High court rejects BP settlement appeal
Tuesday, December 9, 2014
NEW ORLEANS -- The Supreme Court is leaving in place BP's multibillion-dollar settlement with lawyers for businesses and residents over the 2010 oil spill in the Gulf of Mexico.
The justices did not comment Monday in rejecting the London-based oil giant's arguments that lower courts misinterpreted settlement terms and put BP on the hook to pay inflated and bogus claims by businesses.
The court's decision makes the economic and property damage settlement final, starting a six-month deadline for filing claims, said plaintiffs' attorney Joe Rice of Mount Pleasant, South Carolina.
BP PLC wanted the court to consider whether people and businesses seeking payments under the settlement included some who haven't actually suffered any injury related to the spill.
A district court and an appeals court ruled that, under the settlement BP agreed to, businesses do not have to prove they were directly harmed by the spill to collect money -- only that they made less money in the three to eight months after the spill than in a comparable pre-spill period.
BP's Macondo well blew up April 20, 2010, killing 11 men. An estimated 103 million to 176 million gallons of oil spewed into the Gulf of Mexico before the mile-deep well was capped July 15, 2010. Lawyers for BP and the government agree 34 million gallons were captured before it could pollute coastal marshes and fishing grounds.
"Today's ruling is a huge victory for the Gulf, and should finally put to rest BP's two-year attack on its own settlement," lead plaintiffs' attorneys Stephen J. Herman and James P. Roy said in an emailed statement.
The settlement doesn't have a cap, but BP initially estimated that it would pay roughly $7.8 billion to resolve the claims. The company said it can no longer give a reliable estimate for total cost. The company, which made separate settlements for medical claims and seafood-related business claims, has paid more than $13 billion in claims by individuals, businesses and government entities and another $14 billion-plus on response and cleanup, according to its oil spill website.
BP remains concerned "that the program has made awards to claimants that suffered no injury from the spill -- and that the lawyers for these claimants have unjustly profited as a result," BP spokesman Goeff Morrell said in an emailed statement.
He added, "We will therefore continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered."
The 5th U.S. Circuit Court of Appeals did get the method for calculating losses changed after BP argued that claims administrator Patrick Juneau wasn't correctly matching business's revenue and expenses. The company has been trying to oust Juneau. U.S. District Judge Carl Barbier rejected its claims but BP went to the 5th U.S. Circuit Court of Appeals.
A third-party audit of the settlement program, made public in November, found that it correctly processed 99.5 percent of claims. Chicago-based McGladrey LLP described the program as "well-designed and appropriate."
The deadline for medical claims is Feb. 12, according to the federal district court claims website. That for seafood-related businesses is past.