HOUSTON—Does Houston’s city government have a legitimate claim against BP over the Deepwater Horizon oil spill?
A divided Houston city council has voted to retain a team of law firms to investigate that question and possibly file suit against BP. But a number of council members spoke out against the idea, calling it “ambulance chasing” against an oil company by the city government of the nation’s energy capital.
“BP – you’re going to soak them until they’re bankrupt,” said Council member Jack Christie, who voted against the proposal.
Houston suffered “a clear loss of sales taxes” in the wake of the oil spill, said City Attorney David Feldman, estimating the losses at more than $20 million. The spill led the Obama Administration to impose a drilling moratorium in the Gulf of Mexico, which city officials say hurt local energy companies and led to a reduction in business travelers to Houston.
A long list of local governments has filed claims against BP and the company has paid more than $1.4 billion to state governments, city officials say, with Louisiana collecting more than $430 million. Texas has received $5 million.
Now, Houston has cut a deal with three law firms – Jan Woodward Fox PLC, Reich & Birnstock LLP and Norman Jolly PC – to pursue the possibility of a suit. The firms would collect from 33 percent to 40 percent of any damages, but they’ll collect nothing if the city ultimately decides against pursuing a claim.
“At this point, it doesn’t cost the City of Houston anything,” said Council member C.O. “Brad” Bradford, who voted for the proposal.
But a number of council members argued against the proposal, saying the city government shouldn’t jump into the group of governments suing BP simply because they might be able to collect some money.
One of them, Helena Brown, complained about the headlines generated by Houston’s possible lawsuit against BP.
“If you sue BP, sue the federal government for the overkill of the moratorium,” Christie said.
In the end, most of the council members agreed they had a fiscal responsibility to at least investigate the possibility of a claim.
“We have a fiduciary duty to the citizens of Houston, not to any corporation,” said Council member Jerry Davis.
The city council had to vote on the matter this week. Attorneys said the deadline for filing claims is April 20.