BP Loses Last-Ditch Effort to Avoid Paying Spill Claims
WASHINGTON (CN) - The Supreme Court on Monday refused to let BP avoid paying businesses and individuals harmed by the 2010 explosion of its well in the Gulf of Mexico.
At issue is the interpretation by court-appointed claims administrator Patrick Juneau of how BP should make particular claims under its 2012 settlement with businesses and people affected by the explosion of the Deepwater Horizon rig and BP's well, the Macondo Prospect. In addition to killing 11 people, the disaster 50 miles off the Louisiana coast set off the worst offshore oil spill in U.S. history.
U.S. District Judge Carl Barbier, who is overseeing the multidistrict civil litigation related to the spill, called Juneau's "the exact interpretation BP advocated for" while the settlement was in negotiation.
BP had established a $20 billion fund to pay ensuing claims but claimed in a lawsuit that Juneau was paying "fictitious losses," amounting to hundreds of millions of dollars. It estimated the total settlement payments would come to roughly $7.8 billion, but the figure was expected then to clear $9 billion.
Late last year, the 5th Circuit instructed Barbier to design a "narrowly tailored injunction that allows the time necessary for deliberate reconsideration of these significant issues" arising from BP's claim that the administrator is paying claims that are not related to the April 20, 2010 spill.
Barbier made two rulings in light of that remand. Neither party challenged the resolution of an accounting question, but BP balked when Barbier said the settlement did not require those submitting claims for certain business losses to provide evidence of causation.
The New Orleans-based federal appeals court affirmed, 2-1, in March and vacated an injunction that prohibited payment of the relevant claims.
Though the settlement does not require a claimant to submit evidence that the claim arose as a result of the oil spill, each claimant does attest, "under penalty of perjury, that the claim in fact was due to the Deepwater Horizon disaster," Judge Leslie Southwick wrote for the majority.
Southwick also emphasized how BP did not object in this appeal to an October 2012 decision that barred the claims administrator from having to look at potential alternative causes for claimants' losses.
The 5th Circuit refused to reconsider the issue en banc last month, and BP in turn asked the federal appeals court to maintain the "stay" and delay issuing the "mandate" that would put the payments in motion.
The 5th Circuit denied that request on May 27, and the Supreme Court nixed BP's application to recall and stay the mandate Monday.
It did not issue any comment on the order.