversion of business.
Tudor Shanghai
Goh countersued claiming he’s owed S$17,000 in unpaid salary, which Beyonics said he wasn’t entitled to because he failed to disclose that he breached his agreement with the company.
“My client’s position is the allegations are false and will vigorously defend against them,” said Goh’s lawyer Ng Lip Chih. Nedec and Kodec, which aren’t named as defendants in the lawsuit, didn’t bribe Goh, said Tony Lee, Chief Financial Officer at the Korean firms.
Kannan Ramesh, a lawyer representing Beyonics declined to comment.
Shaw, who had opened the Shanghai office of Paul Tudor Jones’s hedge fund firm Tudor Investment Corp. in 1994, founded his own private equity firm in 1999. Shaw Kwei invests in companies in Greater China and Southeast Asia.
Beyonics, in its lawsuit, also accused Goh of giving preferential treatment to Nedec and Kodec in the sale of one of its units, promising them in a 2012 e-mail a “friend price” of $40 million, while saying he would ask $50 million from a rival bidder.
Goh denied the allegation, saying the board had reviewed and approved the sale process.
Goh also claimed expenses which were unauthorized, including S$101,910 for wine, Beyonics said in seeking the return of most of the money.
The wines were given to customers as gifts and used at functions for Beyonics employees and suppliers, Goh said in his defense.
The case is Beyonics Technology Ltd. v Goh Chan Peng, S672/2013. Singapore High Court.
Friday, November 8, 2013
Pop Warner sued for 'head-first' tackling technique
Story originally appeared on USA Today.
A California youth was left paralyzed after a head-first tackle, a technique coaches taught
The family of a Pop Warner youth football player, paralyzed making a tackle during a 2011 game, filed suit in California this week alleging he was taught an unsafe "head-first" technique by his coaches and that the Pop Warner organization and others failed to ensure the coaches complied with rules banning such tackling.
Donnovan Hill was 13 at the time of his injury as a member of the Lakewood (Calif.) Black Lancers, a Pop Warner group about 20 miles south of Los Angeles.
"As Donnovan approached contact with his opponent, he dropped his head down, kept his arms at his side and initiated the tackle head-first," as stated in the lawsuit filed in Superior Court of California. "Upon contact with the opposing player, Donnovan immediately went limp and dropped to the field unmoving."
The suit says Hill sustained a "catastrophic spinal cord injury" and that he has minimal use of his arms and no movement from the chest down, because of tackling as he was taught -- head first.
"It's an unbelievable story about how not to run a football program," says Rob Carey, a Phoenix attorney representing the plaintiffs. "And the really sad part is when you look at Pop Warner, they market themselves as safety, safety, safety."
Jon Butler, executive director of Pop Warner, declined comment, which he said is the organization's stance on all litigation.
In August, Pop Warner announced it is joining the Heads Up Football program being rolled out nationally this year by USA Football, a national youth football governing body which receives NFL funding. Pop Warner said the plan is for all of its 1,300 associations to go through Heads Up certification before the start of next season.
In Heads Up, players are taught to hit with their heads to the side.
Hill was injured in a Nov. 6, 2011, game in Laguna Hills, Calif., about 45 miles southeast of Los Angeles.
"Their coach wasn't certified. He didn't follow their own procedures and get certified on safety at regular intervals," Carey said of Salvador Hernandez, head coach of Hill's team in 2011. "They (Pop Warner) didn't supervise him to make sure he is teaching proper tackling techniques. And the consequence is ... that Donnovan Hill is now quadriplegic."
The lawsuit says the 2011 Pop Warner rules prohibited "face tackling" or "spearing" techniques and that any coaches teaching such techniques should be dismissed following a hearing.
"It's not so much about not being certified," Carey said. "That can happen. ... But what should never happen is you've got an array of coaches, assistant coaches, on the sideline, multiple times, watching Donovan 'face tackle,' and no one stops it. That should never happen. ... They should ensure the rules are being followed."
The suit says game videos show Hill "consistently tackled head-first" throughout the 2011 season. It alleges the coaches observed this repeatedly in practices and games without correcting or reprimanding it. And during one drill, the suit alleges, Hill said he was concerned he might be hurt tackling head first -- and a coach "chastised" him for "whining."
Pop Warner, the Langhorne, Pa.-based group which had about 275,000 youngsters in its football program nationally last season, is a defendant, as is the Orange Empire Conference; Lakewood Pop Warner; Hernandez; four assistant coaches; Roberto Carlos Gonzales, president and athletic director of Lakewood Pop Warner in 2011, and Robert Espinosa, an assistant commissioner of the Orange Empire Conference in 2011. The suit also includes the spouses as defendants.
The suit says Hill does not have transportation to accommodate his injuries and that his life expectancy is diminished. Hill, 15, and his mother, Crystal Dixon, seek unspecified damages, including compensation to care for Hill for the rest of his life.
"I'm sure Donovan himself doesn't really relish the idea of suing his coaches," Carey said. "But it becomes an issue of insurance and compensability and making sure that Donovan is going to be taken care of."
Monday, November 4, 2013
Appeals court to review approval of BP settlement
This story first appeared in fuelfix
NEW ORLEANS — A year ago, lawyers for BP and Gulf Coast residents and businesses took turns urging a federal judge to approve their settlement for compensating victims of the company’s massive 2010 oil spill.
On Monday, however, the one-time allies will be at odds when an appeals court hears objections to the multibillion-dollar deal.
That’s because several months after U.S. District Judge Carl Barbier approved the settlement, BP started complaining that the judge and court-appointed claims administrator were misinterpreting it. The London-based oil giant is worried it could be forced to pay billions of dollars more for bogus or inflated claims by businesses.
Plaintiffs’ attorneys who brokered the deal want the 5th U.S. Circuit Court of Appeals to uphold the class-action settlement.
As of Friday, payments have been made to more than 38,000 people and businesses for
an estimated $3.7 billion. Tens of thousands more could file claims in the coming months.
The settlement doesn’t have a cap, but BP initially estimated that it would pay roughly $7.8 billion to resolve the claims. Later, as it started to challenge the business payouts, the company said it no longer could give a reliable estimate for how much the deal will cost.
The dispute centers on money for businesses, not individuals. Awards are based on a comparison of revenues and expenses before and after the spill. BP says a “policy decision” that claims administrator Patrick Juneau announced in January has allowed businesses to manipulate those figures in a way that leads to errors in calculating their actual lost profits.
Last month, a different 5th Circuit panel threw out Barbier’s rulings on the dispute and ordered him to craft a “narrowly-tailored” injunction that modifies the damage calculations.
The lead plaintiffs’ attorneys said the panel’s decision has no effect on the separate appeal of Barbier’s December 2012 approval of the settlement.
“The processing and payment of (business) claims has not in any way affected the fair, reasonable and adequate compensation paid under the Settlement Agreement’s transparent and objective criteria to any Objector or any other member of the class,” they wrote.
BP wants the court to adopt its interpretation of the settlement terms for businesses. If it does, the “otherwise fatal obstacles” would be eliminated and the entire settlement could be upheld, the company told the 5th Circuit.
BP is not the only one questioning Barbier’s December 2012 approval of the settlement. Attorney Brent Coon, of Beaumont, Texas, argued that a rush to “close the deal” resulted in a settlement program “mired in implementation problems.” He did not have a role in negotiating the settlement but filed one of several formal objections, seeking revisions to the agreement.
“Too much random guess work was needed to determine whether an individual’s claim was eligible for settlement funds or not,” he wrote.
Juneau’s office began issuing settlement payments on July 31, 2012. As of Friday, tens of thousands of claimants have received settlement offers worth more than $4.9 billion.
BP spokesman Geoff Morrell said the 5th Circuit’s ruling last month concluded that Juneau’s interpretations of the settlement “do not withstand scrutiny under the law.”
“If they are not corrected, the settlement class cannot be certified and the settlement should be set aside, ending what once promised to be an historic effort to benefit those who experienced losses as a result of the spill,” he said in a statement.
NEW ORLEANS — A year ago, lawyers for BP and Gulf Coast residents and businesses took turns urging a federal judge to approve their settlement for compensating victims of the company’s massive 2010 oil spill.
On Monday, however, the one-time allies will be at odds when an appeals court hears objections to the multibillion-dollar deal.
That’s because several months after U.S. District Judge Carl Barbier approved the settlement, BP started complaining that the judge and court-appointed claims administrator were misinterpreting it. The London-based oil giant is worried it could be forced to pay billions of dollars more for bogus or inflated claims by businesses.
Plaintiffs’ attorneys who brokered the deal want the 5th U.S. Circuit Court of Appeals to uphold the class-action settlement.
As of Friday, payments have been made to more than 38,000 people and businesses for
an estimated $3.7 billion. Tens of thousands more could file claims in the coming months.
The settlement doesn’t have a cap, but BP initially estimated that it would pay roughly $7.8 billion to resolve the claims. Later, as it started to challenge the business payouts, the company said it no longer could give a reliable estimate for how much the deal will cost.
The dispute centers on money for businesses, not individuals. Awards are based on a comparison of revenues and expenses before and after the spill. BP says a “policy decision” that claims administrator Patrick Juneau announced in January has allowed businesses to manipulate those figures in a way that leads to errors in calculating their actual lost profits.
Last month, a different 5th Circuit panel threw out Barbier’s rulings on the dispute and ordered him to craft a “narrowly-tailored” injunction that modifies the damage calculations.
The lead plaintiffs’ attorneys said the panel’s decision has no effect on the separate appeal of Barbier’s December 2012 approval of the settlement.
“The processing and payment of (business) claims has not in any way affected the fair, reasonable and adequate compensation paid under the Settlement Agreement’s transparent and objective criteria to any Objector or any other member of the class,” they wrote.
BP wants the court to adopt its interpretation of the settlement terms for businesses. If it does, the “otherwise fatal obstacles” would be eliminated and the entire settlement could be upheld, the company told the 5th Circuit.
BP is not the only one questioning Barbier’s December 2012 approval of the settlement. Attorney Brent Coon, of Beaumont, Texas, argued that a rush to “close the deal” resulted in a settlement program “mired in implementation problems.” He did not have a role in negotiating the settlement but filed one of several formal objections, seeking revisions to the agreement.
“Too much random guess work was needed to determine whether an individual’s claim was eligible for settlement funds or not,” he wrote.
Juneau’s office began issuing settlement payments on July 31, 2012. As of Friday, tens of thousands of claimants have received settlement offers worth more than $4.9 billion.
BP spokesman Geoff Morrell said the 5th Circuit’s ruling last month concluded that Juneau’s interpretations of the settlement “do not withstand scrutiny under the law.”
“If they are not corrected, the settlement class cannot be certified and the settlement should be set aside, ending what once promised to be an historic effort to benefit those who experienced losses as a result of the spill,” he said in a statement.
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