BP PLC 
By 
NEW YORK (Reuters) - BP Plc (>> BP plc) appears to be well on its way to concluding an estimated $7.8 billion settlement to resolve most of its civil liability from the Gulf of Mexico oil spill. But a potential landmine lurks in the settlement documents: under certain circumstances, the company can invoke a little-noticed provision that allows it to walk away from the deal.
The potential landmine is opt-outs. In a settlement of a class action, class members can reject the deal and decide to go it alone. Defendants have to be prepared for the possibility that a high volume of opt-out litigation will undermine the goal of global resolution. BP certainly is prepared: Its settlement agreement with plaintiffs claiming economic and property damages includes a provision that gives BP the right to terminate the deal if the total of opt-outs "exceeds a number agreed to by the parties."
So what's the number? That's the $7.8 billion question. The settlement agreement doesn't say. In fact, the document states that the opt-out number that could trigger a blowup is to be submitted to the court "in a sealed envelope."
It's not clear why BP is keeping the number secret. A spokesman for BP said that it was "part of the settlement negotiation process."
Others said they suspect there's more to it. Plaintiffs' lawyer Tony Buzbee of the Buzbee Law Firm, who is weighing whether to recommend the settlement to his clients, said BP may want the number kept under seal so that lawyers with lots of clients do not team up and threaten to opt out in an effort to extract a favorable deal. "They don't want a coalition of attorneys getting together saying we're not going to participate unless you treat us differently," said Buzbee, who added that he's never before encountered an opt-out provision with a secret trigger.
Edward Sherman, a professor at Tulane University Law School, said that by keeping the trigger number private BP was also giving itself the option of accepting the deal even if the opt-outs exceed its threshold. "They can go ahead and accept it, and they're not committed to a public number," Sherman said.
Earlier this month, U.S. District Judge Carl Barbier in New Orleans granted preliminary approval to the pact between BP and thousands of private plaintiffs affected by the spill. Barbier set a fairness hearing date for November 8, when he will consider granting final approval. In the meantime, plaintiffs who are part of the class have until August 31 to file objections to the settlement. Those plaintiffs also face a deadline of October 1 to opt out of the settlement.
(Reporting by Andrew Longstreth; Editing by Eddie Evans)
By Andrew Longstreth
